‘PCSO failed to collect P4 billion from STLs in 2017’

MANILA, Philippines — The Philippine Charity Sweepstakes Office (PCSO) under then general manager Alexander Balutan failed to collect about P4 billion in revenue from authorized agents operating the Small Town Lottery (STL), a senior administration lawmaker said yesterday. 

Parañaque Rep. Gus Tambunting, chairman of the committee on games and amusement of the House of Representatives, said this was the finding of Commission on Audit (COA) auditors in 2017. 

“After the hearings we conducted, it is clear the PCSO is not managing its funds well,” Tambunting said.

He cited a COA report showing that the PCSO failed to collect from 71 of the Authorized Agent Corporations (AACs), which are the entities operating the STL nationwide. 

“The PCSO must safeguard its revenues and must be more prudent with its finances because it is an important source of funds for the government’s programs for the poor,” Tambunting added.

He called on the PCSO management to “stop playing with the people’s money.”

“That is P4 billion which could have been used to help the poor all across the country,” Tambunting said.

He said the PCSO should be held accountable for its failure to protect government interest and its failure to protect the welfare of thousands of poor and sick Filipinos relying on its charity fund for their needs.

When he was asked by Tambunting to submit a list of their accounts receivables, Balutan claimed during one of the hearings that the PCSO does not formally keep track of accounts receivable as its financial statements are based only on actual sales. 

Tambunting said it was absurd that the PCSO does not include accounts receivable in its financial statements. He reminded the PCSO then to make proper records of its finances. 

House Minority Leader Danilo Suarez of Quezon whose public accounts committee recently held a hearing on such issues, said their panel will recommend a thorough revamp of the PCSO leadership if the allegations of solicitation against them are valid.

“The objective is to come up with some verification of what we can identify as serious concern in connection with some allegations that in the manner of expanding our request to nationalize gaming, we have some information that areas are being peddled out to the highest bidder,” Suarez said. 

During the hearing, Suarez emphasized that when a franchise to operate the STL is given to a certain operator, it cannot be subcontracted and will be a ground for cancellation of the franchise.

“It cannot be jointly operated. There can never be a memorandum of agreement or a partnership. The award is given to an entity and it is non-negotiable,” he clarified, to which Balutan agreed.

Suarez cited the case of Southern Rock Empire Corp. based in Sultan Kudarat that was awarded the franchise to operate STL in that area.

Suarez said he received reports that the STL corporation sold its franchise to two individuals, a certain Ed Esconde and Mike Macalindong.

“Then Mike Macalindong and Esconde sold 50 percent of the franchise to a certain individual for P27 million,” Suarez said.

He mentioned that another STL operator, the JY Archers Games and Entertainment Corp. of South Cotabato also supposedly sold its franchise for P50 million.

“We’re not saying that these are verified and true statements. These are allegations,” Suarez said.

He said he received reports that both the chief of staff of PCSO chairman Anselmo Pinili and Balutan are involved in the so-called solicitation on the particular matter.

“This is pretty alarming; alarming because the essence of nationalizing STL to generate employment and revenue was absent.

If that will be the case, it is operating on a wrong procedure,” Suarez said.

Suarez said he even heard remarks to “not pay attention to the concern of Congress because they will be adjourning soon and the President will not stop STL.”

He said he may agree that the President does not have any intention of stopping the operations of the STL but the committee can recommend a thorough revamp of the leadership of PCSO.

“And if proven that these allegations are valid, then there is enough ground for the position of the chair to transmit to the President, to be signed by the Speaker and the chairs of the joint committees asking for a revamp on the leadership,” Suarez said.
He said this is precisely the reason why the hearing was conducted – to verify these allegations.