Make state gaming income productive

Day 16 — In a freewheeling talk with members of the Malacañang Press Corps on Tuesday night, President Benigno “Noynoy” Aquino III (P-Noy), revealed another mouthful to them about his ideas on governance. This was during a getting-to-know-you dinner he hosted at the Palace a few hours before typhoon Basyang dumped its wrath all over Metro Manila.

Among his disclosures, P-Noy echoed the idea of privatizing the Philippine Amusement and Gaming Corp. (Pagcor) amid reports that the government was being short-changed on the revenues generated by the state-owned gaming firm. Pagcor is the government agency that supervises state-run and franchised casinos operating all over the country.

P-Noy raised the possible privatization of Pagcor as a cure to the endemic corruption perpetrated by unscrupulous officials who have turned it as their personal cash cow. After all, Pagcor is the third biggest income-generating government agency owing to casino operations and non-tax revenues at that.

Former Pagcor chairman Efraim Genuino earlier reported that the gaming firm was raking in P30 billion annually in revenues for the government. This, he cited, was supposedly a P20 billion bigger revenue take from the time they took over in January 2001. While the government has been running in huge budgetary deficits these past nine years, Pagcor never had such good financial standing, that is, if we are to believe Genuino’s report.

Genuino was able to keep a close track of Pagcor’s finances over the past nine years since he was one of the few original officials appointed by former President Gloria Macapagal-Arroyo, whose stay in office was as long as hers. He, along with former Government Service Insurance System (GSIS) general manager Winston Garcia were never replaced from their respective posts from day-one till the end of the Arroyo administration.

By the way, P-Noy announced yesterday his appointment of former Negros Occidental Governor, Daniel “Bitay” Lacson, as new GSIS chairman replacing Bernardino Abes. Lacson is one of the most trusted ally of P-Noy’s late mother, former President Corazon Aquino. P-Noy has no replacement yet for the GSIS general manager’s post.

Anyway, since both Genuino and Garcia were co-terminus with ex-President Arroyo, they stepped down together with her on June 30, at least in the case of the GSIS chief. Of course, Genuino created quite a stir when he suddenly produced a Marcos era Presidential Decree (PD) 1869 that empowered him to stay on his post as Pagcor chief for at least one year more ending beyond the term of Mrs. Arroyo.

PD 1869, or the Pagcor charter, requires the re-appointment of the chairman and board of directors every year. Specifically, Section 6 of the Pagcor Charter states that “each director shall serve one year and until his successor shall have been duly appointed and qualified.” Their appointments have to be renewed every year and thus, legally, officials have to serve for one year. These were the legal basis invoked by Genuino defenders when the Pagcor chief was denounced as among the controversial “midnight” appointees of Mrs. Arroyo.

Section 6 of PD 1869, Genuino defenders further argued, made the Pagcor chief’s situation different and unique from Cabinet members and other Presidential appointees who were co-terminus with Mrs. Arroyo. By virtue of this, Genuino, in fact, took his oath as Pagcor chairman on March 9 before Judge Caroline Rivera-Colasito of the Manila Regional Trial Court Branch 23 along with the other board members. They took their oaths of office before the election ban took effect 90 days before the May 10 polls.

Fortunately, Genuino had the decency not to insist on this legal mantle that protected his tenure at Pagcor and he instead took an optional retirement. P-Noy heaved a sigh of relief and even thanked Genuino in giving him one less headache. And true enough, P-Noy immediately appointed his own man to take over as new Pagcor chief, former Ateneo classmate, Cristino “Bong” Naguiat.

With his own trusted people now manning Pagcor, P-Noy therefore could talk about privatizing it. We just hope his people at Pagcor would be able to translate P-Noy’s noble ideas on how to make this top revenue-making agency of the government operate for the benefit of all Filipinos and not for the few ones to bilk it.

Basically, allowing the private sector to manage Pagcor is a step in the right direction. This way, it would remove the government from being the operator and at the same time the regulator of casino businesses in the country. It is therefore a welcome move on the part of the new Pagcor chief who echoed such a plan to push for the creation of a regulatory body once Pagcor is privatized.

As contemplated by Naguiat, the planned regulator agency will be similar to the Nevada Gaming Commission and State Gaming Control Board. Founded in 1955, the Nevada Gaming Control Board is an agency involved in the regulation of gaming throughout the state, along with the Nevada Gaming Commission.

Aside from alleged anomalies they have supposedly uncovered in Pagcor, P-Noy deplored the government has not really been getting its due share of the revenues. Therefore, P-Noy thinks it would be more practical to sell Pagcor and have it run by the private sector and can manage it more professionally and turn in more profits to the government.

In obvious preparations for this privatization of Pagcor, P-Noy announced also yesterday he has given back the administration of the President’s Social Funds (PSF) to the Presidential Management Staff (PMS). Actually, that was the set-up during his late mother’s term at the Palace.

During the term of Mrs. Arroyo, Pagcor delivered to the Office of the President an average of P80 to P100 million a month or P1.5 billion a year. The PSF is the President’s own source of funds to finance her pet projects, submitted to her by favored lawmakers and local government officials. But like any other government funds, those who get PSF are subject to liquidation and audit requirements.

The biggest source of the PSF is of course contributions from Pagcor and from the Philippine Charity Sweepstakes Office (PCSO) out of state-run lotto games and small-town lottery (STL) that were supposed to wean the Filipino folks from the illegal numbers game like jueteng. But that’s another story altogether.