I have always wondered why, among all of the government owned and controlled corporations (GOCCs), the positions at the Philippine Amusements and Gaming Corporation (PAGCOR) are the most coveted. Thanks to the thesis paper prepared by law student Richard de Castro, I was enlightened regarding some of the reasons.
A 100 percent owned GOCC, PAGCOR is the third largest contributor to government coffers (after the Bureau of Internal Revenue and the Bureau of Customs), earning close to P30 billion in 2009. Its charter, Presidential Decree No. 1869, was enacted into law in 1983 by President Marcos pursuant to his legislative powers under the 1973 Constitution. PAGCOR was given a monopoly to regulate all games of chance, particularly casino gaming, in the country. It is in charge of granting permits and licenses to casino operators who wish to do business within the territorial jurisdiction of the Philippines.
Currently, it operates or has awarded licenses to casinos located in 13 cities, eight VIP clubs, three slot-machine arcades, 180 bingo parlors, and a lucrative internet casino platform using prepaid cards. Its earning are distributed as follows: a) 5 percent of net winnings goes to the BIR as franchise tax; b) 50 percent (of the 95 percent balance) goes to the National Treasury as the government’s share; c) 5 percent (after the franchise tax and national government share) goes to the Philippine Sports Commission for the country’s sports development programs; d) 1 percent goes to the Board of Claims, an agency under the Department of Justice, which compensates victims of wrongful detention and prosecution; e) Cities hosting PAGCOR casinos are given a fixed amount for their respective community development projects; and f) the remaining balance is then remitted to the Office of the President for the latter’s Social Fund.
But the allure of PAGCOR seems to flow from a seeming innocuous provision in its Charter which grants it a partial exemption from the auditing powers of the Commission on Audit (CoA). The latter’s authority is limited to a proper determination of the 5% franchise tax and the government’s share of 50% of PAGCOR’s gross earnings. The interest of government, it would seem, is merely in the bottom line and not in the details.
This exemption was supposedly inserted to make PAGCOR “more dynamic and effective in its tasks by providing greater flexibility” in its operations. Query therefore if CoA looks into (or has the authority to pass upon) PAGCOR’s expenditures and disbursements? Also, while it is not covered by the salary standardization law, it would be interesting to find out what salaries, allowances and per diems are being paid to its officers and directors?
In fact, the legal status of this partial exemption is doubtful given the passage of the 1987 Constitution. Two Constitutional directives seem to directly conflict with this statutory provision. Article IX-D, Section 2(2) states that “The CoA shall have the exclusive authority to define the scope of its audit and examination, establish techniques and methods required therefore, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties.” Similarly, Section 3 of the same Article reads: “No law shall be passed exempting any entity of the Government or its subsidiaries in any guise whatever, or any investment of public funds, from the jurisdiction of the CoA. (Emphasis mine)
To be fair, PAGCOR claimed, during a 2008 hearing of the House Committee on Games and Amusements, that it has not availed of this privilege since the Aquino administration took office in 1986. CoA Director Divina Alagon also confirmed during the hearing that “it has been conducting not only financial and compliance audit but also value for money audit or a comprehensive audit of all the accounts and operations of PAGCOR.”
However, the CoA may be compromised in its duties as “the salaries of the resident CoA auditor and his staff shall be fixed by the CoA Chairman with the advice of the PAGCOR board and said salary and other expenses shall be paid by the Corporation.” This presents a potential conflict of interest situation as the persons who stand guard against unlawful expenditure of public funds get their bread buttered from the same can of butter.
Another interesting feature of the PAGCOR Charter is that it exempts the employees of the Corporation from the Civil Service Law. It is a basic tenet in Philippine Constitutional and Labor laws that GOCCs which have their own charter shall be subject to civil service rules while those incorporated under the general corporation code are covered by the labor code. Query again not only as to the legality of this provision but the reason why this special treatment was granted to PAGCOR employees?
In sum, these may be some of the reasons why employment with PAGCOR is an alluring proposition.
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This week’s four centavos go to Presidential sisters Ballsy Aquino and Pinky Abellada not only for taking a “budget” flight to Hong Kong but also for refusing any VIP treatment and falling in line at the airport and immigration counters just like everyone else. These actions coincide with younger brother’s simple, no frills style. (To be fair, I remember that when Presidential daughter Luli Arroyo-Bernas traveled, she did not wish to be fussed over as well and in yesterday’s news, the Arroyo family seems to have caught on with this new way of traveling). What I found amusing was the news report (not this paper) that the actuations of the Aquino sisters “caused quite a stir in the airport”. Why should it when one would expect such behavior to be par for the course? A clear indication perhaps that aside from our Manila airport, our societal values need a make over as well to coincide with that espoused by the returning first family.
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“Nothing will work unless you do.” -John Wooden
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