Pagcor prepays P1.6B in loans
Philippine Amusement and Gaming Corp. (Pagcor) has retired loans to two major lenders six years ahead of schedule in an effort to save on interest expenses after reporting strong revenue in the first four months of 2011.
In a statement, the state-owned gaming firm said that it had settled P1.66 billion in outstanding obligations to Philippine National Bank (PNB) and Land Bank of the Philippines (LBP).
The loans were taken out by previous Pagcor administrations since 2008, with the proceeds used to pay the Philippine Reclamation Authority (PRA) for parcels of reclaimed land intended for the agency’s Entertainment City project in Parañaque City.
“When the present management assumed office in July 2010, the remaining bank loans of the corporation stood at P1.66 billion,” Pagcor chairman and CEO Cristino Naguit Jr. said.
“We completed prepayment of the borrowed amount on May 2 solely through internal funding.”
While the loans had a six-year repayment terms—maturing on 2014—Naguiat said the Pagcor management deemed it prudent to settle the obligations from internally generated cash earlier than scheduled.
“This saved Pagcor a total of P101.17 million in interest payments (which it would pay) had the loans not been pre-terminated”, he said.
The Pagcor chief said the early settlement of the obligations was made possible by the strong performance especially in the first four months of the current fiscal year.
Pagcor earlier reported revenues of P11.13 billion for the first four months, up by more than P1 billion from the P10.07 billion it earned in the same period last year.
“Sound business decisions and cost-saving measures” also enabled the agency to reduce its operating expenses by almost 14 percent during the first four months of the year, Naguiat said.
Total savings during the period amounted to P688 million. For April alone, Pagcor reported savings of about P140 million.
The Entertainment City Manila is an integrated resort complex that Pagcor had proposed to develop on a reclaimed land along the coast of Manila Bay.
Initially conceptualized in 2002, the project is expected to become a flagship tourism project that will increase tourist arrivals in the Philippines and promote Manila as a world-class travel destination.
