ATLANTA, Georgia—Selling off the gaming business of state-owned Philippine Amusement and Gaming Corp. would give the Philippine government a huge windfall that could trim its debts while still generating revenue through taxes, according to a public official.
Representative Hermilando Mandanas (2nd District, Batangas) told the Inquirer on the sidelines of Coca-Cola’s 125th anniversary celebrations in Atlanta, Georgia, that if the Philippine government would use the sale proceeds to pay off some of its principal loans, it could save about P24 billion in interest expenses every year.
He said initial estimates indicated that Pagcor’s gaming business could be sold for at least P400 billion.
“The Philippine government pays its loans at 6 percent or more yearly. Using the proceeds to pay off peso-denominated debts would mean huge savings,” Mandanas said.
The Philippines’ total debt stood at P4.74 trillion as of January this year, according to data from the National Statistical Coordination Board. Domestic debt alone was placed at P2.67 trillion.
Alternatively, the proceeds could be invested in bonds to make the money generate more money for the government, he said.
It has been reported that certain parties, including businessman Ramon Ang of San Miguel Corp., have expressed interest in either buying Pagcor’s gaming business or in facilitating its sale. Ang said in August last year that he and several other Asian tycoons were interested in Pagcor. However, no formal offers have been made.
Mandanas authored House Bill No. 3217, which proposes the abolition of Pagcor and the privatization of its gaming business. Saying that it should not engage in gambling, Mandanas said the Philippine government could simply regulate gaming.
“The government would still earn from gaming anyway, even without Pagcor as operator, since the private gaming operator would have to pay taxes,” Mandanas said.
As for the present employees of Pagcor, Mandanas said: “They will simply be under a private employer. Many, if not all, would probably welcome that since their earnings and benefits could improve. What is important is that the government should not engage in gambling.”
Mandanas said that President Aquino has been supportive of the proposed privatization.
The chief executive earlier stated that Pagcor’s privatization could end corruption in the company and improve professionalism in its gaming business.