Split Pagcor’s regulatory, commercial functions–GCG

The Governance Commission for Government Owned or Controlled Corporations (GCG) is pushing to split the state-run Philippine Amusement and Gaming Corp., citing the conflict between its commercial and regulatory functions.

In a statement Wednesday, the GCG said that its recommendation to President Duterte to separate Pagcor’s dual roles was “due to its conflicting proprietary activities and regulatory functions, in which its operation of casinos conflicts with its function as a gaming regulator.”

Finance Secretary Carlos G. Dominguez III, an ex-officio member of the GCG, last year said that they already submitted for President Duterte’s consideration a draft executive order aimed at privatizing Pagcor’s casinos while retaining it as the body overseeing the gaming sector.

The GCG said that besides Pagcor, it also reviewed the mandate of 11 other GOCCs “in relation to competitive neutrality issues, as part of its commitment to the Philippine Development Plan (PDP) 2017-2022.”

“The GCG is committed to review the mandates of all 123 GOCCs under its jurisdiction, as well as recommend and implement appropriate actions to be undertaken for those with identified competitive neutrality issues, before the end of President Duterte’s term,” it added.

The commission said that it would be working closely with the Philippine Competition Commission, the National Economic and Development Authority, the Department of Justice and the Department of Trade and Industry to review the mandates of GOCCs, and recommend and initiate privatization or transfer of regulatory functions to the appropriate government agency.

“It is the firm belief of the GCG that there should be a level playing field between GOCCs and corporations in the private sector performing similar commercial activities,” it said. “The commission is committed to its role in the formulation and implementation of the national competition policy to improve consumer welfare and market efficiency, and achieve ‘pagbabago and ‘patuloy na pag-unlad’ as envisioned in PDP 2017-2022.”

Socioeconomic Planning Secretary Ernesto M. Pernia earlier said that the government would rationalize the functions of state-run corporations such that they could no longer have commercial and regulatory mandates at the same time.

“If the key purpose of the GOCC is to earn income, then it should be just earning income and not regulating. In other words, just drawing the line between commercial activity or proprietorship and regulation,” according to Pernia, who heads the state planning agency Neda.

Pernia had said that the review of GOCCs’ functions would be part of crafting the national competition policy this year. The national competition policy will ensure, among others, a level playing field for state-run corporations as well as private firms.