Duterte economic team seen pushing to privatize Pagcor, PCSO

The government is studying the turnover to the private sector of commercial functions of two of the biggest income earners among government-owned and controlled corporations (GOCCs)—the Philippine Amusement and Gaming Corp. and Philippine Charity Sweepstakes Office.

According to the country’s chief economist, these state-run firms should stick to regulatory oversight and stop competing with the private sector.

GOCCs, said Socioeconomic Planning Secretary Ernesto M. Pernia, “should adopt structural measures” against “anti-competitive behavior” instead of conducting business to rival the private sector which Pernia said “may be in a better position to carry out some of their commercial pursuits.”

“Transparency must be observed in procurement processes and procurement laws, rules and regulations should be applied equally and equitably to GOCCs and firms in the private sector,” added Pernia, who heads the state planning agency National Economic and Development Authority (Neda).

On Pagcor and PCSO, Pernia told the Inquirer that privatizing these GOCCs is “still under consideration and discussion.”

Neda had submitted for President Rodrigo Duterte’s approval a draft executive order (EO) containing the proposed national competitiveness policy which would foster “an environment that facilitates entry of business players.”

Under this proposed policy, the Neda is pushing for fair competition in a market not dominated by state firms.

The Neda said there was a need to maintain “competitive neutrality” among GOCCs.

This would require GOCCs which operate as businesses “to compete with private firms on a level playing field,” the Neda said.

There should not be “preferential treatment in commercial activities that would disadvantage the private sector,” the agency added.

Last week, Finance Secretary Carlos G. Dominguez III told the Senate finance committee that the Department of Finance (DOF) was likely to make a push for privatizing Pagcor and PCSO’s gaming operations.

Dominguez, who heads the Duterte economic team, said after an analysis in 2016, he was convinced that if gaming was privatized, at least P220 billion in additional revenue may be generated.

He said as soon as he joined the Duterte Cabinet, “that was one of the areas we took a look at immediately as a source of funds.”

Asked by Senate Minority Leader Franklin Drilon if P300 billion would be a “conservative and fair estimate” of revenue from privatizing Pagcor and PCSO, Dominguez said “we could achieve that with no effort.”

“The one-time privatization will lead you to make about P300 billion, and still can generate P300 billion a year,” Dominguez added.

For Dominguez, privatizing Pagcor and PCSO would be “a rational move.”/TSB