MANILA, Philippines — The Department of Finance (DOF) will push through with the plan to privatize the commercial functions of the Philippine Amusement and Gaming Corp. (Pagcor) and the Philippine Charity Sweepstakes Office (PCSO) to raise additional revenues and repay the debt pile that the government accumulated amid the COVID-19 pandemic.
“We’re prepared to work on the privatization of gambling activities,” Finance Secretary Carlos G. Dominguez III said Wednesday, when asked to comment on Sen. Franklin Drilon’s proposal to privatize the gaming industry.
In a statement, Drilon said he was against imposing new or higher taxes to generate more government revenues in the next couple of years, and instead proposed to privatize gaming and military assets.
Privatizing the gaming sector will involve passing on to private firms the operations of Pagcor’s casinos and other licensed activities as well as PCSO’s lottery operations.
Only the regulatory functions of the both state-run Pagcor and PCSO will be retained.
Last year, Dominguez said privatizing Pagcor would generate at least P220 billion a year, while transferring small-town lottery to private operators would raise P40-50 billion yearly, or as much as P300 billion per year.
However, Dominguez said “a new study may be required” to determine how much could be generated from privatizing Pagcor and PCSO’s commercial functions amid a pandemic.
Dominguez said the effects of the COVID-19 contagion will be considered in coming up with new estimates on the revenue take.
Last week, Dominguez said the government will look for additional revenue sources by late 2021 or early 2022 “to pay for the heavy indebtedness that we are incurring this year.”
With programmed gross borrowings of P3 trillion in 2020, the national government’s outstanding debt will hit P10.16 trillion by yearend, jacking up the debt-to-gross domestic product (GDP) ratio to 53.9 percent from a record-low of 39.6 percent last year.