Pacific Online chief refutes Berjaya accusations vs PCSO

Philippine Charity Sweepstakes Office: Clutching at straws?

MANILA, Philippines – The chief of lottery provider Pacific Online Systems Corp. has taken up the cudgels for the state-owned Philippine Charity Sweepstakes Office (PCSO), who is being accused of favoring the former at the expense of the local gaming unit of Malaysian conglomerate Berjaya.

Berjaya-led Philippine Gaming Management Corp. has accused the present management of PCSO of favoring Pacific Online Systems Corp. by allowing the company to enter in what it deems to be its “exclusive” Luzon territory without any bidding.

In a text message on Wednesday, Pacific Online chairman Willy Ocier said as PGMC’s contract was “extended” in 2007, “it’s a new ball game already … No more winning or losing bidder.”

PGMC won the bidding to provide and service lottery equipment for PCSO in 1993 covering the whole Philippines but the government decided to award to Pacific Online the Visayas-Mindanao territory. PGMC was given only Luzon as its exclusive territory.

“Pacific Online was considered a winning bidder as well in 1993 because we were awarded Vis-Min,” Ocier said in a text message, reacting to PGMC’s statement.

“PCSO is the regulator and operator of all lottery games nationwide. PGMC & Pacific Online are systems and service providers. We have no business dictating to the PCSO & government,” Ocier said.

PGMC lamented that the PCSO had been “relentless in its efforts to bring PGMC down,” demanding for the reduction in rental rates on the lotto equipment by as much as 50 percent but giving Pacific Online better deals.

“The Senate Blue Ribbon Committee and COA (Commission on Audit) had criticized the contracts of PGMC & Pacific Online as being disadvantageous to government. We chose to renegotiate with PCSO instead of putting up legal blockades,” Ocier said.

“We gave major concessions to allow PCSO to save lots of money & channel those funds to charity,” he said.

According to Jose Bernas, legal counsel of PGMC, the PCSO had directed PGMC early this year to reduce its rental rates from 10 percent–which was in effect under its present contract until 2015–to 6.5 percent. Later, PCSO revised its dictated rate reduction to 7.85 percent and demanded that PGMC absorb the paper cost, currently borne by PCSO, which is equivalent to 1.5 percent, effectively demanding that PGMC bring its rate down from 10 percent to 6.35 percent.

Bernas noted that Pacific Online, in contrast, was made to lower the rentals on its existing terminals in Visayas-Mindanao down to only 9.85 percent. In addition, he said Pacific Online was allowed to intrude into Luzon, PGMC’s territory, supplying machines at 7.85 percent rent without the cost of paper while its contract was also extended indefinitely beyond March 2013.