THE government lost P2.2 billion in revenues from a Philippine Offshore Gaming Operations (POGO) licensee that fled the country at the height of the COVID-19 pandemic under the Duterte administration, Philippine Amusement and Gaming Corporation (Pagcor) chief and CEO Alejandro Tengco told lawmakers at the House of Representatives yesterday.
Tengco said the licensee did not have a local incorporator and only operated in the country for eight months during the Duterte administration.
“Hindi na po mahahabol (We can no longer go after them). We were told they are out of the country already,” Tengco told the hearing of the House Committee on Appropriations on the proposed P5.768 trillion national budget for 2024.
“This was a P2.2 billion receivable from a POGO that was licensed during the last administration, and during the pandemic po nawala na lang pong parang bula ‘yong POGO (the POGO disappeared like bubbles), they did not… they closed shop and ran away,” he added.
The Pagcor chief said the agency has already revoked the firm’s license and blacklisted it.
On the questioning of House minority leader Marcelino Libanan, Tengco said Pagcor has already informed the Commission on Audit (COA) that the P2.2 billion balance could no longer be collected because the officers of the gaming licensee, who are all foreigners, had already left the country.
Tengco, who assumed office last year, said he has also told the COA supervisor in Pagcor “that there is no way we can collect that said P2.2 billion anymore because during my term, we immediately tried to find the officers of that licensee and we found out during our investigation that they left after closing shop.”
The COA flagged the P2.2 billion collectibles in a June 2022 report.
“During the last exit conference, I had requested the COA, that maybe that receivable can be stricken off already because we really can’t do anything about it and we can’t go after them,” Tengco said.
SHAPE UP
Tengco told lawmakers he has given the POGO firms one last chance to shape up or he will be left with no choice but to recommend to President Marcos Jr. to shut down the whole industry because of POGO-related crimes, including various scams.
He said that 30 POGO licensees have so far been placed under probationary status, a move that will force them to reapply on or before September 15 to avoid the revocation of their gaming licenses.
Six POGO licensees have been suspended this year, including one in Clark for alleged involvement in scam and human trafficking, he added.
The Pagcor chief said 150 service providers have likewise been closed down for various violations, while 70 licensees were imposed fines and penalties totaling more or less P84 million, something that did not happen under the Duterte administration which was known for its closeness to the Chinese government.
Most POGO businesses in the country are run by Chinese companies.
P1B REFUND
While having lost any hope to recover the P2.2 billion POGO revenue, Tengco said Pagcor is seeking a P1 billion refund from its former third-party auditor which was hired to audit POGO operators.
He said the P1 billion refund is being sought from Global ComRCI because Pagcor had to terminate its P5.8 billion auditing contract for allegedly making a false declaration when it submitted a spurious bank certificate of its financial standing as part of its bidding documents – the issue discovered by senators last November.
Tengco cited Republic Act No. 9184 or the “Government Procurement Reform Act,” which dictates that any form of fraud or fraudulent document in bids renders the proposal null and void.
He said Pagcor is coordinating with the Office of the Solicitor General to go after the auditing firm “because, from Day 1, their contract is null and void.”
Tengco said Global ComRCI could not satisfactorily explain the alleged spurious bank certificate, simply claiming that it had the required capital of P1.4 billion (US$25 million) when it submitted its bid.
As a stop-gap measure, Pagcor secured the approval of the Department of Justice (DOJ) for the COA to undertake the auditing on overseas gaming licensees.
Albay Rep. Joey Salceda, chair of the House Committee on Ways and Means, pointed out that under Republic Act 11590 or “An Act Taxing Philippine Offshore Gaming Operations,” the COA can only check on the “integrity of the accounting.”
Salceda said COA has no business ensuring game and financial fairness and checking company operations because it is the job of a third-party contractor.
Tengco however said COA has formed a special team for gaming auditing which is separate from the teams assigned to do the financial auditing of government agencies.
‘CHARITY WORK’
Tengco also defended its procurement of a new logo for P3 million, saying that contrary to claims that it is just a waste of public funds, the designer actually gave the government a good deal which he even likened to “charity work.”
“I don’t know if (critics) made their research but that P3 million was already so cheap. In truth, that designer almost just made charity work,” he told the panel on the questioning of Rep. Raoul Manuel (PL, Kabataan).
Rebranding, he said, does not only mean changing the logo since it comes with deliverables, including the color palette and font sizes in all Pagcor calling cards, stationeries, and envelopes.
Tengco said the designer, Francisco Doplon of Printplus Graphics Services, also had to visit some of the Pagcor establishments to see how the new logo can be used by 45 casino properties across the country.
Manuel said that while top brands such as Coca-Cola, Twitter, and even Nike did not have to spend more than $100 on their logos, the government, which should practice austerity, spent P3 million.
Tengco has said the change of logo was meant to show the agency’s “re-energized” role as the country’s gaming regulator.
For his part, Rep. Zaldy Co (PL, Ako Bicol), chair of the appropriations panel, said “it is important to acknowledge that effective regulation is a cornerstone of maximizing the positive impact of gambling and gaming on government revenues.”
“Governments must implement comprehensive regulatory frameworks that ensure fair play, responsible gambling, and the prevention of criminal activities like money laundering. This regulatory framework will not only safeguard public interests but also foster a positive image for the industry, attracting responsible gamblers and investors,” he said in his opening statement.
Co then underscored the need to address the negative social effects of gambling.
“However, we must balance the financial benefits of the gambling and gaming industry by addressing potential negative social consequences. The government should also allocate a portion of the revenue generated towards programs that address problems arising from gambling, promote responsible behavior, and offer support to individuals who may be adversely affected by gambling-related issues,” he said.
