Philippine Finance Minister Benjamin Diokno announced plans for Philippine casinos. Privatization plans have recently been revived, and PAGCOR is looking to privatize them.
Diokno argued that it was not right for the agency to continue to serve in two roles: the regulator and the operating body.
PAGCOR is a major contributor:
Midway through a discussion about the potential creation of a sovereign wealth fund, Diokno spoke to local media about these events. He argued that PAGCOR should be the main contributor, which was crucial to clarifying the role of regulators. That will be done by privatizing 47 casinos currently under the state’s watch.
On recent events, Diochno said, “PAGCOR is a regulator, but it runs gambling companies at the same time. That is wrong. If you are a regulator, stick to it. You cannot run a gambling casino.
“It’s like you have a central bank but you’re also running a bank. It can’t work. We can privatise operations so PAGCOR can stick to its regulator role.”
The Philippine GOCC Governance Commission is still thinking about the project. However, Alejandro Tengco, the PAGCOR chairman, said the possibility of privatization sounds appealing. He mentioned this shortly after he was sworn into his new office in August.
House Speaker Rufus Rodriguez wants a dedicated casino regulator instead of complete privatization. This means that PAGCOR will only stay as an operator.
The company has to pay a huge fee:
As critics have listed, the main reason for opposing full privatization is the substantial return of PAGCOR casinos. In 2019, the company had to pay Pph 56 billion, or more than $1 billion, to the state. Payments were made through essential contributions and social responsibility programs.
There are also suggestions for investment and financing. So there is a possibility of a Mahalika Wells fund. It could be investing in global infrastructure projects and financial markets around the world. Investors will receive 10% of the total income earned from the game.
Overall, this is a huge amount of money that caused former chairman and CEO Andrea Domingo to abandon his privatization initiative last time.
In 2018, IAG said that the company’s cash flow was strong and that privatization of Philippine casinos was not a necessary step.
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