Privatization of Pagcor, PCSO pushed

MANILA, Philippines — The Department of Finance (DOF) is once again eyeing the privatization of the gaming operations of the Philip­pine Amusement and Gaming Corp.(PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) to generate additional revenues that will help repay the government debt incurred amid the coronavirus pandemic.

Finance Secre­tary Carlos Domin­guez said this in response to the proposal of Sen­ate minority leader Franklin Drilon to privatize the gam­ing industry in­stead of imposing higher or new taxes next year.

“We ’ r e p r e ­pared to work on the privatization of gambling activi­ties,” Dominguez said.

In a statement, Drilon has expressed opposition against the DOF’s proposal to introduce new tax measures by 2021 to pay for the debt it incurred due to the COVID-19 pan­demic.

“Rather than talk about new taxes, the government can generate funds to pay our debts through the long overdue sale of gov­ernment assets and privatization of the gaming industry,”

Drilon said that estimates made by the DOF last year showed that priva­tizing the gaming industry could yield around P300 billion in additional in­come annually.

However, Do-minguez said the government may also need to con­duct a new study to generate new es­timates amid the pandemic.

In a Senate hear­ing last week, the finance chief said the DOF may look into new sources of rev­enues by late 2021 or early 2022 “to pay for the heavy indebt­edness that we are incurring this year.”

For 2020, the Philippines is pro­grammed to bor­row P3 trillion, the bulk or P2.22 tril­lion of which will come from domestic sources. The remain­ing P785.61 billion will be sourced from external lenders.

The money will be used to plug the deficit in the gov­ernment’s budget, which is expected to widen to P1.82 trillion or 9.6 percent of gross domes­tic product (GDP) due to weak rev­enue generation and higher spending re­quirements.

From January to August, govern­ment borrowings amounted to P2.47 trillion, 169.57 per­cent up from last year’s P916.27 bil­lion.

This brought the Philippines’ out­standing debt to a record high of P9.615 trillion as of end- August, 4.92 percent up from the P9.16 trillion recorded as of end-July.

By the end of the year, the Philippines’ outstanding debt is seen to hit P10.16 trillion, translating to a debt-to-gross domestic product ratio of 53.9 percent.