Government losing P225 billion yearly to illegal STL — lawmakers

MANILA, Philippines — The government may be losing as much as P225 billion a year to illegal small-town lottery (STL) games, two Mindanao congressmen said yesterday.

The night before they made the statement, President Duterte lifted the suspension of STL operations although presidential spokesman Salvador Panelo clarified that operators could only resume their gaming business “after compliance of certain conditions.”

 Reps. Prospero Pichay Jr. of Surigao del Sur and Diego Ty of Misamis Occidental pointed out, in the course of a briefing the Philippine Charity Sweepstakes Office (PCSO) gave the House appropriations committee chaired by Davao City Rep. Isidro Ungab, that only 10 percent of STL is legal.

“If you (PCSO) earned P12.7 billion from January to June this year from STL before President Duterte suspended it due to massive corruption, that means that you should be earning P25.4 billion for the whole of 2019,” Pichay told PCSO officials, who were seen nodding their heads.

“And if the testimony of our colleague from Mindanao here that only 10 percent of STL operations is legal, that means 90 percent is illegal. That also means that gross revenues from STL should be around P250 billion a year, or a P225-billion loss on the part of the government,” he said.

 Pichay was referring to Ty, who spoke ahead of him and claimed he knew for a fact that only a tenth of small-town lottery games “is legal because I was a former mayor and a part of a group that lost the bidding for STL in our small town (of Plaridel).”            

He said it is the illegal part of PCSO’s permit holders’ gaming activities that breeds corruption. It is the PCSO that is issuing permits for legal STL operations. Many of its operators are former illegal gambling lords, scores of whom are allegedly still engaged in unlawful gambling activities using their STL permits.

 “In our town, STL bets amount to P300,000 a day. Since we have 15 towns, daily bets total P4.5 million a day or P135 million a month. Imagine that huge sum our poor people are giving away to STL operators,” he pointed out.

Ty said hundreds of millions more are lost to illegal numbers games.

Responding to the statements of Pichay and Ty, PCSO general manager Royina Garma admitted there is corruption in the STL.

“This is now being investigated by the National Bureau of Investigation and the Presidential Anti-Corruption Commission on orders of the President,” she said.

She refused to reveal details of the alleged corruption that prompted Duterte to suspend the games and who are being investigated.

Garma, who took over from former Marine officer Alexander Balutan last July, informed the Ungab committee that PCSO has 87 STL operators, although Albay Rep. Joey Salceda, on the basis of documents in his possession that include a Commission on Audit report, corrected her, saying the accurate number is 8,769.

She also could not immediately provide Salceda with figures on the total amount of taxes and medical assistance to poor patients the PCSO spent last year and this year, prompting the Albay congressman to disclose his own data.

“Based on my reports, you or your predecessor should be praised for contributing immensely to nation-building in terms of the bigger amount of taxes and dividends you have paid to the national government and the number of poor people you have helped,” Salceda said.

The agency spent P8.7 billion for medical assistance in 2018 and P2.8 billion in the first six months of this year.

Garma said the PCSO is now tightening the STL implementing rules to lessen corruption. A report she provided the appropriations committee shows that STL is now her agency’s biggest cash cow.

While PCSO earned P12.7 billion from STL during the first half of this year, it only grossed P10.1 billion from lotto games, P1.3 billion from keno and P500 million from instant sweepstakes. – With Christina Mendez, Romina Cabrera