Philippines President Rodrigo Duterte remains committed to selling off the country’s public-sector casinos. The snag is how to make up for the massive revenue loss to the government that privatization will entail.
After taking office last May, Duterte instructed the Philippine Amusement and Gaming Corporation, the operator of 48 government gaming venues, to begin selling them off in order to raise funds for the state and rid the agency of any possible conflicts of interest stemming from its dual role as the island nation’s gaming regulator.
Andrea Domingo, PAGCOR’s chief executive officer, recently told the Manila Bulletin the policy could end up costing the national treasury around US$474 million a year, the equivalent of 40 percent of its annual revenues.
It’s a real problem for a new Privatization Council that’s been set up to study how to price the venues and their licenses. The planned spinoff was first announced by the Department of Finance last August.
Nonetheless, Finance Secretary Carlos Dominguez is confident of a solution.
“The revenue stream will still come to the government because (casino operators) have to pay taxes,” he said. “We’re not saying that once you are privatized, you are not supposed to pay taxes anymore. Casinos pay a specific rate of tax and they (also) pay for the right to have a casino. Then they have to pay a certain percentage of their gross. So the government will still earn the money.”
According to media reports, the government would like to be able to offer the properties to the private sector to bid on by the end of the year.
