Rep. Villanueva delivered a question of privilege on the escalating tiff between the Department of Finance and the Bureau of Internal Revenue and the Philippine Amusement and Gaming Corporation (PAGCOR) on the latter’s refusal to pay taxes. 

Mr. Speaker, I rise on a question of privilege, both personal to me and affects this institution as a collective. The issues and questions I am to raise directly affects the duties, powers, integrity and reputation of this House. I stand to question the continuing attempts by the Philippine Amusements and Gaming Corporation to circumvent the statutes passed by this House and even infringe on Congress’ power of the purse.

Over these recent months, I believe that all of us have read or heard the escalating tiff between the Department of Finance and the Bureau of Internal Revenue on one side and PAGCOR on the other side. 

Isa sa malaking laban ng CIBAC ay mga panukalang tutol sa pagpapalakas o pagpapalawig sa anumang paraan ng kapangyarihan ng PAGCOR. Pinakamainit dito ang franchise extension ng PAGCOR. Iisa ang CIBAC sa kakaunting nanindigan laban dito. We did not get what we wanted then. But as you know, CIBAC was able to put up a very good fight.

And we stand firm on our position that the franchise extension is invalid. And we are poised to bring the question to the Supreme Court, along with equally-concerned and enlightened citizens and political and church leaders. But that is another story.   

“Kaban” 

Today, we again stage another battle with PAGCOR. This time, on its blatant attempt to deprive our government and people of money due them.  

In fairness to PAGCOR, it appears to this Representation that it has a very good team of advocates and advertisers. Imagine, it has an annual gross revenue growth of 18 percent!  

What does this figure say to us?  

That PAGCOR is able to recruit more gamblers and able to entice higher stakes in gambling.  

So really, thanks but no thanks. 

According to reports, PAGCOR reached a 26.83-billion-peso gross revenue in 2007. This income continues to bag for PAGCOR an impressive rank of Number 3 contributor to government revenues, next only to the Bureau of Internal Revenue and Bureau of Customs.  

Sa simpleng paliwanag na kayang unawain maging ng ordinaryong si Juan dela Cruz, ang PAGCOR ay isang “kaban.” Isa itong napakalaking kaban ng salapi.

Ang “kabang PAGCOR” ay isang multi-billion na kaban. Hawak nito ang limpak-limpak na salapi. Salaping galing sa kita sa sugal. Salaping wala silang balak ipamahagi kahit na batas na mismo ang nagsasabing kailangan nila itong bitiwan. 

Nasaksihan ng floor na ito ang mga diskusyon at debate natin tungkol sa pagpapahaba pa ng prangkisa ng PAGCOR. Tama po ba na isa sa mga argumento ng pabor sa extension ay lalo pang makinabang ang ating pamahalaan sa siguradong malaking kita mula sa sugal? Ngunit bakit ngayon ay parang ayaw na niya bitiwan ang kinitang pera at ibigay ang nauukol sa pamahalaan? 

Sa floor din na ito, tandang-tanda ko na itinanong po ng inyong lingkod kung may epekto ba sa tax exemptions ang franchise extension na ipagkakaloob ng Kongreso sa PAGCOR. At sa floor din na ito, ilang ulit sinabi sa inyong lingkod na franchise extension does not imply tax exemptions. 

Dahil sa ating mga debatihan at sagutang nasaksihan ng floor na ito, marami ang naniwala na sa pagyaman pa ng kaban ng PAGCOR, makikinabang din ang ating mga mamamayan dahil kabang ito ay makakatulong sa pagtaas ng koleksyon ng buwis.

Ang problema, tila naisahan tayo! 

Travesty and mockery  

This Representation is enraged – so enraged – that tax issues are now at the heart of another ongoing debate where PAGCOR is a protagonist.  

Sorry, ANTAGONIST, I mean! According to the DOF, the government is losing 3.9 billion pesos every year because of the non-payment of taxes of PAGCOR. As 2007 closed, PAGCOR allegedly owed the BIR a total of 6.8 billion pesos! Now that PAGCOR’s franchise has been extended, it now declares with bravado that “since time immemorial, PAGCOR has been exempt from (taxes).”  

This I believe is a far cry from the intent of this House when Republic Act No. 9487 was passed into law.  

As I earlier mentioned, I distinctly remember asking whether the PAGCOR’s franchise extension would mean granting it tax exemptions, which I was categorically answered that it would not.  

Sa katunayan, kahit ang bilang ng aktwal na boto ng mga mambabatas na sumusog sa pagpapahaba ng prankisa ng PAGCOR ay kulang upang magkaloob ng tax exemption ang PAGCOR.   

Paragraph 4 of Section 28 of Article VII of the 1987 Constitution provides that “no law granting any tax exemption shall be passed without the concurrence of a majority of all the members of the Congress.” Dito sa House ay tanging 113 lang ang bilang ng mga kinatawan mula sa kabuuang bilang na 230 ang bumoto upang maipasa ang Republic Act No. 9487.

A majority of the members present then but not a majority of ALL the members of the House. Kulang sa itinakdang bilang ng boto sa Konstitusyon. PAGCOR’s strong position on the non-payment of income tax and value added tax because its Charter exempts it from such taxes is a travesty of this House and a mockery of our Constitution! Imagine, even the poorest Filipinos pay VAT on the measly sardines which serve as their family’s sole meal for the day but the cash cavan that is PAGCOR refuses to pay its dues.   

Its position directly contravenes the mandate of the Constitution for Congress to evolve a “progressive system of taxation” and the strict requirements against tax exemptions, all of which are found in section 28 of Article VII of our Fundamental Law. PAGCOR has dared to test these provisions. It has dared to circumvent the will of this House.  

Worse, PAGCOR has not been shamed – it seems not even a bit – that the BIR’s latest information on its non-payment of taxes lists it among the biggest of the most immodest tax evaders! Now, how can we expect other industries to pay the proper taxes when the gambling industry under the charge of a GOCC at that doesn’t do so? Unfortunately, the evasion to pay both income tax and value added tax is not only the issue that bothers this Representation.  

According to Reports, a study of the National Tax Research Center found that PAGCOR is even underdeclaring its income for tax purposes. According to the NTRC study, in 2006 PAGCOR declared only 80 percent of its taxable income. PAGCOR only declared income from its core gaming and did not include as taxable income those generated from non-gaming revenues such as earning from demo units and internet gaming.  This has caused the government to further lose P243 Million more. 

The Big Question 

Ang tanong: sa yaman ng kaban na ito, bakit hindi magbayad ng tama?  In a position paper submitted to the Senate, the DOF said that according to PAGCOR, if it remits taxes to the national government as being pushed by the DOF, it would no longer be able to contribute to the President’s social fund. It appears that PAGCOR is making the President herself as the escape goat? I wonder if Mrs. Arroyo knows this.  

I don’t think it is in Mrs. Arroyo’s character to simply allow herself to be a convenient excuse for anyone, not even PAGCOR, to violate our laws, especially those governing revenue-collection.  

Has PAGCOR created its own reality where its interests have superseded those of the government and the people to which it owes its existence? That in its thirst for vice money, it, as an institution, and its Directors and officers have forgotten what the money it generates was for?  In case it has forgotten, that money is to serve the government and the people!  Ang kaban ng PAGCOR ay dapat kaban ng bayan.  If indeed it is fulfilling its mandate, it should pay taxes properly so as the national treasury can use its remittances for genuinely NATIONAL development efforts.  

CIBAC’s Call 

When former President Marcos issued Presidential Decree No. 1067-A, which created PAGCOR, it would appear that he never intended PAGCOR to be a permanent fixture in the Philippines. PAGCOR was actually created to curb the proliferation of gambling establishments. It was seen then as a quick source of funds to finance the massive infrastructure programs of the “New Society”. In fact, despite all the powers he exercised then, he chose not to make PAGCOR a statutory government agency of a permanent nature but instead a GOCC with a fixed franchise period. Gambling was never intended to be the lifeblood of a nation on a quest to greatness. 

After more than thirty (30) years, maybe it is about time that this House of Representatives of a democratic Philippine Republic, under a Constitution legitimated by our people, review if PAGCOR still remains relevant to our nation’s long-term goals and interests? Maybe we need to reflect, as our people’s representatives whether PAGCOR has outgrown its usefulness or has proved to be more a burden than a relief it was intended to be? 

And the first step we need to take is to immediately launch an inquiry in aid of legislation to investigate the revolting attempts of PAGCOR to deprive our government and people of money legally and morally due them and come up with legislative measures to halt its continuing fraud against the government and our people;  

Let us open your eyes to the truth that PAGCOR is a gambling institution which breeds only a culture of deceit, greed and fraud that slowly corrupts the moral fiber of our nation. With this, I hope we can help our citizens be at peace the next time they hear PAGCOR again.

And hopefully, the next time they hear of PAGCOR would be when this Congress makes the gambling monster permanently rest in peace. 

Thank you.