PAGCOR statement on the uncollected P2.328B POGO income

The Philippine Amusement and Gaming Corporation (PAGCOR) would like to clarify a recent report by the Commission on Audit (COA) regarding its outstanding accounts receivables amounting to P2.328 billion.

Out of the P2.328 billion, the P815.902 million indicated in the report as under protest has already been resolved with finality. To recall, said amount resulted from PAGCOR’s intensive fight against illegal online gambling and its overzealousness to maximize collections which led it to impose assumed or estimated billings for suspected undeclared websites. After thorough revalidation, no link between the suspected undeclared websites and concerned POGOs were established. In fact, the undeclared sites were actually websites of illegal operators stealing the live stream of our licensees.

On the P1.512 billion which remain uncollected, majority of the said amount is attributable to the recent effects of the Covid-19 pandemic. It must be recalled that on March 21, 2020, all POGO gaming operations in the country were ordered shut down by the Government in view of the implementation of the Enhanced Community Quarantine. On June 2020, despite being allowed to resume operations, majority of our operators were still unable to resume operations due to existing lockdowns, restrictions in business operations, prohibition on entry of foreign workers, and other pandemic measures.

It is worth noting that with the passage of the Bayanihan Act, which allowed the adoption of concessions to ease the economic burden on businesses, PAGCOR would have had the option of not imposing the monthly Minimum Guaranteed Fee (MGF) on the POGO licensees which failed to resume its operations. Nonetheless, because of PAGCOR’s desire to source revenues to fund the fight against the pandemic, the monthly MGF, which is for operators who do not meet their monthly target revenues under normal operating circumstances, was continuously imposed on all POGOs for the months of April and May 2020 notwithstanding the closure mandated by the Government, and for the succeeding months, regardless of whether the licensee was able to resume operations or not. In deference to the provisions of the Bayanihan Act, only the procedures on forfeiture of performance bond and cancellation of license were temporarily suspended. Nevertheless, despite such remedial measures, most POGOs were no longer able to reopen since the start of the pandemic, which consequently resulted in the accrual of uncollected bills.

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Finally, it must be emphasized that POGOs which are currently operational were required to fully settle their accumulated arrears before they were allowed to resume operations. This meant full payment of their monthly MGF for the months that they were non-operational beginning on March 2020, including the months wherein closure and stoppage of operations was mandated by the government. These collected amounts were used by the Government to fund the fight against the pandemic.

To date, PAGCOR has been observing proper procedures for the collection of its outstanding receivables. Uncollected accounts receivables have already been referred to the legal department for necessary action, and PAGCOR is set on employing all legal means for its collection.