PAGCOR Casinos May Be Up for Sale Under BBM

The presidential elections in the Philippines earlier this year resulted in the appointment of Bongbong “BBM” Marcos, a scion of Ferdinand Marcos Sr., a former president, and Imelda Romualdez Marcos, a former first lady.

While his family is linked to profligate spending that was largely seen as one of the reasons why the Philippines ended up in financial ruin and the bankruptcy of the country’s national bank, the young offshoot is back and just like his predecessor, Rodrigo Duterte, he has a notable populist and autocratic streak.

New President, Same Potentate Tactics

This aside, the Philippine Amusement and Gaming Corporation (PAGCOR) is under increasing scrutiny from the newly elected president’s office and the organization would need to seek a way to resolve what has been described as conflicting roles of operator and regulator.

The Philippines’ Finance Secretary, Benjamin E. Diokno, gave a statement on Monday urging PAGCOR to clearly delineate its responsibilities, but really – what he means is that the president wants to see PAGCOR’s gambling operations privatized.

The recently appointed chair of PAGCOR’s board of directors, Alejandro H. Tengco, is chummy with BBM, which could mean that the gambling regulator (and operator) is about to undergo some deep changes, although the president stopped short of replacing Andrea Domingo, the current chief executive.

In his address this morning, E. Diokno said that PAGCOR would have to make its plans known and more importantly, outline a clear path to recovery so that the economy “can grow… recover.” The finance secretary hinted at “additional resources” that could be made available to the state’s coffers through the privatization of some companies.

While privatization is usually tied to higher yields from companies, in the case of PAGCOR it may be a self-defeating purpose. The organization is already channeling its full revenue into the state, supporting a variety of programs for mostly poor residents or those impacted by nature’s elements.

PAGCOR Was in a Similar Situation Before

PAGCOR saw itself under similar pressure under Duterte who wanted to sell the casinos and raise immediate cash for the state. The idea was floated in 2016 with the president ordering the intended sale of all 47 properties.

17 of these were supposed to go on sale in 2018, but Duterte’s appetite for quick cash subsided as PAGCOR properties continue to generate strong cash flows. They proved an important lifetime during the pandemic as well and Domingo suggested that the idea to sell these properties has been shelved.

However, under BBM, the idea of selling the lucrative state-owned businesses could be put up again. It may not be the best thing to do.