Press Release
October 4, 2006

Drilon tells GAB: Go after illegal bookies
and collect P3.5 billion in additional taxes

Senate Finance Committee Chairman Franklin M. Drilon has urged the Games and Amusement Board (GAB) to go after illegal horse racing bookies so that government may be able to recover some P3.5 billion worth of uncollected taxes.

"By setting objectives, you can make your agency something that you can justify the existence of because you are trying to recover for government taxes worth P3.5 billion," Drilon told Eric Buhain, GAB chairman, during the Finance committee deliberations on the proposed 2007 GAB budget Tuesday.

This developed after Florencio Fianza, chairman of the Philippine Racing Commission (PRC), testified before the Drilon committee that an estimate of 1,000 illegal bookies were operating in Metro Manila alone, with an average gross sales of P75,000 a day or P23.4 billion a year.

In his testimony, Fianza also explained that out of the amount, 33 percent can be taxed by government and can yield an additional annual tax collection of P3.5 billion.

"If you have this objective, the budget committee of the Senate and also the House Appropriations Committee will be more sympathetic. But unless you can present to us this kind of a picture, you will be told, what are you doing other than imposing regulations?" Drilon said to Buhain.

"What is surfacing is that the illegal bookies will have income bigger than the legal operators. It would appear that off-track-betting operators licensed by GAB will only realize P9 billion, more than double goes to illegal bookies," Drilon said.

At the same time, Drilon lashed at the Philippine Racing Commission (PRC) for the P6 million so-called intelligence funds that suddenly appear in PRC's proposed budget for 2007.

"You are a user of intelligence information for your operations, you are not a gatherer of intelligence information by mandate. Why do you want suddenly a P6 million intelligence funds?" Drilon asked Fianza.

Drilon also explained that such appropriation for intelligence and confidential funds was not found in PRC's budget in all the previous years, and for an activity that is supposed to be the principal function of the Games and Amusement Board, like intelligence operations against illegal bookies.

"There are agencies in this government, law enforcement agencies, which are charged of gathering intelligence information, which are done either in specific request or in general, they do it on a day-to-day basis. This information gathered is supposed to be fed to information users like the PRC," Drilon added.

Fianza explained that part of the reason for this intelligence funds is the objective to "take a more aggressive stance in the operations against illegal bookies, because of the money that is being lost."

But Drilon instead advised Fianza to give the money to the police so they can gather the information and feed them the information they need.

"This is about 12 percent of your maintenance and other operating expenses. Next year, it will become 15 percent, a year after, it will become 20 percent. In the entire government bureaucracy, you have P1.2 billion in intelligence and confidential funds, all accounted for through a closed envelope system. Meaning, pagdating ng accounting period, isusulat mo lang sa papel, purchase of intelligence, P6 million. And that already accounts for P6 million of people's money," Drilon said.

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