Press Release
August 10, 2010

Recto: Pagcor buyers must also be "interested" to join public bidding

Sen. Ralph G. Recto today said the privatization of the Philippine Amusement and Gaming Corp. (Pagcor) should be done through open and transparent public bidding and not through a negotiated bidding.

"Before things become very interesting, we should remind Pagcor buyers that they will have to participate in open public bidding and not through a negotiated one. The sale of Pagcor is not on a first come, first served basis," Recto said.

Recto, an ally of President Aquino, said Malacanang should remind prospective investors that Pagcor would only be let go through an honest and transparent bidding with public interest as primordial consideration.

"While an offer to buy Pagcor for $10 billion is clearly interesting, the proponent must be told to first hurdle the interesting challenge of open bidding," Recto said.

"We must telegraph to would-be investors that Pagcor is not only looking for a White Knight with a thick wallet but also for a proponent that is willing to face challenge via competitive bidding," he added.

He said the government should now start drawing the rules of engagement for the public bidding of Pagcor.

"Let's see if the offer of $10 billion will have more copycats," Recto said.

The senator likewise reminded that Congress will have an ultimate say in the privatization of Pagcor, noting that the franchise from which it draws its mandate emanated from both houses of Congress.

Recto nevertheless lauded Finance Secretary Cesar Purisima for being quick to point out that only the commercial side of Pagcor would be privatized while regulatory control would be retained by the government.

The senator, who chairs the Senate ways and means committee, also urged Malacanang to also study the viability of just forging a lease or concession contract with the private sector instead of selling outright the state gaming agency.

Businessman Ramon Ang of diversifying San Miguel Corp. (SMC) has offered to buy Pagcor for $10 billion in partnership with what he described as Malaysian "big boys."

Ang said the government must not wait six years to monetize Pagcor. He said this can accomplished within six months.

President Aquino has called the offer "interesting" and said it would be reviewed.

Pagcor is a regular contributor to the social fund of the Office of the President.

From January to June this year, the gaming agency turned over P5.04 billion to the government. The first semester remittance fell by P448 million from the P5.488 billion remitted in the same period in 2009.

The gaming agency remitted P9.88 billion last year, below the P11 billion it turned over as part of the government's share in 2008. In 2007, Pagcor contributed P10.31 billion to state coffers.

Pagcor is required under Republic Act 7656 or the Dividend Law to remit at least 50 percent of its annual earnings to the government.

Pagcor booked an unaudited P29.78 billion income in 2009, against P29.61 billion in 2008.

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