As a take-off point, let us quote Abraham Lincoln’s words on the legitimate object of government, viz., “It is to do for a community of people whatever they need to have done, but cannot do in their separate and individual capacities.”
In the case of privatizing Pagcor down to some 45 casinos, it would appear that the “bargain of government spending” is framed along Adam Smith’s theory — “Give me this which I want and you shall have this which you want.”
Privatization simply means removal of responsibilities, activities, or assets from the collective realm, but are there not “risks and rewards when we put public tasks into private hands?” All of a sudden — from out of the blue — this government plan to auction off Pagcor is quite disconcerting unless national survival has become a central concern.
Rep. Rufus Rodriguez rightly questions, thus, “Why do we sell the goose that lays the golden egg?” Specially so since the agency’s forthcoming net gains are on the uptrend (i.e., P59 billion in 2022 and an estimated P75 billion by the end of this year).
So far, the alibi of government is that by selling its casinos — lock, stock, and barrel — Pagcor’s role as “gaming regulator-cum-operator” becomes purely as regulator. In other words, there is that “revolving door problem” which should be avoided. Even granting that this could be a tenable argument for privatization — though never heard of — what would the backlash be?
As far as the role of the Governance Commission for GOCCs is concerned, a public enterprise like Pagcor should only be privatized, if and only if, there’s a “government failure;” when it fails to generate revenues for the state; when it becomes reduced to a “non-performing asset;” when it shows “poor grades” in its Corporate Governance Scorecard. Thus, to privatize Pagcor absent these parameters should be interpreted as “implied contempt for government bureaucracy,” albeit misplaced.
The sale of the casinos would fetch about P60 to P80 billion — practically within the same threshold of profit intake for any given year, give or take. In recent weeks, it’s as though the Senate’s over-fixated concerns with Pagcor were the POGOs (Philippine offshore gaming operators) alleged as fronts for human trafficking, kidnapping, other sorts of lawlessness. After privatizing the Pagcor casinos, will all these problems then go away?
Bottom line, who in his right mind can say that Pagcor isn’t doing any better given that it contributes half of its revenues to the national coffers (i.e., in taxes) and mandated beneficiaries. It is said to be one of the government’s “staunch allies in nation building” and one of the biggest revenue generators. With the casinos out, who will shoulder the fiscal void created when “funded mandates” shift back to becoming unfunded?
As a consequence of privatizing the casinos, there will be a number of national government agencies, local government units, non-government organizations, peoples’ organizations, a number of taxes, duties, licenses, fringe benefits — that taken together would no longer bring a “bundle of joy” to mandated beneficiaries who were allocated such subsidies over the years. The next thing that will ensue is the stark truth that Pagcor would cease to be a “responsible partner of the Filipino” — once privatization cuts the umbilical cord of subsidy dependence.
In the next cycle, Pagcor would slide down from third place among GOCCS that remit the highest government contribution. As a rule, no GOCC belonging to so-called “billionaires club” should close shop without more justifiable grounds. In short, it should come last in privatization’s pecking order.
There’s clearly no compelling reason to sell off the Pagcor casinos by public auction if the projected proceeds to be generated thereof are practically equivalent to the profit intake of any given year.
Again, it escapes comprehension why only a handful of policy makers are against this self-inflicted move. The new pack of most-favored operators will quickly recoup their money without needing to gild the lily. What luck!