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A GAMBLING REPUBLIC? Privilage Speech of Sen. Jinggoy Estrada, Philippine Senate, March 7, 2007  Posted: August 6th, 2008 @ 12:27am I rise today to call attention to and express concern over the rapid and unprecedented proliferation of gambling in our society. I rise today to also denounce the unscrupulous and institutionalized corruption being encouraged, tolerated and perpetrated by the management of the Philippine Amusement and Gaming Corporation, or Pagcor, as it is commonly known. I do so today, in fulfillment of my duties as Vice-chairman of the Senate Committee on Games and Amusement, and as an occasion for us to reflect on whether or not to consider extending Pagcor’s corporate life. This administration has promised us a stronger Republic, but what we have today is a Republic mired in fiscal crisis, submerged in debt, and rapidly sinking in a web of corruption and deceit. What we have today is not a strong Republic, but a Republic wronged and desecrated by an unprincipled leader who assumed power under questionable and dubious circumstances. What this government proclaims today as a strong Republic is really a bankrupt Republic, debt-ridden, a Republic suffering not only from a financial crisis, but from a moral crisis, and a crisis of credibility and integrity. It is also a government now promoting a gambling Republic where slot machine arcades are sprouting all over the place, courtesy of Pagcor and its private partners in evident violation of its mandate under Presidential Decree No. 1869 dated July 11, 1983. This decree authorized Pagcor as the corporate entity solely and exclusively vested with the power to undertake gambling activities, primarily casino gaming and operations in the Philippines. Pursuant to this, Pagcor must exclusively own, manage and operate casinos and slot machines in the country. In 2002, Pagcor operated a total of 13 casinos and two satellite slot machine arcades strategically located in the cities of Manila, Pasay, Parañaque, Tagaytay, Bacolod, Cebu, LapU-Lapu, Davao, Angeles, Olongapo and Laoag, including one inside the Clark Special Economic Zone based on a special agreement with the Clark Development Corporation. A slot machine arcade is also maintained in Bacolod, as well as another in Ronquillo, Sta. CrUz, Manila, not very far from the Sta. Cruz Church. Pagcor owned and operated all these casinos and arcades in strict compliance with its exclusive franchise under its charter, P. D. No. 1869, with the exception of those operating in special economic zones where private casino operations have been specifically authorized by law. The revenues generated from these went solely to the government and such other public programs or projects expressly mandated by law to be funded from Pagcor income, such as the Philippine Sports Commission and the National Commission for Culture and the Arts and the Senate President's Social Fund. But in 2002, barely a year after Mrs. Gloria Macapagal Arroyo grabbed power from President Joseph Ejercito Estrada, following a failed and aborted impeachment trial, Pagcor initiated an effort to expand its slot machine arcade operations with a plan to open eleven more slot machine arcades. This could have been simply treated, repulsive as it may be, as an effort to further expand gambling operations. But it was also meant to vigorously broaden the opportunity and access to gambling houses and thereby gradually propagate a gambling culture. But Pagcor was not simply opening slot machines arcades to be owned, maintained and operated by it exclusively. Pagcor was entering into joint venture agreements with several private investors, under a 60-40 percent sharing scheme. How these investors were chosen, what criteria were used, how the selection process was done, what their capitalization was, we do not know. But one thing is certain: there was no transparency in the deals. As of today, seven investors can be identified based on the contracts with Pagcor. These investors are: 1) Mr. Yap Boon Ming, reportedly a Malaysian national, of the Pacific Palm Corporation who runs the Pan Pacific Hotel and Networld Hotel; 2) Mr. Cesar R. Marcelo of the Six-in-One Amusement and entertainment Corporation; 3) Mr. Datu Ta Kin Yan, apparently another Malaysian national, of the Waz Lian Management Philippines, Inc. who runs the Garwood Park Hotel in Cebu City and Atrium Hotel; and 4) Ms Maria Lourdes Go of the Platinum Gaming and Entertainment Corporation. The rest are Skylove Recreation Haus; Binondo Leisure Resources, Inc., and the JAB-RDCO. They were the first batch of private investors. These deals mean that Pagcor was entering into sub-franchise agreements in total violation of its mandate under Presidential Decree No. 1869. This also means that revenues from slot machine operations are to be shared with selected investors whom the Pagcor have unilaterally chosen, and which eventually will compete with the: Casinos wholly owned and operated by Pagcor. The plan, however, was aborted when it was exposed by The Philippine Daily Inquirer in a series of investigative articles and also by the television program, Probe Team. Damage control was subsequently employed. In an effort to appease critics and douse the controversy, Mrs. Gloria Macapagal Arroyo promptly announced in a speech during the launching of the Arsenio Lacson Foundation at the Manila Hotel in August, 2002: “ ... I am announcing that I am instructing Pagcor to abort the slot machine arcade project. Pagcor says that they passed the slot machine arcade project as part of their corporate powers, but it is well within the law.. . it is not a question of what is legal, it is a question of what is morally upright and morally sound.. .” Sa madaling salita, pumapel at umeksena muli si Ginang Gloria Macapagal Arroyo. This instruction was reiterated in a memorandum subsequently issued by Secretary Silvestre Afable Jr., which stated in no uncertain terms that Mrs. Arroyo has instructed Pagcor to abort its slot machine project. This could have ended there and then. But instead of aborting the project, Pagcor, under the leadership of its chairman and executive officer, Mr. Efraim Genuino, shortly thereafter, opened three new slot machine arcades with private partners and investors and these arcades continue to operate to this day. These are now located at the City Hotel along Mabini Street and Ermita. At the Pan Pacific Hotel in Adriatico and Gen. Malvar St., also in Ermita, and both well within striking distance of the Malate and Ermita churches. A third arcade was established at the Networld Hotel at the corner of Buendia Extension and Roxas Boulevard in Pasay City. Then in the third quarter of 2003, at Pagcor again, opened three additional ones at the Atrium Hotel at the comer of Buendia Extension and Taft Avenue in Pasay City; the Garwood Park Hotel along Fuente Osmeña in Cebu City; and at the Apo View Hotel in Davao City. Last year, Pagcor opened four more, apat na karagdagang slot machine arcades at the Hyatt Marina Hotel bounded by Pedro Gil St., A. Mabini and M.H. del Pilar in Ermita; at the Westin Philippine Plaza at the CCP Complex in Pasay City in partnership with a British Virgin Islands company named Skylove Recreation House; at the Ambassador Hotel along Mabini St., again in Ermita and in partnership with the Six-in-One Amusement and Entertainment Corp-oration; and most recently, at the Cavite Coliseum in Bacoor, Cavite. Kaya po, nitong taong nakaraan, sampung slot machine arcades ang binuksan ng Pagcor at ng mga kasosyo nito. Ano po kaya ang nangyari sa utos ni Ginang Gloria Macapagal Arroyo? Nagbibingi-bingihan ba si Ginoong Genuino o hindi nito sinunod ang utos ng kanyang amo? Alam po kaya ito ni Mrs. Arroyo? But wait, we are not done yet! Almost a month ago, Pagcor quietly opened again two other arcades, one at the Binondo Leisure Hotel in Binondo in partnership with the Alfredo Benitez Group; and another at the Premiere Hotel, a stone’s throw away from the Sta. Crnz Church, and in partnership reportedly with Reghis Romero of the Abu Sayyaf kidnapping fame. I am informed that five more arcades are now in the pipeline, and to be located in Cebu City in partnership with the Platinum Gaming and Entertainment Corporation; in the Manila Jockey Club in Carmona, Cavite, in partnership with the Reyno family; in Hotel Sogo in San Pedro, Laguna, in partnership with the Golden View Group; at the Subic International Hotel inside the Subic Free Port; and in a yet undisclosed location in Palayan City in the province of Nueva Ecija. isang dosena na PO ang anak sa sugal na dapat sana ipina-abort daw, kuno, ni Ginang Gloria Arroyo noong 2002, pero ngayon, buntis na naman at quintuplets pa! Hindi ba alam ni Ginang Arroyo ito o nagbubulag-bulagan lamang dahil kasama ang Malacañang sa hataw? The common theme that surrounds these slot machine arcades is that they were established as joint ventures with private investors and partners who share in the profits. The obvious result and net effect is that the new arcades are competing with purely Pagcor operations where 100 percent of the revenues go directly to the government, in contrast to this scheme where 40 percent are channeled to private partners. This is a sad commentary on a government who claims to be in a serious fiscal deficit and in dire need of funds, needing to impose new taxes on our people who have absorbed the excesses, the abuses, the extravagance, and the corruption of this administration. But the larger issue here, of course, is the unabated proliferation of gambling dens, mushrooming like weeds in the garden of thieves. To skirt the issue of the legality of joint venture agreements with private investors, Pagcor changed the contracts by secretly doing away with the agreements with its partners, and replacing them instead with lease contracts for slot machines. Pagcor executed antedated lease contracts to make it appear that Pagcor is merely leasing slot machine equipment from foreign manufacturers with the rental fee stipulated at 40 percent of the gross revenues derived from the arcades. The stipulated rental fee equivalent to 40 percent of slot machine revenues on a continuing basis appears to be, however, excessive because the cost of new slot machines and lease improvements can be recovered in full in several months. Kaya ang nangyari dito, from joint venture, pinalabas na lease contract lung para walang sabit. Yan ang akala nila! This is patently deceptive. It is a mere cosmetic makeover of a deal that was not only illegal, but also immoral and flawed from the very beginning. It is a mere ploy that hopes to avoid criminal liability. The government corporate counsel, Justice Amado D. Valdez, responding to a request for a legal opinion from Pagcor, expressed misgivings on this deal. In a letter dated July 30, 2002, to Atty. Carlos Bautista of Pagcor’s Corporate and Legal Services Department, Justice Valdez called attention to the nature of the agreement, which, according to him, essentially grants a franchise under the guise of supplying slot machines. Justice Valdez also noted that the 40 percent income granted the private investors is in excess of the maximum ten percent allowed under Section 11 of P.D. No. 1869. After the opening of two arcades in Pan Pacific in Ermita and in Networld in Roxas Boulevard, the casinos at the Heritage Hotel in Pasay City and the Grand Boulevard Hotel in Manila failed to meet their respective targets in slot machine revenues, while income in other branches also lagged behind. The Pan Pacific arcade generated revenues of more than P305 million during eleven months of operation from 2002 to 2003 alone, and of which 40 percent or roughly P122 million went to the private partner. Networld Hotel earned at least P102 million during the same period, of which at least P40 million went to the partner. As of February 2005, almost P2 billion in revenue had been channeled to Pagcor ’s selected private investors. Kitang-kita na PO ang ebidensiya. Imbes sa gobyerno mapunta ang dalawang daang milyong piso, doon pa sa mga private investments ng Pagcor. Dapat ay napakinabangan na po iyan ng ating mga kababayan. Ang PAGCOR kaya talaga ang kapartner ng mga investors na ito o ang mga opisyal ng PAGCOR? Hindi kaya ka-partner din ang Malacañang? For a government crying financial deficit and imposing new and back-breaking taxes on its long-suffering people, this is revolting and infuriating. It is patently criminal because not only do we deprive government of much-needed revenues, we are also promoting a gambling culture, a gambling Republic amidst all the noisy and hostile voices against jueteng, the poor man’s game of chance. The silence of angry and moralizing critics of President Joseph Ejercito Estrada several years back on the issue of gambling is now deafening. With gambling being institutionalized, with its proceeds gradually being funneled to private hands instead of going to social and beneficial causes, where now are the gods and guardians of morality who once assailed President Joseph Estrada because of gambling? Is it because they are now part of this unconscionable deal and are benefiting from it? Mga hipokrito! In contrast to this administration, President Estrada appointed morally upright and responsible officials like Justice Cecilia Muñoz-Palma at the PCSO who did not even vote for him. He also retained Mrs. Alice Reyes of Pagcor, whose management was characterized by integrity where casino operations were controlled exclusively by Pagcor. Nagiging malaking pasugalan ang bansa natin ngayon pero hindi nakikinabang ang ating mga kababayan. Ngayon, mayroon na tayong “telesabong”. Ano pa kaya ang susunod? I submit this for the investigation of the Senate in aid of legislation considering that the deliberations on a bill on Pagcor’s corporate life will soon reach this august Chamber. I have been informed that House Bill No. 3409, otherwise known as “An act further amending Presidential Decree No. 1869, otherwise known as the Pagcor Charter” was passed by the House of Representatives on Third Reading. The bill reportedly not only extends Pagcor’s corporate life, but effectively legalizes the illegal joint venture agreements that Pagcor has entered into. We in this august Chamber, must now seize this initiative because the Ombudsman may find it difficult to objectively and freely investigate Pagcor. He is reported to be a yearly guest of the lavish and extravagant birthday parties of the Pagcor chairman who incidentally can perhaps be considered the most traveled government official today. I assure you, this is but the tip of the iceberg. There are many more anomalies to be discovered and uncovered in Pagcor, and we will watch them like a hawk. Abangan ang susunod na kabanata! |
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Copyright © 2008 Senate President Pro Tempore Jinggoy Ejercito Estrada
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