"Out of touch much?"
In the wake of the abrupt closure of the Philippine Charity Sweepstakes Office’s gaming operation, subject matter experts are sharing their insights about the impact of this development on society. In an interesting article over at Business Mirror, several economists explained why it was a bad idea.
The points they cited were: that there would be a perception of “policy instability” and “increased investment uncertainty” which could turn away investors; funding for PCSO’s social programs would dry up; and gaming patrons would turn to the underground economy for alternatives.
The article did not have enough space for the economists to expound their insights in detail. So let’s take their points one by one and find out why the suspension of PCSO’s gaming operations has a wide societal impact.
The President is very much against government corruption, as he has said time and again, most recently at his State of the Nation Address last week. Apparently matters related to PCSO were brought to his attention that resulted in his anger at “massive corruption” at the agency.
But instead of first conducting an investigation, or issuing a proclamation or other written order, he opted to issue a knee-jerk verbal directive, followed by the subsequent and immediate padlocking of PCSO gaming outlets around the country by the Philippine National Police.
The PNP said that as of Sunday, 23,654 PCSO gaming outlets nationwide were shuttered. When I read that, what came to my mind was Kristallnacht, although thankfully there was no related violence reported. But the incident—where a head of state has but to command and the police act upon it, outside of due process—could indeed scare off potential investors.
Second point: with the stoppage of PCSO’s gaming operations, no money can be raised to fund the agency’s social programs. Newly-installed PCSO General Manager Royina Garma said that PCSO will continue to provide medical assistance this year with revenue earned in 2018, while next year’s programs would be funded by revenues earned this year (January to July, obviously). But medical assistance is not all that PCSO provides.
Last year, the agency made 63.5 billion pesos—a sum that is not peanuts. Where will the government find that much money? ‘Sa PAGCOR’ is not a good answer.
Of PCSO’s revenues, Batas Pambansa Bilang 42 requires that 30 percent of PCSO’s net receipts shall go to their Charity Fund, which last year would have been about over P18 billion.
However, this amount does not all go to the medical-related programs. The Charity Fund also pays documentary stamp taxes, as well as mandatory contributions to many other government agencies, including the National Museum, Dangerous Drugs Board, Philippine Drug Enforcement Agency, and Philippine Sports Commission.
Without PCSO, the funding for these agencies and others will also be drastically cut. The Commission on Higher Education, for example, receives 1 percent of Lotto gross sales; in 2Q-2018 alone, PCSO remitted P71.4 million to CHEd, in line with funding provisions in Republic Act No. 7722.
Moreover, PCSO was supposed to provide 40 percent—almost half!—of the funding of the Universal Health Care initiative that was recently signed into law. Where will the funds for all these agencies come from now, realistically?
There is an additional economic impact to the shutdown of PCSO’s gaming operations, and that is the loss of business and livelihood for the owners and operators of PCSO online Lotto and other gaming outlets around the country.
PCSO’s close to 30,000 outlets employ about 120,000 people. STL alone employs almost 310,000 people who enjoy the mandatory benefits required by law, according to the PCSO in June 2018.
Now they are all out of work, and the smaller owners will have to close shop to stop paying rent on their spaces. And yes, Presidential Spokesman Sal Panelo, many of the outlet employees are really poor and have no savings, and rely solely on this job for their income.
(Panelo recently said on this matter, “I am sure yung namang mga naapektuhan hindi naman sila ganun ka hirap. Marami naman silang kinita during those times they were in operation. So I am sure meron silang pondo to live by.” Out of touch much?)
Many outlet owners, by the way, are retirees, balikbayans, and returned OFWs. Now their golden dreams of a small, thriving business are dead, or mostly dead until the suspension is lifted, if it will be.
Perhaps the largest impact will be felt in the underground gaming world, as PCSO game patrons look elsewhere to fulfill their get-rich-quick hopes and to scratch their itch to play budget games, because the majority of Filipinos cannot afford casino gaming.
The latter is not a substitute for the easy-to-play and affordable online Lotto, which also makes players feel good because part of their bets go to charity. Neither is cockfighting, which not everyone has the taste for; nor horseracing, which is a more complicated pasttime to learn and has its own problems; nor internet gambling, which is not readily accessible.
With PCSO’s Lotto and Small-Time Lottery gone, the illegal number games like jueteng and masiao will likely experience a massive surge in sales-—and without any amount of those tens of billions going to the national coffers. Work that government and law enforcement has done over decades towards eradicating illegal games will be undone in a matter of months, if not weeks.
Here’s a bonus point: Panelo says that patients requesting medical assistance can approach PAGCOR, Department of Social Welfare and Development, and Office of the President. But these agencies do not have the same programs, manpower, nor expertise that PCSO does to care of individual concerns. What these three agencies do when the crowds of people previously at PCSO’s offices flock to their doors? Good luck to them.
It is right that the allegations of “massive corruption” in PCSO be investigated immediately. It is just that erring agency officials and employees as well as franchisees found in violation of rules be charged to the fullest extent of the law.
But to be fair, due process must be observed, appropriate laws be obeyed, and consequences be studied. A knee-jerk reaction, no matter how justified, is not tenable if it does more harm than good.
Study the impact first before making drastic moves. The same thing happened with TRAIN, and look where we are now. /FB and Twitter: @DrJennyO