THE Department of Finance said it is ready to work on the privatization of gaming operations of Philippine Amusement and Gaming Corp. (Pagcor) and Philippine Charity Sweepstakes Office (PCSO) to generate additional revenues to repay government’s debts incurred for Covid-19 response.
Finance Secretary Carlos G. Dominguez III said on Wednesday he backs the recommendation of Senate Minority Leader Franklin Drilon to privatize the gaming industry.
“Yes, we’re prepared to work on privatization of gambling activities,” Dominguez told reporters in a message.
This, after Drilon said he will strongly oppose any plan by the country’s economic managers to impose new taxes or raise taxes by 2021, adding that this will be an added burden to Filipinos and businesses who are striving hard to get back on their feet amid the pandemic.
Last year, Dominguez told the Senate Committee on Finance that they expect as much as P300 billion in revenues if Pagcor and PCSO’s gaming operations were privatized.
Sought to clarify whether this is still the expected amount of revenues that DOF expects from this move, Dominguez said: “A new study may be required given the effects of the contagion.”
Sale of assets
Aside from the privatization of the gaming industry, Drilon reiterated his call for the government to sell public assets such as Camp Aguinaldo and Camp Crame.
In April, however, Dominguez had said there is no need for the government to sell its assets at that time although he did not discount the possibility that the State may do so in a worst-case scenario.
As of September 28, the government has so far secured $9.9 billion (or roughly P480 billion) in foreign loans and grants for its Covid-19 war chest.
The national government’s outstanding debt as of end-August has already reached P9.6 trillion, 21.1 percent up from P7.94 trillion a year ago.
Gross borrowings of the national government from January to August this year have already reached P2.47 trillion, equivalent to more than 80 percent of the all-time high nominal P3 trillion borrowing program set by the Development Budget Coordination Committee (DBCC) for this year amid the Covid-19 pandemic.
The DBCC also expects the country’s debt-to-GDP ratio this year to increase to 53.91 percent of GDP— a level that it has not seen in over a decade—from a record-low of 39.6 percent of GDP last year.
The government borrows to finance its spending requirements as well as to cover its budget deficit.
As tax collections are down amid the pandemic, DBCC projects the budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.