NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

H.B, No, 3999

Introduced by Senator Ralph G. Recto

AN ACT
CREATING THE PHILIPPINE AMUSEMENT AND GAMING COMMISSION
(PAGCOM), AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

This bill seeks to separate the regulatory function of the Philippine
Amusement and Gaming Corporation (PAGCOR) from its role as operator of gaming
activities. These distinct functions should not be placed under one agency in order
to maintain a separation of powers and uphold a system of checks and balances.

There should be a clear separation between the regulatory and proprietary
activities of PAGCOR in order to achieve a level playing field with other private
gaming corporations. The government also has no business running gambling
facilities. Instead, the government should adopt the policy that its role should only
be steering and not rowing. This means government should deal with coordination
and control of gaming entities but should not get involved in direct gaming

operations.

The delineation of functions will also allow the regulatory agency to focus on
the supervision and monitoring of gaming operators to ensure that they comply with
the established rules and regulations including compliance with the required
remittance of government shares to the National Treasury.


Under the bill, the present PAGCOR is abolished while a Philippine Amusement
and Gaming Commission (PAGCOM) is created which will discharge the function of
regulating the gaming operations in the country.

The existing PAGCOR casinos shall be privatized by the Privatization and
Management Office (PMO) and proceeds from such privatization shall be remitted to
the National Treasury and shall form part of the General Fund to be available for
expenditure upon authorization of Congress through the annual General
Appropriations Act (GAA).

The gaming facilities shall focus on foreign tourists. A license shall be issued
to gaming operators only in Local Government Units (LGUs) where the tourist
arrivals as certified by the Department of Tourism are 100,000 foreign tourists per
annum or more. Furthermore, to discourage locals from patronizing the casino, a
minimum of Php 1,000 entrance fee shall be charged to residents.

The PAGCOM shall collect from casino operators five percent (5%) as gross
revenue tax. Further, after such deduction, PAGCOM shall collect an additional
twenty-five percent (25%) from the aggregate gross earnings, which shall be
earmarked for the priority projects of the LGU hosting the gaming facility; the
creation of a Trust Fund in the Department of Social Welfare and Development
intended for the establishment and operation of rehabilitation centers for the
treatment of addictions including compulsive gambling, drug dependency, and
alcoholism, among others; and PAGCOM's administrative cost and other priority
social services programs of the National Government. The 25% share of the National
Government shall be reflected in the GAA as a Special Purpose Fund.

To ease the impact of the separation from government service, PAGCOR
officials and employees who will opt not to be absorbed by the new PAGCOM will
receive a Severance Mitigation Package (SMP) based on the recommendation of the
Governance Commission for Government-Owned and -Controlled Corporations (GCG)
and approval of the President.


The SMP benefits shall be on top of whatever separation and retirement
benefit those officials and employees of the abolished PAGCOR may be entitled to
under existing laws. However, once the SMP is availed of, they shall not be eligible
for employment in the PAGCOM for the next five years from separation or

retirement.

On the other hand, those officials and employees who will opt to stay with
PAGCOM and will be able to get a regular plantilla position shall enjoy a
compensation package that is exempted from the Salary Standardization Law and
should approximate if not exceed what they have been receiving from the abolished
PAGCOR subject to the approval of the President upon recommendation of the GCG.

This bill will ensure the effective operation of gaming corporations to provide
the government with more funds for the implementation of priority programs.
Hence, approval of this bill is earnestly sought.


NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
H. B. No. 3559

Introduced by Senator Ralph G. Recto

AN ACT
CREATING THE PHILIPPINE AMUSEMENT AND GAMING COMMISSION
(PAGCOM), AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

Chapter I
GENERAL PROVISIONS

Section 1. Short Title. — This Act shall be known as the "Philippine Amusement
and Gaming Commission (PAGCOM) Act”.

Sec. 2. Declaration of Policy. ~It is hereby declared the policy of the State to
integrate a centralized and efficient regulatory service in the Philippines in the
conduct of operation for ail games of chance and other similar forms of amusement
and recreation by providing for the creation of a Commission, in such a manner as to
promote transparency, efficiency, and business viability within its jurisdiction. In the
pursuit of this policy, this Act shall have the following objectives:

(a)To delineate the operation of gaming activities, on one hand, and

regulation, on the other;

(b)To centralize and consolidate all forms of regulatory power, including

licensing and enforcement, of gaming activities in one governmental entity

to promote efficiency, transparency, and good governance;


(c) To place the operation of gaming activities in the hands of the private
sector by privatizing the current gaming operations of the Philippine
Amusement and Gaming Corporation (PAGCOR);

(d) To establish, regulate and issue a license to operate business activities of
all games of chance and such other similar forms of amusement and
recreation, within the territorial jurisdiction of the Philippines;

(e) To ensure that such businesses will generate sources of additional revenue
for the national government;

(f) To eradicate the evils, malpractices, and incidence of corruption that are
prevalent in the conduct and operation of gaming clubs and casinos which
operate in the absence of governmental supervision;

(g) To expand and improve the tourism industry; and

(h) To introduce additional safeguards in the regulation and operation of
gaming activities.

SEC. 3. Definition of Terms. — For purposes of this Act, the terms:

(a) Commission shall refer to the Philippine Amusement and Gaming
Commission created under Section 4 of this Act.

(b) President shall refer to the President of the Republic of the Philippines.

(©) Philippine Amusement and Gaming Corporation (PAGCOR) shall refer to
the Philippine Amusement and Gaming Corporation created under
Presidential Decree No. 1869, as amended by Republic Act No. 9487.

(d) Privatization and Management Office (PMO) shall refer to the Privatization
and Management Office organized under Chapter 4 of Executive Order No.
323 (S. 2000).

Chapter II
PHILIPPINE AMUSEMENT AND GAMING COMMISSION
THE COMMISSION
Sec. 4. Creation. - There is hereby created and established an independent,
quasi-judicial regulatory body to be named the Philippine Amusement and Gaming
Commission (PAGCOM), hereinafter referred to as the Commission. For this purpose,
the Commission shall be attached to the Office of the President for supervision and

control.


23
24
25
26
7
28
29
30

31

Sec. 5. Powers and Functions. - The Commission shall have the following

powers and functions:

(a) To provide comprehensive policy guidance for the promotion and
development of the Commission, as provided in this Act;

(b) To ensure that the Commission performs its functions in a proper,
efficient, and effective manner;

(©) To determine the organizational structure and staffing pattern of the
Commission in accordance with the provisions of this Act, subject to
existing Department of Budget and Management (DBM) and Civil Service
Commission (CSC) rules and regulations: Provided, That the PAGCOM
compensation plan including a performance incentive scheme for officials
and employees shall be exempted from the Salary Standardization Law but
subject to the recommendation of the DBM and approval of the President
of the Philippines;

(d) To decide on all matters relating to licenses, certificates, and permits for
the operation of gaming activities and prescribe the appropriate terms and
conditions thereof;

(e) To establish and maintain linkages with international gaming commissions,
associations or organizations of other countries, and international non-
governmental organizations whose main objective is regulation and
supervision of games of chance and other similar recreation and
amusement activities;

(f) To coordinate and cooperate with other government agencies and entities
concerned with any aspect involving the provisions of this Act;

(g) To prescribe rules of practice and procedures for its proceedings;

(h) To issue provisional remedies and interlocutory orders, including
preliminary injunction, whether prohibitory or mandatory, in all cases in
which it has jurisdiction, and in which cases the pertinent provisions of the
Rules of Court shall apply;

(i) To punish for contempt in accordance with the pertinent provisions of the

Rules of Court;


10
ul
12
13
14
15
16
7

(j) To issue subpoena duces tecum and ad testificandum and summon
witnesses to appear in any proceedings of the Commission;

(k) To administer oaths and affirmations in the transaction and performance
of their official duties;

(1) To conduct investigations and hearings of complaints for violation of
gaming laws and of the Commission's rules and regulations, orders,
decisions and/or rulings and to impose fines and/or penalties for such
violations;

(m) To determine, prescribe, approve and periodically review and adjust
the manner and method of payment of fees, costs, and penalties to be
paid to or collected by the Commission;

(n) To formulate policies, directives, programs and projects, as well as the
rules and regulations and guidelines to implement the provisions of this
Act; and

(0) To exercise such other acts as are incidental to or are appropriate and
necessary in connection with the creation of the Commission.

Sec. 6. Composition, Qualification and Tenure. — The Commission shall be
headed by a Commissioner as Chairperson and four (4) Deputy Commissioners as
members, all of whom shall be appointed by the President for a term of three (3)
years and may be reappointed for another term unless removed for cause. They
must be citizens of the Philippines, of good moral character, holders of a college
degree and with at least five (5) years of actual and distinguished experience in their
respective fields.

The President, upon recommendation of the Commission, shall appoint an
Executive Director. The appointee must be a citizen of the Philippines and of good
moral character, holder of a college degree and with at least three (3) years of
actual and distinguished experience in their respective fields. The Executive Director
shall have the following powers and functions:

(a)Advise. and assist the Commission in the formulation and
implementation of the objectives, policies, plans and programs of the
Commission;

(b) Direct and supervise officials and employees of the Commission;


(c) Prepare an annual report on the activities of the Commission at the
close of each fiscal year and submit a copy thereof to the President
and Congress;

(d) Keep and maintain official records and reports of the proceedings of
the Commission;

(e) Oversee all the operational activities of the Commission;

(f) Coordinate the programs and projects of the Commission and be
responsible for its economical, efficient and effective administration;

(g) Administer oaths in connection with all matters relating to the
business of the Commission; and

(h) Perform such other duties as may be assigned by the Commissioner.

Any appointment to fill the vacancy in the foregoing provision arising from
death, removal, retirement, or resignation shall be made only for the unexpired
term.

Sec. 7. Meetings and Quorum. —In all cases, the Commission shall convene
and act as a collegial body in all matters referred to in Section 5 of this Act. The
Commission shall meet at least once a month, or as determined by the Commission.
The presence of at least three (3) members shall constitute a quorum.

Sec. 8. Decision and Appeal. - In all cases or proceedings before the
Commission, the decision of the majority shall prevail. Decisions of the Commission
shall become final and executory fifteen (15) days from receipt thereof. Only one (1)
motion for reconsideration shall be filed with the Commission.

The decision, order, or resolution of the Commission shall be appealable to
the Office of the President within thirty (30) days from receipt. The decision of the
Office of the President shall be final and executory unless stayed by an order of the
Court of Appeals.

CHAPTER III
LICENSING REGULATIONS
Sec. 9. Registration and Licensing of Gaming Operators. - The Commission
shall register and issue the license, authority, privilege or permit to gaming
operators, subject to such rules, guidelines, procedures and other issuances as the

Commission may promulgate: Provided, That licenses shall be issued to gaming


23
24
25
26
27

29
30

31

operators only in municipalities and cities with tourist arrivals of one hundred
thousand (100,000) or more foreign tourists annually as certified by the
Department of Tourism (DOT) unless the gaming facility will be located in a new
entertainment resort facility and the DOT certifies as to the potential tourist
arrivals equivalent to or more than the required number: Provided, further, That
the PAGCOM shall require gaming operators to collect an entrance fee of not less
than One thousand pesos (P1,000) for local players.

The Commission shall also ensure that the granting and revocation of
licenses, authority, privileges or permits are carried out fairly, transparently, and
without discrimination.

Sec. 10. Special Condition on License-Holders. — After deducting the five
percent (5%) gross revenue tax, the Commission shall collect twenty-five percent
(25%) of the aggregate gross earnings of License-Holders, which shall be remitted
to the National Treasury: Provided, That the equivalent amount shall be included in
the General Appropriations Act (GAA) as a Special Purpose Fund and shall be
earmarked for the following: the administrative cost of the Commission; the priority
projects of Local Government Units (LGUs) hosting the gaming facilities; the
Department of Social Welfare and Development (DSWD) intended for the
establishment and operation of rehabilitation centers; and other priority social
services programs of the National Government: Provided, further, That a Trust Fund
is hereby created in the DSWD for the operation of rehabilitation centers for all
forms of addiction including compulsive gambling, drug dependency and alcoholism.

CHAPTER IV
ABOLITION OF PAGCOR

Sec. 11. Abolition of the Philippine Amusement and Gaming Corporation
(PAGCOR). - The PAGCOR, created under Presidential Decree No. 1869, as
amended by Republic Act No. 9487, is hereby abolished.

All powers, duties and rights vested by law and exercised by PAGCOR in the
performance of its regulatory powers, are hereby transferred to the Commission.

All assets, real and personal properties, except those that may be privatized
under Chapter V of this Act, including funds and revenues owned by or vested in
the different offices of PAGCOR are transferred to the Commission.


23
24
25
26
27
28
29
30

31

All contracts, records and documents relating to the powers and functions of
the abolished agency, its offices and branches are likewise transferred to the
Commission.

CHAPTER V
PRIVATIZATION OF THE PHILIPPINE AMUSEMENT AND GAMING
CORPORATION (PAGCOR)

Sec. 12. Privatization of PAGCOR’s Operations. — All assets pertaining to
the operations of gaming activities of PAGCOR shall be privatized and disposed of in
accordance with this Act, and, as soon as practicable, the Commission on Audit
(COA), in coordination with PAGCOR, the Commission and the Privatization and
Management Office (PMO) shall conduct a complete accounting and inventory of
such assets to determine and ascertain their nature, description, amount and value,
as well as other rights and obligations pertaining thereto, if any.

Nothing herein shall be construed as preventing the PMO from causing the
appraisal by a third party of any of the assets prior to or in the course of preparing
the privatization or disposition plans for the said assets.

Sec. 13. Additional Mandate of the PMO. ~ In addition to its powers, duties
and functions under Executive Order No. 323 (s. 2000), as amended, the PMO shail,
for and in behalf of the National Government, take possession of, conserve,
provisionally manage, and dispose of the assets which have been identified for
privatization and disposition by the Commission.

In the discharge of its mandate under Executive Order No, 323 (s. 2000) and
this Section, the PMO is hereby empowered to implement a specific marketing and
disposition program for privatization and disposition; to execute and deliver, on
behalf of the National Government, deeds of sale, contracts, trust instruments, and
other legally operative documents as may be necessary or appropriate to convey
title to, take possession of, and conserve, such assets; to engage external expertise
as may be necessary for the fulfillment of its tasks under this Act; to adopt internal
rules and regulations in relation to the marketing and disposition of the assets; and
to submit periodic reports to the Commission on the status of the disposition

program.


29
30
a1
32

Any and all sales and other modes of privatization or disposition or any form
of divestment or transmission of rights over these assets shall not be considered
final unless approved or ratified by the Commission.

Sec. 14. Powers of the PMO, — The PMO is hereby accorded discretionary
powers with regard to the preparation of the privatization plans and policies of the
assets transferred to it. The PMO is empowered to enter into sales through public
bidding, negotiated sale, lease, or any form of divestment or transmission of rights
over the assets: Provided, That operations of these assets or a partnership with the
private sector in the management or operation thereof prior to actual sale or
disposition shall remain with the Commission.

Sec. 15. Commission to Determine Transfer Value. — The Commission is
hereby vested with full and complete powers and prerogatives to determine the
indicative sale or transfer valuations of the assets identified for privatization or
disposition by the PMO, which valuations shall be based on COA’s audit report or
listing as adverted to or those made by a reputable third-party appraisal firm:
Provided, That any valuations approved by the Commission shall not be deemed a
condonation, waiver, or extinguishment of any obligation by any third party to such
assets.

Sec. 16. Reimbursement and Retention. — In order to fulfill its additional
mandate under this section, the PMO shall be reimbursed for reasonable expenses
incurred in the management and disposition of these assets, subject to pertinent
laws, rules and regulations.

Sec. 17. Remittance of Proceeds of Privatization. ~ All proceeds or receipts
from the privatization, sale or disposition of the assets, except portions thereof for
operational expenses of the Commission, or such amount approved by the
Commission to be refunded to the PMO under the preceding section, shall be
remitted to the Bureau of Treasury (BTr).

Sec. 18. Reporting Requirements. - The Commission shall, on a semi-annual
basis, submit to the President and to Congress a report on the status of disposition
of the assets, which shall include, among others, a description of the individual
assets privatized and disposed of, their purchasers, the consideration received, and

the terms of payment as agreed upon.


23
24
25
26
27
28
29
30

31

CHAPTER VI
SEPARATION AND RETIREMENT BENEFITS

Sec. 19. Separation and Retirement Benefits. ~ Officials and employees of the
PAGCOR who choose to separate from government service or who shall choose to
retire, if eligible, shall be given a Severance Mitigation Package (SMP) in addition to
other separation and retirement benefits to which they may be entitied under
existing laws and regulations, and based on the recommendations of the
Governance Commission on Government-Owned and -Controlled Corporations (GCG)
created under Republic Act No. 10149 and approval of the President.

Provided, that no affected employee who opts to retire or separate from
service shall receive less than an aggregate amount of Two Hundred Thousand
Pesos (Php 200,000.00) as his retirement or separation benefit: Provided, further,
That those who availed of the benefits under the foregoing provisions shall not
qualify for re-employment to the Commission within five (5) years from the date of
retirement or separation from service.

CHAPTER VII
FINAL PROVISIONS

Sec. 20. Funding. - The budgetary requirements for the operation of the
Commission shall be charged against the income of the PAGCOM.

The cost of retirement and separation benefits of officers and employees of
the abolished PAGCOR shall be charged to the funds of the Corporation before its
privatization.

Sec. 21. Auditor. - The COA may appoint a representative who shall be the
Auditor of the Commission and such personnel as may be necessary to assist said
representative in the performance of his duties.

Sec. 22. Interim Period. — All incumbent officials and personnel of PAGCOR
whose positions are vital for the purposes for which this Act was created, shall
continue to discharge the functions of their positions until the Commission has been
organized.

Sec. 23. Saving Clause. - Unless otherwise provided in this Act, rights and
privileges vested or acquired under the provisions of Presidential Decree 1869, as


10
cu
12
33
14
15
16
7

amended by Republic Act No. 9487, its nature and term of the franchise, prior to
the effectivity of this Act shall remain in full force and effect.

Sec. 24. Implementing Rules and Regulations. — Within ninety (90) days from
the date of effectivity of this Act, the Commission, the PMO, the Government Service
Insurance System (GSIS), the Social Security System (SSS), and the DBM, shall
formulate the rules and regulations for the proper implementation of this Act.

Sec. 25. Separability Clause. — If any part or provision of this Act shall be
declared unconstitutional, the other parts or provisions hereof which are not
affected thereby, shall continue to be in full force and effect.

Sec. 26. Repealing Clause. -

(a) Presidential Decree No. 1869, otherwise known as the PAGCOR Charter,

as amended by Republic Act No. 9487 is hereby repealed;

(b) All laws, executive issuances, orders and rules and regulations contrary
to or inconsistent with the provisions of this Act or any part thereof are
hereby repealed, amended or modified accordingly.

Notwithstanding the foregoing, nothing in this Act shall diminish the powers
and functions of agencies, relative to the operation and regulation of gaming
activities, provided under Republic Act Nos. 7922, 9490, 1169, as amended, and
Presidential Decree Nos. 420 and 810.

Sec. 27. Effectivity. ~ This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in two (2) newspapers of general
circulation.

Approved,