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Republic of the Philippines wo oN
HOUSE OF REPRESENTATIVES > RECEIVED @
Quezon City © are. MAY 15 2017
Seventeenth Congress
First Regular Session
“

HOUSE BILL NO. 5655

Introduced by REPS. ENRICO A. PINEDA, MICHAEL ODYLON L. ROMERO, PhD.,
RICARDO “RJ” T. BELMONTE, SABINIANO S. CANAMA, RON P. SALO,
BENHUR B. LOPEZ, JR., TOMASITO S. VILLARIN, ANICETO BERTIZ,
TEODORO G. MONTORO, SALVADOR B. BELARO, JR., BENHUR B. LOPEZ, JR.,
VIRGILIO S. LACSON, MAKMOD D. MENDING, CARLOS ROMAN L. UYBARRETA,
ORESTES T. SALON, and MANUEL LUIS T. LOPEZ

EXPLANATORY NOTE

‘The recent boom in the gaming industry and the increasing interest of the private
sector in investing has made it irrelevant for the government to compete and continue to
invest in casino operations.

Most of the casinos operated by the Philippine Amusement and Gaming
Corporation (PAGCOR), the government corporation mandated to operate casinos
nationwide, cannot anymore cope up with the competition brought about by the highly
capitalized private casinos which have proved to be more efficient in running the
business. Further, the government can be better off investing its money and efforts on
other worthwhile activities and instead concentrate on the more important role of
regulation rather than dip its hands on the pie that can better be managed by the private
sector.

In this light, this bill seeks to release the PAGCOR from its role as a player in the
casino industry and refocus its sights on regulating the industry which has seen a
tremendous improvement in recent years. This is also seen as a move that will address
the seeming conflict of interest that PAGCOR has being a regulator and at the same time
an operator of an industry it regulates. Relative to this, the Privatization and Management
Office (PMO) will be mandated to dispose of the assets of the PAGCOR related with
gaming and casino operations which is seen to generate much needed funds for the
government.

Immediate passage ofthis bill is earnestly sought.

ENRICO A. PINEDA MICHAEL ODYLON L. ROMERO, PhD
1-PACMAN 1-PACMAN
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RICARDO “RJ” T. BELMONTE SABINIANQ S. CANAMA

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

5655

HOUSE BILL NO.

Introduced by REPS. ENRICO A. PINEDA, MICHAEL ODYLON L. ROMERO, PhD.,
RICARDO “RJ” T. BELMONTE, SABINIANO S. CANAMA, RON P. SALO,
BENHUR B. LOPEZ, JR., TOMASITO S. VILLARIN, ANICETO BERTIZ,
TEODORO G. MONTORO, SALVADOR B. BELARO, JR., BENHUR B. LOPEZ, JR.,
VIRGILIO S. LACSON, MAKMOD D. MENDING, CARLOS ROMAN L. UYBARRETA,
ORESTES T. SALON, and MANUEL LUIS T. LOPEZ

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

AN ACT REORGANIZING THE
PHILIPPINE AMUSEMENT AND GAMING CORPORATION
‘THEREBY CREATING THE
PHILIPPINE AMUSEMENT AND GAMING COMMISSION
AND APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES

Chapter 1
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “Philippine Amusement
and Gaming Commission (PAGCOM) Act of 2017.”

Sec. 2. Declaration of Policy. - It is hereby declared policy of the State to integrate a
centralized and efficient regulatory mechanism that would govern the conduct of all
games of chance in casinos and other related establishments including similar games
conducted on-line and in the country by providing for the creation of a Commission that
will promote transparency through an efficient licensing system and effective regulations
which may thereby translate to additional revenues for the government. Accordingly,
this Act shall endeavor to pursue the following objectives;

a. To insulate the government of any involvement in the conduct of gaming and
amusement operations and focus its efforts on regulations;

b. To eliminate confusion on effectively transfer the operation of gaming activities
to the private sector by privatizing PAGCOR’s current gaming operations;

c. Toestablish, 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;

d. To ensure that such businesses will generate sources of additional revenue for the
national government;


e. 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;

£, Toexpand and improve the tourism industry by enhancing regulations that would
effectively tie up tourism initiatives with gaming;

g. To introduce additional safeguards in the regulation and operation of gaming
activities; and,

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 this Act.

b. “President” shall refer to the President of the Republic of the Philippines.

c. “PAGCOR” shall refer to the Philippine Amusement and Gaming Commission
created under Presidential Decree No. 1869, as amended by Republic Act No. 9487.

d. “PMO” shall refer to the Privatization and Management Office organized under
Chapter 4 Executive Order No. 323 (S.2001).

e. “Gaming” shall refer to gambling activities conducted inside casinos and other
related establishments including but not limited to table and card games, and
similar games of chance conducted on-line.

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.

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;

c. 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


Department of Budget and Management 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 governing proceedings before it;

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;

j. To issue subpoena duces tecum and 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. Toconduct 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 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 Chairman 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, holder of a college degree and with at least five (5)
years actual and distinguished 30 experience in their respective fields.


The President upon recommendation of the Commission shall appoint an Executive
Director. He must be a citizen of the Philippines and of good moral character. 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 to 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;

£. 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 Commission.

Any appointment to fill by 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
consideration shall be file 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 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 operators only in
municipalities and cities with tourist arrivals of 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
P1,000 for local players.

The Commission shall also ensure that the granting and revocation of licenses,
authority, privilege 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 shalll be included in the General Appropriations
‘Act (GAA) as a Special Purpose Fund with the following breakdown: ten percent (10%)
for the administrative cost of PAGCOM; five percent (5%) for the Local Government Unit
(LGU) hosting the gaming facilities; ten percent (10%) for the Department of Social
Welfare and Development (DSWD) intended for the establishment and operation of
rehabilitation centers; ten percent (10%) to the Department of Tourism (DOT) for the
improve of critical tourism related facilities; and sixty-five percent (65%) for the K-12
Program of the Department of Education (DepEd): 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: Provided,
even further, That the 65% allocation for the K-12 Progam of the DepEd shall be in
addition to the amounts appropriated in the General Appropriations Act.

CHAPTER IV
ABOLITION OF PAGCOR

Sec. 11. Abolition of the Philippine Amusement and Gaming Corporation (PAGCOR). -
‘The PAGCOR, created under the Presidential Decree No. 1869, as amended by Republic
Act No. 9847, is hereby abolished.

All powers, duties and rights vested by law and exercised by PAGCOR in the
performance of its regulatory powers, is 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.

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
accordance 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 or 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. 2001), as amended, the PMO shall, 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. 2001) 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
in 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.

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 Privatization and Management Office.-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 PAGCOM.

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.

CHAPTER V
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 entitled under existing laws and regulations,
and based on the recommendations of the GCG created under R.A. 10019 and approval
of the President. Provided, that no affected employee who opt to retire/separate from
service shall receive less than an aggregate of Two Hundred Thousand Pesos
(Php200,000) 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 VI
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 amended by
Republic Act No. 9847, its nature and term of 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 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 in full force and effect.

Sec. 26. Repealing Clause, -Presidential Degree No. 1869, otherwise known as the
PAGCOR Charter, as amended by Republic Act No. 9847 is hereby repealed;


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 and/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,