" 
' .. 
SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHIILIPPINES ) 
First Regular Session 
) 
SENATE 
S':No. 251 
Introduced by Senator Ralph G. Recto 
Explanatory Note 
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The Philippine Amusement and Gaming Corporation (P AGCOR) in the recent past 
shares the spotlight with other Government Owned and Controlled Corporations (GOCCs) in a 
spate of controversies involving the alleged misuse of their funds, thereby shortchanging the 
National Government and their mandated beneficiaries, 
Based on recent findings of the current management, former P AGCOR officials are 
indicted for transgressions in the proper use of the income generated by the corPoration in the 
past few years. These anomalous transactions include the use of generated revenues to finance 
partisan activities in the previous elections, and failure to allocate and remit the mandatory 
contributions to beneficiaries, among others. More importantly, the overall financial statements 
of P AGCOR remains concealed to the public eye, as government audit is limited to the 5% 
franchise tax and the 50% net government share of winnings. 
At present, P AGCOR contributes to a number of government agencies performing 
various services, and to development programs on sports, early childhood care, micro, small and 
medium enterprises, and the arts, as mandated by existing laws. Aside from the national 
government share of the income, cities hosting the casinos also benefit from the income 
generated by P AGCOR. Finally, the net income of the corporation goes to the Social Fund of the 
President of the Philippines. 
The public finds itself unapprised of the financial status of P AGCOR. With the limited 
coverage of the audit, as mandated by the existing charter, there is no transparency in the 
utilization of the funds PAGCOR generates. Moreover, the funds of P AGCOR is considered '1ll 
off-budget item and not included among those evaluated during public hearings on the General 
Appropriations Bill, hence it is. devoid of any Congressional scrutiny. 
This bill intends to amend the charter of P AGCOR. Under the bill, the 50% share of the 
government in the aggregate gross earnings of the government corporation shall be allocated to 
fund the K to 12 Program of the Department of Education (DepEd). This allocation is meant to 
improve the quality of education in all public schools nationwide by augmenting funds for the 
following: construction of needed classrooms, hiring of teachers, provision of additional chalk 
allowances for all public teachers, conduct of supplementary feeding program in all public 
elementary schools, continuing education program for public school teachers, provision of 
internet access in all public schools, and acquisition of equipment and fucilities for the technical-
vocational courses under the K to 12 program. 
The provision of funds for the K to 12 Program will benefit more than 22 million students 
in the public schools nationwide. With this measure, shortages for both classrooms and teachers 
will be addressed. Thus, students will no longer suffer from overcrowded classrooms, or from 
classes held under the trees and teachers will no longer shoulder the burden of overloaded 
teaching workloads. More so, public school students can benefit from quality education at more 
conducive learning environments, equipped with the proper tools for learning, and mentored by 
capable teachers. 


In order to promote transparency, the amount to be allocated to fund the K to 12 Program 
under the DepEd shall be included in the General Appropriations Act (GAA). 
With PAGCOR funds used to finance the K to 12 Program, the government will no 
longer be pressured to raise new taxes nor cut budget allocations of other agencies in order to 
meet the requirements of the public school system. This will also result in a higher quality of 
education that will mean a brighter future for Filipino children. 
In view of the foregoing, the approval of the bill is earnestly sought. 
mksbc 


SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
Introduced by Senator Ralph G. Recto 
AN ACT 
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IMPROVING THE QUALITY OF EDUCATION BY AUGMENTING THE BUDGET 
FOR THE K TO 12 PROGRAM OF THE DEPARTMENT OF EDUCATION (DEPED), 
PROVIDING FUNDS FROM THE PHILIPPINE AMUSEMENT AND GAMING 
CORPORATION 
(PAGCOR) 
INCOME, 
AMENDING 
FOR 
THE 
PURPOSE 
PRESIDENTIAL DECREE NO. 1869, AS AMENDED BY REPUBLIC ACT NO. 9487 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Section I of Presidential Decree No. 1869, as amended by Republic Act No. 
2 
9487 is hereby further amended to read as follows: 
3 
"Section 1. Declaration of Policy. -
It is hereby declared to be the policy of the 
4 
State to centralize and integrate all games of chance not heretofore authorized by existing 
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franchises or permitted by law in order to attain the following objectives: 
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(a) To centralize and integrate the right and authority to operate and conduct games of 
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chance into one corporate entity to be controlled, administered and supervised by the 
8 
Government; 
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(b) To establish and operate clubs and casinos, for amusement and recreation, including 
10 
sports gaming pools (basketball, football, lotteries, etc.) and such other forms of 
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amusement and recreation including games of chance, which may be allowed by law 
12 
within the territorial jurisdiction of the Philippines and which will [:(1)] generate sources 
13 
of additional revenue to fund THE K TO 12 PROGRAM OF THE DEPARTMENT 
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OF EDUCATION (DEPED); [infrastructure and socio-civic projects, such as flood 
15 
control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan 
16 
Centers, Nutritional Programs, Population Control and such other essential public 
17 
services;] 
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(C) [(2)] TO create recreation and integrated facilities which will expand and improve the 
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country's existing tourist attractions; AND 


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1 
(D) [(3)] TO [minimize, if not totally] eradicate [,] the evils, malpractices and corruptions 
2 
that are normally prevalent in the conduct and operation of gambling clubs and casinos 
3 
without direct government involvement." 
4 
Sec. 2. Section 7 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is 
5 
hereby further amended to read as follows: 
6 
"Section 7. Powers, Functions and Duties of the Board of Directors. -
The Board 
7 
shall have the following powers, functions and duties; 
8 
a) To allocate and distributer, with the approval of the Office of the President of the 
9 
Philippines,] the earnings of the Corporation AS PROVIDED FOR BY LAW [earmarked 
10 
to finance infrastructure and socio-civic projects]; 
11 
b) To designate the commercial bank that shall act as the depository bank of the Corporation 
12 
and/or trustee of the funds of the Corporation; 
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c) To. prepare and approve at the beginning of each calendar year the budget that may be 
14 
necessary under any franchise granted to it, to insure the smooth operation of the 
15 
Corporation; and to evaluate and approve budgets submitted to it by other corporations or 
16 
entities with which it might have any existing contractual arrangement; AND 
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[d) To submit to the Office of the President of the Philippines before the end of February of 
18 
each year a list of all the infrastructure and/or socio-civic projects that might have been 
19 
financed fi'om the . Corporation's earnings, and to submit such periodic or other reports as 
20 
may be required of it from time to time; and] 
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(D) [(e)] To perform such other powers, functions and duties as may be directed and authorized 
22 
by the President of the Philippines or as may be necessary or proper for the 
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accomplishment of its purposes and objectives." 
24 
Sec. 3. Section 12 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is 
25 
hereby further amended to read as follows: 
26 
"Section 12. Special Condition of Franchise. -
After deducting five (5%) 
27 
percent as Franchise Tax, the Fifty (50%) percent share of the Government in the 
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aggregate gross earnings of the Corporation from this Franchise shall be immediately set 
29 
aside and allocated to fund the K TO 12 PROGRAM OF THE DEPARTMENT OF 
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EDUCATION (DEPED) THROUGH THE following: [infrastructure and socio-civil 
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projects within the Metropolitan Manila Area: 
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(a) Flood Control 
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(b) Sewerage and Sewage 
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( c) Nutritional Control 
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(d) Population Control 


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(e) Tulungan ng Bayan Centers 
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(f) Beautification 
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(g) Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that should the aggregate 
4 
gross earning be less than PI 50,000,000.00, the amount to be allocated to fund the above-
5 
mentioned project shall be equivalent to sixty (60%) percent of the aggregate gross 
6 
earning. 
7 
In addition to the priority infrastructure and socio-civic projects with the Metropolitan 
8 
Manila specifically enumerated above, the share of the Government in the aggregate gross 
9 
earnings derived by the Corporate from this Franchise may also be appropriated and 
10 
allocated to fund and finance infrastructure and/or socio-civic projects throughout the 
11 
Philippines as may be directed and authorized by the Office of the President of the 
12 
Philippines.] 
13 
(A) CONSTRUCTION OF CLASSROOMS; 
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(B) HIRING OF PUBLIC SCHOOL TEACHERS; 
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(C) PROVISION OF ADDITIONAL ANNUAL CHALK ALLOWANCE IN THE 
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AMOUNT OF TWO THOUSAND PESOS (PhP2,OOO.00) FOR ALL PUBLIC 
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SCHOOL TEACHERS NATIONWIDE; 
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(D) SUPPLEMENTARY FEEDING PROGRAM IN ALL PUBLIC ELEMENTARY 
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SCHOOLS NATIONWIDE; 
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(E) CONTINUING TEACHERS EDUCATION PROGRAM FOR PUBLIC 
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SCHOOL TEACHERS; 
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(F) PROVISION OF INTERNET ACCESS IN ALL PUBLIC SCHOOLS 
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NATIONWIDE; AND 
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(G) 
ACQUISITION 
OF 
EQUIPMENT 
AND 
FACILITIES 
FOR 
THE 
25 
TECHINICAL-VOCATIONAL COURSES UNDER THE K TO 12 PROGRAM: 
26 
PROVIDED, THAT THE EQUIVALENT AMOUNT HEREIN PROVIDED SHALL 
27 
BE INCLUDED IN THE GENERAL APPROPRIATIONS ACT (GAA) UNDER 
28 
THE BUDGET OF THE DEPARTMENT Of;' EDUCATION (DEPED). 
29 
Sec. 4. Implementing Rules and Regulations. - Within sixty (60) days upon effectivity of this 
30 
Act, the PAGCOR, the Department of Education and the Department of Budget and Management 
31 
(DBM) shall provide the necessary rules and regulations for the proper disposition of the said funds 
32 
and the effective implementation of this Act. 
33 
Sec. 5. Separability Clause. -
If any provision of this Act is subsequently declared 
34 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect. 


• • 
, ,. 
1 
Sec. 6. Repealing Clause. -
All laws, decrees, executive orders, rules and regulations and 
2 
other issuances or parts thereof which are inconsistent with this Act are hereby repealed or modified 
3 
accordingly, 
4 
Sec. 7. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the 
5 
Official Gazette or in any two (2) newspapers of general circulation. 
Approved, 
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