Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL Noe 849

Introduced by : Cong. George P. Amalz, Cong. Rene L. Relampagos,
Cong. Pryde Henry A. Teves

EXPLANATORY NOTE

Presidential Decree No. 1869 which consolidated Presidential Decree Nos.
1067-A, 1067-C, 1399 and 1632, relative to the franchise and powers of the
Philippine Amusement and Gaming Corporation (PAGCOR), was enacted on July
11, 1983 fo enable the then Marcos Government to regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or
permitted by law.

In this same decree, PAGCOR was given greater flexibility in its operation by
limiting governmental audit only to the determination of the five percent (5%)
franchise tax and the government's share of fifty percent (50%).

When President Cory Aquino took over the reins of government in 1986,
PAGCOR was placed under full audit by the Commission on Audit through COA
Resolution 86-13, which declared Section 15 of PD 1869 relative to the franchise and
powers of PAGCOR, to be without force and effect insofar as the audit thereof is
concerned.

Article IX, D. Section 2, paragraph 1 of the 1987 Constitution expressly
provides that:

“The commission on Audit shall have the power, authority, and duty to
examine, audit, and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property, owned or held in
trust by, or pertaining to, the Government, or any of its subdivisions, agencies,
or instrumentalities, including government-owned or controlled corporations
with original charters, and on a post-audit basis: (a) constitutional bodies,
commissions and offices that have been granted fiscal autonomy under this
Constitution; (b) autonomous state colleges and universities; (c) other
government-owned or controlled corporations and their subsidiaries; and (¢)
such non-government entities receiving subsidy or equity, directly or
indirectly, from or through the Government, which are required by law or the
granting institution to submit to such audit as a condition of subsidy or
equity...”



Section 3 of Letter D. also provides that:

"No law shall be passed exempting any entity of the Government or its
subsidiary in any guise whatever, or any investment of public funds, from the
jurisdiction of the Commission on Audit.”

This measure is not questioning whether COA is performing its audit function
of PAGCOR but rather there is need to amend the law to conform with the
Constitution. The COA circular cannot amend the existing law, which is PD 1869. If
the proper amendment to the law is not done the Supreme Court may declare the
law unconstitutional.

ly requested that this bill be approved by this Chamber.

PRYDE HENRY A. TEVES
Representative Reprpsentative
2h District, Oriental Negros 3:4 Distric/Oriental Negros

‘
RENE |. ilamexees

Representative
1# District, Bohol


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILLNO.2349

Introduced by : Cong. George P. Amaiz, Cong. Rene L. Relampagos,
Cong. Pryde Henry A. Teves

AN ACT
AMENDING PRESIDENTIAL DECREE NO. 1869, AS AMENDED, CONSOLIDATING AND
AMENDING PRESIDENTIAL DECREE NOS. 1067-A, 1067-C, 1399 and 1632, relative to
the franchise and powers of the Philippine Amusement and Gaming Corporation
(PAGCOR), SUBJECTING PAGCOR TO THE AUDIT JURISDICTION OF THE COMMISSION
ON AUDIT

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

SECTION 1. Section 15 of Presidential Decree No. 1869 is hereby amended to
read as follows:

“Section 15. Auditor - The Commission on Audit [ or any government
agency that the office of the President may designate ] shall appoint a
representative who shall be the Auditor of the Corporation and such personnel as
may be necessary to assist said representative in the performance of his duties. The
salaries of the Auditor or representative and his staff be fixed by the Chairman of
the Commission on Audit. [ or designated government agency, with the advice of
the Board, and said salaries and other expenses shall be paid by the Corporation.
The funds of the Corporation to be covered by the audit shall be limited to the 5%
franchise tax and the 50% of the gross earnings pertaining to the government as its
share.| FUNDS AND TRANSACTIONS, INCLUDING REVENUES, INCOME AND
EXPENDITURES, OF THE CORPORATION, SHALL BE AUDITED PURSUANT TO EXISTING
LAWS AND REGULATIONS.”

SECTION 2. All laws, decrees, executive orders, instructions, rules and
regulations or parls thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SECTION 3. This Act shall take effect thirty (30) days after its approval and its
publication in the Official Gazette or in two (2) national newspapers of general
circulation.

Approved,