FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHIILIPPINES 
Second Regular Session 
SENATE 
S.B.No. 2915 
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) 
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'11 
JUL 26 ?Z :29 
INTRODUCED BY HONORABLE RALPH G. RECTO 
EXPLANATORY NOTE 
The Philippine Amusement and Gaming Corporation (P AGCOR) currently 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 ofthe 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 P AGCOR generates. Moreover, the funds of 
P AGCOR is considered an 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 Basic Education Program of the Department of Education (DepEd). 
This allocation shall provide the much needed funds to meet the current and future 
demands of the public elementary and secondary schools, in terms of classrooms, 
equipment, educational materials, and the like. 
With this measure, the funds generated by P AGCOR shall be infused to the 
budget of the DepEd, in order for the latter to provide qnality education in public 
elementary and secondary schools nationwide. The students will no longer suffer from 
overcrowded classrooms, or from classes held under the trees. Public school students can 


benefit fi'om quality education at more conducive learning environments, equipped with 
the proper tools for learning, and mentored by capable teachers. 
The provision of funds for DepEd will fnrther enhance the Basic Education 
Program, thereby benefiting more than 22 million students in the public schools 
nationwide. 
In order to promote transparency, the amount to be allocated shall be included in 
the General Appropriations Act (GAA) to fund the Basic Education Program under the 
DepEd. Furthermore, the bill shall provide the Commission on Audit the authority to 
audit all funds and transactions of the Corporation, subject to existing laws and 
regulations. 
With P AGCOR funds used to finance the Basic Education Program, the 
government will no longer he 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 approv7dliIli 
'. 
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FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
SENATE 
'11 
JUL 26 
f) 2 :29 
2915 
__________________________ 
S_._B_._N_O_· ____________________ !_i_f:_C_L_'i_',_':_;:_;_l._;~p~~------
Introduced by Senator Ralph G. Recto 
AN ACT 
TO ALLOCATE THE FIFTY PERCENT (50%) SHARE OF THE GOVERNMENT IN 
THE AGGREGATE GROSS INCOME OF THE PHILIPPINE AMUSEMENT AND 
GAMING CORPORATION (PAGCOR) FOR THE BASIC EDUCATION PROGRAM OF 
THE DEPARTMENT OF EDUCATION (DEPED) AND FOR OTHER PURPOSES, 
THEREBY AMENDING 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: 
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SECTION 1. Section 1 of Presidential Decree No, 1869, as amended by Republic Act No, 
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9487 is hereby further amended to read as follows: 
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"Section L Declaration o[Policy. -It is hereby declared to be the policy of the 
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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 altain 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 
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Government; 
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(b) To establish and operate clubs and casinos, for amusement and recreation, including 
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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 
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within the territorial jurisdiction of the Philippines and which will [:(1)] generate sources 
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of additional revenue to fund THE BASIC EDUCATION PROGRAM OF THE 
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DEPARTMENT OF EDUCATION (DEPED); [infrastructure and socio-civic projects, 
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such as flood control programs, beautification, sewerage and sewage projects, Tulungan 
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ng Bayan Centers, Nutritional Programs, Population Control and such other essential 
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public 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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(D) [(3)] TO [minimize, if not totally] eradicate [,] the evils, malpractices and corruptions 
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that are normally prevalent in the conduct and operation of gambling clubs and casinos 
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without direct government involvement." 
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SECTION 2. Section 7 of Presidcntial Decree No. 1869, as amended by Republic Act No. 
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9487 is hereby further amendcd to read as follows: 
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"Section 7. Powers, Functions and Duties of the Board of Directors. -
The Board 
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shall have the following powers, functions and duties; 
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a) To allocate and distribute[, with the approval ofthe Office ofthe President of the 
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Philippines,] the earnings ofthe Corporation AS PROVIDED FOR BY LAW [earmarked to 
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finance infrastlUcture and socio-civic projects]; 
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b) To designate the commercial bank that shall act as the depository bank of the Corporation 
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andlor tmstee 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 
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necessary under any franchise granted to it, to insure the smooth operation of the Corporation; 
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and to evaluate and approve budgets submitted to it by other corporations or entities with which 
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it might have any existing contractual an'angement; AND 
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[d) To submit to the Office of the President of the Philippines before the end of FeblUary of 
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each year a list of all the infrastlUcture andlor socio-civic projects that might have been 
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financed from the Corporation's earnings, and to submit such periodic or other reports as may 
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be required of it fi'om time to time; and] 
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(D) [(e)] To perform such other powers, functions and duties as may be directed and authorized 
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by the President of the Philippines or as may be necessary or proper for the accomplishment of 
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its purposes and objectives." 
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SECTION 3. Section 12 of Presidential Decree No. 1869, as amended by Republic Act No. 
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9487 is hereby Further amended to read as follows: 
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"Section 12. Special Condition of Franchise. -
After deducting five (5%) 
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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 
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aside and allocated to fund the BASIC EDUCATION PROGRAM OF THE (DEPED). 
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PROVIDED, THAT THE EQUIVALENT AMOUNT HEREIN APPROPRIATED 
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SHALL BE INCLUDED IN THE GENERAL APPROPRIATIONS ACT. [following 
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infrastructure and socio-civil 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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(1) Beautification 
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(g) Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that should the aggregate 
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gross eaming be less than PI 50,000,000.00, the amount to be allocated to fund the above-
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mentioned project shall be equivalent to sixty (60%) percent of the aggregate gross 
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eaming. 
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In addition to the priority infrastlUctme and socio-civic projects with the Metropolitan 
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Manila specifically enumerated above, the share of the Govenunent in the aggregate gross 
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earnings derived by the Corporate from this Franchise may also be appropriated and 
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allocated to fund and finance infrastlUcture and/or socio-civic projects tlu'oughout the 
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Philippines as may be directed and authorized by the Office of the President of the 
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Philippines.]" 
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SEC. 4. Section IS of Presidential Decree No. 1869. as amended by Republic Act No. 9487 is 
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hereby further amended to read as follows: 
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"Section 15. Auditor. -
The Commission of Audit [or any government agency 
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that the Office of the President may designate] shall appoint a representative who shall 
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be the Auditor of the Corporation and such personnel as may be necessary to assist said 
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representative in the performance of his duties. The salaries of the Auditor or 
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representative and his staff shall be fixed by the Chairman of the Commission on Audit 
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[or designated govermnent agency], with the advice of the Board, and said salaries and 
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other expenses shall be paid by the Corporation. FUNDS AND TRANSACTIONS, 
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INCLUDING REVENUES, 
INCOME 
AND 
EXPENDITURES 
OF THE 
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CORPORATION, SHALL BE AUDITED PURSUANT TO EXISTING LAWS 
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AND REGULATIONS. [The funds of the COlporation to be covered by the audit shall 
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be limited to the 5% franchise tax and the 50% of the gross eamings pertaining to the 
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Govermnent as its share.]" 
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SEC. 5. Separability Clause. - If any provision of this Act is subsequently declared 
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unconstitutional, the validity of the remaining proVisions hereof shall remain in full force and effect. 
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SEC. 6. Repealing Clause. -
All laws, decrees, executive orders, IUles and regulations and 
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other issuances or parts thereof which are inconsistent with this Act are hereby repealed or modified 
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accordingly. 
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SEC. 7. Implementing Rules and Regulations. - Within sixty (60) days upon effectivity of 
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this Act, the PAGCOR, the Department of Education and the Department of Budget and 
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Management (DBM) shall provide the necessary rules and regulations for the proper disposition of 
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the said funds and the effective implementation of this Act. 
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SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days after its publication in any 
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two (2) newspapers of general circulation. 
Approved, 
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