Solon: Probe PCSO P8.3 B Philippine Lottery System deal

September 25, 2019

ONLY a few weeks after President Rodrigo Duterte temporarily suspended then resumed lottery operations of the Philippine Charity Sweepstakes Office (PCSO) due to charges of deep-seated corruption, investigation of the agency’s P8.3-billion Philippine Lottery System (PLS) was demanded by a party-list congressman.

In filing House Resolution 359, Rep. Ronnie Ong of the Ang Probinsyano party-list, called for Congress to investigate the contracts entered into by the PCSO with the Philippine Gaming Management Corporation under Malaysia’s Berjaya Corporation (PGMC/Berjaya) and the Pacific Online Systems Corporation (Pacific Online) for its National Online Lottery System (NOLS).

“The whole point of this Resolution is to protect the people’s money. Ultimately, kawawa dito ay ang ating mga urban poor at mga indigent na probinsyano na umaasa sa mga health programs at pondo ng PCSO”, Ong stressed.

In his resolution, Ong questioned how PGMC/Berjaya and the Pacific Online have managed to secure and keep their Equipment Lease Agreements (ELA) with the PCSO  for the past 24 years despite various irregularities.

Ong is the vice-chairman of the House committee on games and amusements.

“PCSO’s ELA with the PGMC/Berjaya, which was entered into in 1995 for a period of 8 years (but was actually started in 1999) covering the lease of lotto terminals or equipment for the operation of online lottery in Luzon, was found out to be disadvantageous to the government in a Senate blue ribbon committee hearing last 2011. It was found out that PCSO was renting equipment from PGMC/Berjaya for $148 million when it could buy the same equipment for $25 million,” Ong said in his resolution.

Ong said the Senate at that time recommended to the PSCO that it should renegotiate the rental fee with both PGMC/Berjaya and Pacific Online.

Despite the Senate recommendation to renegotiate the fee, the PGMC/Berjaya refused to budge, triggering a string of litigation from the trial court, to the Court of Appeals, up to the International Court of Arbitration.

And even after dragging PCSO into a costly and expensive legal battle, Ong said that it came as a big surprise that the company’s ELA was even extended by the PCSO from August 22, 2015 to August 21, 2018.

Even more ridiculous, Ong said, is the fact that while PCSO is paying millions to PGMC/Berjaya, the company still pressed on with its legal offensive and managed to secure another court injunction in 2017 to stop the gaming body to conduct bidding for its P10.9 billion National Online Lottery System (NOLS), which could have already improved the system.

“Saan ka naman nakakita ng ganyan na binabayaran na nga natin sila kahit overpriced, hinahabla pa rin tayo ? Yan ang tunay na kahulugan ng iginigisa tayo sa sarili nating mantika .  We are paying them so much money so they can sue us. We have to fight this kind of abuse,” Ong said.

Ong said the Supreme Court  finally issued a ruling on August 15, 2018 that the PCSO can   proceed with the bidding of the NOLS which was later renamed as the Philippine Lottery System (PLS) and with a lesser budget of P8.3 billion.

But instead of PCSO finally getting rid of PGMC/Berjaya, the latter company even managed to secure another extension of its ELA from August 23, 2018 to August 22, 2019 because of PCSO’s failure to “timely procure” the said PLS. Pacific Online’s ELA for Visayas and Mindanao operations was also extended for the same reason.

Yet again, PCSO had a failure of bidding for the PLS last July 2019 and had to resort again to another extension of ELA with PGMC/Berjaya and Pacific Online until 2020.

In light of these recent events, Ong stressed that it is very important that Congress should now step in to ensure that proper procurement be observed and at the same time, rogue and abusive companies like PGMC/Berjaya can no longer exploit government agencies like the PCSO.

“There is a need to stop the irregularities, violations, disadvantageous terms and/or corruption as regards PCSO contracts, gaming activities and bidding in line with the President’s directive to address the corrupt practices at the PCSO and among the operators of various games,” Ong said in his resolution.