How Do You Solve a Problem Like PCSO?

The President's move to suspend all the gaming activities of Philippine Charity Sweepstakes Office (PCSO) came as a surprise to everyone. PCSO officials said that they would adhere to the President's orders while they appeal to him to let the agency continue its operations as an investigation is being conducted.

Last Friday, July 26, 2019, several minutes after the Philippine Charity Sweepstakes Office (PCSO) held its nightly Lotto draws, President Rodrigo Duterte went live on national television to announce the suspension of all of its gaming activities due to allegations of widespread corruption within the agency. They include, among others, the Lotto, Keno, Small Town Lottery (STL) and the Peryahan ng Bayan. He ordered the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) units throughout the Philippines to shut down all PCSO outlets and apprehend any person who will engage in "illegal gambling activities," and gave strong emphasis that he will not honor any court order preventing the execution of the suspension order.

The President's move came as a surprise to everyone. Some agreed with the President, as the suspension order came at a time when the Commission on Audit called the attention of PCSO for failure to remit to the government earnings from 1994 to 2016 amounting to P8.426 billion, which represented half of its P16.852 billion net earnings during the said period, and STL outlets being used as a front for illegal gambling operations in some parts of the country. Others, however, expressed concern, as the funds coming from agency are being used to finance some of the government's health programs, and medical assistance and services.

So far, PCSO officials said that they would adhere to the President's orders while they appeal to him to let the agency continue its operations as an investigation is being conducted.

As the lone government agency that is directly involved in gaming operations, with Filipinos from the D and E classes hoping that a dream Lotto jackpot win could be their ticket out of providing themselves and their loved ones financial and material prosperity being the main customers, allegations of corruption plaguing PCSO does not come as a surprise. Some Filipinos even doubt if there are really Lotto jackpot winners, with them thinking that the draws are rigged in favor of corrupt PCSO officials and employees, and their protectors, as none of the Lotto jackpot prize winners' identities have been publicly revealed since the draws started during the mid-1990's. There are persistent rumors of the franchising of PCSO outlets being made favorable to PCSO officials and employees and their kin. Then there are complaints about health and social service assistance being extended by PCSO as insufficient or not given at all.

One question needs to be answered: How can the Duterte administration solve a problem like the PCSO?

The most immediate solution will be to conduct a thorough investigation and massive overhaul of PCSO while the suspension order meted upon its gaming activities stands. This is to ensure that the agency will be run only by competent, credible and trustworthy individuals given the nature of its operations. It also sends a message to corrupt government officials and employees, and to the Filipino people that the Duterte administration is serious about its anti-corruption effort and there is no sacred cow in its crackdown.

However, it is time to for the government to think about the medium- to long-term plans for PCSO. Currently, there are two State entities that are engaged in gaming operations with virtually the same functions and mandate: PCSO and the Philippine Amusement and Gaming Corporation (PAGCOR). 

The only difference is that PCSO is more directly involved in operations by conducting daily lottery draws while PAGCOR is relatively indirect on actual operations since it fully operates casinos known as Casino Filipino. PAGCOR also has a regulatory function in providing licenses to prospective casino operators and Philippine Offshore Gaming Operators (POGOs).

Through an act of Congress or, if possible, a simple Executive Order issued by President Duterte, PCSO can be can be transformed into something similar to PAGCOR, with it granting licenses to private companies to operate the Lotto and Keno draws, and a more centralized STL System. Another idea that the government may way to consider could be merging PCSO and PAGCOR into a single agency, with PAGCOR being the surviving entity and Lotto, Keno, and other PCSO gaming operations will be handled by PAGCOR very much in the same way as how gaming licenses are being granted to private companies. With gaming being a sure source of income to the government, it will be much better to keep the likes of PCSO and PAGCOR under State control.

On the other hand, the health, social service and charitable activities of the PCSO can be handled more directly by concerned government entities such as the Department of Health (DOH) and the Department of Social Welfare and Development (DSWD). The income generated from gaming activities will go straight to line agencies of government through the Presidential Social Fund of the Office of the President of the Philippines or through the creation of DOH- or DSWD-specific funds. 

Taking such course of action cut the sources of graft and corruption within PCSO but can also ease the burden of indigent Filipinos who troop to the PCSO office in Quezon City to line up early in the morning in hopes of receiving some form of assistance for their or their loved ones' medical or social service needs.

It is time for the government to completely wean itself from direct involvement in gaming activities that can be used as a source of graft and corruption by some officials and employees. The crackdown within the PCSO is a step in the right direction. The medium- to long-term will be through reforms that can create a PAGCOR-like entity out of PCSO or a merger of PCSO and PAGCOR while the health, social service and charitable aspect of the PCSO will be handled directly by the DOH and DSWD through funds derived from gaming operations income.

About the Author
Benedict is an agricultural economist, academician and writer. He has gained experience and expertise in various fields of economics, business, political science and public relations after through professional ventures in the academe, and in the public and private sectors. He has authored or co-authored key publications on topics ranging from agriculture and food security to global affairs and politics.
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