Posted on: December 13, 2022, 12:00h.
Last updated on: December 13, 2022, 12:06h.
Disposing of casinos owned by the Philippines government could play a role in financing the proposed Maharlika Investment Fund, a sovereign wealth fund (SWF) investment vehicle introduced to the Filipino Congress last month.
Filed on November 28 by Philippines House Speaker Martin Romualdez at the appeal of President Ferdinand “Bongbong” Marcos Jr., House Bill 6398 seeks to establish a sovereign investment fund. The venture would receive the country’s surplus funds, foreign reserves, proceeds from the privatization of government assets, and revenue from oil and mining exports to invest in real and financial assets globally.
SWFs are state-owned investment funds. The proposed Maharlika SWF is similar in design to the United Arab Emirates Abu Dhabi Investment Authority, Kuwait’s Investment Authority, and Saudi Arabi’s Public Investment Fund.
Philippines Finance Secretary Benjamin Diokno this week said one possible way to help fund the nation’s SWF, should Congress approve it, would be to sell the government’s casinos.
The Philippine Amusement and Gaming Corporation (PAGCOR) is both a gaming regulator and operator. The government agency oversees the gaming operations of commercial casinos across the country, chiefly in the Manila capital where four integrated casino resorts are located, and additionally manages its own PAGCOR casinos under its Casino Filipino brand.
Dating back to the early days of former President Rodrigo Duterte’s administration, there have been calls for PAGCOR to sell off its casino assets and transition to a regulator-only capacity. Duterte ultimately opted to keep PAGCOR in its current regulator-operator arrangement, as the controversial leader concluded that the gaming agency’s revenue was too critical to consider disposing of through a one-time money grab.
Diokno is the latest national government official to support PAGCOR undergoing a major change. The finance chief says government agencies shouldn’t regulate industries in which they also directly participate.
PAGCOR is a regulator but at the same time, it operates gambling. That’s wrong. If you’re a regulator, stick to that,” Diokno opined.
“We can privatize its operations so PAGCOR can stick to being a regulator,” he added.
House Bill 6398 passed a House committee on December 1. It must still gain approval in the House Ways and Means and Appropriations committees before the bill can move to the House floor for a vote.
The Philippines’ SWF proposal has been met with plenty of criticism, mainly from the public, which believes the recently inaugurated Marcos Jr. is seeking to establish an investment vehicle that will benefit his family and increase his power and stronghold on the nation not unlike his late father did decades ago.
The Maharlika Investment Fund was initially proposed to receive PHP125 billion (US$2.25 billion) from the Government Service Insurance System (GGIS) and PHP50 billion (US$900 million) from the Social Security System (SSS). Other funding sources are to include PHP50 billion from the Philippines government’s Land Bank, PHP25 billion (US$450 million) from the country’s Development Bank, and PHP25 billion from the National Government.
Following much criticism, the sponsors of the Maharlika legislation removed GGIS and SSS funding. Diokno believes PAGCOR disposing of its 44 Casino Filipino locations is a sound way to bridge the funding gap that resulted from GGIS and SSS money not being included in the Maharlika Investment Fund financing.