Former Senate President Franklin Drilon sought on Saturday, Jan. 28 the privatization of the government’s gaming industry to fund the Maharlika Investment Fund (MIF) being proposed by administration allies.
The solution to the problem of funding the MIF ‘’lies in the long overdue privatization of the Philippine Amusement and Gaming Corp. (Pagcor) and the Philippine Charity Sweepstakes Office (PCSO)", he said.
"Privatizing these two would generate up to P300 billion that the government could use to fund its ambitious Maharlika Investment Fund,” Drion said in a statement released this Saturday.
The Senate Banks Committee chaired by Senator Mark Villar starts on Tuesday its public hearing on the MIF Bill.
Senate President Juan Miguel Zubiri earlier said that the MIF Bill of Villar is similar to the bill filed at the House of Representatives.
The House has already approved the MIF on third and final reading, doing so before the holiday recess.
Drilon pointed to the past statements in the Senate of former Finance Secretary Carlos Dominguez that the privatization of the gaming industry would yield P300 billion in fresh revenues annually.
“Pagcor should do away with operating casinos and PCSO, we have no business running the lotto and small-town lotteries,” Drilon said.
The former Senate Minority Leader reiterated his long-standing position that the government should not be directly involved in lottery and casino operations and should limit itself to being a regulatory body that protects the interests of the betting public.
Drilon said when the government bids out to the private sector the operation of its gaming industry, there is no need for it to dip its fingers into the dividends generated by government-owned and -controlled corporations and government financial institutions such as the Bangko Sentral ng Pilipinas (BSP), Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP) to fund the MIF.
“We are shooting two birds in one stone by privatizing the gaming industry: to generate funds and eliminate the source of corruption,” he stressed.
Drilon emphasized that the President has the authority to privatize the two gaming agencies under the GOCC Governance Act, which Drilon authored in 2011.
He said the establishment of sovereign funds is not a new concept, citing that there are about 147 countries with sovereign wealth funds.
However, the funding for most of these already existing and functioning sovereign wealth funds would always come from sale of commodities and non-commodities and budget surplus.
With the Philippines’s ballooning budget deficit, pegged at P1.2 trillion for the period January to November 2022 alone, the sovereign wealth fund could not be funded by a budget surplus.
“None is funded out of borrowings,” he stressed.
The difference between a successful and failed sovereign wealth fund around the world lies in the country’s strict adherence to the rule of law, Drilon emphasized.
Singapore and Norway, both manage sovereign wealth funds, have a very good regime of following the law, he said.
Malaysia’s state-owned investment fund, 1MDB, on the other hand, was embroiled in corruption scandals due to the country’s weak rule of law, Drilon added.
He also cited as a crucial factor in the success of a sovereign wealth fund the confidence of the people in the ability of those who would run the fund.
The former senator said he is certain that the measure would pass but also expressed high confidence that his former colleagues in the Senate, which he had served 24 years, scrutinize scrutinize the measure.
“I am certain that this bill will pass. I have confidence in a number of my colleagues that they will do their job in scrutinizing this,” Drilon said.