PAGCOR's P1-B coffee purchases bared


Posted at Jul 27 2011 01:57 AM | Updated as of Jul 27 2011 05:44 PM

PAGCOR's P1-B coffee purchases bared 1
PAGCOR Chairman Cristino Naguiat Jr. with Karen Davila.

MANILA, Philippines - The Philippine Amusement and Gaming Corporation (PAGCOR) on Tuesday linked former chairman Efraim Genuino and the previous board to the state gaming firm's payment of more than P1 billion for coffee drinks from August 2001 to June 2010.

PAGCOR Chairman Cristino Naguiat Jr., in a press statement, described the alleged irregularity as  "scandalous," "outrageous," and "offensively excessive."

The state gaming firm said it obtained documents showing that almost P700 million from the more than P1 billion in coffee expenses went to concessionare Promolabels Specialty Shop.

"Based on PAGCOR's records, Promolabels was given a 3- to 5-year concessionare contract by the Genuino management for the operation of Figaro coffee shops in our Casino Filipino panches in Paranaque, Angeles, Heritage, Olongapo, Pavilion, Tagaytay, and the former Casino Filipino Silahis," Naguiat said.

Breakdown of PAGCOR expenses on coffee in its 12 panches from 2001 to 2010:

  • August 2001 - P933,664.57
  • 2002 - P22,204,609.23
  • 2003 - P29, 804,628.60
  • 2004 - P83,714,154.02
  • 2005 - P172,819,600.96
  • 2006 - P167,379,603.74
  • 2007 - P119,670,645.01
  • 2008 - P164,561,181.88
  • 2009 - P162,917,571.58
  • January-June 2010 - P83,403,251.29

Total: P1,007,408,908.86

Genuino's friends

Naguiat said the contracts between Promolabels and PAGCOR were signed by a certain Lot Manalo.

"In the original contracts with PAGCOR, it was stated that Promolabels was a duly registered corporation, but upon our verification, we found out that they were not registered with the Securities and Exchange Commission (SEC). When we checked with the Department of Trade and Industry (DTI), we were able to get certification last July 6, 2011 stating that the Promolabels Specialty Shop is owned by Carlota Cristi Manalo Tan," Naguiat said.

He said Manalo is the wife of Johnny Tan, a friend of Genuino.

Tan also allegedly has links to Genuino's BIDA party-list group.

"Tan was in fact the second nominee of the BIDA party-list during the 2010 national elections next to Sheryl Genuino-See who is the daughter of the former PAGCOR chair," Naguiat said.

Tan is one of the respondents in the P186-million plunder case filed by PAGCOR against Genuino and 40 other individuals in connection with the state gaming firm's transactions with BIDA.

A high-ranking casino official of PAGCOR, who spoke on condition of anonymity, claimed that he was totally unaware of the Genuino management's plan to get an exclusive coffee provider for his panch.

"We also received reports that during the time of Mr. Genuino, Promolabels had given marching orders to their F&B (food and beverage) attendants for a sales quota of P3,000 per day. This means that one Figaro/Promolabels attendant had to make coffee sales of P90,000 a month, or P1.08-million a year in the casino," Naguiat narrated.

He said the Commission on Audit (COA) had called the attention of the Genuino management about the big discrepancy in the cost of Figaro products inside and outside the casinos.

Overpriced by 64%

In an Audit Observation Memorandum (AOM) dated April 28, 2006, the COA said that for 2005 alone, the differences in the prices of Figaro coffee sold in the Casino Filipino panches of Heritage, Paranaque, Pavilion and the former Silahis were as high as 64% more that what was offered by Figaro outlets outside the casinos.

"Assuming the prices inside the casino are the same with those outside, the charge for food and beverage would have savings of as high as P73 million," the report stated.

In a separate AOM addressed to the former management of the PAGCOR's Parañaque casino on Fepuary 17, 2006, a COA auditor noted that "excessively priced products inside the casino may indicate excessive payments for Food and Beverage charges."

"Itong mga kape na ito ang sabi nila pang-marketing strategy daw. Napansin ko agad na parang ang laki naman ng binabayaran ng PAGCOR sa mga coffee concessionares. So we began to offer free coffee to our customers starting September last year," Naguiat said.

Naguiat said the P 1billion spent for Promolabels and the other coffee concessionares during Genuino's term could have been saved for PAGCOR'S social development projects.

"It could have been used for the construction of 1,000 classrooms, or for the distribution of assorted medicines in more than 10,000 health missions nationwide, which would have benefitted 15 million Filipinos. The amount could have also provided one full meal daily for more than 300,000 malnourished public school children under the PAGCOR's feeding program," he said. - With a report from Willard Cheng, ABS-CBN News