The Philippine Charity Sweepstakes Office (PCSO) headquarters in Mandaluyong City on July 31, 2019. Jonathan Cellona, ABS-CBN News
MANILA — Former Senate Minority Leader Franklin Drilon on Saturday encouraged lawmakers to consider funding the proposed Maharlika Investment Fund through the privatization of the government's gaming regulators and agencies.
Drilon said the privatization of the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) would generate P300 billion revenues annually.
“PAGCOR should do away with operating casinos and PCSO, we have no business running the lotto and small-town lotteries,” said Drilon, describing it as "overdue."
“We are shooting two birds in one stone by privatizing the gaming industry: to generate funds and eliminate the source of corruption,” he added in a statement.
Drilon said the government "should not be directly involved in lottery and casino operations."
The President has the authority to carry out his proposal, he noted, through the government-owned and controlled corporation (GOCC) Governance Act.
This would also prevent government officials from meddling with the dividends from financing institutions like the Bangko Sentral ng Pilipinas, Development Bank of the Philippines, and Land Bank of the Philippines, as suggested by the proposed Maharlika law.
Existing and successful sovereign wealth funds have come from budget surplus or a government's sale of commodities and non-commodities.
With the country's debt at P1.2 trillion though, the budget for the proposed Maharlika Investment Fund should come from other sources, Drilon said.
"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," he said.
In 2019, Senator Win Gatchalian said it was better if the PCSO become privatized to prevent corruption.
Gatchalian said that proceeds from PCSO games should be remitted directly to the Department of Social Work and Development (DSWD) to fund social services programs.
A decade earlier, the proposed privatization of PAGCOR made waves after then San Miguel Corp. Vice-Chairman Ramon S. Ang proposed to buy it for $10 billion. The Department of Finance described the offer as "cheap."
Several state assets back then were eyed for privatization to shore up the government's budgetary deficit.
President Ferdinand Marcos, Jr — who earlier said he broached the idea of the sovereign wealth fund — this month "soft launched" the MIF to the World Economic Forum and said this should be created with the country's circumstances in mind.
Based on the latest version of the proposal, the MIF will first be funded by surpluses from GOCCs before its listing on the Philippine Stock Exchange (PSE).
The proposed wealth fund has been criticized by activists and opposition figures, as well as some business groups.