PAGCOR seeks P1B refund from ex-POGO auditor after contract termination

State-run Philippine Amusement and Gaming Corporation (PAGCOR) is seeking a P1 billion refund from Global ComRCI, the former third party auditor hired to audit Philippine Offshore Gaming Operators (POGO) under a P5.8-billion contract.

PAGCOR chairman Alejandro Tengco made the disclosure to the House appropriations panel during Day 2 of the deliberations on the proposed P5.768 trillion budget for 2024.

Tengco’s statement came five months after PAGCOR terminated its auditing contract with Global ComRCI over a spurious bank certificate that it allegedly submitted in its bidding documents involving its financial standing.

“Under Republic Act 9184, any form of fraud or fraudulent document in your bid deems the proposal null and void. We are coordinating with the Office of the Solicitor General para po mahabol iyong pribadong kumpanya (to go after this private company). Dapat ibalik iyong P1 billion na nakolekta nila from PAGCOR (the P1 billion collected from PAGCOR must be returned) because from Day 1, their contract is null and void,” Tengco said.

Tengco said with the termination of the contract, PAGCOR has secured the approval of the Department of Justice (DOJ) for the Commission on Audit to conduct auditing on POGO or overseas gaming licensees.

“Under our laws, POGO licensees cannot operate without an independent auditor. We wrote a letter to the Department of Justice to ask if we can tap COA as auditor for our overseas gaming licensees, and the DOJ said such is allowed,” he said.

“Now, it is COA handling the auditing for overseas gaming licensees, and this decision has enabled the government to save at least P5.8 billion,” Tengco added.

It was Senator Sherwin Gatchalian who first flagged PAGCOR's contract with Global ComRCI. 

Tengco said that despite PAGCOR's repeated communications with Global ComRCI to explain the alleged spurious bank certificate, the firm only said it had the required capital of US$25 million at that time it submitted its bid to become PAGCOR's auditor for POGOs.

"Their explanation just ended there. And that is why after a month, we were already advised by our legal team that we already have a right to cancel their contract," he pointed out.

Ako Bicol party-list Representative and House appropriations panel chairperson Elizaldy Co lauded PAGCOR’s efforts in going after fraudulent practices that maximize its contribution to the public funds while ensuring responsible gaming.

“These funds, derived from various gambling and gaming activities, have supported critical sectors including education, healthcare, infrastructure development, and public safety, including the Universal Health Care law. A well-structured regulatory framework not only safeguards public interests but also fosters a positive industry image that attracts responsible gamblers and investors,” Co said during the same deliberations.

“It's important to acknowledge that effective regulation is a cornerstone of maximizing the positive impact of gambling and gaming on government revenues. Governments must implement comprehensive regulatory frameworks that ensure fair play, responsible gambling, and the prevention of criminal activities like money laundering,” Co added.  —KBK, GMA Integrated News