The Philippine Amusement and Gaming Corporation (PAGCOR) has failed to collect P2.3 billion worth of income from Philippine Offshore Gaming Operations (POGOs) since December 2021, according to the Commission on Audit.
Based on the June 13, 2022 Management Letter on the Audit of PAGCOR sent to its chief Andrea Domingo, state auditors said that income from POGOs amounting to P2.328 billion as of end of 2021 and lodged to Accounts receivable remained uncollected for more than one year to five years.
"This [non-collection] is contrary to Section 4.C, Regulation 6 of the Offshore Gaming Regulatory Manual (OGRM), depriving the PAGCOR of funds that could be derived therefrom," COA said.
Section 4.C on Billing and Collection of Regulatory Fee, Regulation 6 on Financial Requirement, Reporting and Remittance, of the OGRM states that: "The POGO Licensees are given until every 15th of the month to settle their billing."
The P2.3 billion uncollected income from POGOs, COA said, increased by P846.179 million or 57 per cent from the last year’s balance.
Likewise, COA said another P600 million of income from POGOs has also remained uncollected for less than a year.
But PAGCOR argued that the collection failure was a result of its intensive fight against illegal online gambling and its overzealousness in maximizing collections for the government coffers.
PAGCOR said they already contracted a third-party audit platform service provider in December 2017 to provide accurate and near real-time data of Gross Gaming Revenue (GGR).
In April and May 2018, PAGCOR said it already billed the POGOs an estimated fee based on average income performance or average GGR for the past 30 days multiplied by the regulatory fee percentage since there was no definite amount of GGR from those suspected websites.
This action, PAGCOR said, prompted the affected POGOs to file protest letters on various dates from May 2018 to October 2019.
"Some of the affected POGOs partially paid while some did not pay the billed amount, hence resulting in outstanding balances," it said.
Moreover, PAGCOR said that out of the P2.328 billion accounts receivables yet to be paid by POGOs for more than a year, P815.902 million is under protest.
This means that the remaining uncollected P1.512 billion has been overdue from more than one year to five years.
COA noted that such a significant amount of uncollected income is not acceptable.
Thus, the COA ordered PAGCOR to evaluate and validate the accounts receivable under protest, and provide the necessary adjustments in the state gaming corporation's books, if warranted; and revisit the effectiveness of pertinent provisions in the OGRM to improve collection of regulatory fees.
In response to COA's recommendations, PAGCOR said adjustments will be recorded in the books in May 2022 and that the agency received no further protest.
"Moving forward, [PAGCOR's ] Compliance Monitoring and Enforcement Department will observe the approved internal processes for protest resolution," it said. —LBG, GMA News