Alejandro H. Tengco gives first sit-down interview since taking the helm of PAGCOR
In an exclusive interview with SiGMA News, Alejandro H. Tengco, the recently appointed Chairman and CEO of the Philippine Amusement and Gaming Corporation (PAGCOR), discusses his vision for the country’s gaming industry and his plans for the future. Read on for insights into Tengco’s leadership style, his priorities for PAGCOR, and his thoughts on the challenges and opportunities facing the Philippine gaming sector.
There are new calls for privatisation. This has been attempted already but was unsuccessful. How is it being tackled this time?
Through the years, PAGCOR has been a reliable source of revenue for various government programs. While the new management recognises this achievement, which has been a result of the agency’s dual function as a gaming regulator and an operator — we also welcome new opportunities for improvement and growth.
As calls for PAGCOR’s privatisation resurface, the new management believes that as a government entity, it should have a clearly defined function. Having a dual role — as an operator a regulator at the same time — is contrary to business ethics.
Hence, we need to carefully evaluate the possible outcomes of our decision. Foremost, our main consideration is the welfare of our over 14,000 employees from various Corporate offices, casino branches and satellite operations groups nationwide. If ever PAGCOR becomes a purely regulatory body, we have to be very well prepared for the transition and ensure that all our employees will be taken care of.
PAGCOR is one of a few regulators which is also a casino operator. Does this affect credibility? Are there plans to change this? How do you ensure that the lines between the two are not blurred?
For more than three decades, PAGCOR dutifully fulfilled its mandates to regulate and operate games of chance in the country so it could generate revenues for nation-building. For some time, this has been a win-win set-up for the government because the revenues from gaming are channeled back to government coffers and programs.
But with the ever-changing gaming landscape — not only on the Philippines — but also globally, the new PAGCOR management is open to the calls for the state gaming firm to focus on a specific role to avoid the complexities of running two different shows.
POGO-related crime increased four-fold over recent years. PAGCOR said it will not sit idly in the face of these injustices. Can you elaborate on this subject?
To maintain and safeguard the integrity of the POGO industry, PAGCOR will continue to monitor the lawfulness of the activities of our accredited licensees and service providers. We will amend contracts that need to be amended. Should our licensees and service providers be found guilty of engaging in criminal acts, we will not hesitate to impose sanctions and penalties, as provided by the law, and even cancel permits if so warranted.
Likewise, we strengthened collaboration with various government agencies a month after we took office last year to combat illegal gaming operations, including offshore gaming. Hence, a result of the inter-agency cooperation meeting held last September 2022 involving PAGCOR, the Philippine National Police (PNP), National Bureau of Investigation (NBI), Department of Justice (DOJ), and Department of Interior and Local Government (DILG), there have been no reported criminal activities or kidnapping-related incidents of workers in the offshore licensing industry since.
There is also the issue of illegal POGO operators. What is PAGCOR doing about this?
Issues pertaining to illegal offshore gaming operations are being seriously addressed by PAGCOR. Aside from our existing inter-agency agreement with the PNP, NBI, DOJ, DOLE and DILG, we also strengthened partnership with agencies like the National Intelligence Coordinating Agency, Bureau of Immigration, and the Anti-Money Laundering Council to forestall any illegal activities and labor practices related to POGO.
Gaming income of PAGCOR for 2022 increased by 69%. Is this mainly a result of reopening after Covid, or is it attributed to other factors?
The gaming industry’s robust performance in 2022 was largely attributed to the opening of Philippine borders to local and foreign tourists, which also improved the performance of the travel, entertainment, and hospitality sectors. Since the lockdowns were eased in the country late last year and gaming venues reopened, customer confidence slowly returned and the attendance in our owned casinos slowly improved. Our licensed casinos likewise recorded a major revenue growth.
How big of a role does the sector have in the Philippine economy?
The gaming sector does not only generate revenues that help promote various programs in the country but also opens opportunities that boost local tourism and make the Philippines an ideal destination for leisure travelers and business investments.
What hurdles does the Philippines need to tackle to maintain its crown in the region?
For the Philippines to maintain its reputation as among the top gaming destinations in the Asian region, it must keep abreast with the latest global gaming trends and continuously adopt innovations that will make it more enticing for gaming enthusiasts. PAGCOR, as a gaming regulator, is recognised in the Asian region for providing a legal environment that authorises gaming products and for making gaming regulation fairly transparent.
Under the current management, PAGCOR will endeavor to improve its regulatory functions and business operations. We will ensure that our plans and programs for 2023 will be generally beneficial to our industries, putting foremost the interests of responsible gaming and of nation-building.
Why should companies look at the Philippines as a place to do business?
The country’s rich natural resources, world-renowned tourist spots, highly skilled and industrious workforce, and friendly people make the Philippines an ideal place to do business.
Likewise, the Philippines’ strategic location — within four hours’ flying time to some of the major economies like Singapore, Japan, and South Korea — makes it an ideal gateway to some of the biggest markets in the region.
How can an expo like SiGMA Asia further establish the Philippines’ status in the Asian gaming industry?
With the help of the latest digital trends that will be showcased in SiGMA’s expo, the Philippine gaming industry will have the chance to explore new technologies and tap potential new markets both here and abroad — provided that our regulatory policies are in place, and our business operations maintain their transparency.
A chunk of the funds raised by PAGCOR go into social initiatives. Can you tell us more about this, perhaps about the projects currently being supported or which are in the pipeline?
Of PAGCOR’s total revenue pie, close to 70% is channeled back to the government both as mandated contributions and agency-initiated Corporate Social Responsibility projects.
The biggest share of our contributions to nation-building goes to the National Treasury as the mandated 50% government share. We likewise remit 5% franchise tax to the Bureau of Internal Revenue. We also allocate funds to the Philippine Sports Commission for the training of our national athletes and cash incentives for those who brought honor to the country by winning in international sports competitions.
Among other mandated beneficiaries of PAGCOR are the Board of Claims under the Department of Justice and the cities hosting PAGCOR’s Casino Filipino branches nationwide.
Our commitment to help build a better nation has always gone beyond our mandate. As always, we continued to touch the lives of marginalised Filipinos through our own Corporate Social Responsibility programs.
Under the new management, we aim to prioritise education and health by building more education facilities, hospitals, and wellness centers nationwide.
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