Philippine SC upholds PSC funding from PAGCOR, PCSO
The Supreme Court has affirmed with finality its earlier ruling directing the Philippine Amusement and Gaming Corporation (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) to remit portions of their revenues to the Philippine Sports Commission (PSC), clearing the way for the release of long-delayed funding for national sports development.
In an en banc resolution released this week, the High Court denied the motions for reconsideration filed by PAGCOR and PCSO and ordered both agencies to comply fully with their obligations under Republic Act No. 6847, the law that created the PSC. The resolution also instructed the two state-run gaming bodies to submit a detailed accounting of the amounts owed and the remittances made over the years.
The ruling effectively closes a legal dispute that has stretched back more than a decade. It reinforces the mandatory nature of funding for the PSC, which is tasked with overseeing and supporting the country’s sports programmes and athletes.
Accounting of decades-long obligations
Under the Court’s directive, PAGCOR is required to account for and remit five per cent of its annual gross income from 1993 to the present. PCSO, for its part, must account for and remit 30 percent of the charity fund derived from the proceeds of six sweepstakes or lottery draws per year, including lotto operations, covering the period from 2006 to the present.
In its ruling, the SC acknowledged that the accumulated balances may be substantial and allowed for the possibility that any outstanding amounts could be settled over a period of up to 10 years.
According to local media reports, former lawmaker Josseller “Yeng” Guiao, who filed the petition for mandamus that led to the decision, has previously estimated that full implementation of the ruling could result in as much as PHP25 billion ($420.8 million) in arrears being released to the PSC.
Legal basis rooted in statute
In rejecting the motions for reconsideration, the SC reiterated that the funding mechanism for the PSC is clearly provided for by Philippine law and supported by constitutional principles.
PAGCOR, the Philippine gaming regulator, had argued that the ruling should be applied only prospectively, warning that retroactive application could lead to over-remittance and complications involving franchise tax payments and income tax obligations. The agency also maintained that its franchise tax and the national government’s income share should take priority over allocations to the PSC.
The Court dismissed these arguments, holding that the PSC charter plainly mandates the remittance of five percent of PAGCOR’s gross income, without any provision allowing deductions for franchise tax or other obligations before computation. It also noted that PAGCOR itself had played a role in advancing an incorrect interpretation of the law in the past, undermining claims of good faith.
SiGMA News sought comment from PAGCOR, but the agency said it will not release a statement for now.
Scope of PCSO remittances
PCSO separately argued that its obligation to the PSC should be limited to traditional sweepstakes draws and should not include lotto operations. The SC rejected this position, stating that the law does not distinguish between sweepstakes and lottery draws in a manner that would exclude lotto from the funding base.
According to the Court, creating such a distinction would amount to carving out an exception that is not found in the statute. While the Court acknowledged that PCSO had made some remittances to the PSC over the years, it stressed that the agency must still demonstrate that these payments meet the requirement of 30 percent of the net proceeds from six qualifying draws each year.
Implications for sports development
The ruling is expected to strengthen the financial position of the PSC, which relies heavily on statutory funding to support athlete training, international competition, and grassroots sports programmes.
“We treat the PAGCOR fund as a blessing and a significant responsibility,” Patrick Gregorio, PSC Chairman, said in a statement in December.
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