STL companies in Iloilo wallow in P700-M debt

Philippine Charity Sweepstakes Office General Manager Royina Garma explains the fate of the two Small Town Lottery operators in the city and province of Iloilo during her visit on Nov 14, 2019. (Jennifer P. Rendon)

By: Jennifer P. Rendon

The Philippine Charity Sweepstakes Office (PCSO), or the government for that matter, will be P700 million richer if the two Small Town Lottery (STL) operators in the city and province of Iloilo can pay their shortfalls.

Both Red Subay Gaming Corp and ZFIC Iloilo Gaming Corp have yet to return to operation since President Rodrigo Duterte ordered on July 26, 2019 the suspension of all PCSO-sanctioned games.

Based on PCSO data, Red Subay Gaming Corp, the sole STL authorized agent corporations (AACs) in Iloilo province, incurred a shortfall of P335.39 million, since it began its operation on Oct. 8, 2018.

ZFIC Iloilo Gaming Corp., the AAC in Iloilo City, owes PCSO more or less P369.8 million since March 1, 2017.

On Aug. 22, Pres. Duterte allowed the resumption of STL operations provided the AAcs meet certain PCSO conditions.

One of the conditions is for AACs to deposit a cash bond equivalent to three months of the PCSO’s share in their guaranteed minimum Presumptive Monthly Retail Receipt (PMMR) on top of their existing cash bonds.

These cash bonds will be automatically forfeited in favor of PCSO if the AACs fail to fully remit their guaranteed minimum monthly retail receipts on time, without prejudice to the other remedies that may be exercised by the government.

PCSO General Manager Royina Garma on Thursday said that the two Iloilo AACs have been suspended after they failed to pay their dues under their contracts.

“If they’re operating, it means they are operating illegally,” she said.

Garma was in Iloilo City Thursday to turn over mandatory PCSO contributions to the Commission on Higher Education (CHED). She also held a dialogue meeting with 132 active lotto/keno agents under PCSO-Iloilo Branch.

Garma said PCSO will soon notify Red Subay and ZFIC Gaming that the bond they posted with the agency will be forfeited.

Eventually, their authority to operate will be terminated, she added.

“We can then open the area to corporations that can deliver what they will commit to PCSO,” she said.

Garma said they are just waiting for the implementing rules and regulations (IRR) to be signed by President Duterte.

Once the president signs the IRR, the PCSO could accept applications from firms who want to take over the Iloilo operations.



Reports have indicated that Red Subay failed because of its high PMMR.

“Kasalanan nila. Sila ang nag bid. Eh mayabang,” Garma said.

She explained that the AACs set the PMMR, not the PCSO.

“They thought that if they will set the amount big, they thought eventually that they could request for the reduction,” she said.

But it should not be the case since there’s a contract between the AAC and PCSO.

Besides, the Commission on Audit (COA) won’t allow such move, Garma said.

Ano ‘to negosyo na kung sino-sino lang dyan na private na once na ma-realize mo na hindi ka kikita, mag-adjust tayo, mag-usap-usap tayo. Hindi ‘yan pwede sa gobyerno. Kaya dumaan ‘yan sa tamang proseso through bidding,” she said.

The PCSO only sets the minimum amount based on a formula, where it is deemed that the ACC could earn in a certain locality.

Mayabang (arrogant)… sabi niya ‘kaya ko’. Hindi naman pala kaya. Ngayon na sisingilin, they will blame PCSO,” Garma said.

She added, “Excuse me, they should never blame PCSO because we never asked for that amount. It was them who actually gave a commitment that they will be able to deliver the specific amount to government.”

When asked if the AACs are indeed losing, Garma said she’s a police officer and she knew better.

Galing ako sa baba. Alam ko kung kumikita yan o hindi. Kaya hindi nila ako pwedeng lokohin. Inuuna pa kasi nila yang binibigay outside, mga pang PR,” she said.

Garma said she’s been telling STL corporations that they should pay first what is due to government because there’s a contract.

“We could order the closure of their operation and the mayors or governors could do nothing about it,” she said.

Garma said the corporations could not re-apply, and even the names of their incorporators will be blacklisted,

“Even sa other areas, they could not apply. Niloko na nga tayo, papayag pa ba kayo?” she said.

Garma said there’s only one way for their operation to continue.

“They should pay first,” she said.

In terminating the AACs authority, Garma said there’s a process to be followed.

Under the previous IRR that was crafted by the past board of directors and management, arbitration will be initiated if the ACCs challenge the order.

“But this time, with the instruction of the President, there is no more arbitration. Once it’s in the contact, you have to pay. If you fail to pay, then you’re out. It’s that simple,” she said.

The arrears the two AACs incurred could have been a big help to the government’s Universal Health Care program.

Since July, Garma estimated that PCSO lost around P50 million to P70 million after STL operations in Iloilo city and province stopped.