Philippine Charity Sweepstakes Office general manager Alexander Balutan revealed on Wednesday the mandatory contributions to various government agencies had been hurting the agency’s charity fund.
“We are appealing to Congress to repeal our mandate on mandatory contributions because it is eating up our funds for medical service,” said Balutan during the Sama-samang Talakayan at Linawan media forum at Fort Ilocandia in Laoag City, Ilocos Norte.
This is in response to Commission on Audit’s warning against the agency over its “questionable” transactions worth more than P10.17 billion intended for charity programs and medical assistance.
“Let this be an eye opener to our legislators, unless laws are repealed, billions of pesos intended for health services will be siphoned by these mandatory contributions na hindi naman related sa health services,” said Balutan.
“We cannot stop these remittances unless Congress repeals laws governing us to stop these mandatory contributions.”
PCSO is a principal agency tasked to generate funds for health services and programs of national character through lotto, digit games, Instant Sweepstakes, and Small Town Lottery.
The PCSO Charter states that from the gross receipts generated from the sale of sweepstakes tickets, whether for sweepstakes races, lotteries, or other similar activities, the printing cost of such tickets is deducted to arrive at the net receipts.
Pursuant to Section 6, Republic Act No. 1169, as amended (PCSO Charter), the net receipts shall be divided into 55 percent (Prize Fund), 30 percent (Charity Fund) and 15 percent (Operating Fund).
The agency also provides funding support to various government agencies commissioned to receive part of the agency’s earnings.
As of 2nd quarter of 2018, PCSO has already released P71.4 million or P71,452,785.50 to be exact for the Commission on Higher Education alone, which is 1 percent of the gross sales of Lotto.
As of June 2018, the total shares/obligations for mandatory contributions is P14,048,632,664.99. From 1998 to 2017, PCSO has already released a total of P12.198 billion with an outstanding balance of P1.8 billion.
From January to June 2018, PCSO has released another P443 million and now the agency has an outstanding balance of P1.8 billion.
The 28 recipients of mandatory contributions of PCSO, seven of which are under Executive Order, 20 under Republic Act, and one under Commonwealth Act, include CHED, Dangerous Drugs Board, Philippine Sports Commission, Philippine Crop Insurance Corp., National Commission on Indigenous People (Ancestral Domain Fund), National Museum, Department of Health, Overseas Worker Welfare Administration-Congressional Migrant Workers Scholarship Program.
They also include Department of Foreign Affairs Information System on Migration, Quirino Memorial Medical Center, Shelter and Urban Development Programs, National Endowment Fund for Children TV, National Book Development Act, Department of Justice, Philippine Drug Enforcement Agency operations, SARS Awareness and Prevention, local government units, PhilHealth, Philippine International Trading Corp., Avian Flu Fund, Ligtas Buntis, Nutrition Foundation of the Philippines, Philippine Red Cross, Girl Scouts of the Philippines, National Council on Disability Affairs, Quezon Institute, and Boy Scouts of the Philippines.
Apart from the mandatory contributions, PCSO also pays taxes to the government.
As of January 2018, the agency is paying P1 billion a month for the taxes. Last year, the agency paid P14 billion for the arears and penalties of the previous years.
On July 23, the agency will implement the 20-percent increase in the prices of Lotto tickets as a result of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law which imposes a 20-percent documentary stamp tax (DST) on all lotto tickets.
“It is the biggest challenge PCSO is facing now – the additional 20-percent tax from the TRAIN law,” Balutan said.
.“But let us not look at this 20 percent as just an additional burden. Let us look at the brighter side of it because in the long run, we will all benefit from this. It will go a long way in building bridges, roads, and other infrastructure projects of the Build, Build, Build Program of President Rodrigo Duterte,” he added.