The Philippine Charity Sweepstakes Office said that since 2010, the agency has been reviewing its Small Town Lottery program and implementing measures to correct its flaws, including the payment of documentary stamp tax by STL operators.
The game was established in 2005 on an experimental basis to counteract illegal numbers games in the provinces and to raise more funds for the PCSO’s social welfare programs, including its flagship Individual Medical Assistance Program, ambulance donation, and medical equipment donation programs, among many others.
The previous PCSO administrations received no audit observation memoranda from the Commission on Audit regarding DST on STL. Upon assumption of office in July 2010 of the Board of Directors under the present administration—then-chairman Margarita P. Juico, then-director Aleta L. Tolentino, and current directors Jose Ferdinand M. Rojas II (vice chairman), Betty B. Nantes, Mabel V. Mamba, and Francisco G. Joaquin III—concentrated on tightening the control and monitoring aspects of the game, PCSO having received no adverse opinion on the matter from the CoA nor Bureau of Internal Revenue.
From 2010 to 2012, the Board discovered weaknesses in the STL system that they corrected by imposing stricter implementing rules and regulations in 2014, including the need for STL accredited agent corporations to pay DST; this requirement was implemented beginning 2015.
On the reduction of STL revenue share allocations to provinces, congressional districts, LGUs, and the Philippine National Police in the IRR presently being implemented, this is because the amounts are actually discretionary; under the charter, PCSO is not mandated to give STL shares to LGUs. However, PCSO recognizes the efforts of these groups in fulfilling the STL purpose to provide an alternative to jueteng and allocated shares to them.
The LGU shares from STL revenues are taken from the Charity Fund allocation of the revenues. Under the PCSO’s charter, its revenues are apportioned among three funds: 55 percent is allocated to the Prize Fund (for the games), 30 percent goes to the Charity Fund, and 15 to the Operating Fund (PCSO receives no funds from the government for its operating expenses). STL shares for the congressional districts, LGUs, etc. are taken from the Charity Fund and may not be taken from either of the two other funds.
With the growing need to fund the social welfare programs of PCSO and increase the amount for the Charity Fund, the Board decided to adjust the shares of stakeholders instead. The shares are intended for the LGUs’ charity programs. LGUs and other stakeholders may still, at any time, request additional financial assistance from PCSO.
“We have been strict and prudent in our management of PCSO, including its games and programs,” said Rojas. “Under our watch, tax arrears from the previous administration amounting to over P2 billion have already been paid, as were other debts, such as mandatory contributions to other government agencies. A fund of P2 billion to construct a PCSO headquarters has been set aside, something previous agency administrations have not done. Daily fund allocation for the IMAP has increased from P4 million in 2010 to the present P18.5 million. Stricter rules for games and screening of operators have also been implemented.”