Supreme Court Orders PAGCOR to Remit 30 Years’ Worth of Payments to Philippine Sports Commission

The Supreme Court mandates that PAGCOR must remit 5% of its gross annual income to the Philippine Sports Commission, starting from 1993 up to the present.

The Supreme Court of the Philippines has issued a landmark decision requiring the Philippine Amusement and Gaming Corporation (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) to remit substantial funds to the Philippine Sports Commission (PSC).

The ruling, delivered unanimously by Senior Associate Justice Marvic M.V.F. Leonen, mandates both agencies to fulfill long-standing financial obligations under existing laws. The ruling was made public on the court’s website on August 22, 2024.

According to the Supreme Court’s decision, PAGCOR “remit the full amount of 5 percent of its gross income per annum, after deduction of its 5 percent franchise tax, from 1993 to [the] present in favour of the Philippine Sports Commission.” This amount is calculated after deducting PAGCOR’s 5% franchise tax.

In the first half of 2024 alone, PAGCOR reported gross revenues of PHP51.76 billion (US$921.7 million), and a net income of approximately PHP6.57 billion, marking a 121.5% increase year-on-year.

Despite this, PAGCOR had argued that the PSC’s share should be subject to additional deductions, leaving a significantly lower percentage. However, the Supreme Court’s ruling rejected this argument, stating that the remittance to the PSC should be made in full without additional deductions.

In addition to PAGCOR, the Supreme Court also instructed the PCSO to remit 30% of the charity fund from its sweepstakes or lottery draws to the PSC for the years 2006 to the present. The Court’s decision clarifies that the term “lottery” as used in the relevant law includes lotto draws conducted by the PCSO.

The decision follows a petition filed by Josseler Guiao, a former member of the House of Representatives and Vice Chairperson of its Committee on Youth and Sports Development. Guiao’s petition claimed that this “non-remittance caused lack of funding for sports development projects” of the PSC.

The ruling addresses claims made by PAGCOR that its financial contributions to the PSC should be reduced due to various other financial commitments, including a 50% share to the national government and a 10% subsidy to the National Power Corporation. The Court rejected these claims, emphasizing that the law mandates a straightforward allocation to the PSC.

Read related article: Pagcor Reports 26.8% Increase in Expenses, Despite Revenue Boost