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Thursday, November 30, 2023

Al Tengco: PAGCOR’s game changer

“With all of PAGCOR plans in place, gaming in the Philippines will never be the same again”

In the game of chance where PAGCOR thrives on its dual role as regulator and operator, reforms are necessary.

Changes and innovations—the essence of reforms—are needed to improve operations, upgrade manpower skills and modernize facilities with an eye on priming up the business in the long run. Since government is involved and the stakes are high, any PAGCOR reform plan, therefore, must be geared for the greater good.

About two months ago, I had the rare privilege to meet up and interview PAGCOR’s chairman/CEO Alejandro H. Tengco who is fast gaining reputation as a reformist.

Tengco, a true-blue Atenista (from primary school to a law degree), has struck at the sweet spot in his bid for reforms. Time and circumstances are on his side.

If it is prudent to suggest, Al Tengco should hasten these reforms in his noble attempt to be the “game changer” in the gaming industry.

He must seize the opportunity to institute changes at PAGCOR while the odds are heavily stacked in his favor.

He has adequate resources at his disposal to carry out these reforms which range from modernization of onsite and online casinos, slot machines, video arcades to upgrading of infotech facilities—the entire gamut of PAGCOR’s operations and the Philippine gaming industry as well.

Actually, the die is cast, as they say in the industry.

Tengco and his management executives headed by Juanito L. Sanosa Jr., president and chief operating officer, all came well prepared.

Their game plan started rolling in August 2022. This was the date they assumed their posts at PAGCOR, a regular contributor of billions of pesos in revenue to the national coffers.

“We have started preparing for this transition in earnest, and we are starting where it matters most – within PAGCOR itself,” Tengco said as quoted by published reports.

The transition and internal reforms called for, among others, a redesign of PAGCOR’s logo.

In Tengco’s words: “The new PAGCOR logo incorporates the element of fire associated with energy, inspiration, passion, and transformation. It symbolizes the flame that ignites change and drives progress.

“(It) also reflects a beacon, which stands for guidance, leadership, and direction. It represents a guiding light that helps people find their way.”

This was a well-crafted, brilliant remark but much maligned by detractors.

The designer’s price tag also drew harsh criticisms. Despite the brickbats and a threat of legislative inquiry into PAGCOR’s logo redesign, Tengco stood by his decision.

Rather than engage in buck-passing or sulk in a corner, Tengco wisely and decisively went on to suit deeds to his words. Action man, indeed.

Now, PAGCOR is trying to cash in on the post-pandemic boom fueled in part by the “revenge spending” of Asian high rollers.

With Tengco calling the shots, PAGCOR expects to hit 92 percent of its pre-pandemic revenue in 2023 after a record high earnings of P81 billion in 2019.

In 2022, total revenue reached P58.96 billion and estimated to increase 28 percent to P75.5 billion this year.

For the 2024 estimate, a modest increase of 6.34 percent to P80.28 billion in revenue was in the cards.

This year, the Tengco-led PAGCOR expects to remit to the National Treasury some P50.09 billion, 44 percent more than last year’s P34.67 billion, living up to its role as one of the contributors to nation-building.

Much more revenue can be generated from the privatization of PAGCOR, whose goal is intended to enhance the value of its assets for a better price while making the casinos more attractive to potential buyers.

The Finance department has pegged the sales proceeds at P200 billion, according to records of the House committee on appropriations.

But that estimate, I believe, is an unrealistic “pie in the sky” considering that PAGCOR doesn’t have real estate assets that could appreciate in value over time.

Tengco pointed this out to lawmakers during the House hearing in August.

It looks like the P80-billion ballpark is more acceptable, if I were to make an estimate.

Under Tengco’s plan, first to be privatized are 45 casinos, all PAGCOR-owned and operated.

Also up for the auction block are Casino Filipino’s Information and Communication Technology and Cybersecurity infrastructure. But before these can be privatized, an upgrade to enhance the casino complex is a must.

Any displacement of personnel that may arise during the privatization, Tengco and his team are ready to address the potential issues.

During town hall meetings with PAGCOR employees across the country, Tengco says:

“We tell them there is no reason to worry because we have plans in place to mitigate, if not totally avoid, any personnel displacement.”

This just goes to show Tengco’s human side.

Driven to succeed, Tengco once told a Manila forum he wanted to make PAGCOR the gold standard in Asian gaming. “We certainly know our potentials and capability to become the gold standard in the Asian gaming scene.”

This isn’t a pipe dream or an empty boast at all given that PAGCOR under Tengco’s watch is determined to transform itself into a purely regulator role once its privatization takes full effect by 2025.

I’ll take a leaf from US investment banker and ex-president of NYSE John Thain in support of Tengco’s regulatory bid: Thain says, “Regulators are in the best position to regulate when they are intimately knowledgeable about the activities they are regulating.”

On that encouraging note, I will put a check mark in the box for “intimate knowledge” because PAGCOR has over four decades of experience been running this kind of business in the Philippines. The crystal-clear conclusion is that PAGCOR is highly competent and qualified to be a gaming regulator. I wholeheartedly support the Tengco management in its decision.

Soon to assume its new role as regulator, Pagcor vows better safeguards and controls to address the social ills which go with the conduct of gaming operations.

PAGCOR can also bank on license fee collections as revenue booster. Its beneficiaries like charity organizations and even local government units can continue to count on PAGCOR for much-needed donations.

With all of PAGCOR plans in place, gaming in the Philippines will never be the same again. Tengco, the game-changing chairman, richly deserves a congratulatory pat on the back.

(The author is a book writer and publisher of coffee-table books with a least 40 titles to his name. He is also the president and executive director of the Million Trees Foundation Inc, a non-government outfit advocating tree planting and watershed protection.)

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