WHEREAS, to facilitate the enforcement and application of the above-mentioned Presidential Decrees, it is imperative to consolidate them into one statute;
WHEREAS, since its creation in 1977, PAGCOR has demonstrated its reliability as a source of income for the Government, particularly for the funding of government infrastructure projects, such that, as of December 1982, PAGCOR has generated gross revenue of P1.677 Billion, contributing P956 Million as the 60% share of the Government plus P83 Million in the form of 5% franchise tax;
WHEREAS, PAGCOR's operation has enabled the Government to identify the potential sources of additional revenue, provided games of chance are strictly managed and made subject to close scrutiny, regulation, supervision and control by the Government;
WHEREAS, to make it more dynamic and effective in its tasks, PAGCOR should now be reorganized by (a) increasing the participation of the private sector in the subscription of the authorized capital stock of PAGCOR and by adjusting the share of the Government in the gross earnings to 50%; provided, that the annual income of the Government is not less than P150 Million and, if it is less, then the share of the Government shall be 60% of the gross earnings; (b) providing for a settlement of the portion of the Government's share that was utilized for the stabilization of casino operations, and (c) providing for greater flexibility in operation by limiting governmental audit only to the determination of the 15% franchise tax and the Government's share of 50% of the gross earnings;
WHEREAS, in order to make PAGCOR's regulatory powers more effective, it is necessary that businesses primarily engaged in gambling operations be affiliated with PAGCOR, and become subject to its regulatory powers with respect to operation, capitalization and organizational structure;
WHEREAS, under Presidential Decree No. 1416, as amended, the President of the Philippines is authorized to reorganize the administrative structure of government offices:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and by Presidential Decree No. 1416, as amended, do hereby decree;
TITLE I — GENERAL PROVISIONS
SECTION 1. Declaration of Policy. — It is hereby declared to be the policy of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by law in order to attain the following objectives:
TITLE II — CREATION OF PHILIPPINE AMUSEMENT AND GAMING CORPORATION
SEC. 2. Philippine Amusement and Gaming Corporation (PAGCOR), Creation and Purpose. — To implement State policy and pursue the objectives set forth in the preceding Section, there is hereby created a body corporate to be known as the Philippine Amusement and Gaming Corporation, hereinafter referred to as the "Corporation”, which shall have its principal office in Metropolitan Manila. The Corporation may establish such offices, agencies, subsidiaries, or branches in the Philippines as its operations would require and its Board of Directors may determine.
SEC. 3. Corporate Powers. — The Corporation shall have the following powers and functions, among others:
SEC. 4. Authorized Capital Stock. — The Corporation shall have an authorized capital stock divided into one million voting and no par value shares, to be subscribed, paid for and voted as follows:
The voting power pertaining to shares of stock subscribed to by the Government of the Republic of the Philippines shall be vested in the President of the Philippines or in such person or persons as he may designate.
The voting power pertaining to shares of stock subscribed by private persons or entities shall be vested in them.
SEC. 5. Government Investment. — The Government advances to the Corporation authorized on May 29, 1978, having reached the amount of P70,430,752.03, shall be converted into equity as part of the investment of the Government to be applied to the subscription of 550,000 shares.
SEC. 6. Board of Directors. — The Corporation shall be governed and its activities be directed, controlled and managed by a Board of Directors, hereinafter referred to as the Board, composed of five (5) members, three (3) of whom shall come from the Government sector and shall be appointed by the President, while the ether two (2) shall be from the private sector, who own at least 1 share of stock in the Corporation and who shall be elected by the stockholders of the corporation in the annual general meeting or in a special meeting called for such purpose.
Each Director shall serve for a term of one (1) year and until his successor shall have been duly appointed and qualified.
SEC. 7. Powers, Functions and Duties of the Board of Directors. — The Board shall have the following powers, functions and duties;
TITLE III — AFFILIATION PROVISIONS
SEC. 8. Registration. — All persons primarily engaged in gambling, together with their allied business, with contract or franchise from the Corporation, shall register and affiliate their businesses with the Corporation. The Corporation shall issue the corresponding certificates of affiliation upon compliance by the registering entity with the promulgated rules and regulations thereon.
SEC. 9. Regulatory Power. — The Corporation shall maintain a Registry of the affiliated entities, and shall exercise all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such affiliated entities mentioned under the preceding section, including but not limited to amendments of Articles of Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the operation of the affiliating entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding, except only with respect to original incorporation.
TITLE IV — GRANT OF FRANCHISE
SEC. 10. Nature and term of franchise. — Subject to
the terms and conditions established in this Decree, the Corporation is hereby
granted for a period of twenty-five (25) years, renewable for another
twenty-five (25) years, the rights, privilege and authority to operate and
maintain gambling casinos, clubs, and other recreation or amusement places,
sports, gaming pools, i.e. basketball, football, lotteries, etc. whether on land
or sea, within the territorial jurisdiction of the Republic of the
Philippines.
SEC. 11. Scope of Franchise. — In addition
to the rights and privileges granted it under the preceding Section, this
Franchise shall entitle the Corporation to do and undertake the following:
SEC. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of the Government in the aggregate gross earnings of the Corporation from this Franchise shall be immediately set aside and allocated to fund the following infrastructure and socio-civic projects within the Metropolitan Manila Area:
In addition to the priority infrastructure and socio-civic projects within the Metropolitan Manila specifically enumerated above, the share of the Government in the aggregate gross earnings derived by the Corporate from this Franchise may also be appropriated and allocated to fund and finance infrastructure and/or socio-civic projects throughout the Philippines as may be directed and authorized by the Office of the President of 'he Philippines.
SEC. 13. Exemptions. —
Vessels and/or accessory ferry boats imported or to be imported by any corporation having existing contractual arrangements with the Corporation, for the sole and exclusive use of the casino or to be used to service the operations and requirements of the casino, shall likewise be totally exempt from the payment of all customs duties, taxes and other imposts, including all kinds of fees, levies, assessments or charges of any kind or nature, whether National or Local.
(b) Others: The exemption herein granted for earnings derived from the operations conducted under the franchise specifically from the payment of any tax, income or otherwise, as well as any form of charges, fees or levies, shall inure to the benefit of and extend to corporations(s), associations(s), agency(ies), or individuals) with whom the Corporation or operator has any contractual relationship in connection with the operations of the casino(s) authorized to be conducted under this Franchise and to those receiving compensation or other remuneration from the Corporation or operator as a result of essential facilities furnished and/or technical services rendered to the Corporation or operator.
The fee or remuneration of foreign entertainers contracted by the Corporation or operator in pursuance of this provision shall be free of any tax.
(a) operation of the casino(s) or investments in any affiliate activity that will ultimately redound to the benefit of the Corporation or any other corporation with whom the Corporation has any existing arrangements in connection with or related to the operations of the casino(s);
(b) Government bonds, securities, treasury notes, or debentures; or
(c) BOI — registered or export-oriented corporation(s).
(a) A specific area in the casino(s) or gaming pit shall be put up solely and exclusively for players and patrons utilizing foreign currencies;
(b) The Corporation shall appoint and designate a duly accredited commercial bank agent of the Central Bank, to handle, administer and manage the use of foreign currencies in the casino(s);
(c) The Corporation shall provide an office at casino(s) exclusively for the employees of the designated bank, agent of the Central Bank, where the Corporation shall maintain a dollar account which will be utilized exclusively for the above purpose and the casino dollar treasury employees;
(d) Only persons with foreign passports or certificates of identity (for Hong Kong patron only) duly issued by the government or country of their residence will be allowed to play in the foreign exchange gaming pit;
(e) Only foreign exchange prescribed to form part of the Philippine International Reserve and the following foreign exchange currencies: Australian Dollar, Singapore Dollar, Hong Kong Dollar, shall be used in this gaming pit;
(f) The disbursement, administration, management and recording of foreign exchange currencies used in the casino(s) shall be carried out in accordance with existing foreign exchange regulations; and periodical reports of the transactions in such foreign exchange currencies by the Corporation shall be duly recorded and reported to the Central Bank thru the designated Agent Bank; and
(g) The Corporation shall issue the necessary rules and regulations for the guidance and information of players qualified to participate in the foreign exchange gaming pit, in order to make certain that the terms and conditions as above set forth are strictly complied with.
SEC. 14. Other Conditions. —
(a) Tourist and/or foreigners who are not residents of the
Philippines;
(b) Residents with a gross income for the previous year of at
least P50,000.00, which fact shall be certified to by the Bureau of Internal
Revenue; and
(c) The number of guests of the above-mentioned qualified
persons shall be limited to two (2) only; provided, that the said
guests are at least 21 years of age;
(a) Government officials connected directly with the operation of the
Government or any of its agencies;
(b) Members of the Armed Forces of the
Philippines, including the Army, Navy, Air Force or Constabulary; and
(c)
Persons under 21 years of age or students of any school, college or university
in the Philippines.
From these are excepted the personnel employed by the casinos, special guests, or those who at the discretion of the Management may be allowed to stay in the premises.
TITLE V — GOVERNMENT AUDIT
SEC. 15. Auditor. — The Commission on Audit or any government agency that the Office of the President may designate shall appoint a representative who shall be the Auditor of the Corporation and such personnel as may be necessary to assist said representative in the performance of his duties. The salaries of the Auditor or representative and his staff shall be fixed by the Chairman of the Commission on Audit or designated government agency, with the advice of the Board, and said salaries and other expenses shall be paid by the Corporation. The funds of the Corporation to be covered by the audit shall be limited to the 5% franchise tax and the 50% of the gross earnings pertaining to the Government as its share.
TITLE VI — EXEMPTION FROM CIVIL SERVICE LAW
SEC. 16. Exemption. — All position in the Corporation, whether technical, administrative, professional or managerial are exempt from the provisions of the Civil Service Law, rules and regulations, and shall be governed only by the personnel management policies set by the Board of Directors. All employees of the casinos and related services shall be classified as "Confidential" appointee.
TITLE VII — TRANSITORY PROVISIONS
SEC. 17. Transitory Provisions. — The properties, monies, assets, rights, choses in action, obligations, liabilities, records and contracts of the Philippine
Amusement and Gaming Corporation (PAGCOR) under Presidential Decree Nos. 1067-A, 1067-B, 1067-C, 1399 and 1632 shall continue to be vested in and assumed by the Corporation, pursuant to this Decree.
Likewise, all personnel of PAGCOR under the above-mentioned Decree shall be absorbed by the Corporation under this Decree and shall remain in their respective positions without demotion in rank or reduction in salary: provided, that employees who shall be separated from the Corporation shall be given at least one month gratuity for every full year of service, a fraction of over six months being considered a full year, but in no case more than twenty-four months salary, in addition to all benefits to which they may be entitled under existing laws, rules and regulations.
TITLE VIII — REPEALING, SEPARABILITY AND EFFECTIVITY CLAUSES
SEC. 18. Repealing Clause. — All laws, decrees, executive orders, administrative orders, rules or regulations, inconsistent herewith are hereby repealed, amended or modified accordingly.
SEC. 19. Separability Clause. — The provisions of this Decree are hereby declared to be separable, and in the event any one or more of such provisions are held unconstitutional, the validity of the other provisions shall not be affected.
SEC. 20. Effectivity. — This Decree shall take effect immediately.
Done in the City of Manila, this 11th day of July, in the year of Our Lord, nineteen hundred and eighty-three.