PAGCOR Casino Filipino Privatization Could Cut Universal Health Care Funding by Up to P2.1 Billion Annually

 

PAGCOR Casino Filipino Sale May Leave Universal Health Care Facing Billions in Annual Funding Loss

The planned privatization of Casino Filipino could reshape the Philippine gaming industry, but legal experts caution that the move may also create a significant financial gap for the country's Universal Health Care (UHC) program.

A study released by local firm Geronimo Law concludes that transferring Casino Filipino operations to private ownership would likely reduce the annual funding allocated to UHC by approximately P1.7 billion to P2.1 billion, based on projected revenue from 2024 and 2025. While separating PAGCOR's regulatory and commercial responsibilities may strengthen governance and improve operational efficiency, the report argues that the reform carries measurable consequences for public health financing.

The concern stems from the funding structure established under Republic Act 11223, also known as the Universal Health Care Law. The legislation directs half of PAGCOR's remittances to the national treasury toward the Philippine Health Insurance Corp. to support broader access to healthcare services for Filipinos.

Casino Filipino has been a meaningful contributor under this framework, providing P3.02 billion to the UHC program in 2024 and another P2.47 billion in 2025. Once the casinos are transferred to private operators, PAGCOR would no longer generate gaming revenue from direct operations. Instead, its primary source of income would come from regulatory and licensing fees.

According to Geronimo Law, this transition creates a major funding challenge. To replace the current level of healthcare contributions using licensing revenue alone, privatized casino branches would need to generate more than three times their existing gross gaming revenue. The firm considers such growth highly ambitious under current market conditions.

The situation resembles replacing a steady stream with a collection bucket. Even if the bucket continues to gather water, it must capture substantially more than before to match the dependable flow that previously sustained the system. In the same way, licensing fees would have to increase dramatically to compensate for the loss of direct gaming income.

PAGCOR currently operates Casino Filipino through a legislative franchise that remains valid until July 2033. Despite that authority, the government continues to advance its privatization initiative. PAGCOR Chairman Alejandro Tengco previously announced that the Governance Commission for Government Owned or Controlled Corporations is expected to submit its recommendation to the Office of the President during the third quarter of the year, with an executive order anticipated before year end.

The proposed timeline calls for the sale of approximately 40 Casino Filipino branches between late 2026 and 2027, followed by the complete separation of PAGCOR's regulatory and operational functions by 2028.

Government estimates place the total proceeds from the privatization at between P30 billion and P50 billion. However, Geronimo Law emphasized that these one time sale proceeds would not be directed to the Universal Health Care program because the legal earmarking applies only to gaming income and not to asset sales.

The study concludes that privatization may still be justified from a governance perspective by eliminating conflicts between PAGCOR's regulatory and commercial roles. Nevertheless, it warns that policymakers should carefully weigh those regulatory benefits against the recurring loss in healthcare funding, which it estimates could range from roughly P1.6 billion to P2.3 billion every year after the sale, unless an alternative funding mechanism is introduced.