Government agency PAGCOR remits PHP4.59 billion in cash dividends to the National Treasury.
PAGCOR Boosts Dividend Remittance to 75%, Strengthening National Budget and Economic Growth
In a significant move to bolster government revenue and support continued economic growth, the Philippine Amusement and Gaming Corporation (PAGCOR) has increased its dividend remittance to the National Treasury to 75% of net income for 2024. This is an increase from the 50% mandate under Republic Act No. 7656, also known as the Dividends Law.
The higher remittance percentage directly enhances the national government's budget, providing more funds for public spending and development programs without increasing taxes. PAGCOR's Chairman and CEO, Alejandro H. Tengco, attributed the higher dividend rate to the firm's strong earnings of Php79.37 billion in gross revenues and Php6.13 billion in net earnings from gaming operations in 2023.
Deputy National Treasurer Eduardo Anthony Mariño III received the dividend check during a brief ceremony at the new PAGCOR Executive Office in Pasay City. Mariño emphasized that the increased remittance from PAGCOR would support the administration's socioeconomic agenda, particularly as the country faced challenges in achieving growth targets due to inflation in the past year.
The reasons for the increase include PAGCOR's strong financial performance, allowing for higher dividend payouts. Additionally, the government aims to maximize income from government-owned and controlled corporations (GOCCs) to support fiscal needs, possibly to align with fiscal goals amid the Philippines' economic growth trajectory and greater revenue requirements.
The larger dividend inflow strengthens the national budget, providing more resources for infrastructure, social services, and other fiscal priorities. This additional funding helps reduce fiscal deficits or dependence on debt financing. GOCC remittances, including those from PAGCOR, are reported to have exceeded forecasts, contributing positively to total government revenues.
Government revenue increments from PAGCOR dividends support public investments that can stimulate economic growth, infrastructure development, and social programs, contributing to the projected GDP growth of 5.5% for 2025. However, PAGCOR has concurrently been reducing tax remittance rates on online gambling operators, which might partly offset higher dividend remittances through other channels by seeking to foster the growth of the online gambling sector.
Overall, the increased dividend remittance improves government fiscal space without direct tax hikes, supporting a balanced approach to sustaining growth and government finances. The increase in the dividend follows Finance Secretary Ralph Recto's request to allocate an additional 25% dividend for government expenditures. PAGCOR transferred Php4.59 billion in cash dividends to the National Treasury in 2023.
In summary, PAGCOR's increase in dividend remittance to 75% of net income aims to boost government funds, supporting budgetary stability and public investments that underlie continued economic growth, while strategic adjustments in gaming tax rates suggest a nuanced fiscal strategy balancing revenue generation and sector growth.
The increased dividend remittance of 75% from PAGCOR's net income directly contributes to the national government's business sector, providing more funds for public spending without implementing new taxes. This substantial remittance is a result of PAGCOR's strong financial performance in the field of finance.
