Philippine Amusement and Gaming Corporation

Genuino-led PAGCOR management spent over a billion pesos just for coffee

Genuino-led PAGCOR management spent over a billion pesos just for coffee

“Scandalous”, “outrageous”, “offensively excessive”….that’s how Philippine Amusement and Gaming Corporation (PAGCOR) Chairman Cristino Naguiat, Jr. described the gross irregularity committed by the previous PAGCOR management, which they have recently unearthed.

Documents obtained by the current management of the Philippine Amusement and Gaming Corporation (PAGCOR) revealed that the state-owned gaming firm paid over a billion pesos for coffee served to casino customers under the management of ex-PAGCOR Chair Efraim Genuino and its board from August 2001 to June 2010.

The bulk of this amounting to almost P700 million went to the concessionaire Promolabels Specialty Shop for serving coffee products in PAGCOR’s seven casino branches.

“Based on PAGCOR’s records, Promolabels was given a three- to five-year concessionaire contract by the Genuino management for the operation of Figaro coffee shops in our Casino Filipino branches in Paranaque, Angeles, Heritage, Olongapo, Pavilion, Tagaytay and the former Casino Filipino Silahis,” said Chairman Naguiat.

All contracts of Promolabels’ Figaro coffee shops in the seven PAGCOR casinos were signed by a person named “Lot Manalo”. “In the original contracts with PAGCOR, it was stated that Promolabels was a duly registered corporation, but upon our verification, we found out that they are not registered with the Securities and Exchange Commission (SEC). When we checked with the Department of Trade and Inudstry, we were able to get a certification last July 6, 2011 stating that the Promolabels Specialty Shop is owned by Carlota Cristi Manalo Tan,” said Naguiat.

It turns out that Manalo is the wife of Johnny Tan, who is a known ally of Genuino. Johnny Tan was also connected with the infamous BIDA party-list, a political group identified with Genuino. “Tan was in fact the second nominee of the BIDA party-list during the 2010 national elections next to Sheryl Genuino-See who is the daughter of the former PAGCOR chair,” explained Naguiat. Tan was recently named as one of the respondents in the P186-million plunder case filed by PAGCOR against Genuino and 40 other individuals in connection with the questionable BIDA transactions.

A high-ranking casino official of PAGCOR, who spoke on condition of anonymity, claimed that he was totally unaware of the Genuino management’s plan to get an exclusive coffee provider for his branch.

“Basta na lang nagpadala ng notice ang Head Office na may bagong concessionaire at kailangan naming i-accommodate. Ganyan ang kalakaran dati, most of the time basta na lang darating ang notice na may bagong concessionaire at walang kontrata,” the casino official disclosed. All concessionaire contracts in the different PAGCOR branches were centralized under the supervision of the Research and Development Department during Genuino’s term. Said department was headed by then Executive Vice President Rene Figueroa.

During the previous administration, 99% of the Promolabels’ sales in at least one branch (Heritage) were actually charged against PAGCOR for F&B consumption of its customers. Said coffee concessionaire also enjoyed the monopoly of coffee supply inside the casinos. “We also received reports that during the time of Mr. Genuino, Promolabels had given marching orders to their F&B attendants for a sales quota of P3,000 per day. This means that one Figaro/Promolabels attendant had to make coffee sales of P90,000 for a month, or P1.08 million a year in the casino,” Naguiat narrated.

He added there were observation reports from the Commission on Audit (COA) in previous years calling the attention of the Genuino management about the big discrepancy in the cost of Figaro products inside and outside the casinos.

In an Audit Observation Memorandum (AOM) dated April 28, 2006, the COA pointed out that for 2005 alone the comparison of the prices of Figaro coffee sold in the Casino Filipino branches of Heritage, Paranaque, Pavilion and the former Silahis were as high as 64% than what was offered by Figaro outlets outside the casino.

The same COA report noted that based on records, the total sales of Promolabels for 2005 alone was P153 million. “Assuming the prices inside the casino are the same with those outside (the casino), the charges for food and beverage would have savings of as high as P73 million,” the report stated.

In a separate AOM addressed to the former management of the Paranaque casino on February 17, 2006, a COA Auditor who did an audit of the prices of Figaro products noted that “excessively priced products inside the casino may indicate excessive payments for Food and Beverage charges.”

One of the first steps Chairman Naguiat did when he assumed office in July 2010 was to curb the excesses in marketing expenses, including coffee consumption of customers.

“Itong mga kape na ito ang sabi nila pang-marketing strategy daw. Napansin ko agad na parang ang laki naman ng binabayaran ng PAGCOR sa mga coffee concessionaires. So we began to offer free coffee to our customers starting September last year,” Naguiat noted.

As a result of the new management’s move, substantial savings were instantly generated by PAGCOR. “During Mr. Genuino’s term, PAGCOR paid an average of more than P100 million for the yearly consumption of coffee in seven Casino Filipino branches. Now, we are spending a maximum of P36 million a year to serve the customers in our 12 casino branches, and also the 12,000 employees of PAGCOR,” he explained.

Naguiat stressed that “the billion pesos spent for Promolabels and the other coffee concessionaires during the time of Mr. Genuino could have been saved for PAGCOR’s CSR projects. It could have been used for the construction of 1,000 classrooms, or for the distribution of assorted medicines in more than 10,000 health missions nationwide that could have benefitted 15 million Filipinos. The said amount could have also provided one full meal daily to more than 300,000 malnourished public school children under the PAGCOR’s feeding program.”

Now, the billion peso question... SINO ANG KUMITA?

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