Commission on Audit. (INQUIRER FILE PHOTO)
MANILA, Philippines – The Commission on Audit (COA) has asked the Philippine Amusement and Gaming Corporation (Pagcor) if the Casino Filipino (CF) Manila Bay branch should continue operating in view of the P2.113-billion worth of losses it incurred for the last five years.
In COA’s audit report of Pagcor released on July 18, the state auditor said that the downward trend started in 2014, when the branch’s net income registered a deficit of P352 million.
The losses for the year 2015 was at P458 million, P386 million in 2016, P413.5 million in 2017, and P502.7 million in 2018. According to COA, this was not reflected in the government controlled corporation’s Financial Statement (FS).
“When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern,” the commission stressed, citing paragraph 25 of the Philippine Accounting Standards (PAS).
“When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties,” COA added.
A table disclosed by COA showed that from 2014 to 2018, Casino Filipino had a total income of P10.60 billion. However, branch operating expenses over the years amounted to P6.5 billion, while franchise taxes were at P527.2 million.
Government and host city shares also took a huge part of the income. CF’s contribution to the City of Manila was at P84.48 million annually, while government shares were at P4.984 billion in five years, and total grants to the Dangerous Drugs Board were at P23 million.
The losses were also spurred by decreasing incomes from 2014. In 2014, CF had an income of P2.850 billion, down to P2.360 billion in 2015, and slightly up again at P2.416 billion in 2016.
But in 2017, the CF’s income shrunk to P1.758 billion, and was further down in 2018 with just P1.215 billion.
According to the management of the branch, the losses can be attributed to stiff competition in the gaming industry, with hotels and integrated resorts having their own casinos and gaming facilities.
COA asked Pagcor and CF to assess whether the continuous operation of the branch is still viable, and to fully disclose the financial statements of the branch. The state audit agency also urged the management to craft plans which would revitalize the branch, to gain sufficient income and ensure the operation of the branch. /jpv