SC reminds COA of its limited authority to audit Pagcor

Screenshot of the Supreme Court main building

MANILA, Philippines — The Supreme Court has reminded the Commission on Audit (COA) that it has limited authority to scrutinize the use of public funds by the Philippine Amusement and Gaming Corp. (Pagcor).

Voting unanimously, the high tribunal pointed out that Presidential Decree No. 1869 clearly stipulated that the COA may only audit the 5-percent franchise tax that Pagcor remits to the Bureau of Internal Revenue (BIR) and half of the state gaming regulator’s annual gross earnings.

The magistrates cited the Marcos-era edict in setting aside the notice of disallowance that the state auditors had issued against former Pagcor chair Efraim Genuino, who had approved a P2-million financial aid for a drainage system of a private subdivision in Los Baños town, Laguna, in 2010.

Los Baños, known for its natural hot spring resorts, had received millions of pesos in projects and assistance from Pagcor after Genuino’s son, Anthony, joined and eventually won the mayoral race that year.

In a 14-page ruling, the high court said the COA committed grave abuse of discretion when it audited Pagcor’s operating expenses, which Genuino claimed was the source of the financial assistance.

“By law, [the] COA’s audit jurisdiction over Pagcor is limited to the latter’s remittances to the BIR as franchise tax and the national treasury with respect to the government’s share in its gross earnings,” the high court said in a June 15 decision, which was made public only on Monday.

It said this restriction on the COA’s audit authority over Pagcor was intended to give the state regulator “some flexibility in [its] operations.”

“It is a cardinal rule in statutory construction that when the law is clear, ‘there is no room for construction or interpretation. There is only room for application,’” the magistrates said.

The court also noted that since the law was “clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.”

As correctly argued by Genuino, the court said the COA’s power to audit Pagcor “is not unrestricted.”