MANILA, Philippines – The Philippine Charity Sweepstakes Office (PCSO) is missing P6.034 billion from Small Town Lottery (STL) operations, dragging trial courts into the issue and prompting a Supreme Court review of injunctions issued thus far.

President Rodrigo Duterte verbally ordered the shut down of PCSO gaming operations, citing as one of the reasons the non-remittance of national government shares from STL. (READ: Did stubborn PCSO employees trigger Duterte’s order vs gambling?)

According to the 2018 audit report of the PCSO, 57 STL agents and 45 authorized agent corporations (AACs) did not remit revenues to the agency for 2017 and 2018, resulting in shortfalls worth P6.034 billion for the past two years.

The Commission on Audit (COA) found that the 57 STL agents and 45 AACs failed to meet the required Presumptive Monthly Retail Receipts (PMRR) by P7.230 billion in 2018 and P7.589 in 2017. The PMRRs are an amount determined by the PCSO as the minimum monthly sales of an authorized agent.

Of those PMRR shortfalls, STL agents incurred shortfalls due PCSO in the net amount of P3.051 billion in 2018 and P2.983 billion in 2017, or P6.034 billion for those two years.

Furthermore, the COA found that the PCSO did not include these shortfalls in their recognized revenues.

The PCSO even told COA that “the probability of receiving cash is almost impossible taking into consideration that the PMRRs are just based on presumptions by the Authorized STL agents.” (READ: Employee perks, non-remittance of gov’t shares ailed PCSO for years)

“The agreed PMRR was incorporated in a valid and enforceable contract between the PCSO and the STL Agents and was a legal obligation by itself. Therefore, it cannot be said that the probability of collection is almost impossible,” said COA.

Where the Supreme Court comes in

As a response to the problem, PCSO terminated contracts with STL agents which committed non-payments and which resulted in shortfalls due to PCSO.

But these STL agents ran to the court, several of them to the Mandaluyong Regional Trial Court (RTC), with whom they secured preliminary injunctions. The injunctions stopped the PCSO from implementing its termination of contracts.

PCSO Chairperson Anselmo Simeon Pinili wrote the Office of the Court Administrator (OCA) on February 12 to raise the concern.

Days after President Rodrigo Duterte verbally ordered the shutdown of PCSO gaming operations due to alleged corruption, Court Administrator Midas Marquez ordered all trial court judges to submit to them status reports of all PCSO-related cases.

Marquez’ circular dated July 29 referred to Pinili’s complaint over the injunctions.

Chief Justice Lucas Bersamin said on Wednesday, July 31, that while all judges are presumed to have issued those injunctions in a regular manner, the OCA “is very very capable of detecting deficiencies and non-compliances.”

“If they noticed anything irregular, then they will determine if there is a need to investigate deeper or to just call the judges’ attention to whatever shortcomings there were,” Bersamin said, adding that the OCA’s inventory is a regular process that just happened to coincide with Duterte’s rants against the PCSO.

“We required them to submit reports to monitor only; only when we notice things that are irregular do we come into the picture,” said Bersamin.

President ‘may be right’

In Duterte’s verbal order to stop PCSO gaming operations, he mentioned that he “will not honor” court injunctions.

“I will not honor anything there. Everybody, everybody has to stop,” said Duterte.

Bersamin said he still backs trial court judges in the presumption of regularity in their injunctions, but that Duterte “may be right” as well.

“I’m not saying the President was wrong, he may be right in some way. There is an existing law that you cannot issue a Temporary Restraining Order (TRO) on these particular kinds of cases, so maybe he was thinking of that,” Bersamin said.

Bersamin was referring to Administrative Circular No. 07-99 reiterating that TROs cannot be issued “in cases involving implementation of government infrastructure projects.” – Rappler.com