The government should place under its top priority list the development of legalized gambling in the Philippines because it makes much money from it. One listed company alone reported having paid the government P6.5 billion in franchise fees and taxes. To be exact, in the last three years, that is, from 2012 to 2014, the government collected a total of P6,498,866,014 from Leisure and Resorts World Corp. (LRWC).
The amount topped the enumeration of the “cost and operating expenses” LRWC reported in a financial filing it posted on the website of the Philippine Stock Exchange.
This financial filing must be encouraging for the government because its collections are increasing every year. In 2012, its take from LRWC’s gambling operations, or better called, of course, as gaming operations, amounted to P1.725 billion, which rose by a further 17.449 percent to P2.026 billion in 2013. In 2014, its gambling share totaled P2.748 billion, for a huge increase of 35.637 percent.
PAGCOR’s share raised to 50%
In a footnote to its financial statement, LRWC said it used to pay “PAGCOR 47.5 percent and 5 percent of its revenue from electronic bingo operations as franchise fee and BIR franchise tax, respectively, until March 31, 2013.” PAGCOR is the government’s Philippine Amusement and Gaming Corp. and the BIR stands for the Bureau of Internal revenue.
The government’s collection policy then suddenly changed. “Starting April 1, 2013,” LRWC said in the same footnote, “the company pays PAGCOR 50 percent of its gross revenue as franchise fee and the tax regime changed from the franchise tax to corporate income tax.” As a result, it said, “the group’s income tax expense consists of the 30 percent regular corporate income tax…”
With its growing share from LRWC’s gaming operations, PAGCOR must have seen or projected more money flowing into its coffers. In 2014, LRWC’s revenues increased 30.014 percent to P6.58 billion from P5.061 billion. For further perspective, in 2012, the company reported revenues of P4.533 billion. For the first quarter of 2015, LRWC’s figures show P888.12 million in franchise fee and taxes it paid PAGCOR and BIR. Based on the first quarter’s LRWC payment, this could amount to P3.55 billion for the year.
By the way, where did LRWC’s P109.1 million expenses, which fell under “others,” go? This unexplained expense in the financial filing should have boosted the company’s net profit of P934.087 million to top P1 billion at P1.043 billion. The company spent only P53.34 million in 2013 and P85.353 million in 2012 under “others.” Why the sudden surge?
Insiders’ paper wealth
Delfin L. Lazaro, a member of the seven-man board of Ayala Corp., sold 9,840 AC shares on June 24 and 60 AC shares on June 25 at P798 per share. After selling, he still owns 258,297 AC common shares, or 0.13 percent. At P789.50 per share, AC’s closing price on Friday, his AC shares are worth P203.925 million.
Jose Marcel E. Panlilio, chairman, president and chief executive officer of Boulevard Holdings Inc. (BHI), bought 600,000 BHI shares at P0.093 per share on June 22 and sold on the same day 6.08 million BHI shares at P0.090 each. The following day, he sold 2.1 million shares, also at P0.090. The sale reduced the number of BHI shares he held to 5.11 billion BHI shares or 42.59 percent. At P0.092 per share, he remains very rich with his ownership of P470.136 million worth of BHI shares.
Jerry C. Angping, a director of Nihao Mineral Resources International Inc., raised the number of Nihao shares he held directly to 334.432 million from 311.028 million shares after buying additional shares from the open market on June 23 and June 24, at prices ranging from a high of P3.86 to a low of P3.72. He also indirectly owns 21.095 million Nihao shares, which give him a total of 334.432 million shares. At Nihao’s closing price of P3.87 on Friday, he is a billionaire with paper wealth of P1.294 billion.
Loan to equity
As of March 31, 2015, DFFN Inc. reported an accumulated deficit of P648.755 million. Because it had, aside from fully paid capital stock of P150 million, additional paid-in capital of P282.811 million and deposit for future subscription of P182.173 million, among some positive entries under its equity filing, it had only a capital deficiency of P84.066 million.
With its authorized capital stock of 150 million shares at P1 par value, DFNN has an application for capital increase to 500 million shares pending approval by the Securities and Exchange Commission. The proposed capital would include 100 million preferred shares with par value of P1 each.
The additional capital stock is intended to accommodate the conversion of P182.173 million DFNN’s debt into equity. At P4.75 conversion price, the borrowings would be equivalent to 38.352 million DFNN shares.