Pagcor mulls P18.5-B bond flotation

State-owned casino operator Philippine Amusement and Gaming Corp (Pagcor) said yesterday it hopes to raise up to P18.5 billion from a bond float scheduled before the end of the month.

Chief of staff Rafael Francisco told Reuters Pagcor will use the offering proceeds to buy a 60-hectare property on the reclaimed land of Manila Bay from state-owned Philippine Estates Authority and develop it into an amusement complex.

"We are hoping to raise up to P18.5 billion through a bond flotation," Francisco said. "The issuing managers are First Metro Investment Corp., Land Bank of the Philippines, and Development Bank of the Philippines."

"We are just going through the process of securing necessary approvals. Hopefully, we would be able to launch the bonds before the end of the month," he said.

Finance Secretary Jose Camacho said the disposal of the property would enable the government to raise much needed cash to help meet the 2001 budget deficit target of P145 billion.

"The budget deficit is under control. The revenues from the Bureau of Internal Revenue and the Bureau of Customs are a bit short. But then we have this privatisation of a property owned by the Philippine Estates Authority," Camacho told reporters in New York.

Camacho was accompanying President Gloria Macapagal Arroyo on a visit to the United States.

The Pagcor bonds – which will be in tenors of three, four, five and six years – will use as guiding rates the yields of secondary fixed-rate Treasury notes for the equivalent tenor plus a spread.

Pagcor, which operates 12 casinos, two slot machine arcades and 85 bingo parlors across the country, is one of the top contributors to the nation’s coffers. It remits around 52.5 percent of its gross gaming revenues to the government.

Its gross revenues of P2.047 billion in 1987 have grown over the years to reach P14.62 billion by the end of 2000. This year, Pagcor expects to surpass its target gross revenue of P16.15 billion.

Francisco said Pagcor was finalizing plans to develop the 60-hectare property.

"It’s going to be an entertainment center where we expect investors to establish theme parks, theme hotels and casinos, and shopping centers, and housing projects," he said.

"The master development plan is being finalized."