NextGen Day

After the agency’s documentary stamp tax (DST) rate is reduced to 10%, more needy individuals and their families would receive assistance from the Philippine Charity Sweepstake Office (PCSO) through the Universal Health Care (UHC).

In a recent Senate hearing held by the Committee on Health and Demography chaired by Senator Joseph Victor Ejercito, PCSO chairman Junie E. Cua stressed this and highlighted the organization’s support for increasing funding for social programs, particularly those focusing on health.

According to Cua, reducing the DST rate from the current 20 percent to 10 percent would result in a 170 percent rise in PCSO payments, from the estimated PHP1.25 billion to roughly PHP3.4 billion this year, an increase of slightly more than PHP2 billion.

“You will observe that the fact that we must pay a documentary stamp tax of 20% of our receipts, which amounts to tens of billions, limits PCSO’s ability to contribute to the UHC program. Right now, our campaign is focused on convincing Congress to let us reduce our DST requirement so that our contribution to the UHC will increase. So, according to our forecast, if the Documentary Stamp Tax is 10%, our contribution would be PHP3.3 billion; if it is 5%, it will be PHP4.4 billion, Cua said in response to a senator’s question about how the PCSO might make a larger contribution to the UHC.

Ejercito responded by pledging that the Senate would investigate the proposed legislation decreasing the DST rate, highlighting the fact that “more than PHP 2 billion will be added to the UHC via PCSO alone” in his statement.

In light of the PHP2,600 per session coverage rate offered by the Philippine Health Insurance Corporation (PhilHealth), PHP2 billion may afford 769,230 hemodialysis treatments for poor diabetes patients.

The same sum, with PhilHealth providing PHP16,000 for each case, will assist 125,000 impoverished individuals with severe dengue.

Cua cited this as one of the arguments the PCSO is making to Congress in order to reduce the DST rate applied to gross retail receipts.

In order to streamline its revenue allocations and lessen the strain on the Charity Fund, the PCSO is also arguing before the House of Representatives for a change to its charter.

Both proposals, if adopted by Congress, would enhance the agency’s contribution to UHC, which would ultimately benefit the public by enabling them to take advantage of better benefits packages provided by the government through PhilHealth, according to Cua.

With 40% of its “net charity fund” going to PhilHealth for the UHC this year, PCSO is one of the funding sources for the implementation of the UHC law.

The PCSO forecasts total retail receipts of PHP53.23 billion for 2023 in its presentation to the Senate. As a result, the agency must pay DST in the amount of about PHP10.65 billion (20% of retail receipts).

The PCSO uses the charity fund allocation, which accounts for 30% of total receipts, or around PHP15.65 billion, to pay for DST, required contributions, and other PCSO expenses.

As a result, the estimated net charity fund is only about PHP3.133 billion, of which PHP1.25 billion, or 40%, will be given to the UHC.

The PCSO estimates that if the DST is reduced to 10%, the expected net charity fund will rise to PHP8,455,788,962.61. At this rate, the UHC share will eventually rise to PHP3,382,315,585.05, or a 169.9% increase, as stated by Cua.

If DST is further reduced to 5%, the net charitable money will rise to PHP11.1 billion, with PHP4.45 billion going to the UHC—a 254.86 percent increase over the first calculation with 20% DST.

The PCSO released a total of PHP2.7 billion as its contribution to the UHC Act between October 2019 and December 2022.

The PCSO is the main government organization in charge of holding sweepstake horse races, lotteries, and other similar events in order to raise money for health programs, medical support and services, and national charities.

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