PAGCOR Expects Decoupling Decision “Very Soon” — The Problem Is What Comes After

Key Points

• The GCG review is still pending; once concluded, the recommendation must reach the Office of the President before any executive order can be issued, with Tengco now estimating that stage could happen in early 2027.
• Geronimo Law estimates Casino Filipino’s privatisation could cut Universal Health Care funding by between PHP1.7 billion and PHP2.1 billion annually, a consequence that has received almost no government response.
• Tengco revised his expected sale proceeds sharply downward on 15 September 2026, from earlier estimates of PHP30–50 billion to approximately PHP20 billion, citing casinos that are, in his words, “bleeding heavily.”

Alejandro Tengco walked onto the stage at the IAG Academy Summit 2026 in Newport World Resorts Manila on 15 September and delivered the line the Philippine gaming industry has been waiting four years to hear. “Currently, the proposal remains under review by the GCG, and we expect a decision to be out very soon,” the PAGCOR chairman and CEO said. Tengco has said variations of this before. What is different this time is the detail he added on the sidelines, away from the summit stage: the presidential executive order that would actually implement the split could come in early 2027. That is not “very soon.” That is at least another 16 months. And it is only the beginning.

Four Years of Pending Reviews

The Governance Commission for Government-Owned and Controlled Corporations has been reviewing PAGCOR’s decoupling proposal since 2022. No formal recommendation has left the commission. PAGCOR had publicly announced its plans to transition into a purely regulatory body as far back as March 2023. By September 2025, it was still awaiting GCG approval. The 2025 privatisation target became the 2026 target, which became “very soon,” which is now pointing to early 2027 for the executive order stage alone, not the actual sale of Casino Filipino.

Tengco told reporters at the IAG Summit sideline that the GCG could deliver its recommendation within the next 30 days, as PAGCOR has already submitted all requested documents since the last quarter of 2025. Once the GCG concludes its review, it will endorse the proposal to the Office of the President for evaluation. The PAGCOR chief was direct about the sequence: “Should the President find merit in the proposal, an Executive Order will be issued to implement the separation of PAGCOR’s regulatory and commercial functions.” Whether that order arrives in early 2027, per Tengco’s own expectation, or slips further depends on decisions not yet made.

What the Split Actually Requires?

Tengco’s argument for decoupling has not changed since he first made it. PAGCOR currently regulates the Philippines’ national gambling market while operating roughly 40 Casino Filipino branches and satellite venues. Private operators apply for licences from a regulator that simultaneously competes against them. “You do not want a regulator to regulate its own operations,” Tengco said at the summit, a point he has made in almost identical language at every public event since 2022. The conflict is structural, not hypothetical.

Legal considerations are far more extensive than most international press reports have recognised. PAGCOR is regulated by Presidential Decree 1869 and the Republic Act 9487, and any reorganisation must comply with those laws. In an interview on 26 January 2026 for NEXT.io, Tengco said that any plans to sell PAGCOR’s operational assets included labour conditions that were binding; the purchaser of the company would have to hire between 50% and 70% of the Casino Filipino workforce. This was a legally binding condition, not just a goal.

The Financial Consequences Few Are Discussing

The number that drew the least attention at the IAG Summit is the one with the most real-world impact. Tengco told reporters the 38 Casino Filipino sites and branches are “bleeding heavily at the moment,” and that selling them could yield approximately PHP20 billion for PAGCOR, a significant revision from earlier projections of PHP30–50 billion. The casinos are leasehold operations, PAGCOR owns none of the real estate, and buyers are purchasing licences and future revenues rather than property assets.

What that revised figure also means for the country’s Universal Health Care programme has barely entered the public debate. A July 2026 legal analysis by Geronimo Law calculated that the privatisation could reduce UHC funding by between PHP1.7 billion and PHP2.1 billion annually. Under the Universal Health Care Act, PhilHealth receives 50% of the national government’s share of PAGCOR’s income from casino operations. Once those casinos transfer to private ownership and PAGCOR shifts to collecting licence fees only, that income stream contracts sharply. Geronimo Law noted that the PHP20 billion sale proceeds do not flow to UHC at all, as those proceeds are not franchise gaming earnings and do not enter the base on which the UHC share is calculated.

A Market Under Pressure

The fiscal context complicates things even more. The GGR in Philippine gaming dropped 15.87% YoY to PHP87.60 billion during Q1 2026 with PAGCOR, citing reduced discretionary spending owing to political turmoil in the Middle East and increasing inflationary pressures. Things got even worse during the second quarter as the industry’s GGR decreased 20.33% YoY to PHP88.13 billion due to poor performance in electronic gaming revenues and increased spending pressure on consumers. Total GGR decrease for the first half of 2026 stands at 26.64%. In particular, GGR at Casino Filipino dropped to PHP2.90 billion, accounting for 3.30% of total GGR for Q2 and PHP3.17 billion for Q1.

Expert Analysis

We will say what the coverage is largely avoiding. Tengco’s revised PHP20 billion proceeds estimate, disclosed quietly to reporters on the sidelines of a summit, is a significant climb-down from the PHP30–50 billion range that was circulating as recently as July 2026 and the PHP50–80 billion range from earlier years. That is not a rounding error. Casino Filipino’s operational revenues are contracting, the assets are leaseholds rather than freeholds, the workforce absorption requirement sits at 50% to 70%, and the overall Philippine gaming market has posted back-to-back quarterly declines exceeding 15% and 20% respectively. Buyers run models. What that model produces at the moment is not pretty.

The decoupling argument stands on solid institutional ground. A regulator competing commercially against its own licensees creates distortions that are difficult to defend in a maturing market. The documented shift in the Philippine online market, where GCI-Yield Sec data cited by NEXT.io shows illegal operators’ share of online GGR falling from 92% in January 2023 to under 50% by December 2025, reflects a regulatory environment that has genuinely tightened. That matters. But the decoupling is a different problem entirely. Getting GCG sign-off is one gate. Getting the President to issue an executive order is another. Running a competitive sale process for leasehold casino assets in a contracting market, with mandatory workforce conditions and a healthcare funding consequence nobody has publicly resolved, is a third. “Very soon” describes only the first of those gates. The other two are the ones that will define whether this reform actually lands.