Jay Lagare

Got another good chuckle reading another Inquirer article on Ramon Ang’s offer to buy Pagcor for $10B. Last time it was the legislative boys blabbing about it, now it’s the Pagcor’s turn to chime in. Quoting Pagcor’s spokesman:

“The $10-billion (about P450 billion) proposal is a good start, but I think it’s too low. If the time is right, we could make use of different valuation methods,” he said.

With an annual gross revenue of about P30 billion, Pagcor can easily earn P690 billion when its franchise ends in 2033, a difference of some P240 billion from Ang’s proposal (taking the current dollar-peso exchange rate of P45), Santiago said.

As Conrado Banal said in his article, there’s such a thing called present value. P450 billion now is better than P690 billion in 2033 and is still better than P30 billion every year till 2033. Unless of course the government doesn’t know what to properly do with P450 billion, which is quite a possibility.

Of course if they can grow revenues then maybe it’s worth more. But still quoting Pagcor’s spokesman:

“(Ang) said he could raise Pagcor’s annual revenue to at least P35 billion. If he could do it, then why can’t we do it?” the Pagcor spokesperson said.

Here’s one reason why not: competence. Ang is rich and you can’t even figure out present value :P

Got a good chuckle reading the Inquirer article about what our lawmakers think of Ramon Ang’s offer to buy Pagcor for $10B. Specifically this one:

“Sen. Edgardo Angara is also backing Ang’s proposal as long as the government continues to get its share of Pagcor’s annual gross revenues, which last year reached P29 billion.”

Damn! The government gets $10B, its share of the revenues, and its tax collections!

And also this one also from the same article:

“Sen. Miguel Zubiri said that the government’s take from the casino operations could come in the form of franchise fees. “It’s a huge amount of money without the headaches and the charges of corruption,” said Zubiri.

Annual revenues of P29 billion doesn’t look nearly enough to justify a $10B valuation and probably already includes revenues from the lucrative franchising operation that is part of what Ang wants to buy!