PCSO: P2B more charity fund with lower documentary stamp tax

MANILA – More indigent persons and their families will be aided by the Philippine Charity Sweepstake Office (PCSO) through the Universal Health Care (UHC) once the agency's documentary stamp tax (DST) rate is lowered to 10 percent.

This was emphasized by PCSO chairman Junie E. Cua during a recent Senate hearing conducted by the Committee on Health and Demography led by Senator Joseph Victor Ejercito as he highlighted the agency’s advocacy of boosting funds for the government’s social programs, especially on health.

Cua said lowering the DST rate to 10 percent from the current 20 percent, would hike PCSO’s contributions by 170 percent, from a projected PHP1.25 billion to almost PHP3.4 billion, this year, an increase of a little more than PHP2 billion.

“You will note that the ability of PCSO to contribute to the UHC program is the fact that we need to pay 20 percent of our receipts by way of Documentary Stamp Tax and this runs into tens of billions. Our advocacy right now is, if we can be allowed by Congress to reduce our DST obligation, tataas yung aming (it will increase our) contribution sa UHC. So our projection, kung (if) 10 percent lang ang aming (our) Documentary Stamp Tax, ang aming contribution ay aabot ng (our contribution will reach) PHP3.3 billion; at kung (and if) 5 percent, aabutin yan ng (it will reach) PHP4.4 billion,” Cua told senators when asked how the PCSO can contribute further to the UHC.

In response, Ejercito vowed that the Senate will study the proposed legislation lowering DST rate, especially noting the fact that more than “PHP 2 billion will be added to the UHC from PCSO alone.”

In perspective, PHP2 billion can fund 769,230 hemodialysis sessions for indigent diabetic patients considering that the Philippine Health Insurance Corporation (PhilHealth) coverage rate per session is PHP2,600.

The same amount can help 125,000 indigent patients with severe dengue, with PhilHealth covering PHP16,000 per case.

Cua said this is among the reasons the PCSO is currently lobbying Congress for the decrease in the DST rate imposed on gross retail receipts.

The PCSO is also making representations before the House of Representatives for the amendment of its Charter in order to rationalize its revenue allocations to further reduce the burden on the Charity Fund.

“Both initiatives, if approved by Congress, would result to an increase in the agency’s contribution to UHC that would ultimately benefit the public in terms of realizing improved benefit packages being offered by the government through PhilHealth,” Cua said.

PCSO is one of the fund sources for the implementation of the UHC law, with 40 percent of its “net charity fund” to be allocated to the PhilHealth for the UHC this year.

In its presentation to the Senate, the PCSO is projecting a PHP53.23 billion in total retail receipts for 2023. With this, the agency has to pay about PHP10.65 billion (20 percent of retail receipts) in DST.

Meanwhile, the charity fund allocation is 30 percent of the total receipts, or around PHP15.65 billion, which is used to pay the DST, mandatory contributions, and other expenses of the PCSO.

Thus, the projected net charity fund is only around PHP3.133 billion, 40 percent of which, or PHP1.25 billion, will be allocated to the UHC.

According to the PCSO, if the DST is lowered to 10 percent, the projected net charity fund is projected to increase to PHP8,455,788,962.61. At this rate, the resulting UHC share will then increase to PHP3,382,315,585.05 – or an increase of 169.9 percent as Cua said.

Lowering the DST rate further to 5 percent will increase the net charity fund to PHP11.1 billion, resulting in a PHP 4.45-billion allocation to the UHC, or a 254.86 percent increase from the original computation at 20 percent DST.

From October 2019 to December 2022, the PCSO has released a total of PHP2.7 billion as its contribution to the UHC Act.

The PCSO is the principal government agency for raising and providing funds for health programs, medical assistance and services, and charities of national character thru the conduct of sweepstakes horse races, lotteries and similar activities. (PNA)