Licensees' Foundations Under the PAGCOR Implementing Rules and Guidelines

Under the PAGCOR Implementing Rules and Guidelines for Foundations, a licensee's foundation is a non-stock, non-profit corporation that the licensee must incorporate and register with the Securities and Exchange Commission (SEC). It is the beneficiary foundation required under the Provisional License issued by PAGCOR. Its creation, funding, project approval, reporting, and dissolution are all governed by the IRG, which took effect on December 5, 2024 under Revision No. 7. Gaming System Administrators follow a parallel set of rules under their own IRG, which took effect on November 6, 2025.

What a Licensee's Foundation Is

The IRG defines a foundation as a non-stock, non-profit corporation established to extend grants or endowments, or to raise funds for charitable, religious, educational, athletic, cultural, literary, scientific, social welfare, or similar objectives. In the gaming context, it also refers specifically to the beneficiary foundation created by the licensee as required under its Provisional License.

Because it is a non-stock corporation, no part of its assets, property, or income may be distributed as dividends to members, trustees, or officers. Any profit obtained incidental to its operations must be used to further the purposes stated in its Articles of Incorporation.

How the Foundation Is Created

Incorporation is done by the licensee holding a duly issued Provisional License from PAGCOR. The foundation must be incorporated as a non-stock corporation and registered with the SEC.

The basic SEC requirements are a cover sheet, Articles of Incorporation, and By-laws. Additional requirements include an endorsement or clearance from other government agencies, if applicable, and — for foundations — a notarized certificate of bank deposit of the contribution, which shall not be less than P1,000,000.00, plus a statement of willingness to allow the SEC to conduct an audit.

For Gaming System Administrators, incorporation is triggered once the GSA generates total Gross Gaming Revenue of One Hundred Million Pesos (Php100 Million) in a month. The GSA must incorporate and register a foundation not later than sixty (60) days after reaching that threshold. A GSA owned by a licensed land-based casino with an existing foundation need not establish a separate one, but must open a dedicated bank account for its remittances.

Where the Foundation's Funds Come From

For a licensee's foundation, the main source of funds is the casino operated by the licensee. Two percent (2%) of total Gross Gaming Revenues from non-junket tables is set aside for the foundation. Monthly remittance is made on or before the 10th day of the following month and deposited in the foundation's bank account.

For a GSA foundation, the main source is the electronic games offered through the GSA's platform, where one percent (1%) of total GGR is set aside, remitted on the same 10th-day schedule.

The foundation may also generate and receive funds from other sources — contributions, donations, and endowments from persons, partnerships, corporations, and other entities, whether domestic or foreign. These must be deposited in a separate bank account, kept distinct from gaming revenue funds, and are not subject to PAGCOR's monitoring, control, and approval. They are also exempt from the monthly submission requirement, though documentation must still comply with the Anti-Money Laundering Law.

How Funds Are Disbursed and Used

Withdrawals from gaming revenue funds are made through checks signed by the Treasurer and countersigned by the President, or by other signatories the Board of Trustees may designate. No withdrawal is authorized except for the amount stated in the Authority to Proceed (ATP) issued by PAGCOR for a specific project.

For licensee foundations, the budget allocation based on monthly remittances is: Cultural Heritage and Environment, 25%; Education, 35%; and Health, Wellness and Sports Development, 40%. Annual administrative expenses may not exceed Ten Million Pesos (Php10,000,000.00) or thirty percent (30%) of total donations and gifts for the taxable year, whichever is lower. Trustees may not receive any compensation or remuneration in cash or in kind.

The Three Stages of Project Approval

For GSA foundations, project implementation has three stages, each requiring PAGCOR Board of Directors approval:

1. Project Concept. The foundation submits its proposed project concept, containing details such as estimated cost, beneficiary, location, objective, timeline, and project partner. No amendment may be made to an approved concept unless the foundation notifies the department and secures Board approval.
2. Issuance of Authority to Proceed (ATP). Within 90 calendar days after concept approval, the foundation submits its request for ATP together with the Memorandum of Agreement or Deed of Donation with Acceptance. No funds may be released unless the ATP has been issued.
3. Issuance of Certificate of Credit (COC). Within 90 calendar days upon project completion, the foundation submits its request for COC with liquidation documents — final report, Certificate of Acceptance or Completion, Acknowledgement Receipt, certified true copies of receipts, and photos. The department conducts compliance verification before endorsing the request to the Board.

Reporting Requirements

Foundations must maintain financial records required by agencies such as the Bureau of Internal Revenue and the SEC. Monthly submissions — bank statements, reports of funds received, and reports of funds released per project — are due on or before the 20th day of the succeeding month. Semi-annual reports on ongoing projects, with photographs or other proof of implementation, are due every July 10th and January 10th. Annual submissions include the General Information Sheet, Audited Financial Statements, annual plans and programs, and a certification that the foundation has not received government funds or donations within the threshold of its operations.

Dissolution

The foundation is co-terminus with the Provisional License or Regular Casino Gaming License. For GSA foundations, it is co-terminus with the valid accreditation granted to the GSA. Subject to PAGCOR's approval, all assets net of liabilities must be fully applied to eligible projects before dissolution, or conveyed and transferred to another non-stock, non-profit domestic corporation organized for similar purposes, or to the government for public purpose.

Frequently asked questions

Does a PAGCOR licensee need to set up a foundation? Yes. The IRG refers to the beneficiary foundation created and established by the licensee as required under the Provisional License issued by PAGCOR. It must be incorporated as a non-stock corporation and registered with the SEC.

How much of gross gaming revenue goes to the foundation? For a licensee's foundation, two percent (2%) of total Gross Gaming Revenues from non-junket tables is set aside. For a Gaming System Administrator's foundation, one percent (1%) of total GGR from electronic games is set aside.

Can foundation trustees receive compensation? No. Under the IRG, trustees shall not receive any compensation or any type of remuneration in cash or in kind for their services as members of the Board of Trustees.

Practical takeaways

• Register the foundation with the SEC as a non-stock, non-profit corporation, with a notarized bank deposit of not less than P1,000,000.00.
• Remit the required percentage of GGR on or before the 10th day of the following month to the foundation's bank account.
• Secure an Authority to Proceed before releasing any funds for a project — no ATP, no disbursement.
• Keep gaming revenue funds separate from donations and endowments, which are exempt from monthly reporting but must comply with anti-money laundering rules.
• File monthly, semi-annual, and annual submissions on time to remain compliant.

Primary sources

The rules discussed above are drawn from the following PAGCOR issuances, embedded here in full for your reference.

Implementing Rules and Guidelines for Foundations Rev. No.: 7Open in Law LibraryDownload PDF

Implementing Rules and Guidelines for the Foundations of Gaming System AdministratorsOpen in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.