PAGCOR has spoken a lot in recent months about a “paradigm shift” under way within the company, a transformation into something more than merely a gaming operator. How does the company define this, both in terms of the Manila Bay Integrated City project and in other areas?

Francisco: The mandate of PAGCOR, aside from regulating and operating the games of chance, is that it should be able to create recreational facilities that will encourage tourists to come to the Philippines. That is why we have been involved in continuous work to improve our casinos to position them as major tourism attractions. That is the reason why PAGCOR has decided that we should pursue concepts that include non-gaming activities. This has come about partly as a result of the success story in Macau and these resort developments we see that are coming up in Singapore as well. These have led people to believe that PAGCOR can be successful with its own version, the Integrated City development. Because of the scale of this project, many, many other sectors of business and industry will benefit. We’ll have employment generation. The construction industry will benefit. And in the end it will be tourism that will benefit.

PAGCOR only recently had its charter renewed after some rather contentious debate in the Legislature. How important is this for the company’s ability to move the Integrated City plan forward?

It was the first obstacle we encountered once we’d gotten our plans ready for the project. Investors were asking, how long do we get our license? How many years of privilege will we have to operate casinos? That was back in 2001. Well, we had to tell them, PAGCOR’s charter expires in 2008. They said, we’re going to make all this investment and you’re only giving us five or seven years of privilege? The message to us was, we realized we should renew the charter. Because we won’t be able to attract investors. Unless PAGCOR does this by itself. There was also a plan to go ahead and build it and the result of whatever we invested would go back to the government. But we don’t have the capability, we don’t have the experience to implement a development of this size. We’re not in that business. The hotel business, the retail business. So we need private companies to do this for us. And the private companies will only come if we’re able to give them a license that will go beyond 2008. That’s how we explained it and discussed it and debated it with the lawmakers. We presented them with the Integrated City development and told them, this is what the Philippines needs. This was backed up by an international research company. And there were other models. Like what has happened in places in Asia, like Bali, for example. Even today, Bali in Indonesia is a role model that other places in Asia are trying to follow. Bali is a brand name in tourism. Our research suggested that for a premier leisure destination we should have a model similar to Bali. That’s how we explained it to the lawmakers.

What is the duration of the new charter?

Twenty-five years.

So you’re in a position now to provide investors with a level of comfort.

Yes, comfort. That’s what investors were asking for. Get your charter extended, and as business people we’re going to invest in your project.

You have some other interesting areas of potential development within the “special economic zones” at the former U.S. military bases at Clark and Subic Bay.

It was asked that another plan be put in place to do something in these areas with these huge hectares of land. So a proposal came out, based on models from other countries, where economic zones were established and were able to generate development. So that’s where it started. Basically the idea was to attract manufacturing first. There are tax incentives and custom privileges to enable manufacturers to make their products here less expensively than in their own countries. … And these two places really were strategic in terms of their status. Clark has one of the largest, longest runways in the world. It can accommodate several jumbo jets. Subic, because of the depth of its water, it can accommodate heavy ships to dock. … Gambling was allowed in these places as a result of inquiries from some major investors. We would always tell them, there’s no place for you to operate in the Philippines because our charter says casinos can only be operated by PAGCOR. Clark and Subic created a window because the law that created them had a provision that casino gaming is allowed provided it is licensed by PAGCOR. So it gave us our first private casinos.

Which is very significant, as it turns out, for the Integrated City development?

Yes, it’s a critical development. Because we were afraid that even if our charter is extended, what does that mean to investors? We found out that the investors were not just asking for licenses, they also wanted to participate in or even operate casinos.

It was announced back in March that PAGCOR is partnering with Clark Development Corp. on a project with a gaming component. What is happening with that?

We knew we didn’t have enough land in Manila. But there are huge tracts of land available there, and because of the improvements to infrastructure the time has been shortened, because of new, wider roads, and there is a plan to develop fast train service between Clark and Manila. So a development at Clark would be timely.

What does the plan call for?

It is similar to what we’re doing at Manila Bay. We will invite investors to come and submit concepts. We thought of having our own approach or model. But we thought that while we’re doing our own concept, let’s also see what they want to do with those huge tracts of land.

PAGCOR has been able to grow revenues at double- digit rates — 10 percent from 2005 to 2006, significant revenue growth in 2007. To what do you attribute this?

Many factors. The improvements to our casinos, our customer service, our ability to promote our casinos as safe destinations for people to enjoy. We are lucky. We may not have mainland China, like Macau. But we are fortunate to have other growth economies in Asia. Which has allowed people to travel. And because of security issues in the U.S., in Europe, because of 9/11, more and more Asians are traveling within the region, when before where they would travel as far as Europe and North

These are key feeder markets for PAGCOR?

Yes. Southeast Asia, China, Korea, Japan.

Is PAGCOR looking to grow them? Where are the opportunities?

These are countries where PAGCOR’s presence can be promoted. Like India. As you know, the economy in India has greatly improved. India’s population has been growing tremendously, as fast as China’s. And there is no casino gambling except in Goa. But Goa is far from civilization. So this is one new market PAGCOR is looking at. As far as the existing places where most of our tourists come from, we have made arrangements for PAGCOR to develop overseas offices. Right now, we don’t have any offices in these countries. We rely on our own efforts, our foreign agents, and on our Department of Tourism that promotes the Philippines. We are pursuing now our own marketing offices. This is already started. First in Macau. We’re putting up a consular office, and this will house a PAGCOR office. The consular office will of course be able to grant or extend visas to mainland Chinese who are in Macau. With that you’re able to indirectly promote PAGCOR. And we will eventually establish offices in South Korea and Japan. We have already made several trips there to be able to see how we can do this.