The latest corruption allegations couldn’t have come at a worse time for PAGCOR’s leader, Alejandro Tengco, as the organisation seeks to steady the Philippines’ regulatory ship heading into 2026.
Accusations centre around a conflict of interest involving the family company of Tengco, have come at an unfortunate time for the organisation as it seeks to steady the Philippines’ regulatory ship heading into 2026.
Tengco has vehemently dismissed any suggestions from the media that he had influence on his family’s construction company, Nationstar Development Corporation, winning government contracts.
However, media investigations revealed that Nationstar, which was founded by Tengco in 2015 and is currently owned by his children, has secured more than 14 government contracts valued at Php 7.1bn (£90bn) since 2022, when he began his role with PAGCOR.
Tengco emphasised that he divested his interest in the construction company upon assuming leadership of the Philippines’ gaming regulator, having begun transferring ownership to his children as early as 2019.
“My position as Chairman and CEO of PAGCOR has no direct or indirect influence in the awarding of public works contracts to Nationstar,” said Tengco through a statement posted on PAGCOR’s website.
“There is no conflict of interest because under the Anti-Graft and Corrupt Practices Act (RA 3019) and the Code of Conduct of Government Employees (RA 6713), conflict of interest occurs when a public official has direct or indirect financial or pecuniary interest in any business contract or transaction in which they must intervene in their official capacity.”
Tumultuous 2025
The story closes out what has been a turbulent year for the Philippines’ gaming industry, as lawmakers in the country have repeatedly attempted to bring down regulated online gaming.
At the time of writing, the country’s Senate is still considering several bills that have called for a total ban on online gaming – citing the “silent epidemic” of gambling addiction in the Philippines.
In response, PAGCOR has been forced to defend the merits of supporting regulated iGaming, highlighting the significant income it generates for the Philippines’ government, while also warning that any prohibition “will only drive players to illegal operators and result in loss of revenue and jobs”.
“PAGCOR is committed to strengthening regulation and enforcement to ensure that only legitimate and properly monitored operators are allowed to operate,” said Tengco, speaking at a conference hosted by Light & Wonder.
“These illegal sites not only deprive the government of much-needed revenues but also expose Filipino players to numerous risks.”
Among the new regulations in the country is a mandatory decoupling of online gambling platforms to mobile wallets and payment applications, as well as a new accreditation requirement for iGaming service providers.
Although the former has been linked to a dip in revenue for leading operators such as DigiPlus in the third quarter of the year, the changes have been viewed as a vital step to renew trust in the industry.
“The delinking of e-wallets resulted in a short-term decline in activity toward the latter part of the quarter. However, these measures are vital to protect players and ensure secure, transparent transactions,” said Tengco.
Cautious optimism
Looking ahead to 2026, the fact that the bills above were submitted in July and there has been no action as of yet suggests that the momentum behind the push to ban online gaming has lost significant momentum.
However, any rumours of impropriety within the sector risk renewing conversations surrounding its position within the Philippines’ society.
The coming months represent a critical period for PAGCOR as it seeks to stabilise and push for the growth of an industry that has been touted as having the potential to cement itself as Southeast Asia’s second-largest gambling market behind Macau, as revenue is forecast to surpass $7bn in 2025.
Central to this action has been PAGCOR’s commitment to fighting the black market.
In October, PAGCOR signed a memorandum of understanding to divert Php 50m (£639,125) in funding to the National Bureau of Investigation (NBI), the organisation charged with countering illegal gaming.
According to PAGCOR, there are approximately 12,000 illegal online gaming sites in operation, compared to just 77 licensed operators.
While stricter regulations may be viewed as a burden for licensed operators, in the long term, such measures are key to differentiating the legal market from the illegal market and should inspire confidence among consumers.
Keith McDonnell, Director of the KMI Group, previously told iGaming Expert: “What the Philippines needs most now is time to carefully consider how a regulatory framework and workable tax system can provide long-term benefits to the local economy while protecting the most vulnerable.
“Everyone knows an outright ban on [inland gaming operators] would drive things underground, leading to more social, economic and political problems.”
A knee-jerk reaction from any stakeholder within the conversation risks bringing down the sector, and PAGCOR must lead the industry’s future with a cool head to navigate iGaming through a crucial beginning to 2026.”