Can You Lose by Winning the P550 million Lotto Jackpot?

Aneth Ng-Lim

Posted at Sep 10 2018 09:32 AM | Updated as of Sep 10 2018 12:30 PM

Aspiring multi-millionaires line up at a Lotto outlet. Mark Demayo, ABS-CBN News/File

MANILA -- If you’re a betting man (or woman), no doubt the Ultra Lotto 6/58 with a P550 million jackpot as of Sunday night caught your interest.

You’re not alone, as millions across the country queue in Lotto outlets run by the Philippine Charity Sweepstakes Office (PCSO), hoping to be the next mega millionaire.

PCSO is the government agency directed to raise funds for health programs, medical assistance and services, and various charities. To carry out this mandate, PCSO holds charity sweepstakes, races, and lotteries and invests in other activities for continuing sources of funds.

Historically, lotteries have been around as early as 1833. You may remember that National hero Dr. Jose Rizal actually won P6,200.00 in the draw of 1892, while on exile in Dapitan. He donated his winnings to an educational project.

But the PCSO we know today was established only in 1935 when then President Manuel L. Quezon approved Act 4130. Today, there are at least 15 national government programs that draw funds from PCSO – including the Philippine Sports Commission and the Commission on Higher Education.

PCSO can only retain 15 percent of its net income, and is regulated to provide 55 percent to prizes and the balance 30 percent to charities. So when you buy a lotto ticket, you are not only funding your "dream" but also helping government programs.

And yes, there have been many dreamers who got lucky and went home with the lottery jackpot. The biggest winner to date was a balikbayan who pocketed P741 million in April 2014 from the Grand Lotto 6/55.

However, since names of winners are usually withheld for security purposes, it’s not easy to find out what they did with their winnings, or if they are still mega millionaires today.

But if we look beyond Philippine shores, we will find many examples of lottery winners made poorer for it. You may ask, how is that possible? Can one spend all that money quickly and actually end up in worse situation? Sadly, many cases have shown that yes it can happen, and that’s usually when the winner did not have a financial plan to manage the unexpected windfall.

So let’s say you get lucky on Tuesday night and your ticket shows the six number winning combination meaning you beat the odds of about one in 14 million. What should you do with the money after you have jumped for joy, shouted yourself hoarse and hugged everyone at home, in your office or on the streets?


In other countries, lotto winners have to come forward to collect their winnings or they forfeit. Thankfully, here at home, you can choose to withhold that information and even send someone with a special power of attorney to redeem your prize. You may think it is tempting to shout your great fortune from the rooftops (or boast in social media) but not if it will make you the target of crime and also relatives and friends looking for balato (money given away in goodwill by a winning gambler).


Before you start spending any of your winnings, make sure to consult a tax professional on what you owe the government. Previously, lottery jackpots were tax-free but starting January 2018, PCSO implemented the 20 percent tax on lottery winnings of P10,000 or more as required in the Tax Reform for Acceleration and Inclusion (TRAIN) law. That 20 percent can take quite a bite of your mega millions so make sure to pay it off, and other taxes if any right away to comply.


Before you even think of touching that many, look to history for best lessons on what to do with your jackpot. Start with Jack Whittaker, a West Virginia businessman who won a $315 million Powerball jackpot in 2002. Ten years later, his daughter and granddaughter had died of drug overdoses while his wife had divorced him.

He had also been sued many times. Once, when he was at a strip club, someone drugged his drink and took $545,000 in cash that had been sitting in his car. Crying to reporters, he said: “I wish I’d torn that (lottery) ticket up.” Whittaker’s story and other sad stories about lottery winners are documented in financial adviser and newspaper columnist Don McNay’s book, “Life Lessons From the Lottery.”


Good advice is not free and with your jackpot, you will be the target of well-meaning people giving you free advice what to do with your money – what insurance to buy (usually from them), what business to invest in (usually theirs), what property to get (usually what they are selling). If you do not pay a fee for services, chances are you will pay for it through charges and commissions, and possibly even the cost of getting something you don’t need.

At the minimum, you will likely need a financial planner (not connected with any bank, insurance company or investment firm so you know you are not getting tied advice), an accountant and a lawyer (to advise you on tax and legal issues with every financial decision you make). It is also good to have a second opinion, and for you to educate yourself so you will always make informed and the best possible decisions.


Reward yourself in the short-term, provide for basics in the medium-term and secure your long-term needs. You did win a lottery so you get a break for living it up right now – but within certain limits of course.

A good rule would be to work backwards. With your financial planner, discuss how much you will need to enjoy your golden years of retirement in comfortable style, and set that aside in trust if possible.

Then, make a list of the medium-term basics, that would be your requirements in the next 5 to 10 years which could be education for your children in schools abroad, and also providing them trust funds that can make them financially independent but not excessive to the point they will no longer work for their own future.

After those funds are secure, look at the amount you have left and then reward yourself.

Do you want to move to a bigger house with better security? Or a car that purrs instead of coughs when you start the engine? Make your list, and check it twice or thrice before you open your wallet. While a bigger house is always nice, maybe a 5-bedroom for your family of 4 is enough instead of the 12-bedroom being offered.

Whether you are a jackpot winner or not, one advice that can always help is to spend your money with a real purpose in mind. Money is a finite resource after all, jackpot or no.

Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.