The 1991 eruption of Mount Pinatubo as well as the establishment of shopping malls in Pampanga contributed to the decline of Paskuhan. The Ligligan Parul festivities was moved to SM City Pampanga in 2000 and to Robinsons Starmills in 2008. The Department of Foreign Affairs used to host a consular office which issues passports in Paskuhan until 2002. Paskuhan was converted to the North Philippines Cultural and Historical Village in 2003 which showcased the culture of the Ilocos, Cagayan Valley, Central Luzon and Cordillera regions. The Pampanga Mayors' League issued a resolution as early as 2009 to start the process to come up with an agreement with the Department of Tourism to acquire management and jurisdiction over Paskuhan. As of 2012, the Village is financially distressed and almost all shops, restaurants and other features were practically closed, with a budget of only 800 thousand pesos a month and only 24 workers left. By that time Paskuhan has discarded its Northern Luzon theme. The Commission on Audit in a 2012 circular advised TIEZA to rehabilitate, privatize or handover the facility to the local government. Also in the same year the Sangguniang Panlalawigan of Pampanga filed a resolution to establish a branch of Casino Filipino within Paskuhan, a plan opposed by the religious sector, militant organizations, and a parents and teachers association.
2015 sale of Paskuhan
Four SM Group affiliates and Robinsons Land Corp. engaged in an open bidding for the purchase of the Paskuhan Village on December 17, 2014. The Pampanga provincial government earlier has also offered to buy the facility at book value or at least acquire administration and operational rights over the property three days earlier. The San Fernando city government also filed a counter proposal to the bid initially contested among five firms. Premier Central Inc. won the bid and two lots of the Paskuhan Village was sold to it on May 2015 so that the facility could be redeveloped. However the Village fell to further neglect due to a sales dispute. House Resolution 654 was filed by Pampanga Third District Representative Aurelio Gonzales Jr. which called for the investigation on Paskuhan's sale. The sale to Premier Central was declared void on October 2, 2017 by Solicitor General Jose Calida. The Committee on Good Government And Public Accountability of the House of Representatives recommended the nullification of the sale for violating the Tourism Act of 2009 which prohibits the sale of state-owned cultural treasures and heritage sites. The body also cited their findings that the right of first refusal entitled to the local governments of Pampanga and its capital city San Fernando was ignored.
Future plans
Following the void of the sale of Paskuhan to Premier Central, San Fernando Mayor Edwin Santiago urged in October 2017 for the revival of the Paskuhan as a Christmas-themed park and the return of the Giant Lantern Festival to the venue although plans of the city to acquire the property is still being deliberated at the time.
