Philippine Tourism Recovery Helps Gaming Revenue Reach $6 Billion
The Philippine gaming industry is poised to achieve a milestone in 2024, with gross gaming revenue (GGR) expected to exceed $6 billion. This projection was announced by Alejandro Tengco, chairman of the Philippine Amusement and Gaming Corporation (PAGCOR).
Arriving passengers outside Ninoy Aquino International Airport in Manila, the Philippines. (Source: Bloomberg)
LISTEN TO THIS ARTICLE:The forecasted GGR represents a significant increase from the $4.9 billion recorded in 2023, which itself was a record annual figure. The latest estimate also surpasses an earlier forecast made in January 2024, which anticipated $5.7 billion in GGR for the year.
Related: PAGCOR Delays Sales of State-Run Casinos Until 2026Tengco attributed the robust growth in the gaming sector to the strong performance of the electronic gaming segment. He also indicated that PAGCOR's net income for 2024 could nearly double compared to the previous year.
In 2023, PAGCOR reported a net income of $116 million, marking a 53.3% increase from 2022. By October 2024, the agency had already recorded a net income of just over $165.1 million for the first nine months of the year, an increase of 98.1% from the same period in 2023. Tengco expressed confidence that the final net income for the year would reach between $205 million and $257 million.
The expected surge in gaming revenue comes amid broader developments in the regulatory environment. PAGCOR is on track to revoke all licenses for offshore online gambling operations by the end of 2024.
This move follows an executive order issued by Philippine President Ferdinand Marcos Jr. in July, which banned all Philippine Offshore Gaming Operator (POGO) activities in the country. The directive extends to current operators, license renewals, new applications, and efforts to combat illegal offshore gaming operations.
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Increased Tourism Helps Drive Results
The recovery of the Philippine tourism sector has played a crucial role in driving growth in the gaming industry. A report by Maybank Securities Inc. suggested that the country's tourism arrivals could fully recover to pre-pandemic levels by 2025.
The recovery is being fueled by a strong influx of visitors from key markets such as South Korea, the US, Japan, and Australia. These countries have historically been significant contributors to the Philippines' tourism industry due to deep cultural and historical ties.
Between January and November 2024, the Philippines recorded over 5.35 million visitor arrivals, including more than 432,000 entries by overseas Filipinos. South Korea remained the top source market for foreign tourists, with nearly 1.44 million arrivals during this period, accounting for 26.8% of all international visitors.
The US and Japan followed, contributing 839,635 and 352,630 arrivals, respectively. However, the tourism sector continues to face challenges, particularly with lower-than-expected arrivals from China. While China accounted for 21.2% of total arrivals in 2019, it represented only 5.6% of arrivals during the first 11 months of 2024.
Efforts to boost tourism include ongoing infrastructure investments such as airport upgrades, which aim to enhance the overall travel experience and capacity for incoming visitors. Maybank highlighted these initiatives as key to sustaining growth in tourism arrivals over the long term.
Despite the current shortfall in meeting the Department of Tourism's 2024 target of 7.7 million arrivals, industry analysts remain optimistic about the sector's potential to recover fully by 2025.
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