With a global economy that’s far from Samson-like, the word “bullish” has been rarely thrown around in recent memory. But that’s exactly what Bank of America – Merrill Lynch thinks of the potential of the Philippine gaming market once Pagcor’s Entertainment City gets up and running.
“We expect the official gaming revenue to double to about US$5 billion plus (1.5 percent of GDP) with large multiplier-effects on tourism and retail,” BofA-ML said.
The investment bank points to the increased gaming options and accommodations that will be available once Solaire Manila (800 rooms), Belle Grand (826 rooms), and Manila Bay Resorts (1,050 rooms) open their operations in the next 18 months or so. Of particular importance are the significant increase in gaming tables – 736 in total – that will be available to play in to add to the 300 tables Resorts World Manila already has.
BofA-ML hinted that the Philippines’ gaming expansion will also have a causal effect on the improved tourism, alluding to the expected increase in tourists that will flock to the country to enjoy its new gaming facilities. Of importance are the foreign high-rollers and VIPs who, despite representing only about a quarter of the total traffic, still offers a larger revenue contribution thanks to their deep pockets and love for gambling.
The state-owned gambling regulatory agency, Pagcor, has been very vocal about its expectations of significantly raising the Philippines profile as a new gambling destination in Asia. Chairman Cristino Naguiat Jr. has been unabashed about his agency’s goal of generating an annual revenue of $10 billion once Entertainment City is fully operational by 2016.
But setting sights on that goal and achieving it are two entirely different conversations. Pagcor still has a ways to go before its able to sniff that number, but with its recent run of record revenues – it fell short of hitting $1 billion in revenue in 2012 – seems to point to an improving trend that will not only have its effect on gaming revenue, but, according to BofA-ML, will also play a factor in improving the country’s tourism.
As it stands now, the Philippines’ tourist numbers – 4.1 million in 2012 – is still paltry compared to what its neighbors, Malaysia (25 million) and Thailand (22.3 million) have been getting the past year. But with the opening of the Entertainment City resorts, the investment bank expects the Philippines’ tourism numbers to significantly increase, similar to the 30-percent improvement in tourists Singapore experienced when it opened its two integrated casino resorts: Marina Bay Sands and Resorts World Sentosa.
Understandably, there are still a lot ‘ifs’ that need to be turned into ‘whens’ as far as the Philippine gaming market is concerned. But the important thing is that the needle is pointing upwards with a lot of room for growth in the future.
With the global economy as fickle as it has been in recent years, a semblance of stability, albeit one based more on promise than results, is all you can really ask for at this point.