The Philippine Amusement and Gaming Corp (PAGCOR), the state-backed gaming regulator and casino operator in the Philippines, did not have a very good year. According to financial data it released yesterday, PAGCOR reports that its net income plummeted by 71.4% for the whole of 2019.
PAGCOR reports that its net income was PHP9.01 billion (US$177.2 million) for the year, despite an increase of 11.7% in gross gaming income. Casino customers accounted for PHP24.70 billion ($485.35 million) of the cash flow, while PHP53.28 billion ($1.04 billion) came from junket operators, non-casino customers and other sources of income. The productivity is a result of PAGCOR’s operations at state-run casinos, as well as its management of certain private-sector venues in the country.
The numbers could have been worse. The entity received a little support from regulator fees on licensed casinos, which accounted for PHP28.68 billion ($563.56 million) in revenue. This represents a year-on-year increase of 18.9%, and helped to shore up what would have otherwise been even greater losses.
Expenses took a substantial chunk out of PAGCOR’s gross income for the year. It tallied deductions of PHP39.77 billion ($781.48 million), divided between its 50/50 revenue-sharing agreement with the country, taxes and the state’s Dangerous Drugs Board. Those figures were, respectively, PHP35.93 billion ($706.38 million), around PHP3.79 billion ($74.47 million) to cover the 5% franchise tax and PHP60 million ($1.17 million) for the board.
The entity’s non-regular income included things like the sale of real estate to Bloomberry Resorts Corp. That transaction was worth PHP37.72 billion ($741.19 million) and, if it hadn’t had to include all non-regular income, PAGCOR would have been able to report positive growth of 11.2%.
There was also some improvement in the way of expenses. According to the shared information, PAGCOR was able to cut expenses, either proactively or reactively, by 17.3%, paying out just PHP30.48 billion ($598.93 million). Almost a third of that decrease – 31.7% – was a result of a reduction in subsidies paid to national government agencies for “corporate social responsibility projects.” For those projects, only PHP13.62 billion ($267.63 million) was paid.
PAGCOR may have figured out how to tighten its belt where appropriate. Going into the year, it had put a target of PHP74.42 billion ($1.46 billion) on gaming income and a target of PHP2.43 billion ($47.77 million) on gaming profit. However, it was able to beat both of those projections.