Philippine casino industry gross gaming revenue (GGR) could reach 85 percent of pre-pandemic level by the fourth quarter this year, says banking group Morgan Stanley.
Factors in favour of Philippine growth included “travel reopening” in Southeast Asian countries in general during the second quarter, “and eased Covid control measures as of March 2022.”
In the case of the Philippines, “pent-up demand and election-induced consumption could provide upside to our estimates,” added analysts Gareth Leung and Praveen Choudhary, of Morgan Stanley Asia Ltd, in a Tuesday note, referring latterly to that country’s presidential election, due in early May.
In the first quarter, for which most Philippine casino operators are still to report results, Morgan Stanley expects the large-scale private-sector gaming resorts – including Solaire Resort and Casino (pictured) – in the Entertainment City zone in Manila, to have generated in aggregate GGR of PHP27 billion (US$515 million).
That would be up 15 percent quarter-on-quarter, and equal to 68 percent of the pre-pandemic performance in the first quarter of 2019, said Morgan Stanley.
This would in likelihood have been “driven by stronger local demand recovery in mass and slot revenue,” i.e., a 17 percent quarterly improvement in those segments, and about 82 percent of what those segments generated in the first quarter of 2019.
Since March 1, casino resorts have been allowed to operate at full capacity, as Metro Manila was placed under “alert level 1”, the lowest level of countermeasure against Covid-19.
The Philippines has also reopened to foreign tourists, which might assist casino resort earnings there.
The national authorities had said in March that the country was to reopen for general tourism from April 1, provided visitors were fully vaccinated.
Based on the latest government data, about 265,553 foreigners visited the country from February 10 to April 17, reported the Philippine News Agency on Wednesday.
In another note issued on Tuesday, Morgan Stanley said that in the absence of significant travel easing for the Macau gaming sector, casino markets across Southeast Asia presented stronger opportunities for investors.
This was on the basis they had a “policy of living with Covid, unlike Greater China”.
Singapore, a casino duopoly, had said in March it was reopening to jabbed foreign tourists from April 1.
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