Philippines’ GGR tracking US$3 bln in 2015: Naguiat
There is a “good chance” that casino gross gaming revenue (GGR) in the Philippines will reach US$3 billion in 2015, up by 20 percent from the previous year, the chairman of the Philippine Amusement and Gaming Corp (Pagcor), Cristino Naguiat (pictured), told Bloomberg in an interview. The nation’s gaming revenue rose 14 percent year-on-year to US$2.5 billion in 2014, according to Pagcor.
Mr Naguiat’s upbeat 2015 forecast comes amid the ongoing anti-corruption crackdown by the Chinese government that has, according to some analysts, contributed to a decline in gaming revenues across the region.
Casino GGR in Macau has fallen for 13 consecutive months when judged year-on-year, and contracted by 37 percent year-on-year in the first half of 2015. Casino operators in Singapore have also been hurt, especially in the VIP segment, according to investment analysts.
Despite the concerns, Mr Naguiat said the country’s casinos are performing well. First-half GGR at local casinos grew by 16 percent year-on-year to US$1.4 billion, he added.
“It’s proof that the Philippines has a good mix of foreign markets [customers] and that there are many who really want to come to the Philippines,” Mr Naguiat told Bloomberg.
He added: “Bloomberry is raking the numbers in, while Melco [sic] has been steadily bringing in the people.”
Bloomberry Resorts Corp developed and operates Solaire Resort and Casino in Manila. Melco Crown (Philippines) Resorts Corp, a unit of Melco Crown Entertainment Ltd, manages City of Dreams Manila, which opened in February. Travellers International Hotel Group Inc, a venture between Philippine-based Alliance Global Group Inc and Genting Hong Kong Ltd, operates Resorts World Manila, a casino resort near the capital’s airport.
Tourist arrivals in the Philippines increased by 8.2 percent year-on-year to 2.23 million in the first five months of the year. The largest single contributor by country was South Korea, which accounted for 24.5 percent of all arrivals, Bloomberg reported. China was the fourth largest source of tourists during the period, with a 7.1 percent share.
Philippine gaming revenue could have been higher if not for China’s anti-graft campaign, Mr Naguiat reportedly said.
Philippine casino stocks surged on Tuesday after Mr Naguiat’s remarks, and were also up on Wednesday morning. Melco Crown Philippines was up 4.23 percent to PHP5.67 (US$0.126) at midday, and Travellers International was gaining 0.97 percent to PHP5.22. Bloomberry Resorts, which jumped 8 percent on Tuesday, was trading at PHP9.33 at midday on Wednesday, up by 1.30 percent.
Several companies with casino interests in the Philippines have been buying back shares at a time when their stocks have been undergoing declines. Share buybacks typically have the effect of concentrating the value of existing shareholders, say investment analysts.
Philippines-based First Metro Investment Corp, the investment banking arm of Metropolitan Bank and Trust Co, warned investors to take a cautious stance on gaming-related stocks.
In a report published on July 3 – titled ‘Philippine Gaming Sector: Macau contagion’ – First Metro said the majority of brokers regarded Philippine gaming stocks as worth buying on the basis that “2015 earnings though downgraded will still be ahead of last year” and share prices of casino-related stocks “are at a huge discount to target prices”.
But the institution added it was “still hard to bet on the sector”, despite recent revenue statistics, a reported reduction in dependence on VIP players and “a more benign tax regime and geographical proximity to regional clientele”.
It stated: “Gaming has lost its lustre and needs to show more evidence of a revival.”
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