Rising geopolitical tensions in the Middle East are beginning to filter into the Philippine gaming sector, with higher fuel costs weighing on mobility and softening on-ground activity, according to Alejandro Tengco, chairman and chief executive of the Philippine Amusement and Gaming Corporation (PAGCOR).
Speaking on Tuesday, April 14, at the 34th Manila After Dark organized by Inside Asian Gaming, Tengco said the effects of elevated oil prices are already visible across operations, as transport and logistics costs rise and discretionary spending tightens.
“This is not a good time for everyone,” he said. “Gaming jurisdictions globally are feeling the impact of the oil crisis, and even more progressive countries like Singapore, Macau, and the United States are not spared.”
The spillover highlights how an external energy shock is cutting into a sector navigating both expansion and transition.
The Philippine gaming industry posted ₱214.75 billion in gross gaming revenues (GGR) in the first half of 2025, up 26% year-on-year, driven largely by electronic gaming, which accounted for more than half of total revenues. That momentum, however, showed signs of leveling off later in the year, with third-quarter GGR at ₱94.51 billion, broadly flat as regulatory changes and tighter payment controls took effect.
Full-year performance reflected a more mixed picture. PAGCOR reported total revenues of ₱106.03 billion in 2025, down about 5% from the previous year, as land-based casino earnings softened and player behavior shifted further toward digital channels. Electronic and online gaming now account for a majority share of industry revenues, underscoring a structural pivot that is cushioning—but not fully offsetting—pressures on physical venues.
Looking ahead, the operating environment remains constrained. PAGCOR has indicated that gross gaming revenues may remain broadly flat in 2026, citing softer tourist arrivals and lingering policy and payment frictions that continue to weigh on both land-based and online segments. That outlook suggests limited near-term upside even before factoring in additional external shocks such as energy price volatility.
Tengco said the strain extends beyond casino floors to the wider network of stakeholders. Still, he framed continued industry engagement as a stabilizing factor.
“Being together like this makes us forget, even for a while, the challenges we face,” he said. “It allows us to rekindle relationships—whether as clients, suppliers, or partners—and that is important, especially in difficult times,” he said.
Against that backdrop, rising fuel costs are emerging as an added layer of pressure. Higher transport expenses are beginning to affect visitation patterns while also increasing operating costs, particularly for integrated resorts that depend on physical foot traffic. The impact is uneven, with digital platforms proving more resilient, but the broader ecosystem—from operators to suppliers—remains exposed to shifts in consumer mobility and discretionary spending.
That emphasis on coordination reflects a more defensive stance as volatility persists. “It is important that we come together, that we continue these conversations, and that we support each other as an industry,” Tengco added.
At the policy level, the Philippine Amusement and Gaming Corporation is preparing to recalibrate. “At PAGCOR, we will adjust what we need to do. We have to be in tune with the times and ensure that responsible gaming remains at the center of what we do,” Tengco said, signaling potential operational and regulatory adjustments as conditions evolve.
The industry’s medium-term direction may also hinge on structural reform. A proposal to separate PAGCOR’s regulatory and commercial functions remains under review by the Governance Commission for GOCCs (GCG), with privatization of state-run casinos under consideration.
“Many are asking for the decoupling, and we are awaiting the decision of the GCG,” Tengco said. “If we get the approval to privatize, it will be a game changer.”
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