In the dynamic realm of gaming and entertainment, the Philippine Amusement and Gaming Corp. stands at a pivotal juncture, poised for unprecedented growth and transformation. PAGCOR Chairman and CEO Alejandro Tengco shares insights into the corporation’s ambitious objectives, strategic initiatives and the compelling investment landscape within the gaming sector.
Bridges: PAGCOR’s 40th anniversary last year coincided with record gross gaming revenues. What are your objectives and milestones to sustain this growth in the years ahead?
Tengco: When I took on this role in August 2022, we were already on a positive trajectory, reaching revenues close to 67% of prepandemic levels. The real growth kicked in during 2023 as we gradually reopened the economy, surpassing even our prepandemic numbers ahead of schedule.
Looking ahead to sustain this momentum, we’re focusing on two key drivers. One is the expansion of integrated resorts with private investments of over $1 billion for one to qualify in Metro Manila, about $200 million in the economic zone of Clark and about $300 million elsewhere. IRs include a hotel, minimum retail space, dining options, “staycation” facilities and event venues.
We have exciting developments in the pipeline, including the opening of Solaire North this year. By 2025, another IR will launch in Metro Manila, with potential projects in Cebu and tourist destinations like Boracay by 2026. Clark is also on our radar for an IR in 2027, followed by possibly Solaire Puerto Azul in 2028. These expansions are expected to greatly increase our gross gaming revenues.
Additionally, my plan is to privatize by 2025. This shift will involve transitioning the operation of 41 land-based casinos currently run by PAGCOR to the private sector. By doing so, these establishments will be managed more efficiently, and we will derive license fees amounting to 25% of their gross sales.
Why is the gaming sector experiencing such rapid growth, and how is PAGCOR planning to capitalize on this trend?
Several factors are driving the growth of the e-games sector. We significantly reduced license fees, dropping them from 52.5% to a competitive 35%, which encourages compliance and investment. Convenience is another key factor — players can enjoy games from anywhere, especially appealing after the pandemic. Innovations like mobile-compatible games enhance accessibility.
What strategic measures are being taken to facilitate a seamless transition with the privatization of land-based casinos?
The main challenge we are addressing is PAGCOR’s dual role as regulator and casino operator. This setup conflicts with basic business ethics. Privatization will allow us to focus solely on regulation, collecting taxes and licensee fees without high overhead costs.
Now is the time to invest in the Philippines. We’ve restructured policies to align with current trends and continuously evolve.
Alejandro H. Tengco, Chairman and Chief Executive Officer of Philippine Amusement and Gaming Corporation
Will investors be interested in purchasing privatized assets?
Absolutely. We’ve received inquiries, particularly for key cities like Cebu, Davao, Tagaytay and Angeles City, indicating promising opportunities.
How is PAGCOR attracting international investors and gamers to the Philippines?
By 2030, Japan’s first IR is set to open in Osaka. Visits from Japanese agencies demonstrate our respected position as a mature gaming jurisdiction. Cambodia is also interested in collaborating, inspired by our regulatory improvements. This recognition attracts investors seeking growth opportunities.
Can you provide insights into current and projected employment figures in the gaming sector?
With privatization and continued growth, the gaming sector is expected to generate remarkable employment opportunities. Currently, there are about 150,000 direct employees and an additional 150,000 indirect roles. As the sector expands, these numbers will increase, contributing to the country’s economic growth.
Why is the Philippines an attractive destination for gaming sector investment?
Now is the time to invest in the Philippines. We’ve restructured policies to align with current trends and continuously evolve. Investors recognize our mature regulatory authority, stability and reliability. Beyond gaming, visitors appreciate our beautiful beaches, attractions and warm hospitality.
For more information, visit: www.pagcor.ph
