PAGCOR Flags Risks Ahead for Philippine Gaming Revenues in 2026

Philippine Amusement and Gaming Corporation Chairman Alejandro Tengco issued a direct warning that gross gaming revenue could fall by as much as 19 percent during 2026, and the projection rests on mounting cost pressures plus ripple effects from ongoing tensions in the Middle East. The statement came after regulators released fresh numbers showing the sector already recorded a 16 percent year-on-year decline to Php87.6 billion in the first quarter of 2026.

Those quarterly results mark the latest in a series of softer figures that have drawn attention from operators and policymakers alike. Tengco tied the expected further drop to rising operational expenses that squeeze margins while external geopolitical events add uncertainty to player spending patterns and tourism flows.

Quarterly Data Reveal Early Weakness

Official statistics released by PAGCOR detail how regulated casinos and gaming venues generated Php87.6 billion in gross gaming revenue during the January-to-March period, and that total sits 16 percent below the same stretch in the prior year. The contraction appears across multiple segments, including table games and electronic gaming machines, while integrated resorts also posted softer win rates compared with 2025 levels.

Industry observers point to higher energy and labor costs as one driver behind the slowdown, yet Tengco emphasized that these domestic factors alone do not explain the full picture. External shocks tied to conflict in the Middle East have begun to affect both inbound tourism from key markets and broader economic sentiment that influences discretionary spending on gaming and entertainment.

Forecast Points to Deeper Contraction

Tengco projected that full-year 2026 revenue could slip by up to 19 percent if current trends persist, and the estimate factors in continued cost inflation plus potential reductions in visitor arrivals from regions directly or indirectly impacted by Middle East instability. The warning arrives at a time when operators are already adjusting marketing budgets and reviewing capital plans in light of thinner cash flows.

Data compiled by the regulator shows that electronic gaming revenue has borne a larger share of the decline than table games so far this year, although both categories registered negative growth. Tengco noted that sustained pressure on household budgets in source markets could keep arrival numbers subdued through the remainder of 2026 and into the following year.

Cost Pressures and External Shocks Combine

Cost pressures cited by the chairman include elevated utility rates, imported equipment expenses, and compliance-related outlays that have risen steadily since late 2025. At the same time, the Middle East situation has introduced volatility in fuel prices and global travel routes, factors that raise the cost of long-haul flights for visitors from Europe and parts of Asia.

While the Philippine gaming industry has historically shown resilience during regional downturns, the combination of domestic inflation and geopolitical uncertainty creates a more complex operating environment than earlier challenges. Tengco stressed that the forecast assumes no sudden de-escalation in the Middle East and no major policy shifts that might ease cost burdens on licensees.

Industry Response and Monitoring Efforts

Operators have begun reviewing staffing levels and promotional calendars in anticipation of softer revenue, and some integrated resort projects have delayed certain expansion phases until clearer trends emerge. PAGCOR continues to track monthly performance indicators and maintains regular dialogue with licensees to assess liquidity positions and debt servicing capacity.

The regulator also monitors employment figures across the sector, given that casinos remain significant employers in entertainment districts around Metro Manila and Clark. Any prolonged revenue weakness could translate into slower hiring or selective reductions in non-gaming amenities that support overall foot traffic.

Conclusion

The warning delivered by Chairman Tengco places the 16 percent first-quarter decline into a longer-term context, and the 19 percent downside scenario for 2026 reflects both internal cost dynamics and external geopolitical influences. Regulators and operators alike will watch subsequent quarterly releases for signs that the contraction is stabilizing or accelerating, while the linked industry statistics page maintained by PAGCOR offers updated figures as they become available.