You are in:
Easy does it…
A conservative approach to the Philppines gaming industry has put it in a strong position to weather the financial crisis and as we find out, they’re doing it with a smile. By Max V. de Leon in Manila
When the global financial crisis reared its ugly head and wrought havoc on the global economy in the second half of 2008, unaudited financial reports revealed that the state-owned monopoly, the Philippine Amusement and Gaming Corp (Pagcor Corp) had raked in US$629.79 million.
Rafael ‘Butch’ Francisco, its president and COO told Macau Business this represented a 6 percent jump on 2007 revenues of US$590.85 million. In just 8 years revenues have more than doubled from US$304.8 million in 2000.
Francisco says the company sees no need to downgrade or revise its original target of US$646.8 million set a few years ago.
Steady as she goes
The Pagcor boss says their strategy has been simple: “Our expansion has been conservative, we have only operated 13 casinos in the past decade. We are not like Macau or Singapore or Las Vegas who keep building casinos. We want to create the demand but we certainly don’t over supply,’’ he says.
The Pagcor chief notes that even if they keep surpassing targets by 6 to 8 percent each year, they will not be tempted into grand expansion plans.
The company’s next expansion will only begin in 2010 with the multi-billion-dollar Bagong Nayong Pilipino- Manila Bay Entertainment City project (please see related story).
Pagcor is confident it can weather the global fiscal storm through a mix of offerings including beaches, golf courses, shopping centers, spas, wellness and medical facilities, a strategic location, and, of course, says Francisco, world famous Philippine hospitality.
“We are not really purely gambling, like Macau. Las Vegas also started as a gambling state, but they were able to reverse the trend. Macau is also doing that now,’’ he says.
Gaming with a smile
Philippine Tourism Secretary Ace Durano says the gaming industry is attracting foreign visitors.
“It (gaming) is a good product to have as part of the products mix that the Philippines can offer. It makes us more interesting as compared to other Asian destinations,” Durano told Macau Business.
Samie Lim, the past president of the Philippine Chamber of Commerce and Industry (PCCI) and currently its tourism committee chair, one big advantage of the Philippines is its people.
“Gaming is about entertainment and hospitality. People should be smiling while they are taking your money away. Win or lose, Filipinos are smiling. This is a driving factor of the industry,” he says. Lim also says that because the Philippines only has a small share of the global gaming business, the only way is up, especially with a solid base of Chinese gamblers who are less affected by money worries than US or European punters.
Pagcor marketing efforts for the year will continue to focus on Asia as a result, particularly China, Japan and Korea.
Lim says after Macau, the Philippines is the next best destination for Chinese gamblers due to its proximity to China, and because “Singapore is too restrained.”
“By going to the Philippines, it will cost the Chinese less money and time than going to Singapore. They can fly out of China in the morning and still have more time to play in Manila in the same day. Also, those who go to business meetings then to casinos will have the advantage because they will not lose much time,” Lim says.
Francisco says this is also what Pagcor wants, to make the Philippines the alternative to Macau for Chinese gamblers.
He says the Philippines should never aspire to be a threat to Macau in terms of being the top gaming destination in Asia, simply because of its hold on the Chinese market.
“Our competitors should be Singapore and Malaysia only. We are recognised as the No. 2 in Asia. At least we should maintain that,” he says.
High rollers
More Koreans, Taiwanese and Chinese are flying in to the Philippines on chartered flights, which means they are willing to spend thousands of dollars in just a few days as invited guests who will be filling up the VIP rooms.
Lim says the Philippines should also start tapping the Indonesians, who are considered to be among the world’s biggest gamblers.
Francisco says the biggest task at hand at this time is to find the segments that are least affected by the crisis and tap into them as the new markets to replace hard hit bankers and financial big-wigs.
This, he says, will be the theme of the Asia’s GEM – Asia’s Gaming & Entertainment plus Leisure Expo to be hosted by Pagcor from April 1 to 3 at the Hyatt Hotel and Casino Manila and the SMX Convention Center.
Francisco says the topics to be discussed will also cover the economic crisis and how it is affecting the industry country by country.
Stocks or chips?
Lim says another question to ask in these days of turmoil is, is there a better chance to make money in the stock market or at the casino table?
He asserts that while there is a scientific basis to your percentage chances of winning a game of blackjack, this is not true of the stock market.
“The thing now is, people are afraid of investment in stocks and in banks because they got burned there. In gaming, maybe they would think that they have a better opportunity if they know how to do it well. Its also a chance to relax,” he says.
Lim also says it could be time for the Philippines to consider opening its doors to Stanley Ho Hung-sun: “Maybe we should open to him. If we are open to the Americans and Japanese, why not to him?” he noted.
