The Philippine gaming industry did not start well this year, but the international rating agency S&P has given a relatively optimistic forecast. On July 1, S&P credit analyst Zhang Fuluora released the latest industry research report, believing that the relaxed entry policy and the orderly recovery of online gaming business will become the two core engines to drive the total revenue of Philippine gaming back to the growth range. The PASA official website noticed that the logic of this report is not complicated—the visa-free policy is responsible for bringing people in, the offline physical casinos are responsible for keeping people, and the gradual stabilization of the online format is responsible for making up for the lost increment. However, S&P also did not avoid risks: high energy costs and continuously increased compliance requirements are still two unavoidable mountains on the road to recovery.
Q1 How cold it is: Overall fell nearly 16%, electronic gaming plummeted 22%
According to the official data that has been released, the current chill in the industry is quite direct. According to the disclosure by the Philippine Amusement and Gaming Corporation, the total revenue of Philippine gaming in the first quarter of 2026 decreased by 15.9% year-on-year, among which online gaming, electronic chess, online poker and other electronic gaming businesses were the most severely hit, with revenue falling by 22.4% year-on-year. PAGCOR pointed out that the reasons for the revenue contraction are the rising energy prices due to the situation in the Middle East and the high domestic inflation leading to the compression of residents' disposable funds—in plain terms, wallets are deflated, and naturally, entertainment consumption follows suit.
On the revenue structure, offline licensed physical casinos are still the basic disk, contributing 44.5 billion pesos in the first quarter, accounting for more than half of the revenue; the electronic gaming sector's revenue in the same period was 39.9 billion pesos, accounting for about 45.6%. As a reference, during the industry peak in 2025, the total annual gaming revenue in the Philippines once approached 400 billion pesos. From nearly 400 billion to a double-digit drop in Q1, the steepness of the turning point is self-evident.
Visa-free gate opening: Chinese tourists 14 days visa-free, offline casinos benefit first
The reason why S&P dares to give a warming judgment during the industry's downturn is that the continuous relaxation of entry policies is one of the most important supporting variables. The Philippines currently continues the visa-free entry policy for Chinese citizens for up to 14 days, and has also extended the visa-free stay period for people from the Taiwan region of China until the end of June 2027. Once the convenient entry and exit conditions are translated into actual passenger flow, not only hotels, catering, and tourism industries will benefit—the customer sources of various integrated resorts with casinos will also be activated, laying a good foundation for the recovery of offline gaming revenue.
This logic chain does not require too complicated reasoning: foreign tourists stay in integrated resorts, and besides hotels, catering, and shopping, casinos are just one of the stops—but this stop contributes the highest per capita spending and stay duration, often the most solid part of the entire resort's revenue structure. S&P's optimism is essentially betting that the customer flow increase brought by the visa-free policy can cover the erosion of profits by inflation and compliance costs.
Costs and regulation: Two unavoidable mountains
Even with a clear favorable direction, S&P did not ignore the existing structural risks of the industry. The foremost is the high energy costs—continuously rising prices and electricity costs directly push up the daily operating expenses of casinos, and some stores may even be forced to shorten business hours, further squeezing the already thin profit margins.
The regulatory side is also intensifying. The Philippine regulatory authorities have issued mandatory regulations, requiring all types of technical services and operational support enterprises within the industry to complete qualification verification, and those who do not meet the standards on time will face shutdown and rectification of their online operating systems. In terms of capital control, major banks and online electronic wallet payment platforms have been officially included in the anti-money laundering monitoring system of the gaming industry, and all financial institutions that provide fund transfer services for the gaming format must strictly comply with local anti-money laundering regulations. Major casinos are also required to upgrade internal risk control systems to accurately identify suspicious funds.
The PASA official website believes that visa-free inflow and the recovery of the online format do have the ability to pull the Philippine gaming industry out of the trough of the first quarter, and S&P's optimism is not without basis. However, high operating costs, increasingly strict regulatory requirements, and continuously expanding compliance expenditures determine that the slope of this recovery will not be too steep. From "getting out of the trough" to "returning to the peak," there is still a considerable distance involving operational efficiency, compliance adaptability, and the global macro environment.
————
This article is from "PASA-Global iGaming Leader" gaming industry news channel:https://t.me/pasa_news
Gaming original depth channel:https://t.me/gamblingdeep
Free data report: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
