MANILA, Philippines—The Philippines’ burgeoning gaming industry may surpass Singapore’s $5.6-billion gaming market by 2018 on the back of a larger local mass market and likely spillover of foreign high-rollers, foreign bank Credit Suisse said.
In a new equity research dated February 27, “Let the Games Begin,” Credit Suisse initiated coverage of the Philippine gaming sector with a rosy outlook of 28 percent compounded annual growth rate for the industry over the 2012 to 2018 period.
“We view the Philippines as having a potentially larger domestic market in the high-margin mass segment compared to other Asian gaming hubs on the back of favorable demographics,” the report said, noting that the Philippine population of 97 million was almost three times that of Singapore, Malaysia and Macau combined.
It pointed out that the Philippines also had the fastest growing working age population in emerging Asia, projected to grow more than two percent annually over the next 10 years. Accelerating wage growth, signs of increased spending power and consumer confidence at near-record highs all point to favorable demand prospects, the report said.
Meanwhile, Credit Suisse also noted that limited hotel capacity and the absence of new casinos elsewhere in the region until 2015 could result in a spillover of foreign VIPs (very important persons) into the Philippines.
The bank initiated coverage of two listed gaming stocks Bloomberry Resorts Corp. and Belle Corp. with “outperform” ratings and respective target prices of P17.50 and P6.50, respectively.