Inside Asian Gaming

IAG JAPAN JUN 2019 44 We believe the Philippine gaming market’s competitive advantages will continue to have profound influences on its long-term outcome, which will empower the industry to keep growing. Philippines remain among the most competitive of the ASEAN countries. Even for professionals and those at middle management levels, the average base salaries in the Philippines are among the lowest across the ASEAN region, contributing to competitive operating margins and investment returns. 3) IMPROVING INFRASTRUCTURE Given the massive domestic market, attractive investment factors and the tourism-driving beauty of its natural environment, the country has the potential to be even more prosperous with improved infrastructure. With the aid of Official Development Assistance (ODA) offered by countries such as Japan, Korea and China, the Philippines is now opening the “Golden Age of Infrastructure” by planning 75 flagship projects with US$160 billion in investments. It aims to complete 32 of them by 2022, effectively empowering further growth of many industries, including gaming. For example, the 106-kilometer Manila-Clark Railway Project, which aims to cut travel time between the two cities from more than two hours to just 50 minutes, is anticipated to be a strong catalyst in boosting tourism growth in the Clark Zone and benefiting the Clark-based casino properties. The project is expected to be completed by 2021. On the other hand, major concerns regarding the growth and stability of the Philippine gaming market are based on political risks and the geopolitics between key feeder markets/countries. We think the political risks imply 1) political viability to pass legislation of casino gaming, and 2) political volatility where the political winds may change dramatically and thus impact the IR’s ability to do business. For today’s large-scale international IRs, another factor that has become increasingly important when evaluating a prospective jurisdiction is the key feeder markets and the associated geopolitics. Geopolitical COLUMNISTS