Update the PHILIPPINES

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Update the PHILIPPINES Update THE PHILIPPINES HURLING STONES AT THE SKY After Marcos was forced into exile P- Can the gaming industry in the Philippines shake its image of corruption and Noy’s mother Corazon Aquino took over scandal to become the second largest regional gambling hub in Asia? the reins of the government and changed the country to a democracy. She died in The Philippines, the ‘sick man of Asia’, is PAGCOR is trying to exceeded $2bn. Then almost two years 2009 and just a few weeks later calls for suddenly looking much healthier these shake off the ago something happened in the her son to run as president began. He days as investors clamber into the country image of corruption Philippines that gave the country a huge accepted the challenge and has been to give the country a much needed shot which has tainted cash influx, whilst also giving the region’s thrust into his current position by the in the arm. the company in the casino industry a chance to expand in a clear call of the people and he won the past whilst also big, big way. elections by a margin of 5.5 million votes. The country has been something of a looking at future yoyo over the years. In 2007 things looked projects. Several In June 2010, President Benigno ‘NoyNoy’ As the new President took over there bright as the economy approached its best changes have Aquino III (P-Noy) was sworn in as the were similar changes at the state owned performance, but this was soon crushed been introduced Philippine’s 15th president. He promised Philippine Amusement and Gaming with reports of corruption. Today, the into the company to free the region from poverty and Corporation (PAGCOR) as the old regime $200bn economy is on a stronger footing. such as a reduction corruption, whilst also tackling the was ousted and a new one installed. Its stock market was the best performer in in operating sluggish growth and economic problems. Asia last year and up nearly 13 per cent expenses with In July 2010 a new management team this year. Overseas buying of Philippine excessive Outgoing president Gloria Macapagal took over the PAGCOR helm and Cristino stock hit a record $938m in the fourth expenditures Arroyo had a stormy nine year rule, Naguiat was named as Chairman. For quarter of last year and economic growth curbed. The new which saw four failed power grabs and nine years PAGCOR had promoted itself is projected to be about four per cent. management has opposition impeachment bids against her as a company that was a “global imposed stringent over allegations of vote rigging, corporation,” now under new Corporate balance sheets are also in good regulations on the corruption and rights abuse. management PAGCOR is aiming to take shape, remittances from overseas Filipinos use of service its role back to its roots and concentrate is a steady 10 per cent of GDP and vehicles and a President Aquino has pledged a new era on its own turf. consumer debt is the lowest in Asia at reduction in PR and of good governance, reforms and a just seven per cent. advertising. democracy sensitive to the common Firstly, PAGCOR is trying to shake off the people. His parents are revered for their image of corruption which has tainted the However, until recently foreign opposition to the late dictator Ferdinand company in the past, whilst also looking investment into the Philippines has Marcos who was ousted from power back at future projects. Several changes have always remained fairly low. Over the last in 1986. His father Senator Benigno been introduced into the company such 10 years until 2010 the country’s annual Aquino was assassinated in 1983 as the as a reduction in operating expenses with net Foreign Direct Investment never opposition leader of Marcos. excessive expenditures curbed. The new May 2012 PAGE 62 Update THE PHILIPPINES the tourism figures which are trailing limply behind its other Asian neighbours. The Philippines sees around four million tourists per year, which although has been increasing steadily, is still much lower than the number of tourists visiting Malaysia, Singapore and Thailand. In fact over 70 per cent of the 62 million annual tourists to the region visit these other three countries. In response to these issues, Resorts World Manila was born. In June 2008, the Travellers International Hotel Group, received the first provisional licence from PAGCOR to develop its new gaming project. Travellers International are permitted to operate two casinos sites from 2005 and 2033. The first project was Resort World Manila which is the Philippine’s first integrated tourism estate and opened back in August 2009. Resorts World Manila is a US$700m luxury casino resort which has generated US$355m in revenue during its first year of operation. It is located in Newport City, the first tourism economic zone in the Philippines, and just across from Terminal 3 of the Ninoy Aquino Airport. Resorts World Manila is currently home to three hotels – the five star Marriot Hotel Manila with 323 guest rooms and 19 suites; the six star casino hotel Maxims Resorts World management has imposed stringent yielded a P505m or 25 per cent growth Tower with 168 suites, three villas and Manila is currently regulations on the use of service vehicles compared to the same month last year. one Presidential suite and the newly home to three and a reduction in PR and advertising. We also surpassed the January 2012 opened budget Remington Hotel with 623 hotels – the five star Operating expenses have dropped by gaming income target of P2.38bn standard rooms and 89 serviced Marriot Hotel P846m over a six month period. operations by over three per cent.” apartments. There is also the Newport Manila with 323 Mall including games arcade GameZoo, guest rooms and Meanwhile there has also been an PAGCOR earnings are distributed as 3D cinemas, restaurants and a 1,500 seat 19 suites; the six improvement of budget performance and follows: theatre boasting the largest LED wall ever star casino hotel a review of contracts. The company has built in the Philippines. Maxims Tower with renewed its casino offerings whilst • five per cent to the Inland Revenue as 168 suites, three introducing award schemes for its franchise tax, The hotels currently offer 1,226 rooms villas and one workers. across the three brands and the plan is to Presidential suite • 50 per cent of the balance goes tot he bring the total number of hotels to seven and the newly In 2011, PAGCOR saw total revenues of National Treasury as the government’s over the next five years. Maxims Tower opened budget P36.65bn, a 16.5 per cent growth mandated income share, was the first hotel in the country to offer Remington Hotel compared to the total income the year all-suite accommodation. with 623 standard previously of P31.4bn (of which P21.7bn • five per cent of the balance goes to the rooms and 89 came from gaming operations) Philippine Sports Commission, The resort also inaugurated the Newport serviced City Transport Terminal, which provides apartments. There Meanwhile, income is increasing monthly • one per cent to the Board of Claims, round the clock access to and from the is also the Newport and in March 2012 reported highs of airport terminals as well as to various Mall including P3.67bn, an increase from February’s • Cities hosting PAGCOR casinos are also parts of metro Manila and neighbouring games arcade P3.46bn, and its 10th consecutive month given a fixed amount for their provinces. GameZoo, 3D of high gross earnings. respective community development cinemas, projects, The casino has 300 tables, 100 electronic restaurants and a The income has been put down to the table games and 1,700 slots over three 1,500 seat theatre sustained improvement of marketing • PAGCOR also provides funds for other floors and includes a VIP room and boasting the largest programmes for Casino Filipino’s national development and sports programmes, junket rooms. The casino recently added LED wall ever built and foreign markets, upgrading of slot whilst the remaining balance goes to 200 new slots and 100 new electronic in the Philippines. machines and the rationalisation of the Social Fund. table games as the popularity of this style expenses in gaming operations. of gaming is beginning to grow in the THE GROWTH OF GAMING Philippines. Meanwhile there are linked CEO Cristino Naguiat said: “Our casinos, One of the aims behind the development slots, stand alone machines and these are arcades and in-house bingo operations of gaming in the Philippines is to boost all available via the main gaming area at May 2012 PAGE 63 Update THE PHILIPPINES Resorts World, Maxims VIP gaming area, Maxims non smoking gaming area and Genting Club. The company behind the project is Travellers International Hotel Group – a joint venture between Alliance Global and Genting Hong Kong and the resort draws around 11 million visitors per year. Alliance is expecting average daily foot traffic to the resort to more than double by next year as the companies develop more projects and claim it could reach 35- 40,000 visitors by the end of 2012 higher than the initial projection of 30,000. At the moment Resort World attracts around 18-20,000 per day of which 16,000 are concentrated on its casino operations. Another four hotels will be added including two five star hotels and two four star hotels with a total room count of 2,700. Meanwhile, the six star Maxims Tower is undergoing expansion with another 50-60 super sized suites being added whilst the five star Marriot Hotel will add up to another 100 rooms.
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