Casinos, resorts remain strong despite setbacks

THE COMMUNITY, business, and social services sector’s growth experienced a tempered uptick in 2016.

The sector’s gross value added (GVA) — a measure of the value of goods and services produced by a sector — increased by 7.3% to P841.70 billion in 2016, the Philippine Statistics Authority data showed.

The growth logged by the sector in 2016, however, was slower than the previous year’s 8.3%.

All subsectors posted growth, but slower pace was recorded for the recreational, cultural, and sporting activities and the health and social work, dragging the overall performance of the sector.

Recreational, cultural, and sporting activities’ output — accounting for a fifth of the total sector’s production — increased by 7.7% in 2016 to P182.11 billion, slacking the most from the 12.4% increment recorded in 2015.

BW FILE PHOTO

The Philippine gaming sector was in the spotlight last year after its casinos figured in the Bangladesh central bank hacking incident. Hackers in February last year transferred $81 million from the Bangladesh Bank’s account with the Federal Reserve Bank of New York to a Philippine bank. The stolen money was then withdrawn and transferred to casinos, where the money trail ended.

Out of the stolen $81 million, about $15 million has been returned to the Bangladesh government.

The incident prompted the government to include casinos under the coverage of the Anti-Money Laundering Act, the inclusion of which was signed into law (Republic Act No. 10927) in July this year.

Despite these developments, the gaming sector posted a P158.12-billion gross gaming revenues in 2016, 18.6% higher than the P133.28 billion in 2015, according to the Philippine Amusement and Gaming Corp.’s latest data.

Growth was likewise reflected in earnings of casino-resorts.

Melco Crown (Philippines) Resorts Corp., the operator of the City of Dreams Manila, reported a 63% jump in its net revenues driven by improved volumes across all gaming as well as its non-gaming segments. Bloomberry Resorts Corp., the owner and operator of Solaire Resort & Casino and Jeju Sun Hotel & Casino, reported a net profit of P2.32 billion last year, a reversal of the P3.38-billion net loss incurred in 2015, piggybacking on all-time high records in its gaming segments.

On the other hand, Travellers International Hotel Group, Inc., operator of Resorts World Manila saw earnings decline 15% during the period on account of lower revenues from its casino operations as well as increased financing costs due to the peso depreciation.

The health and social work subsector grew by 6.3% to P129.37 billion. Its growth, however, slowed from 9% in 2015.

The GVA of hotels and restaurants rose by 8.2%, the fastest growth among all subsectors, to P144.62 billion in 2016 from 6.9% logged in 2015.

Education — which comprised 40% of the sector’s total output — went up by 7.2% to P339.54 billion.

Output of other services activities grew by 6.8% to P42.68 billion, while that of sewage and refuse disposal sanitation and similar activities increased by 3.2% to P3.20 billion. — Mark T. Amoguis