(The growth) will be driven by the absence of a regulatory clampdown on gaming by its citizens, growing tourist arrivals—a 12.1 percent increase during 2010 to 2012—and the rising number of [integrated resorts] IRs in the country,” Fitch said.
"The Philippines’ attraction as a gaming destination arises from its positioning as a low-cost tourist destination and robust domestic demand, underpinned by growing overseas foreign worker remittances," it said.
International consultancy firm Spectrum Gaming Group said the Philippines' gross gaming revenue reached $1.45 billion last year, and is projected to grow 11% annually to us$ 3.36 billion by 2020.
However, the gaming industry's potential may be hampered by the tax treatment of the Bureau of Internal Revenue (BIR). Fitch said the gaming sector was “heavily taxed,” citing the 15% levy on very important persons (VIPs) plus a 2 percent heritage fee. Also, there is a 25% gaming tax and 2% heritage fee on mass market players.
“Additionally, the IRs was subject to a 30 percent corporate income tax although that is being challenged by the developers. The Philippines’ low-cost environment compared with other gaming destinations like Macau, Singapore, and Australia counterbalance the high taxes," Fitch conclude.