PAGCOR Leadership Flags Risks to 2026 Gaming Revenue from Regional Tensions

PAGCOR Chair Alejandro Tengco has issued a direct warning that the country's gross gaming revenue could fall by as much as 19 percent during 2026, with rising costs tied directly to the Middle East conflict cited as the primary driver behind the projected shortfall, and this forecast matches earlier projections that already anticipated the same percentage decline amid sustained industry pressures despite continued regulatory oversight. The announcement draws attention to how external geopolitical developments translate into higher operational expenses for licensed operators across the Philippines, forcing adjustments in budgeting and expansion plans well before the new calendar year begins. Tengco's statement places the 19 percent figure at the center of discussions about long-term stability for both land-based and online segments that contribute to national revenue streams.

Details Behind the Projection

Data released alongside the warning shows the 19 percent drop aligns precisely with models developed in prior months, where analysts factored in elevated fuel prices, supply chain disruptions, and security-related premiums that operators must absorb when sourcing equipment and maintaining facilities. These elements compound during periods of heightened regional instability, and the resulting cost increases reduce the margin available for reinvestment or new project approvals.

Those monitoring the sector note that PAGCOR continues to enforce licensing standards and compliance checks even as revenue forecasts soften, which means oversight activities remain unchanged while operators navigate narrower financial windows. The consistency between the current warning and previous estimates suggests the underlying variables have not shifted substantially since the initial calculations were completed.

Connection to Middle East Developments

Costs linked to the Middle East conflict enter the equation through multiple channels, including higher transportation fees for imported gaming hardware and increased insurance rates for cross-border shipments. Operators report that these line items have risen steadily, and Tengco's projection incorporates the assumption that similar trends will persist into 2026 unless broader conditions change.

June 2026 sits squarely inside the period covered by the forecast, so any continued escalation in conflict-related expenses during the first half of that year would directly affect quarterly GGR collections reported to PAGCOR. The agency therefore treats the projection as a planning benchmark rather than a speculative scenario, allowing both regulators and licensees to prepare contingency measures in advance.

Industry Pressures and Regulatory Context

Despite the anticipated contraction, PAGCOR maintains its role in supervising all legal gaming activities and collecting the corresponding fees that support government programs. Observers point out that the 19 percent figure reflects gross revenue before deductions, which means the actual impact on net operator income could vary depending on how efficiently each licensee manages its cost base.

Earlier projections already embedded assumptions about prolonged supply disruptions and energy price volatility, and the latest statement from the chair simply reaffirms those assumptions without introducing new variables. This continuity allows market participants to update their internal models using the same percentage benchmark rather than recalibrating from scratch.

Conclusion

The warning issued by Alejandro Tengco therefore serves as an official marker for the Philippine gaming sector heading into 2026, highlighting the transmission of external costs into domestic revenue expectations while PAGCOR continues its standard regulatory functions. The alignment with prior forecasts underscores that the 19 percent decline remains the central reference point for planning across the industry.