The Philippine gaming industry is expected to contract this year as regulatory tightening, weaker consumer spending and restrictions on e-wallet access weigh on the online gambling segment, according to SandP Global Ratings.
In a report, the debt watcher projected gross gaming revenue (GGR) in the Philippines to decline by seven percent in 2026, reversing the six-percent growth recorded last year.
Growth is expected to return in 2027, although at a modest two percent.
SandP classified the Philippines alongside Australia and New Zealand as ‘headwind markets,’ which face regulatory tightening and softer consumer spending.
It said the Philippines’ relatively more permissive approach to online gambling could pose challenges for traditional casino operators, potentially reducing the returns and feasibility of large-scale physical casino investments.
The outlook contrasts with other major gaming markets in the region. SandP expects Singapore’s GGR to expand by seven percent this year and five percent in 2027, while Macao is projected to grow by three to five percent annually over the same period.
Malaysia and Cambodia are also expected to post growth this year at four percent and five percent, respectively. Australia and New Zealand, meanwhile, are projected to contract by three percent and nine percent.
‘The Philippines is a case in point,’ SandP said. ‘A 20-fold growth in online gaming between 2022 and 2025 ignited concerns over addiction, prompting sudden restrictions on e-wallet linkages in August 2025.’
The rating agency said such abrupt policy changes could result in ‘severe revenue erosion,’ citing the impact on dominant online gaming operator DigiPlus Interactive Corp.
According to SandP, the Philippines and New Zealand stand out in Asia-Pacific because most markets in the region maintain restrictive policies toward online casino games, poker and sports betting.
The challenges facing the Philippine market are also weighing on the credit quality of some operators.
SandP downgraded Universal Entertainment Corp., the Japanese operator behind Okada Manila, to B- with a negative outlook in May, citing its heavy debt burden and the poor performance of its Philippine gaming business.
‘The downturn in the integrated resort business is likely to continue due to tough macro conditions and competition in the Philippines gaming market,’ SandP said.
The rating agency expects these pressures to suppress groupwide earnings before interest, taxes, depreciation and amortization. It could also push Universal Entertainment’s debt-to-EBITDA ratio to about 10 times over the next 12 months.
SandP is also monitoring the risk of deteriorating liquidity, although it does not expect major cash flow problems over the next few quarters.
More broadly, SandP expects Asia-Pacific gaming revenue to expand by three to five percent annually over the next two to three years, supported by rising household wealth and tourism.
However, the rating agency said demand alone is becoming a weaker indicator of credit quality as policy decisions, capital allocation and market-specific risks increasingly determine operator performance.