Pagcor moves to exit Casino Filipino by late 2027 as losses hit PHP7 billion

Pagcor is seeking government approval to separate from and divest its Casino Filipino operations, targeting an exit in the third or fourth quarter of 2027 after reporting projected losses of at least PHP7 billion for 2026. The proposed disposal could fetch a minimum of PHP20 billion (about $318.8 million) and would end the agency's dual role as operator and regulator if signed off by the relevant bodies before the Office of the President.

Pagcor loss figures and sale valuation

The Philippine Amusement and Gaming Corp reported that Casino Filipino is on track to lose at least PHP7 billion in 2026, up from roughly PHP6 billion in the prior year. Pagcor estimates a sale of the Casino Filipino estate could raise PHP20 billion or about $318.8 million. The agency currently operates twelve casinos directly and administers another 23 under revenue-sharing agreements.

Why Pagcor wants to divest Casino Filipino

Chairman and Chief Executive Alejandro Tengco linked the mounting losses to workforce costs and other financial pressures. Speaking to reporters at the opening of the Kaban Hotel and Casino in Boracay, Tengco said:

"Casino Filipino is bleeding like mad." — Alejandro Tengco

Tengco also pointed to wider legacy obligations that have increased Pagcor's cash outflows. A Supreme Court ruling requires Pagcor to make payments equivalent to 5% of gross revenue to the Philippine Sports Commission covering reporting years back to 1993. He said monthly remittances under that obligation have risen from roughly PHP180 million to PHP400 million.

The approvals process and timing

The immediate next step is a recommendation from the Governance Commission for Government-Owned or Controlled Corporations. Tengco said:

"Within October, the Governance Commission for Government-Owned or Controlled Corporations [GCG] will make a recommendation to the Office of the President on whether it supports the decoupling or not." — Alejandro Tengco

If the GCG recommends decoupling, the Office of the President — headed by President Ferdinand Marcos Jr — must consider and approve the proposal. Subject to those approvals, Pagcor aims to exit casino operations in the third or fourth quarter of 2027.

Market impact and industry context

Divesting Casino Filipino would terminate the arrangement under which the Philippine Amusement and Gaming Corp both regulates private casinos and competes with them through its own outlets. Existing Pagcor licensees have already expressed interest in acquiring Casino Filipino outlets, according to Pagcor statements. A sale would convert state-run casino real estate and operating rights into private-sector assets, shifting competition and regulatory dynamics.

Pagcor also revised its near-term industry outlook. Tengco expects Philippine gross gaming revenue to exceed PHP350 billion in 2026, down from an original target of PHP400 billion. He attributed the downgrade to the domestic economic downturn and the impact of the Middle East conflict on tourist and high-value player flows. On profitability, Pagcor's net income could fall below PHP5 billion in 2026, compared with nearly PHP17.5 billion in 2025.

What a sale would mean operationally

A transaction that raises at least PHP20 billion would likely involve transfers of property, gaming licences or operating agreements tied to the twelve directly operated Casino Filipino venues and the 23 revenue-sharing sites. Existing licensees who have shown interest would need to secure the required approvals from Pagcor and, depending on the asset, from the GCG and the Office of the President. The separation also requires formal government consent because Pagcor's statutory remit combines regulation and commercial operation.

For private operators and investors, the deal would open opportunities to acquire established Philippine casino footprints. For regulators, the change would resolve the structural conflict of having the regulator operate in the same market as licensees.

Short-term fiscal implications for Pagcor

If the GCG and the president approve decoupling and the sale proceeds materialise at or above the PHP20 billion floor, Pagcor would receive a material capital inflow that could be used to service legacy obligations, including the retroactive sports-commission remittances. Pagcor's monthly payments to the Philippine Sports Commission have more than doubled, from around PHP180 million to PHP400 million, a cost that Tengco singled out when explaining the Casino Filipino losses.

A successful disposal would also remove a loss-making operating line from Pagcor's income statement, potentially stabilising net income in subsequent reporting periods. Pagcor's guidance warns, however, that broader market conditions — lower-than-expected gross gaming revenue and geopolitical pressures — will continue to weigh on sector earnings through 2026.

What to watch next

Stakeholders should monitor the Governance Commission for Government-Owned or Controlled Corporations' October recommendation and any subsequent action by the Office of the President. Interested licensees will need to prepare bids and regulatory dossiers if the sale process proceeds. The potential buyers' identities, transaction structure and final proceeds will determine how quickly the exit completes in 2027.

For reporting on regulatory implications, see Pagcor's role in the sector and the separation debate in the regulation and casino coverage sections. The process will reshape the Philippine casino market if the proposed timeline holds.

Marcus Webb, Industry Deals Correspondent