Gambling On The Philippines

Via The Financial Times, an article on the gaming boom soon to unfold in the Philippines:

The four big casino complexes rising along the scenic Manila Bay in the Philippines haven’t opened their doors yet, four years after the government awarded the exclusive licenses as part of the country’s ambitious plan to cash in on Asia’s gambling and tourism boom.

But that has not stopped Enrique Razon Jr, the 52-year old chief executive of the country’s biggest port operator, from almost doubling his net worth in just a matter of months after a public offering of shares in his Bloomberry Resorts and Hotels, a holder of one of the lucrative, limited-edition permits.

Forbes magazine, which just released its 2012 list of the world’s richest people, describes Razon as the Philippines’ biggest gainer this year, and ranks him the country’s third-richest person, worth $3.6bn. He joined the country’s highly exclusive club of dollar billionaires just last year with $1.6bn. “Much of the $2bn jump in his wealth this year is from his stake in Bloomberry Resorts, which had a public offering in May,” according to Forbes.

Until March this year, Forbes estimated Razon’s wealth at $1.9bn, an increase in just $300m from June last year. But the public offering in May, which valued Bloomberry at around $1.9bn, boosted his estimated wealth to $3.6bn in just two months. The country’s richest man, retail and property magnate Henry Sy, worth $9.1bn, increased his wealth by similar amount: $1.9bn, according to Forbes.

To be sure, all of these are just paper gains, not cash. Still, Razon’s amazing jump in net worth reflects the current bullishness among Filipino investors for the casino boom that is expected to boost the country’s tourism and gaming revenues. The head of the state gaming monopoly that issues casino licenses, Pagcor, has predicted the country’s gaming revenue will surge from just $2bn last year to $10bn by 2016 when the four new casino resorts start full operations. That compares to Singapore’s $6-7bn last year, according to Pagcor.

Before getting the casino license in 2009, Razon spent close to two decades building his family’s port operations business, International Container Terminal Services, into the country’s biggest, expanding in Asia, Latin America, Europe and the Middle East. He also ventured into the energy business, acquiring stakes in the national transmission company and an oil-and-gas exploration venture. These businesses, which help provide the infrastructure backbone for sustained economic growth, are doing quite well – but it took Razon four years to double his net worth, from $820m in 2007 to $1.6bn by 2011, according to Forbes’ estimates.

That increase might seem good, except when compared to the doubling in his net worth in double quick time after the Bloomberry deal. It makes you wonder if Filipino investors are now keener on the business of gaming rather than trading, logistics or manufacturing.

This entry was posted on Friday, June 29th, 2012 at 10:10 pm and is filed under Philippines.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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