PAGCOR Income to Drop 18% in 2026 Amid E-Wallet, Crisis Hit

Kyle Kevin

iGaming Writer

Fact Checked

PAGCOR income is set to drop 18% this year, but the regulator still hopes the holiday gaming season can claw back some of the first-half damage.

PAGCOR income is forecast to drop 18% in 2026, falling to PHP86.95 billion ($1.41 billion) from PHP106.03 billion last year. The Philippine gaming regulator’s net income will plunge even harder, collapsing 91% to PHP1.66 billion from PHP17.47 billion in 2025. Chairman Alejandro Tengco delivered the figures at a House of Representatives budget hearing on Monday. The numbers reflect a perfect storm: e-wallet delinking that gutted online gaming transactions, Middle East geopolitical tensions squeezing consumer spending, and a Supreme Court ruling that forced PAGCOR to remit far more to the Philippine Sports Commission. The first half already bore the scars. Total revenue hit PHP43.32 billion, down 26.6% year-on-year. Gaming operations revenue fell 27.1% to PHP38.92 billion. Electronic gaming — e-bingo, e-games and bingo grantees — cratered 41.9% to PHP18.60 billion. Net income for the first six months collapsed 85.3% to PHP1.58 billion. Yet Tengco is not surrendering the year. He pointed to rising tourist volumes at integrated resorts and the approaching peak gaming season as reasons the second half could partially recover what the first half lost.

PAGCOR Income Forecast: The Numbers Behind the Drop

The 2026 budget presentation laid bare the scale of the reversal. PAGCOR’s total income projection of PHP86.95 billion marks a PHP19.08 billion haircut from 2025. Net income at PHP1.66 billion represents a collapse of more than PHP15.8 billion. The figures are not abstract. They translate directly into reduced nation-building contributions, smaller government remittances, and tighter budgets for the sports programmes PAGCOR is now legally obligated to fund more heavily. The first-half data explains why the full-year forecast looks so grim. Total revenue of PHP43.32 billion was down from PHP59.05 billion in H1 2025. Gaming operations, which supply roughly 90% of PAGCOR’s revenue, generated PHP38.92 billion — a PHP14.48 billion year-on-year shortfall. Licensed casino revenue dipped 3.85%. PAGCOR-operated casinos fell 8.67%. The electronic gaming segment, which had overtaken licensed casinos as the industry’s largest revenue contributor in 2025, suffered the worst blow. Its PHP18.60 billion first-half revenue was down 41.9% from PHP32 billion a year earlier. Net operating income declined 35.05% to PHP31.75 billion. Net income fell 85.29% to PHP1.58 billion. The steeper net income drop reflected higher mandated remittances to the Philippine Sports Commission. PAGCOR remitted PHP2.01 billion to the PSC in H1 2026, up 58.68% from PHP1.26 billion in the same period last year. That remittance surge was not optional. It was a direct consequence of a Supreme Court ruling that reset the calculation basis. Despite the revenue collapse, PAGCOR still contributed PHP30.16 billion to nation-building in the first six months. The National Treasury received PHP18.49 billion as its 50% share. Franchise taxes totalled PHP1.94 billion. Socio-civic projects got PHP7.36 billion. The regulator is fulfilling its obligations even as its own income evaporates.

E-Wallet Delinking and the Middle East Crisis

Tengco identified two primary drivers of the collapse. The first was the Bangko Sentral ng Pilipinas order delinking electronic wallets from online gambling platforms. “We had experienced a downtrend of about 40 percent in gaming activity because it’s not as easy as before when platforms were linked,” Tengco told lawmakers. The directive forced major e-wallet providers such as GCash and Maya to remove in-app gambling links. Licensed platforms saw online gaming transactions drop roughly 50% in the immediate aftermath. The pain was not evenly distributed. The electronic gaming segment, which had generated PHP201.12 billion in 2025 and accounted for 50.77% of total industry GGR, took the hardest hit. Its first-quarter GGR alone fell 22.43% to PHP39.9 billion. The second driver was geopolitical tension in the Middle East. Tengco said the crisis stoked consumer prices and squeezed discretionary spending among the middle-income and working-class players who dominate the online segment. “The class lower C segment and the upper D are the ones who are affected now by the crisis,” he said at an earlier industry event. “Before placing their bets or playing online, they would make sure that they eat.” Inflation in the Philippines accelerated to 7.2% in April, well above the central bank’s 2%-4% target. Higher fuel and transport costs drained household disposable income. Non-essential spending — including gaming — suffered. The combined effect was brutal. The Philippine gaming industry posted GGR of PHP88.14 billion in Q2 2026, down 20.3% year-on-year. That followed a 15.87% decline in Q1. For the first half, industry GGR was running well below the PHP396.14 billion full-year record set in 2025. Tengco had warned as early as June that 2026 GGR could fall as much as 19%. The first-half data suggests that forecast may prove optimistic. AGBrief tracks regulatory developments across Asia-Pacific gaming markets.

The Supreme Court Ruling That Deepened the Pain

The revenue collapse would have been painful enough on its own. A Supreme Court ruling made the net income line far worse. The court upheld a petition by former congressman Yeng Guiao and ordered PAGCOR to remit a full 5% of its gross annual income to the Philippine Sports Commission. The ruling, finalised in 2025, overturned a 1993 executive order that had reduced the PSC allocation to roughly 2.13%. It also imposed retroactive liability. PAGCOR now faces an estimated PHP37 billion in back payments dating to 1993. The court structured repayment over 10 years at roughly PHP3.7 billion annually. In the first half of 2026 alone, PAGCOR remitted PHP2.01 billion to the PSC, up 58.68% from PHP1.26 billion in H1 2025. The monthly remittance has jumped from roughly PHP188 million to around PHP440 million. That is PHP252 million per month in additional outflow at a time when revenue is shrinking. Tengco said the steeper decline in net income was “due to PAGCOR’s higher mandated remittances to the Philippine Sports Commission following the Supreme Court’s ruling requiring the state gaming agency to remit five percent of its gross income to the PSC, instead of the previously adopted computation.” The ruling affects PAGCOR’s cash position directly. It also raises questions about the regulator’s ability to fund its other mandated obligations. The National Treasury still expects its 50% share. Socio-civic projects still need funding. Franchise taxes and corporate income taxes still must be paid. The PHP37 billion retroactive liability hangs over future budgets like a cloud. PSC Chairman Patrick Gregorio has welcomed the windfall, saying the funds will transform Philippine sports. Facility upgrades in Rizal, PhilSports and Baguio are planned. Athlete benefits will expand. Sports tourism will get a push. Those are worthy goals. They are also expensive ones, and PAGCOR is now the primary funder at a moment when its own income is collapsing.

Why PAGCOR Still Sees a Late-Year Recovery

Tengco is not declaring defeat. He told lawmakers that PAGCOR is seeing signs of improvement in gaming activity and remains hopeful the second half can recover some of the first-half weakness. His optimism rests on two pillars. The first is seasonality. “Considering that the peak season for gaming activity is coming up,” he said, “hopefully we’re able to recover the weak revenue in the first-half towards the latter part of this year.” Philippine gaming traditionally accelerates in the fourth quarter, driven by holiday spending and tourist arrivals. The second pillar is tourism. Tengco noted that integrated resort operators have reported an increase in tourist volumes. He observed a “slight upward trend towards the end of July and early August.” Visitor arrivals from China grew 61.73% in the January-to-April period, aided by a 14-day visa-free policy. That matters because Chinese tourists are a critical feeder market for integrated resorts and land-based casinos. However, not all tourism signals are positive. Arrivals from South Korea, another key casino market, declined 6.18% in the first four months. The broader economic picture remains challenging. Inflation is elevated. Fuel prices are volatile. The Middle East crisis shows no sign of resolution. Analysts at Colliers Research expect muted gaming revenues for the remainder of the year. Ateneo Center for Economic Research fellow Ser Percival Peña-Reyes said gaming revenues will likely stay subdued while inflation remains above target and consumer confidence stays cautious. PAGCOR has also identified a potential new revenue stream. The regulator is exploring a Special Class of Business Process Outsourcing that could generate PHP2.5 billion to PHP3 billion in additional revenue this year by providing offshore services to casinos and operators. That would not close the PHP19 billion revenue gap. But it would help. For 2027, PAGCOR is already budgeting a rebound. It projects total income of PHP88.34 billion, up 1.59% from the 2026 forecast. Net income is expected to rise 14.8% to PHP1.91 billion. Those are modest gains from a low base. They also assume the headwinds of 2026 do not worsen. The regulator’s dual role as operator and regulator remains under scrutiny. Lawmakers have long criticised the conflict of interest. PAGCOR has planned a PHP50 billion casino sale to address it, though timing remains uncertain. For now, the immediate challenge is simpler: generate enough revenue to cover obligations that just grew substantially while the core business shrinks. PAGCOR income is falling. The question is how far, and for how long.

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This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.