to mass-oriented business . While it is true that mass gaming tends to yield a relatively higher profit margin than VIP business , it is important to not overlook the infrastructure and capacity required to handle the volume of mass visitation necessary to offset the decrease in premium business and achieve future growth . The Philippine market fills another exemplary role in this context .
Infrastructure improvements in the Philippines , ranging from enhanced connectivity between Manila and the neighboring regions to the newly added terminals at airports in Clark and Cebu , are expected to facilitate rapid recovery and further growth of the country ’ s gaming industry . The Clark International Airport ’ s new 10,000-square-meter terminal can accommodate approximately 8 million additional passengers per year . In addition to providing a more efficient gateway into Clark , it also is intended to ease air traffic congestion at Manila ’ s Ninoy Aquino International Airport .
Workforce
Further to above , one challenge that surfaced during the pandemic and continues to linger is the availability of a quality workforce . Shortages in skilled labor have hindered recovery and growth pace of economic activities around the world , and have been especially challenging for service industries like gaming . Mass gaming requires a larger workforce of quality , skill and reliability , which is likely to challenge many operators in the region ’ s gaming markets .
The Philippines possess another competitive advantage in this area . The local workforce tends to be comprised of fast learners who have the passion to work in most entertainment and hospitality settings . Meanwhile , labor costs in the Philippines remain among the most competitive in the ASEAN countries , attracting foreign investments and new operations to the country .
Taxation
Gaming tax rates and structure can have a significant impact on the potential success of an IR development and the acceptable return on private investment . Implementing a tax structure that attracts optimal capital investment while still deriving adequate revenue through taxes and providing ample funding for tourism promotion , regulatory oversight , and other associated social needs is critical .
The Philippines ’ gaming tax regime remains commercially competitive in the Asia Pacific region , which represents a solid competitive advantage of the market , as operators can allocate more financial resources towards customer acquisition and / or capital improvements that result in greater prospective revenues .
While macroeconomic conditions and geopolitics between the Philippines and its key feeder markets may impose challenges in the years ahead , on balance , the Philippines gaming market is expected to grow in a sustainable manner thanks to its major business drivers and competitive advantages . The Philippine market already has set an exemplary case for the industry in the Asia Pacific region to evolve in a post-Covid era and will continue to build on that by capitalizing on the booming , and increasingly wealthy , middle class in the region , and better stimulating tourism and related economic impacts that benefit the country . — Michael Zhu is senior vice president , international operations planning and analysis for The Innovation Group .