Great tourism potential
IT’S ACKNOWLEDGED that tourism can easily attract private investors, generate jobs, and eventually help fuel economic growth. Blessed with more than 7,000 islands, the Philippines is home to some of the world’s best beaches and summer destinations, among them Boracay and Palawan. This landscape should have made tourism a major economic pillar and dollar earner. But sadly, the Philippines lags behind its neighbors in developing and benefiting much from it.
The government recently reported that the tourism industry ended 2015 with another milestone: It breached the five-million mark in foreign arrivals and generated P228 billion in revenues. But in fact the Philippines is last among Asean’s six major economies. In 2014, Malaysia was No. 1 in the number of visitors with 27.44 million, generating revenues of $16.7 billion. Thailand was second with 24.78 million tourists, but was No. 1 in receipts at $38.4 billion. Singapore was third with 15.1 million tourists and earnings of $17.44 billion. It was followed by Indonesia with 9.44 million tourists and $10.7 billion in revenues. Vietnam was fifth with 7.87 million tourists and $8.17 billion in revenues. The Philippines was No. 6, with 4.83 million tourists and $4.84 billion in receipts. It should step up as Cambodia is closing in with 4.5 million visitors and $3 billion in revenues. Laos also had 4.16 million tourists in 2014, although its earnings were just $641 million.
At a business forum last week, Guenter Taus, president of the European Chamber of Commerce in the Philippines, observed that the country continued to lag behind its peers in Asean in terms of tourism because of lack of infrastructure and inadequate means and relatively high cost for foreign tourists to get here. Taus also pointed out that the presence of top international brands and the creation of tourism destinations that meet visitor expectations were decisive factors in the success of Philippine tourism.
What to do? The government should first start addressing the problem of how difficult it is for foreign tourists to reach their final destination in the Philippines. The solution is to develop international airports in the regions to cut foreign tourists’ travel time and costs. As it is, about 70 percent of visitors come in through the Ninoy Aquino International Airport, the primary port of entry. Given the poor interconnection from Naia to tourist destinations in the north and south, it is no wonder that tourists’ complaints about the difficulty of reaching their destinations abound.
The privatization of regional airports through the flagship public-private partnership program was a step in the right direction. However, bidding delays have pushed this to the next administration. Bid submission for the PPP deal was supposed to have been held last Feb. 29, but the Department of Transportation and Communications moved it to an unspecified date. The plan is to auction contracts for the development, operation and maintenance of the regional airports in two bundles—the first to include the P20.26-billion Bacolod-Silay Airport and P30.40-billion Iloilo Airport, and the second, the P40.57-billion Davao Airport, P14.62-billion Laguindingan Airport, and P2.34-billion New Bohol Airport.
For 2016, the government is targeting a 10-percent increase in foreign receipts to P250 billion and a 13-percent jump in arrivals to six million tourists. The next administration can actually do more. Admittedly, there is much to be done if the Philippines is to become a hot tourism destination, particularly for big spenders. For one, it needs to attract foreign investments in infrastructure and facilities that will meet tourists’ expectations. More specifically, the Department of Tourism needs to identify specific sectors that hold the biggest potential—ecotourism, medical, cruise or high-end tourism. This will help potential investors determine where to put their money.
It’s clear that tourism opens up unlimited opportunities for new business ventures for both domestic and foreign investors. The government should give priority to this sector, invite investors through adequate incentives to put up the required facilities, and then conduct an extensive marketing campaign to draw visitors.
Tourism is a low-hanging fruit that can easily be converted into a driver of sustainable and inclusive growth. All it needs is just the right amount of government attention.
