Tourism

From 2004 to 2009, the average shares of tourism in GDP and in total employment were 6.12 percent and 9.68 percent, respectively. In the midst of global and national economic, political and social upheavals, the tourism sector remained resilient. Visitor arrivals in the past six years grew at an annual average of 8.21 percent from 2.29 million in 2004 to 3.01 million in 2009. The threat of terrorism and financial crisis has not dampened the industry as it demonstrated moderate improvement in its market share to the global and Asia and the Pacific arrivals from 0.30 percent in 2004 to 0.34 percent in 2009 and from 1.61 percent in 2004 to 1.67 percent in 2009, respectively (Table 3.3).

Table 3.3: Percent Share of Tourism to GDP, Employment and Total Exports Vis-à-vis Visitor Arrivals Globally and in the Asia Pacific

Sources: National Statistical Coordination Board, Department of Tourism and World Tourism Organization

Tourism receipts from inbound expenditure of foreign visitors from 2004 to 2009 also expanded at an average of 7.96 percent from US$ 1.99 billion in 2004 to US$ 2.23 billion in 2009. Consequently, the share of tourism receipts to total exports in the economy grew at an annual average of 4.94 percent during the same period.

These receipts have driven private and foreign investments in the accommodation, transportation, recreation, entertainment and miscellaneous services sectors of the tourism industry. Tourism is regarded as the fourth largest contributor to foreign exchange receipts. The top three are electronics and semiconductors, overseas Filipino remittances, and BPO.

Outside Manila, the most frequented destinations visited by foreign tourists included: Boracay Island, Tagaytay, Cebu, Laguna, Batangas, Cavite, Bohol, Pampanga, Palawan and Davao. Among the activities undertaken by most tourists during their visit in the country were shopping for local crafts and delicacies; sightseeing, beach holiday, scuba diving, visiting friends and relatives, honeymoon; attending business meetings; and looking for investment opportunities. Many tourists also engaged in various cultural, nature and adventure experiences to complement, perhaps, their medical and health activities. In 2010, foreign tourists spent an average of US$ 83.93 per day and stayed an average of eight nights during their visit.

Table 3.4: Visitor Arrivals to ASEAN Countries ('000)

Source: World Tourism Organization

Table 3.5: Philippines Travel and Tourism Competitiveness in comparison with selected ASEAN Countries, 2009

Source: World Economic Forum, and Travel and Tourism Competitiveness Report 2009

However, the Philippines ranked only sixth in attracting foreign tourists vis-à-vis its ASEAN neighbors, whose market shares have rapidly grown, while that of the Philippines expanded modestly. Visitor arrivals in Malaysia in 2009 totaled 23 million; Thailand, 14 million; Singapore, 7.5 million; Indonesia, 6.3 million; and Vietnam, 3.7 million. (Table 3.4).

More work is needed to enhance the country's competitiveness as a tourist destination. The country's attractiveness hinges on the availability of support infrastructure (air, land and water), a healthy business environment, and transparent and proactive rules and regulations. The WEF 2009 Report ranked the Philippines lowest among comparable ASEAN neighbors in terms of the number of airlines with scheduled flights originating in the country and the availability of good air connections to overseas markets to provide access for more foreign visitors. The Philippines also lagged behind in terms of quality of roads and ground transportation network that offers efficient accessibility to major tourism centers and tourist attractions (Table 3.5).

Restrictions on foreign ownership of companies and property rights remained a handicap in attracting tourism investments, especially from international chains and the network of accommodation operators. The time and cost needed to start a tourism enterprise also deserve attention.

The Philippines contributes actively to global policy-making as well as observes and promotes international agreed principles and norms in the domestic setting. As global and regional economies become more integrated, internal policy decisions will inevitably influence decisions and policies of other countries, and vice-versa. This reality enhances internal coordination and cooperation mechanisms and external country-team representation protocols among government instrumentalities and various stakeholders in society. An outward-looking orientation must be complemented by an alignment of laws and regulations that facilitate the expected benefits and lessen any adverse effects of interfacing closely with the world economy. Internal processes and legal framework must be strengthened to take advantage of opportunities presented by the global economic environment. At the same time, small and medium enterprises need to be informed of how these policies will benefit them in trading their goods in the international community.