Slowly but surely, the tourism industry is becoming the third

growth engine in the service sector, after remittances from

overseas Filipino workers and the BPO-IT sector. Tourism
Secretary Wanda Teo recently announced that the figures for
foreign visitors in the first two months of 2017 show
encouraging signs that the target of 7 million foreign tourists
for the whole of 2017 is attainable. There were 631,639 foreign
arrivals in January, and 579,178 in February, half of them from
South Korea and the United States. These figures for the first
two months of the year already represent 17.30 percent of the
targeted 7 million visitors. That’s the good news.

The not-so-good news is that the Philippines is way behind its

neighbors in foreign tourism. In 2016, for example, Thailand
attracted 33 million foreign visitors, Malaysia 27 million,
Singapore 16 million, Indonesia 12 million, Vietnam 10 million,
and the Philippines 6 million. These figures can be found in a
detailed report on Philippine tourism issued by the think tank
CLSA based in Hong Kong.

In a publication issued last February, titled “Mabuhay!

Philippine tourism still full of potential,” analyst Jose-Paolo
Fontanilla of CLSA analyzed the Philippine tourism industry and
made projections for the next six years. He painted a bright
scenario, projecting that international tourist arrivals will grow
at 16 percent annually for the next six years so that by 2022
total arrivals will break the 14-million mark. Foreign exchange
receipts by 2022 will account for 3.5 percent of GDP.

There is an upside in what is called “Dutertenomics”—i.e., if the

massive infrastructure projects both by the government and
the private sector (public-private partnerships) are actually
implemented, the influx of foreign visitors could even be
beyond expectations. Note that a good number of the planned
projects involve the privatization of airports in the major
tourism destinations like Cebu, Bohol, Palawan, Iloilo, Bacolod,
Davao and Cagayan de Oro.

Also contributing to a positive outlook is the rebalancing

strategy being followed by the Duterte administration in
shifting greater attention to closer relations with our northeast
Asian neighbors such as China, South Korea, Japan and Taiwan
—potential sources of increased tourism flows into the
Philippines. The CLSA study projects the number of Chinese
tourists to the Philippines to pass the 4.5-million mark by 2022,
which would still be half of Thailand’s Chinese visitors. By that
time China could account for 32 percent of the Philippines’
tourist arrivals, surpassing South Korea as the Philippines’ top
source of tourists, perhaps as early as 2019. In fact, the one-
million mark of Chinese tourists to the Philippines may be
reached this year. There is a lot of room for growth for tourists
from Japan, Singapore, Taiwan and Malaysia, as well as
Australia and the United Kingdom.

As a whole, international tourist arrivals can grow at the brisk

rate of 16 percent annually (keeping pace with the growth of
the BPO-IT sector), compared to only 9 percent during the past
six years (2010-2016). Total arrivals will reach 14 million
tourists who will be contributing 3.5 percent to GDP by 2022,
up from 2.4 percent in 2016. Tourism also should include the
more than 65 million domestic travelers, as reported in the
2015 Domestic Household Survey conducted by the Philippine
Statistical Authority. If domestic tourism is included, the gross
value added contributed by the tourism sector is already
equivalent to 8.2 percent of GDP as of the latest actual data in
2015. The CSLA analysis expects this to reach 12.6 percent of
GDP by 2022.

Even more important than its contribution to GDP is the

employment-generating potential of the tourism sector,
especially in the countryside. As of 2015, the tourism sector
was estimated to have a total employment of 5.0 million,
representing about 12.7 percent of the global workforce in the
country. The Duterte administration is targeting to bring this
number up to 6.5 million by 2022; this would bring up the rate
to 14.4 percent of total employees, which is close to the
employment rate of manufacturing today.

PUBLIC AND
PRIVATE PROBLEMS SOLUTION RECOMMENDATIO CONCLUSION
SECTORS N
1. Tourism A. SHORTFALL OF  TOURIST 1. ESTABLISH  GOOD
industry IS TOURIST ARRIVALS ARRIVAL CONTIGENCY CONTIGENC
THE THIRD AS PROJECTED PROJECTIONS PLAN DURING Y PLANNING
GROWTH SHOULD CALAMITIES & TO ENSURE
ENGINE IN CONSIDER PANDEMICS THAT TOURISTS
THE SERVICE CALAMITIES/U PROMOTE CONFIDENC
SECTOR, NUSUAL HEALTH, SAFETY & E IN
AFTER OFW EVENTS SECURITY, CLEAN RELATON TO
REMITTANCE AFFECTING ENVIRONMENT, THERIR
S, BPOT-IT INFLUX IN PH DISCIPLINE IN THE SAFETY,
COMMUNITY SECURITY &
HEALTH
ATTRACTS
EVERYONE
TO VISIT PH
B. IN 2016,  CONTINUITY IN 1. BUILD MORE  CONTINUITY
TOURISTS IN PH IS “DUTERTINOMI ROADS, BRIDGES, OF INFRA
WAY BEHIND CS”- INFRA INCLUDING MASS PROJECTS
COMPARED TO PROJECTS TRANSPORTS FOR FAST
THAILAND, IMPLEMENTATI THROUGH LAND, TRAVEL,
MALAYSIA, ON INVOLVING AIR & SEA, ACCOMMO
SINGAPAORE, PUBLIC & HOTELS, RESORTS, DATION OF
INDONESIA, PRIVATE ENVIRONMENTAL TOURISTS &
VIETNAM SECTORS PROGRAMS. COMFORTS
WILL
SURELY
INCREASE
TOURIST
ARRIVALS IN
PH
C. STRATEGIC  SUSTAIN GOOD 1. COOPERATION  STRATEGIC
REBALANCING IN RELATIONS IN BETWEEN REBALANCIN
 FOREIGN ASIAN COUNTRIES G OF
RELATIONS WITH COUNTRIES PROMOTING FOREIGN
NORTHEAST ASIAN TOURISM RELATIONS
COUNTRIES INDUSTRY, ANTI- WOULD
(JAPAN, CHINA, S. TERRORISM, BENEFIT
KOREA,TAIWAN & DRUG SYNDICATE BOTH
OTHER ASIAN INFORMATION COUNTRIESI
COUNTRIES) EXCHANGE, ETC. N ALL
ASPECTS OF
TOURISM
CONCERNS
D. UNEMPLOYMEN  DEVELOPMENT 1. EXERT  HIGH RATE
T PROBLEMS OF MORE COORDINATIVE EMPLOYME
ESPECIALLY IN THE TOURIST SPOTS EFFORTS WITH NT
COUNTRYSIDE IN LGUs & ALL IMPROVES
COORDINATIO RELATED THE
N W/ LGUs & GOVERNMENT ECONOMIC
PRIVATE SECTORS FOR ACTIVITY IN
SECTORS THAT MORE PH &
GENERATES EMPLOYMENT COUNTRYSI
EMPLOYMENT DE.

BACKGROUND:

Accordingly, Tourism Industry in the Philippines is the third economic engine. Former tourism Wanda
Teo figure out that in 2017, 7 million tourist or 17.30% is attainable.

However, in 2016 the Philippines is way behind its neighbors in foreign tourism, for example, Thailand
attracted 33 million foreign visitors, Malaysia 27 million, Singapore 16 million, Indonesia 12 million,
Vietnam 10 million, and the Philippines 6 million.

Jose-Paolo Fontanilla,analyst of CLSA analyzed the Philippine tourism industry PROJECTED TOURIST
for the next six years Will grow at 16 percent annually so that by 2022 total arrivals will break the 14-
million mark. Foreign exchange receipts by 2022 will account for 3.5 percent of GDP.

The “Dutertenomics”—i.e., THE CONTINUING massive infrastructure projects both by the government
and the private sector (public-private partnerships) implementation influx of foreign visitors beyond
expectations of major tourism destinations like Cebu, Bohol, Palawan, Iloilo, Bacolod, Davao and
Cagayan de Oro.

Contributing to a positive outlook is the rebalancing OF FOREIGN strategIC relations with our
northeast Asian neighbors such as China, South Korea, Japan and Taiwan—potential sources of
increased tourism flows into the Philippines. Also, There is a lot of room for growth for tourists from
Japan, Singapore, Taiwan and Malaysia, as well as Australia and the United Kingdom.

It is said that international tourist arrivals can grow at thE RATE of 16 percent annually (keeping pace
with the growth of the BPO-IT sector), compared to only 9 percent during the past six years (2010-
2016).

ALSO IMPORTANT IS THE TOURISM’S CONTRIBUTION TO GDP BECAUSE IT GENERATES EMPLOYMENT

IN THE COUNTRYSIDE. DATA SHOWS, BELOW:
 Philippines Tourism PERCENTAGE OF
Employment GLOBAL
WORKFORCE IN
THE PHILS
COUNTRYSIDE
ESTIMATE
2015 5 MILLION 12.7%
2022 6.5MILLION 14.4%