An Assessment of the Socio - Economic Impact of the Rapid Influx of Korean

Tourists in Makati City, Philippines (2004 – 2007): A Case Study*

By: Emie C. Baylon
MA Asian Studies Student
University of the Philippines - Diliman

Introduction:
One of the noticeable trends in Philippine tourism of today is the rapid increase of Koreans in the
Philippines. Most of these Koreans could be seen in public areas like supermarkets, malls, hotels,
even in nightclubs or even in typical busy streets or schools perhaps. Department of Tourism
mentioned in its data that the influx of Korean tourists to the Philippines has significantly risen to
29.3% in 2004 – 2005 alone. The Koreans ranked second among the ten highest tourists that visited
the Philippines.
Table 1: VISITOR ARRIVALS TO THE PHILIPPINES BY COUNTRY OF RESIDENCE (JAN 2005)
Jan-
Rank Country Jan-Dec % Dec Growth
2005 Share 2004 Rate

1. USA 528,493 20.1% 478,091 10.5%

2. KOREA 489,465 18.7% 378,602 29.3%

3. JAPAN 415,456 15.8% 382,307 8.7%

4. TAIWAN 122,946 4.7% 115,182 6.7%

5. CHINA 107,456 4.1% 39,581 171.5%

6. HONGKONG 107,195 4.1% 162,381 -34.0%

7. AUSTRALIA 96,465 3.7% 89,175 8.2%

8. CANADA 72,853 2.8% 64,537 12.9%

9. SINGAPORE 69,435 2.6% 60,253 15.2%

UNITED
10. KINGDOM 63,002 2.4% 56,770 11.0%

11. GERMANY 50,411 1.9% 45,092 11.8%

12. MALAYSIA 43,059 1.6% 34,170 26.0%

Sources of Data: A/D Cards & Shipping Manifests
Prepared by: Tourism Research & Statistics Division, Office of Tourism
Development Planning, Product Development and Coordination,
DEPARTMENT OF TOURISM

At present, in the recent data of the Department of Tourism, that towards the end of 2006 until
January 2007, the rate of Korean tourists that came to the Philippines significantly increased to
20.7%, with a percentage share of 26% to the total tourists who came to the Philippines. It is one of
the noticeable trends in the country that most of these Korean tourists flock to tourist spots like

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 1
Boracay, Tagaytay, Batangas, Cebu, and Davao. Most of these Koreans tourists visit areas where
they could unwind and relax, like going to spa and have leisure time with friends and family or
engage in activities like scuba diving, jet skiing or snorkeling after some business activities.
Table 2: VISITOR ARRIVALS TO THE PHILIPPINES BY COUNTRY OF RESIDENCE (JAN 2007)
Rank Country January % January Growth
2007 Share 2006 Rate
1. KOREA 70,733 26.0% 58,583 20.7%
2. USA 55,632 20.4% 53,225 4.5%
3. JAPAN 34,947 12.8% 41,014 -14.8%
4. CHINA 9,917 3.6% 13,015 -23.8%
5. CANADA 9,812 3.6% 8,786 11.7%
6. AUSTRALIA 9,414 3.5% 8,577 9.8%
7. TAIWAN 8,419 3.1% 12,793 -34.2%
8. HONGKONG 6,709 2.5% 10,759 -37.6%
9. SINGAPORE 6,691 2.5% 5,808 15.2%
UNITED
10. KINGDOM 6,175 2.3% 5,690 8.5%
11. GERMANY 4,978 1.8% 5,102 -2.4%
12. MALAYSIA 4,723 1.7% 4,136 14.2%

Sources of Data: A/D Cards & Shipping Manifests

Prepared by: Tourism Research & Statistics Division, Office of Tourism Development Planning,
Product Development and Coordination, DEPARTMENT OF TOURISM

Because of this, DOT data claims that, the Korean tourist arrivals in barely three months of this year
have generated estimated tourism receipts of US$620.08 million to the country marking a 29.10
percent increase from the US$503.37 revenue during the same period last year. This, according to
the DOT, means that if this trend continuously prevails, the Koreans would be one of the potential
elements that will help in the development of Philippine tourism.1

In most reports released by the DOT, “Korean Wave” or hallyu in the Philippines is often pictured
as a beneficial trend to the Philippine economy. On the contrary, certain media releases also shows
that although the country enjoys increased arrivals of Korean tourists, the significant contribution of
these tourists has been questioned by most Filipino tour operators. Given this case, is the Philippines
really benefitting from these increasing Korean tourists? What could be the effects of rapid influx of
Koreans tourists coming to the Philippines?

* This is a revised paper submitted to the Asian Center for Second Semester 2006 - 2007
1 _____. “Philippine Tourism Records All” (http://www.hankooki.com/philtourism.html )

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 2
This paper shows that the rapidly increasing number of Korean tourists coming to Makati City has
resulted to both positive and negative effects on the economic situations of the area. In the process
of proving the aforementioned statement, the following questions will also be answered:
• Who are the Korean tourists in Makati, Philippines?
• What causes them to come to the Philippines?
• How do the Korean tourists react to the Philippines and the people?
• How do the Filipinos react to the increasing number of Korean tourists coming to the
Philippines?

Definition of Terms:
In the light of giving clarity to the terminologies used in this paper, the following term should be
considered:

Ø Tourism – although it was defined by the Department of Tourism as an activity or anything

related to business, leisure or relaxing activities related to the place of visit, done by people
outside their common or usual environment for not more than 1 year, for the purposes of
this paper, this will only focus on leisure travels or sight seeing activities specifically in
different business centers, malls, museums and other tourist attractions in Makati City,
specifically not less than one (1) month.
Ø Korean Tourists – for this study, this paper will only center on Korean nationals, visiting
the Philippines for leisure travel or sight – seeing travels with a length of stay not less than
one (1) month. One common variable would be the pre – arranged package tours of these
visitors in South Korea by Korean traveling agencies.
Ø Economic Leakages – this term refers to the gaps and the unfavorable economic effects of
the interactions between the Filipinos and the Korean Tourists coming to the Philippines.
These leaks were perceived to be benefits supposed to be gained by the residents or natives
(in this case, the Filipinos) but have turned out to be a gain of the visitors (in this case, the
Korean Tourists) who came for tourism activities. For the purposes of this paper, this will
only focus on the misunderstandings and possible causes of socio – economic gaps between
Korean tourists and the Filipinos in Makati.

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 3
Related Studies:
Many studies were already made showing the capacity of tourism to be the source of income of
most countries of today. Naisbitt, claimed that tourism is becoming one of the industries that will
contribute greatly to the economies of the world specifically towards the 21st century.2 This shows
that most people in different parts of the world expressed their willingness to visit different parts of
the world thus; this change may also result to the generation of 100 million jobs in the different
parts of the world in the 21st century.3 World Tourism Organization also recognizes that 698 million
people traveled to a foreign country in 2000, spending more US$ 478 billion. International tourism
receipts combined with passenger transport currently total more than US$ 575 billion - making
tourism the world's number one export earner, ahead of automotive products, chemicals, petroleum
and food. 4 Galvani, in her study of tourism in London recognized the potential of tourism to
accelerate economic growth. Although tourism can become a good vehicle for socio – economic
progress to be attained, she recognized that a need to come up with a multi - faceted development
should be one of the vital goals of the tourist planners. This is what she termed as “tourist circuits”,
wherein in this circuit is the final goal of developing tourism, making all connected aspects of
tourism (people, resources, culture, etc.,) create a chain reaction in a single area. According to her,
an important step to attain this “tourist circuits” would be the integration of themes that will help in
attracting people and make all stakeholders of tourism accountable to its development.5

Although sustainable development projects on tourism are being taken, the existence of a widening
gap between tourism sustainable development goals and the reality that the tourism industry is
facing is still evident. 6 The need to harness resources is a call to develop tourist sites so as to
generate markets but does not coincide with the concept of sustainability. Choi and Song state that
in the light of aiming for the development of tourism as a bankable source of economic growth and
productivity of people, the concept of what is “sustainable tourism” should be clarified. They added
that structured means of measuring sustainable tourism should be defined in order to produce

2 John Naisbitt. Megetrends 2000 and Global Paradox. USA: AIT Delphi Study. c2000. pp. 4 – 5.
3 Alliance Internationale de Tourisme, Future Trends in Tourism. USA: AIT Delphi Study. c2000. pp. 4 – 5.
4 _____. “Economic Impact of Tourism”
http://www.wttc.org/resourcecentre/mediacentre/releases/000617econimpactmeasure.asp
5 Adrianna Galvani. “The Tourist Circuits” I.G.U.Sustainable Tourism Study Group. Cheju, Korea, August 10-13,
2000
6 William Trousdale. “Governance in Context: Boracay Island, Philippines” Annals of Tourism Research Canada:
EcoPlan International Canada, c2000.

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 4
indicators that will determine factors that will aid its growth. They proposed a model called a
structural concept model (ST model) which revised the Pressure – State – Response model (a model
presented and developed by the OECD), combined with the revised Environment – tourism system
7
environment model to contextualize the effects of tourism to the people.

Even if sustainable development means are taken to boost the tourism industry, varying effects to
the stakeholders are still observable. A specific example would be “leakages”. Leakages are the
amount of tourist expenditures that remain locally after taxes, profits, and wages are paid outside the
area minus the import expenditures purchased or made by tourists. Leakages often happen when
the tourists arranged their package tours in their own country which will make their country earn
more than the host country/ies they will visit.8 In a study done by the UK Public Sector on tourism
leakage in Thailand, it was shown that 70% of all money spent by tourists ended up leaving Thailand
(via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). This is almost the
same estimates for other developing countries which range from 80% in the Caribbean to 40% in
India.9

Another effect of unmanaged and unstructured tourism would be the creation of “enclave
tourism”.10 This is the condition when businesses maximize all chances of earning from tourists by
creating "all-inclusive" vacation packages. When tourists remain for their entire stay at the same
cruise ship or resort, which provides everything they need and where they will make all their
expenditures, not much opportunity is left for local people to profit from tourism. In a study
conducted by the Organization of American Association on Jamaica's tourist industry specifically on
the effects of the all-inclusive compared to other types of accommodation. They found that all-
inclusive hotels generate the largest amount of revenue but their impact on the economy is smaller
per dollar of revenue than other accommodation subsectors. The Jamaican native people often feel

7 Byonggil Choi and Jaeho Song. “Development of the Structural Concept Model for the Sustainability of Tourism”
Tourism Study Group Pre-Congress Meeting; I.G.U.Sustainable Tourism Study Group. Cheju, Korea, August 10-13,
2000
8 _____. “ Economic Impact of Tourism” http://www.uneptie.org/pc/tourism/sust-tourism/economic.htm
9 _____. “While Travelling 5 - Questions for Your Travel
Agent”http://www.publicsector.org/local_agenda_21and_you/WhileTravelling/5Questions.html
10 _____. “Tourism in the Carribean” http://www.tourismconcern.org.uk/magazine/caribbean.htm

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 5
discriminated because of the inability to understand the culture of the foreigners entering their
country. 11

The aforementioned studies will somehow guide us in the understanding of the rapid influx of
Korean tourists in Makati. Although most of these researches were done in Western countries or
some in other parts of Asia, they provided some ways as to how we can appreciate the positive and
negative effects of the growing number of Korean tourists in Makati.

Significance, Scope and Limits of Study:

The rate of Korean tourists in the Philippines is significantly increasing. As mentioned a while ago,
they rank first among the ten highest tourists visitors in the Philippines in the early data released by
the DOT in 2007 and still are believed by the DOT as the one of major key players in tourism today.
In this study, Makati City was used as a case study because a growing number of Korean tourists are
evident. From this growing number of Korean tourists, a growing market will also be possible. This
growing market may also lead to a possibility of manipulation by most Koreans investors and
businessmen that come to the country since these Korean businessmen are aware that their
countrymen have a tendency of being too exclusive and isolated12. If manipulation exists, the
question of benefits and losses come into the picture. Benefits and losses need to be identified to
show the gains and losses Makati City will have from these Korean tourists. The awareness of this
will guide the city government in coming up with probable ways to cope from these losses and turn
these losses into some gains.

Part of identifying the benefits and losses from the rapid Korean tourist would be to assess the
reactions of both the Koreans and the Filipinos towards each other. Interviews from both Koreans
and Filipino workers were conducted to see their impression of each of other. The knowledge and
awareness of the reactions of the two culture bearers could possibly bring about ways of establishing
good relationship among each other or worst, extension of the conflicts or gaps between the two
culture – bearers.

11 _____. “Tourism in the Caribbean” http://www.tourismconcern.org.uk/magazine/caribbean.htm

12 Quoted from the interview from the Store Manager of Kaya Express, Makati Avenue, March 9, 2007

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 6
Methods of Research
Since this research is focused on the assessment of the economic effects of the rapid influx of
Korean tourists to the Philippines, specifically in Makati City, a case study approach was used.
Relevant data about the number of tourists coming to Makati and in the Philippines were gathered.
These data were collected from the Office of the Mayor, City Hall of Makati and the Department of
Tourism, T. M. Kalaw. Manila. Some relevant studies on tourism and its contribution to economy
were also employed from the UP College of Tourism and UP School of Economics.

To be able to solicit the significant data on the reactions of Filipinos towards the Koreans and vice
versa, key informant interview and observation using purposive sampling was used. To be able to
solicit the information on Koreans, five Korean tourists were interviewed. The interviews were
conducted at Kaya Restaurant, Makati Avenue. The Koreans interviewed were mostly on a package
tour in the Philippines, pre – arranged by a Korean Travel Agency. They are all staying in Makati
hotels and 3 of them were already staying in the Philippines for about 3 weeks and 2 of which were
already here in the Philippines for 1 week and 2 weeks respectively. Interviewees will be called
Tourist A to E. Face – to face interview sessions were done with the informants upon their visit to
the restaurant.

Selective and purposive sampling interview method was also used in collecting data regarding their
perceptions about the Koreans and its contribution to their socio – economic life was also
conducted. Employees and middle management personnel were interviewed to check the varying
perceptions of the Filipinos towards Korean tourists. Employees from establishments visited by
tourists were selectively interviewed last March 9 and 10, 2007. Interviews were conducted while the
interviewees were on their post, with the permission of their managers or the HRD manager.

I. Profile of the Korean Tourists in Makati

As mentioned a while ago, Korean tourists were interviewed for this research. 5 Korean tourists
were interviewed for this research. Tourists A, D, and E were residing in Makati hotels located
along Makati Avenue and Tourists B and C are residing in a hotel in Ayala Avenue. All of them are
in Makati for the last days of their package tour in the Philippines. These package tours that they

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 7
got were all pre – arranged in Korea and these package tours were the ones who arranged all
accommodations, food, recreational activities that the Korean tourists will be into while they are
here in the Philippines.

Tourists B and D Korean tourists are married and Tourist A, C and E are singles. All of them have
attained their college degrees. Tourist A and E finished their post – graduate course, Tourist A said
that he got his degree in Seoul National University and the Tourist E got his degree in Yonsei
University. Both Tourist A and E are professionals or holding managerial positions while Tourist
B, C and D are all occupational groups, with their partners tagging along with them during the trip.
All of them are middle – aged working individuals, Tourist B and D are already 32 years old, Tourist
C is 34 years old, Tourist A is 37 and Tourist E is 39 years old.

As said a while ago, they are in Makati City because they were pre – arranged in Korea. Tourist A
and E went to Cebu first, Tourist C went to Baguio and Tourists B and D went to Boracay.

II. Koreans tourists and their Philippines experience

Most of the Korean tourists that were interviewed for this paper, are having their leisure trips in the
Philippines. These leisure trips included scuba – diving, leisure travels, relaxation activities and
others. Apart from knowing their activities they engaged into while in the places they visited, they
were also inquired of their motivations of visiting the Philippines and the reactions that they had in
the places that they visited. They also said that their trips were all pre – arranged in Korea by
Korean travel agencies. These Korean travel agencies would contact Korean tours here in the
Philippines as part of the package tours.

A. Motivating Factors in visiting the Philippines and Makati

Most of these Korean tourist that were interviewed, mentioned came to the Philippines for leisure
trips. The top best answers of these Korean tourists why they chose the Philippines among other
Asian countries was because of its geographical proximity to their nation, a very good climate and cheaper cost

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 8
for spending quality leisure trips. Makati sites became familiar to them because it is part of the package
tour they got in Korea.

Tourists A and B further elaborated that they chose to visit the Philippines and be in Makati because
they wanted to experience the hospitality of the Filipinos which their friends experienced when they
visited the Philippines. Most of them got into Makati because it is where their hotel is located and
very near airport. Their friends encouraged them to go to Cebu and Boracay conseuqently because
they loved the huge golf courses and the relaxing spas made for Korean in Cebu and the very nice
beach resorts and accommodations in Boracay. Tourists C and D, on the other hand, were both
curious of the Philippines because they got it from the internet that the Philippines has good beach
resorts and good places where Korean tourists could stay. Tourist E said that he has a friend in
Cebu and he wanted to pay a visit to her friend so she went to the Philippines for a package tour.
Tourists C, D and E were curious about the beautiful malls in Makati and this became a motivation
for them to visit Makati before going to other places in the country.

B. Sources of Information and their reactions to the places that

they visited
These Korean tourists got the idea of the Philippines and/or of Makati from their friends who are
either in the Philippines or have visited the Philippines as tourists also. Some of them got
information from the internet. These motivated factors led them to come to the Philippines and so
they could get to see the different tourist spots in the country.

Given these, most of the Korean Tourist said that they liked their stay in the Philippines. 3 out of 5
said that if they will be given another chance to go back, they will surely grab the opportunity to go
back to the Philippines specifically in Makati. Generally, all of them said that they liked the
hospitality and friendliness of all Filipinos, from the hotel to the resorts they visited. They liked and
enjoyed the warm treatment to them as tourists. Most of all, they liked it that they did not spend too
much in the places that they visited because it was either the cost was cheap or the entire visit was
covered by the package tours that they got.

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 9
Tourists A, B and D liked the warm weather. Tourist A went here during the summer, he felt that it
was very easy for him to enjoy golf with his friends. For Tourists B and D, they enjoyed their stay in
Boracay because of the sunny weather. Tourist C enjoyed the fruits and vegetables in Baguio. He
said, that the fruits and vegetables were very cheap and yet these were very fresh. He said that he
gained weight because of his stay in Baguio. Tourist E said that he liked the liquors in the
Philippines. He said that the beer is not as strong and was good. He liked the hotel where he was
staying because they served him Korean food and liquor whenever he wanted some.

The negative impressions about the Filipinos were also asked as part of their reactions. All of them
said that they did not like that the Filipinos were always late. They did not like it also that the
Filipinos were very reckless whenever they drive. They also hated the traffic in Makati and most
cities that they visited.

Tourists A, C and E did not like the airport facility of the Philippines. They felt the need to improve
some facilities. They also did not like the negative things reported in most Philippine newspapers.
It made them feel a little scared when they were here. Tourists B and D had negative reactions
about poverty situations specifically in some areas of Makati. According to both of them, Filipinos
are very lazy and this causes them to become poor individuals. Being poor and unemployed would
also their probable reasons why some people in Makati, are getting involved into vices like crimes,
cheating and illegal activities. They also find it inconsistent that Makati is considered to be the
business capital even if some areas in Makati are considered to be slum areas.

III. Socio - Economic Effects of Korean Tourism to the Filipinos

Tourism, being one of the important industries in the Philippines, has its pitfalls and gains. This
cannot only be seen in financial or monetary form but it could also be in the form of how the
natives, inhabiting the area could react to the entrance of the tourist to the country.

A. Korean Tourism as a Potential Source of Income in Makati

As mentioned, the rapid influx of Korean tourists to the Philippine archipelago has become a big
chunk of the earnings of the tourism industry of the Philippines. Consider the table below:
Table 3: VISITOR ARRIVALS TO THE PHILIPPINES BY COUNTRY OF RESIDENCE

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 10
(January 2007)13
% %
SHARE SHARE
to to %
EAST Tourism Tourism GROWTH
ASIA VOLUME income VOLUME income RATE

CHINA 9,917 3.6 13,015 4.8 -23.8

HONGKONG 6,709 2.5 10,759 4.0 -37.6

JAPAN 34,947 12.8 41,014 15.3 -14.8

KOREA 70,733 26.0 58,583 21.8 20.7

TAIWAN 8,419 3.1 12,793 4.8 -34.2

Among all East Asian countries, it is South Korea that has the most number of visitors entering the
Philippine archipelago last January 2007. With a growing rate of 20.7% and is still increasing, this
brings us to the assumption that Korean tourists contribute much to the tourism industry. DOT
sources said that the total tourist arrivals in three months generated estimated tourism receipts of
US$702.08 million to the country marking a 32.12 percent increase from the US$504.83 revenue
during the same period last year. With the growing rate of Korean tourists right now, despite the
ongoing crises the Philippines is experiencing, it is true that it will be a significant source of income
at present.14 In Makati’s case, although the Officer - in – charge of the Tourism Office would say
that the Koreans do bring money to the City, the Officer – in – Charge cannot release exact figures
of earning that the Koreans contribute to the City income. They say that the bulk of income
contributed by these Korean tourists is all forwarded to the DOT, thus is included in the DOT data.

The officials in the Makati Tourism Office claimed that they do all efforts to support the DOT in
attracting Korean tourists. In fact, the Koreans have become the tourist nationality generating
income in tourism these days. Only 378,602 Korean tourists came in 2003 but 572,133 came in 2006.
Tourism Secretary Ace Durano hopes to see a much higher figure by end 2007. Some 11 million
Koreans tourists leave their country every year. Durano wants to get at least a million of that before
long—and beat Thailand.15 There are now over 100,000 Koreans living here also, each of whom
are estimated to spend an average of $800-$1000 per month, which adds up to almost $1 billion in

13 Data from the Tourism Research & Statistics Division, Office of Tourism Development Planning, Product
Development and Coordination, DEPARTMENT OF TOURISM. January 2007
14 Sources are taken from the DOT data dated January 2007.
15 Rene Q. Bas. “Huge Korean Presence Hardly Benefits Pinoys” http://www.manilatimes.net August 5, 2007

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 11
consumer spending each year. Koreans in the Philippines significantly outnumber those in
neighboring Indonesia, estimated at 23,000, and Singapore, with only about 8,000.16

Enclaves or “Korea towns” are also evident. In fact, businesses were also built within these enclaves.
In Makati, there are a lot of Korean restaurants, noraebangs (karaoke bars), PC bangs (internet café),
churches, schools, spas, sauna baths and supermarkets built within the Koreatown in Makati.17

Makati Tourism believed that apart from Ayala Avenue, Barangay Poblacion and the stretch of
Makati Avenue is be a potential source of roughly 20 – 21% of the revenues of Makati. This is an
estimated projection of possible earning coming from businesses related to tourism like for bars,
karaoke bars, spas, sauna and etc.,. Makati Tourism officials are saying that Korean businesses are
indeed generating income and jobs in Makati.18

B. Socio – Economic Leakages

While the fact that rapid increase in Korean tourists can be a potential source of income to Makati, a
possibility of having negative effects can also be at hand. Let’s look at this table19, for instance:
Sample Travel Quotations to the Sample Travel Quotations to the
Makati and Manila, Philippines Makati and Manila, Philippines
(as quoted by a travel agency in Korea) (as quoted by an accredited travel agency of
Philippine Department of Tourism)
Travel Type: City Tour (Manila – Travel Type: City Tour (Manila –
Makati) Makati)

Estimated Quotation – 299,999 won. 3 Days 2 Nights Packages

Additional expenses - 50,000 to 100,000
won National Capital Region (Makati – Manila)
Other Expenses
Airport tax and bunker adjustment Intercontinental Manila - Php 5,500.00 ++
factor - $100
tips for the guide and driver - $30 Orchid Garden Suites - Php 3,500.00 ++
horse tracking - $80
a life jacket lease fee - $10 Inclusions: 3 days 2 nights accommodation based
an absence penalty - $50/day on twin sharing (per person basis) with daily
breakfast.
TOTAL = 500,000 – 600,000 won
(approx.)++
NOTE: Request for tours for Museums will be
added upon travelers request)

16 Jet Damaso “Koreans invade the Philippines” http://www.manilatimes.net July 11, 2007
17 Cathy Rose Garcia. pp. 3 – 4.
18 Statistical Data from the Makati Tourism, Office of the Mayor, Makati City, February 2007.
19 Sources: “FTC Warns on Cheap Travel Item” (http://news.mk.co.kr/newsRead.php?no=411794&year=2006)
and a quotation from a accredited DOT Travel agency in Manila (http://www.visitthephilippines.gov.ph)

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 12
The facts above were supported by the 5 Korean tourists interviewed for this paper. All 5
interviewees said that their tour to the Philippines were pre – arranged because they find it cheaper
than spending on your own without pre – arranged accommodations. If this will be the common
picture, a possibility of “leaking away” of financial resources from the destination country to another
country, particularly when the tourism company is based abroad and when tourism-related goods &
services are being imported to the destination country can occur. Financial resources include tour
arrangement payments, airfare, accommodations, etc., 20

Pre – arranged package tours will also mean that the tourist will no longer spend, if not, will
minimally spend in that host country during the duration of his/her visit.21 This is also confirmed
to be happening in Makati. If most tour packages of Korean tourists are done or arranged by
Koreans in Korea, accounting of revenues will not be clearly defined. Tracking of the payments will
be difficult.

Another issue raised is on the increasing number of involvement of Koreans in tourism operations
in the Philippines. The Labor Code of the Philippines enumerated regulations on travel operations,
the Koreans find immigration and labor laws to be very lenient because some provisions were not
stated clear like the rules on tour guides. Supposed to be, the local travel tour guides are responsible
in guiding the Korean tourists. But because only few Filipinos are knowledgeable of the Korean
Language, the DOT accredited Korean nationals to become tour guides in our country. To date,
there are around 18 - 20 Korean travel guides given accreditation by the DOT. 22 According to
Bureau of Immigrations of the Philippines, there are 11,889 Koreans in the country, making them
the fourth largest foreign group staying in the Philippines, which hosts 113,724 registered foreigners,
according to data from the Bureau of Immigration. From 2006 to June 2007, a total of 640,000
Koreans have entered the country. Most of them are tourists, the BI said. Of the 11,889 registered
Koreans in the country, 10,551 are holders of nonimmigrant visas, 1,130 have special visas and 218
with immigrant visas.

Koreans with nonimmigrant status are those with pre-arranged employment here, students,
businessmen and those married to Filipinos.

20 Rene Q. Bas. “Huge Korean Presence Hardly Benefits Pinoys” http://www.manilatimes.net August 5, 2007
21 S. Wheat. “The Tourism Juggernaut”. People & The Planet. c. 1997.pp.4 - 6 ,
22 Source: The Department of Tourism website “ (http://www.visitthephilippines.gov.ph )

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 13
There were reports that local tour companies and support sectors do not earn from the Korean
packaged tour groups because these Korean tours have Korean tour guide tasked to meet the tour
group upon arrival in the Philippines and all aspects of the tour were monopolized by the Koreans.23
The monopoly will have an impact to Filipino businessmen and the locals involved.

Another impact would be related to the interaction of the tourists and the natives in the place of
visit. Normally, in the tourism industry, the two cultures are given venues to interact with each
other. Although there is an existence of a cultural difference between the two cultural groups,
tourism, if handled properly, could be also a probable venue for peaceful interactions, or in worst
cases, possible conflicts or between the two groups. 24 But this is not the case between Koreans
and the Filipinos nowadays. Local Filipinos feel a sudden “invasion” of their communities and
neighbourhoods and even small – scale businesses because of the growing number of similar – sized
communities and businesses owned by Koreans. Local Filipinos businesses feel that unfair market
strategies are used by the Korean businesses to manipulate their growing market. For instance,
some of these businesses would put signs, “For Koreans only” to attract their fellow Koreans.
Given this, it will be very difficult for local Filipinos who have the same business to penetrate into
the Korean market since these Koreans will prefer Korean products sold in Korean - owned stores.

The first part of the paper discussed the reactions of the Korean tourists toward Filipinos. To show
also the reactions of the Filipinos to the Koreans, interviews among people having direct
interactions with them were conducted. People from managerial positions down to the rank and file
staffs were asked to see the varying reactions towards the Korean tourists.

Based on the interviews conducted on the perceptions of the Filipinos towards the Korean tourists,
it has appeared that they do not fully know the Koreans. Most of these Filipinos claim that they are
having difficulty understanding the Koreans because of the language barrier. Most of the interviewees
say that Koreans, although had received education, still has difficulty expressing themselves
accurately in English. This also caused DOT to hire more Korean tour guides to better undertand
the Koreans. To date, around 20 Korean tour guides are given accreditation by the DOT.

23 Jolene Bulambot and Irene Sino Cruz. “Only Korean businesses earn from Korean tourists” Philippine Daily
Inquirer, Visayas Bureau June 6, 2007.
24 Hemmati and Koehler. pp. 26 – 28

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 14
Although it is very innate for the Filipinos to be very hospitable and kind to visitors, given that they
do not fully understand Korean tourists, they tend to be irritable and unfriendly tothem at times.
In the interviews with taxi drivers and staffs of department stores and money changers, they would
say that they don’t like having Koreans as clients because they have the tendency to be rude at them
and are hard – headed. But to people in managerial positions, they would just respond to these
Koreans as if they are like other tourists and they do not give them special attention despite their
visibility.

Conclusion
This paper presents the economic impact of the influx of Korean tourists in Makati City. It has
been a known fact that Koreans are becoming one of the potential tourist market of the Philippines,
therefore the need to carefully study their impact to our society and economy is indeed necessary.

This paper focused on the Korean leisure – travelers – has traveled anywhere in the Philippines and
is currently in Makati for their last few days of stay before flight back to Korea. In this case study,
Korean leisure – travelers go to Makati through pre - arranged package tours, all arranged in Korea.
They visit Makati because it is very near to the Ninoy Aquino International Airport, a lot of new and
huge malls are there, it is the business center and one of the biggest Koreatowns can be found in
Makati. Usually, from Makati, they are also to embark another tour in the Philippines and go back
to Makati before leaving.

Most of these Koreans find good and bad things about the Philippines and its people. They like the
hospitality and warmth of the people, the good climate and the cheap products sold in the country
while they dislike the poverty situation, rising crime rates and other frightening reports seen in the
newspaper. They also do not like the laziness and the lack of urgency of most Filipinos.

The third part of this paper focuses on identifying the effects of the rapid increase of Korean
tourists to the Philippines. As for the benefits, Philippine DOT claims that the increasing rates of
Korean tourists coming to the country are potential market of nation. Even the local government of
Makati supports the same claim. This further gives rise to establishments and communities or
enclaves wherein Koreans could stay together as “groups”. On the other side, it could also pose a

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 15
“financial leak” to the whole nation, specifically to local travel agencies since most of these Koreans
come to the Philippines in package tours arranged by Korean traveling agencies. Furthermore, the
rapid influx of Koreans to the Philippines may also result to a certain gap between the Filipinos
specifically to the general masses since they only have a few knowledge of the Korean culture.
Language barriers and the lack of understand of some attitudes may cause conflicts between the two
groups if not addressed fully.

Recommendation
In order to minimize the leaking of income in tourism as seen in the case study done in Makati,
there is a need to strictly that will regulate the ownership and involvement of Korean businessmen
in tourism – related activities. This will ensure that there will be an equal opportunity for the local
businesses and foreigners to earn from this increasing market. Regulation of package tours arranged
outside the country should also be discouraged or minimized in order to allow more venues for
consumption. If these package tours are not regulated, there is a huge possibility of being unable to
balance the rates of gains and losses among all businesses connected to tourism. Laws that will
support local businesses and other initiatives that would increase the local’s access to tourist markets
should also be made to protect the interests of the locals.

Another important recommendation would be investing on consumer awareness and educating the
locals of the culture of the Korean tourists coming to the Philippines. Through educating the
people of the culture of the Koreans, all the more that it will be easier for them to understand them
so as it would be easier to deal with these tourists. Involvement and partnership among non –
governmental organizations and academicians that will aid the government in promoting the
knowledge of the Korean culture will definitely be of help so as the gaps between the Filipinos and
the Koreans could easily be patched up.

Lastly, as structured tourism model that will promote participation from all sectors of the economy
should be present. Strategies that will protect and conserve all resources involved in tourism
industry should be made in order to attain the goals of the tourism. Cultural and gender sensitive

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 16
projects that will promote the interests of both the Koreans and the Filipinos should also be taken
into consideration so as both parties would gain in the tourist industries.

If this will be observed, both parties then will be able to maximize “hallyu” or the Korean Wave that
is very prevalent in almost all countries around the world. Tourism will then provide a fruitful
venue for both the Filipinos and the Koreans to exchange culture while relaxing and enjoying.

Bibliography
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Statistical Data from the Makati Tourism, Office of the Mayor, Makati City, February 2007.

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Alliance Internationale de Tourisme, Future Trends in Tourism. USA: AIT Delphi Study. c2000.

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An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 17
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Bulambot, Jolene and Sino Cruz,Irene. “Only Korean businesses earn from Korean tourists”
Philippine Daily Inquirer, Visayas Bureau June 6, 2007.

Garcia, Cathy Rose. “More Koreans Look Forward to Retire in the Philippines” The Korea Times.
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Interviews
Individual Interviews with 5 Korean Tourists (March 9, 2007 p.m.) Kaya Express - Makati Ave.

Interview from the Store Manager and Store Crew of Kaya Express, Makati Avenue (March 9, 2007
p.m.) Kaya Express - Makati Ave.

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 18
Interview with Baggers, Saleslady and Counter Manager, SM Makati (March 10, 2007 p.m.) SM
Makati

Interview with 2 cab drivers parked along SM Makati Taxi Lane (March 10, 2007 p.m.) SM Makati

Interview with Camber maid, Bell Boy and HRD Head, (March 9, 2007 a.m.) Dusit Hotel Makati
City

Interview with Security Guard and Counter Clerk, Senri Money Exchange, (March 10, 2007 a.m.)
Makati City

An Assessment of the Socio – Economic Impact of Korean Tourists in the Makati City 19