INVESTOURISM

Presented by: Evelyn B. Pantig Undersecretary of Tourism

Worldwide Visitor Arrivals and Receipts, 1994 - 2003
1994 Visitor Arrivals (In Millions) Visitor Receipts (In US$ Billion) 550 1995 550 1996 595 1997 613 1998 664 1999 652 2000 687 2001 684 2002 703 2003 694

353

401

434

443

441

457

477

464

474

514

Source: World Tourism Organization

INTERNATIONAL TOURISM ARRIVALS, 2001 - 2003
Region Europe Americas Asia and the Pacific Africa Middle East Total Growth Rate 2000 403 129 118 28 21 699 2001 390.8 120.0 121.1 28.3 23.6 684.1 (.47%) 2002 399.8 114.9 131.3 29.1 27.6 702.6 2.70% 2003 401.5 112.4 119.1 30.5 30.4 694.0 (1.22%)

Top Tourist Destinations Worldwide, 1994 - 2003 (In Million)
1994 France Spain United States Italy United Kingdom Germany Greece 61 39 45 27 20 14 10 1995 60 39 43 56 23 14 10 1996 62 41 46 57 25 15 9 1997 67 62 48 58 26 16 10 1998 70 68 46 58 26 17 11 1999 73 72 48 59 25 17 12 2000 77 74 51 62 25 19 13 2001 75 76 45 60 22 18 14 2002 77 52 42 40 24 18 14 2003 75 53 40 39 25 18 n/a

Source: World Tourism Organization

Top Tourist Earners Worldwide 1994 - 2003 (In US$ Billion)
1994 United States Spain France Italy Germany United Kingdom Greece n/a 21.4 24.7 23.7 13.9 15.0 3.9 1995 61.1 25.7 27.5 27.7 17.0 18.6 1.4 1996 69.9 27.4 28.3 28.7 16.4 19.2 3.7 1997 75.0 26.6 28.3 30.0 16.4 20.6 3.8 1998 71.3 29.7 29.9 29.9 16.4 21.0 6.2 1999 74.9 32.5 31.5 28.4 16.7 20.2 8.8 2000 82.0 31.5 30.8 27.5 18.5 19.50 9.2 2001 72.3 32.9 30.0 25.8 17.2 16.3 n/a 2002 65.5 33.6 32.3 26.9 19.1 17.6 n/a 2003 65.1 41.7 36.6 31.2 23.0 19.4 n/a

Source: World Tourism Organization

Tourist Arrivals to the Asia - Pacific Region, 1994 - 2003 (In Million)
1994 China Hongkong Malaysia Thailand Singapore Vietnam 21.0 9.3 7.1 6.1 6.9 1.0 1995 20.0 10.2 7.5 7.0 7.1 1.3 1996 22.8 13.0 7.1 7.2 7.2 1.6 1997 23.8 11.2 12.6 7.5 7.1 1.7 1998 25.0 10.1 10.9 8.2 6.2 1.5 1999 27.0 11.3 13.9 9.1 7.0 1.8 2000 31.2 13.0 17.2 10.0 7.7 2.1 2001 33.1 13.7 23.0 10.8 7.5 2.3 2002 36.8 16.6 13.2 10.9 7.6 2.6 2003 33.0 15.5 10.6 10.0 6.1 2.4

Source: NTOs Reports, World Tourism Organization

Tourist Receipts of Selected Destinations in the Asia - Pacific Region, 1994 - 2003 (In US$ Billion)
1994 China Hongkong Thailand Malaysia Singapore Vietnam 7.3 8.2 5.8 3.3 7.0 85 1995 8.7 9.6 7.7 3.5 8.3 86 1996 10.2 10.8 8.7 2.6 7.9 87 1997 12.0 9.2 7.0 2.8 6.8 n/a 1998 12.6 7.1 5.9 2.2 5.1 n/a 1999 14.0 7.2 6.7 3.2 n/a n/a 2000 16.2 7.9 7.1 4.6 6.0 n/a 2001 17.8 8.2 6.7 6.3 5.3 1.3 2002 20.3 10.1 7.5 6.8 5.1 1.6 2003 17.4 n/a n/a n/a n/a n/a

Source: NTOs Reports, World Tourism Organization

Visitor Arrivals and Receipts to the Philippines, 1994 - 2004
1994 Visitor Arrivals (In Million) Visitor Receipts (In US$ Billion) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004*

1.57

1.76

2.04

2.22

2.14

2.17

1.99

1.80

1.93

1.90

2.50

2.28

2.45

2.70

2.83

2.41

2.55

2.13

1.77

1.74

1.52

2.25

Source: World Tourism Organization *Estimated

VISITOR ARRIVALS TO THE PHILIPPINES, January ² July 2004
Country USA Japan Korea Hongkong Taiwan Australia Canada Singapore U.K. Germany China Guam Jan ² July 2004 292,777 217,986 210,219 96,745 69,456 48,688 36,139 34,448 33,165 25,604 22,911 21,124 Jan ² July 2003 216,557 176,131 157,230 72,531 47,906 35,890 27,220 26,905 26,907 21,186 17,264 16,564 Growth Rate 35.2% 23.8% 33.7% 33.4% 45.0% 35.7% 32.8% 28.0% 23.3% 20.9% 32.7% 27.5%

PHILIPPINE TOURISM INVESTMENT LAWS AND POLICIES

TOURISM INVESTMENT PRIORITIES PLAN
OMNIBUS INVESTMENTS CODE OF 1987 (EO 226)
TOURISM PRIORITY ACTIVITIES (2004 Investment Priorities Plan)
‡ Tourism Estates (P/NP) ‡ Accommodation Facilities (P/NP) (Hotels, Tourist Inns, Apartment Hotels, Pension Houses, Resorts) ‡ Historico-Cultural Heritage Projects ‡ Ecotourism and Agri-tourism Facilities ‡ Health/Medical Tourism
P = Pioneer NP = Non-Pioneer

TOURISM INVESTMENT PRIORITIES PLAN
OMNIBUS INVESTMENTS CODE OF 1987 (EO 226)
PIONEER STATUS CRITERIA  For Hotels (De Luxe & First Class only)
‡ ‡

OUTSIDE METRO MANILA IN LESS DEVELOPED AREAS

- US $100,000 / room - US $50,000 / room but not less than US $5 million per project 

For Resorts (Class ´AAAµ only)
‡ ‡

OUTSIDE METRO MANILA - US $ 10 million per project IN LESS DEVELOPED AREAS - US $ 5 million per project

TOURISM INVESTMENT PRIORITIES PLAN
OMNIBUS INVESTMENTS CODE OF 1987 (EO 226) INCENTIVES TO TOURISM PRIORITY PROJECTS  Income Tax Holiday  Tax- and Duty-Free importation of capital equipment  Employment of foreign nationals

TOURISM INVESTMENT PRIORITIES PLAN
IMPORTATION OF CAPITAL EQUIPMENT (pursuant to EO No. 313)  0-1% duty on equipment  Granted to enterprises registered with BOI on after June 6, 2004  Can be availed until June 6, 2006.

TOURISM INVESTMENT PRIORITIES PLAN
INCOME TAX HOLIDAY UNDER EO 226 
New Projects (Pioneer)  New Projects (Non-Pioneer)  Expansion Projects  Projects in Less Developed

-

6 years 4 years 3 years 6 years 3 years

Areas (regardless of status) 
Modernization Projects

SPECIAL INVESTOR·S RESIDENT VISA (SIRV) UNDER E. O. NO. 63

RATIONALE 
Development of international tourism through infusion of capital by foreign investors  Disposition of government touristrelated assets for management of the private sector  Grant of benefits and incentives to attract foreign investments in tourism

INCENTIVES GRANTED UNDER E. O. NO. 63 
Special Investor·s Resident Visa (SIRV) to investor, wife and unmarried minor children  Remittance of Earnings  Repatriation of Capital  Right of succession

QUALIFICATIONS OF APPLICANT 
He has not been convicted of a crime involving moral turpitude  He is not afflicted with AIDS or any loathsome, dangerous or contagious disease  He has not been institutionalized for any mental disorder or disability  He is willing and able to invest at least US $50,000 in a tourism related project

QUALIFICATIONS OF APPLICANT 
In the case of foreign corporation which is willing to invest the amount of at least US$50,000.00 in a tourist-related project, the SIRV may be issued to the corporation·s Chief Executive Officer.

TOURISM RELATED INVESTMENT LAWS
OWNERSHIP OF PRIVATE LANDS General Rule 

Nationality Requirement under the Philippine Constitution  up to 40% foreign equity

TOURISM RELATED INVESTMENT LAWS
LEASING OF PRIVATE LANDS  General Rule per PD 471 ‡ 25 years - original ‡ 25 years - renewable  Exception per RA 7652 or Investor·s Lease Act ‡ Minimum investment of US $5 million for tourism projects ‡ 50 years - original ‡ 25 years - renewable

TOURISM RELATED INVESTMENT LAWS
FOREIGN INVESTMENTS ACT OF 1991 (RA 7042 AS AMENDED BY RA 8179)  Domestic market is open to foreign investors as long as the activity is not restricted in the Foreign Investment Negative List
‡ ‡

Ownership of private lands (up to 40% foreign equity) Tourist Transport Operation (up to 40% foreign equity)

TOURISM RELATED INVESTMENT LAWS 
Minimum paid-in equity capital of US $200,000.00 for domestic market enterprises with more than 40% foreign equity participation. (not applicable if applying for fiscal incentives with BOI whereby pioneer status criteria under EO 226 must be complied with)

TOURISM RELATED INVESTMENT LAWS
R. A. 6957, AS AMENDED BY R. A. 7718 (BOT LAW)  Authorizes the financing, construction, operation and maintenance of infrastructure projects by the private sector.

TOURISM RELATED INVESTMENT LAWS
INCENTIVES UNDER THE BOT LAW 
Financial assistance from direct government appropriation and/or from Official Development Assistance (ODA) of foreign governments or institutions not exceeding 50% of the project cost  Minimum government regulations and procedures  Special government undertakings in support of private sector

TOURISM RELATED INVESTMENT LAWS
RETAIL TRADE LIBERALIZATION ACT OF 2000 (R. A. 8762)  Extent of foreign equity in Restaurants
‡

Below US $ 2.5M capital - no foreign equity US $ 2.5M capital or more - up to 100% foreign equity

‡

TOURISM ECOZONES (TEZs)
SPECIAL ECONOMIC ZONE ACT (R.A. 7916)  MOA between DOT and PEZA
‡

Signed October 7, 2002 

Guidelines for Registration of TEZs
‡

Effective November 12, 2002

Develop Tourism Infrastructure
TOURISM ECO ZONES (TEZ)
Definition of a Zone 
Large tracts of land that have tourism potential, and where investment will be focused  Could be: - Contiguous or a group of islands - Entirely new or a redevelopment of an existing area

Components of a zone 
Adequate access, accommodations, and attractions to meet tourist needs  One-stop-shop for investors to facilitate investments in hotels and critical attractions  Secure, orderly, clean and tourist friendly area  Environmentally friendly practices  Duty-free importation

DESIGNATION AS A TOURISM ECOZONE (TEZ) 
Development of viable action plan that can attract support by investors and donors  Fast-track infrastructure development through prioritization of government projects, private sector incentives and/or negotiation with multi-laterals  Revitalize existing tourist destinations through grant of incentives  Strategy and support for investor marketing (e.g., one-stop shop, incentives) and destination marketing  Institutionalized public and private sector commitment to ensure alignment and continuity  Enforcement of standards and programs to ensure preservation of environment and cultural heritage 


Job creation Fast-tracked economic development Unity Sustainable tourism    

Human resource and community development

Investment in education to develop a culture of tourism

TOURISM ECOZONES (TEZs)
SPECIAL ECONOMIC ZONE ACT (R.A. 7916)
Registrable Activities 
Tourism Ecozone Developers/Operators  Tourism Ecozone Locators
‡ ‡ ‡ ‡ ‡

Sports and Recreational Centers Accommodation Convention & Cultural Facilities Theme Parks Special Interest Attraction/Activities/Establishments

TOURISM ECOZONES (TEZs)
SPECIAL ECONOMIC ZONE ACT (R.A. 7916) Registrable Activities  Enterprises establishing and operating airports, seaports/marinas

TOURISM ECOZONES (TEZs)
SPECIAL ECONOMIC ZONE ACT (R.A. 7916) Incentives to Tourism Ecozone Developers & Locators 
Tax and duty free importation of Capital Equipment  Income Tax Holiday  Employment of foreign nationals  Exemption from national and local taxes, in lieu thereof, 5% Gross Income Tax Rate  SIRV under E.O. 63  Incentives under BOT Law

DOT COMMITMENT TO TEZ INVESTORS
Infrastructure development
Funding Investor marketing ‡ Prioritize and direct infrastructure to ensure easy access to and within zones and high quality attractions and facilities ‡ Facilitate private investment by streamlining processes and granting incentives to mitigate risk ‡ Fast-track legal resolution of issues ‡ Coordinate among various stakeholders to ensure long-term institutional commitment to master plan (e.g. tour operators, LGU) ‡ Develop standards and programs to create an optimal tourist environment, stabilize peace and order, and ensure consistent delivery of tourist services ‡ Mobilize funding at destination and national level to market zone ‡ Coordinate tour operators and travel agents to develop attractive packages

Stakeholder coordination Destination marketing

TOURISM ECOZONES (TEZs)
ENDORSED ECOZONES TO PEZA
PROJECT NAME Panglao Island Tourism Economic Zone (Jimbart Land Ventures) Boracay EcoCultural Village Resort Fort Ilocandia Tourism Ecozone TOTAL PROJECT COST (in P Million) STATUS

210.00 Change of name to Blue Sky Resort Corp 381.56 Awaiting approval from PEZA 565.00 Proclaimed 1,156.00

PRIORITY AREAS

Laiya Aplaya, Batangas

Laiya Aplaya, Batangas
Development Directions
‡ Forestry reserve and trekking destination with beach front recreation. ‡ Phase I development will cover 151 hectares to be done by private group called Aplaya Laiya Corporation ² one or more hotels with 750 room capacity, beach front facilities with 675 rooms, retirement village with 200 units ranch and camp site, convention center, commercial center and sports facilities.

Additional Development
‡ Hotel-villas on west and east side of beach ‡ Golf and country club on the hilly and rolling terrain.

Pagudpud-Bangui

Pagudpud-Bangui
Development Directions
‡ Coastal development to house a number of international grade hotels, and residential and recreational facilities for sailing, diving, sports and social recreation.

Palawan

Palawan
Development Directions
‡ Establishment of tourism estates in Busuanga and El Nido such as hotels and resorts, theme parks and gardens, sports facilities, shopping and business centers. ‡ Development of an integrated transport system (air, land and water) to provide linkages between the different tourism centers and to serve not only the tourism sector but the local communities as well. ‡ Development of destinations, products and tourism circuits in the south.

Boracay Island

Boracay Island
Development Directions ‡ upgrading of current facilities and infrastructure (Kalibo Airport, ferry landing, public beach restrooms, standard tourist reception systems, environmental protection mechanisms)

Panglao Island

Panglao Island
Development Directions

‡ Tourism estate development ² resort hotels and residential villas with high, medium and low density clusters which can accommodate a total of 7,000 tourists at a time ‡ 18-hole golf course ‡ Retirement village ‡ Marina and other facilities for sailing, diving, fishing, boating, and a variety of water sports ‡ About 30% of estate·s land area will be for support facilities ² green wedges, plazas, roads, boulevards and reforestation areas.

Samal Islands

Samal Islands
Development Directions
‡ A total of 20 development sites covering 6,000 hectares. ‡ From these will rise 3,000 resort units of various configurations ² from hotel rooms and apartments to villas and beachfront bungalows. ‡ Various projects are still open for investors. ‡ The Philippine government·s major contribution to the development of Samal is in the form of vital public infrastructure:  18.7 kilometers of roads and bridges  a water supply system  solid and liquid waste disposal  berthing facilities;  a jetty. ‡ Power supply provisions

Samal Islands
Development Directions
‡ In 1998, Ekran Berhad of Malaysia, the primary developer of Samal, opened the first 300 rooms out of the 1,720 it has committed to build, just in time for the start of Samal Casino Resort·s full operation. The DOT, LGUs, business sector and community are committed to provide the attractive climate for new businesses and for sustaining the existing ones.

‡

Investment Promotion Services
‡ Databanking and opportunities generation surveys  Preparation of Area Investment Folders  Preparation of Investment Brochures ‡ Organization of/participation in investment promotion missions ‡ Holding of investment fora and business matching sessions ‡ Assistance to potential investors  Inbound missions  Inquiries ‡ Assistance to local proponents

Investment Promotion Services
‡ Investment Communications  Tourism Investment Updates bulletin  Primers  Website (www.wowphilippines.com.ph)

EXPO 2005 WORLD EXPOSITION
‡ Participation in the investment seminar (end of May or early June) ‡ Local proponents (private sector and local government units) encouraged to join to meet potential investors ‡ To cover Tokyo-Osaka-Nagoya ‡ Collaterals/AV presentations should be bi-lingual

For additional information, please contact

Office of Tourism Coordination Tel. No. (632) 526-76-54; (632) 536-03-26 (fax) e-mail: otc@tourism.gov.ph Or Office of Tourism Standards Tel No. (632) 525-32-57; (632) 524-98-24); e-mail: mvjasmin@tourism.gov. ph

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