To meet the goals of the National Tourism Development Plan (NTDP) 2016-22, the Department of Tourism (DOT) is working with the private sector to diversify the country’s tourism offerings, developing attractions outside the capital, and boosting connectivity and promotion efforts. This should help to reach the targets of welcoming 12m foreign arrivals by 2022 and boosting tourism employment to 6.5m people, or 14.4% of the workforce.
One part of the Tourism Act of 2009 was to lay groundwork for development of tourism enterprise zones (TEZs). These allow high-potential destinations to receive priority investment under the NTDP through fiscal incentives to draw investors. To this end, in 2009 the government formed the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to identify attractions, establish TEZs and oversee their development by coordinating with the private sector, building supporting infrastructure, and promoting them to investors.
In late 2016 TIEZA announced a range of incentives, including a six-year tax holiday, a discounted income tax rate of 5%, tax-free importation of capital goods and investment, the ability to roll over any net operating loss, and a 50% tax reduction on all social responsibility schemes, in addition to streamlined work visa applications and permitting foreigners to hold land leases. To date, five flagship TEZs have been established – San Vicente Long Beach in Palawan, Rizal Park Complex in Manila, Mt Samat Shrine in Bataan, Bucas Grande Island in Surigao del Norte, and Panglao Bay Premiere in Bohol – alongside six privately run TEZs and six projects on TIEZA-owned property that are in the early stages of development, including Queen’s Castle – a PUBLIC SPEND: The government has earmarked P16bn ($316.1m) for TIEZA to invest in infrastructure, roads, utilities and land acquisition for the 2017-22 period. More broadly, the government says that P810bn ($16bn) in public outlays will be needed to develop the country’s tourism destinations, part of which would be utilised for more transport vehicles and aircraft, building new accommodation, expanding airports and marketing. It expects another P414bn ($8.2bn) in fundCONNECTIONS: The DOT is also working to boost connectivity by establishing new air and sea transport links. Alongside its work opening new routes to secondary airports, in 2017 it began developing a weekly “roll-on/ rolloff” ferry service, called M/V Super Shuttle, whereby tourist buses can board ships to get to other islands in the archipelago. The DOT plans to first launch services between Davao, General Santos City, and the seaports of Mindanao and Palawan, before linking these with foreign ports on the island of Bitung in Indonesia as well as Malaysia and Brunei, although the port destinations for the latter two were unconfirmed as of April 2018.
Domestic air links are also multiplying. In February 2018 Cebu Pacific announced it would start running direct flights from Manila to Batanes in March through its subsidiary Cebgo. That same month, Malaysian lowcost carrier AirAsia launched thrice-weekly flights from Clark International in Manila to the secondary cities of Tacloban, Puerto Princesa and Iloilo, adding to the existing routes it runs to Davao and Caticlan.
To expand destinations and diversify offerings, a homestay programme is being led by the private sector and supported by the government. Under the model, tourists wishing to experience Philippine culture first-hand can arrange to stay with a local family via private cooperatives such as Homestay Philippines. “The investment of families is very minimal. They can start with one room, recoup their costs, and be able to expand,” Mina Gabr, former secretary of tourism, told local press about the scheme. Households joining the cooperative pay fees totalling P16,000 ($316), and in return are marketed by the group, earning income from guests they host. “Its our people that we are marketing as well, not just events and places,” Rose Bilongco, president of Homestay Philippines, told local media.
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