Interview: Pocholo D Paragas
How will tourism enterprise zones (TEZs) and foreign direct investment (FDI) help to further the sector’s economic development?
POCHOLO D PARAGAS: A provision that extends the TIEZA tax perks available to TEZ operators for an additional 10 years was signed into law in April 2019. We expect that this measure will help to generate P222bn ($4.1bn) in capital investment and around 160,000 direct and indirect employment opportunities.
TEZs are designed to promote private initiatives, and TIEZA and the government have established a series of flagship TEZs in Manila, Bataan, Palawan, Bohol and Surigao del Norte. The administration is responsible for the regulation and oversight of these zones, while private corporations and individuals are responsible for their operation and management.
The country is ready to attract more investment, and FDI will be key for further development of the industry. Beyond increasing the capital inflows required to boost the industry, promoting investment is crucial for several reasons. First, it projects a positive and stable image of the country. Moreover, as new investors leverage opportunities in the Philippines, this encourages even more investors to enter, thereby promoting positive competition. Investment inflows will also enable the country to compete at an international level.
What more can be done to accelerate infrastructure development and boost travellers’ experiences?
PARAGAS: Infrastructure development has to be carried out in two directions: macro-planning, to improve the overall infrastructure of the country; and micro-planning, to ensure access to basic services for visitors and the provision of information for potential travellers. With regard to those who are considering the Philippines as a potential tourism destination, we need to provide them with answers to three key questions: where, when and why? The availability of information, both online and upon arrival, will help visitors make the right decisions to improve their experience. Other infrastructure priorities include improving accommodation supply, basic utilities and sanitation. The extension of TEZ incentives aims to catalyse investment in these areas in an environmentally sustainable manner.
In what ways can the Philippines leverage technology to help improve services?
PARAGAS: Technology will play a fundamental role in communications, infrastructure development and revenue collection. Not only can we help travellers to make informed decisions by embracing new technologies, but we can also ensure that developments in the sector are environmentally sustainable. These developments include innovative sanitation solutions, waste processing and energy generation. The Philippines has over 7000 islands and boasts the world’s fifth-largest coastline: it is important that we protect our heritage. Technology will help us to roll out a preventative strategy to ensure steady growth of the tourism sector.
In terms of digitalising revenue collection, TIEZA has platforms such as the electronic import permit system – a web-based system to submit requirements before import permits are issued in TEZs – and the online travel tax payment system. These platforms are key to driving investment and increasing inbound tourism.
Beyond leisure and entertainment, which niche market is best positioned to support sector growth?
PARAGAS: The cruise tourism industry has a lot of potential and is prioritised in the National Tourism Development Plan 2016-22. As such, we are working to put in place the necessary infrastructure and transport solutions. In 2014 more than 23,000 tourists visited the Philippines by cruise ship, with this figure expanding to 205,000 in 2018. The projection for 2030 is a total of 600,000 visitors by cruise ship. A feasibility study to determine the best location to install a new cruise port and terminal has been ongoing since October 2018.
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