MEDIUM-TERM DEVELOPMENT PLAN 2001-2004

Chapter 5
PUTTING THE PHILIPPINES ON THE INTERNATIONAL TOURISM MAP
The Philippines has a natural competitive advantage in tourism because of the warmth of its people and its natural wonders that are yet to be fully harnessed. Tourism is also recognized as a major contributor to the generation of foreign exchange earnings, investments, and revenues, and to the growth of the countrys output. It is a catalyst for construction, manufacturing, and other economic activities, and a creator of human resource-intensive jobs. The government will aggressively market the country as a tourist destination and as an investment and convention site. Four tourism hubs will be further developed to promote greater accessibility to markets. The availability of tourism infrastructure and affordability and diversity of tourist products will be enhanced to further attract foreign and Filipino travelers. Faced with the challenge of putting the Philippines in the growing international tourism market, reforms will be implemented to meet the tourism industrys development requirements, rebuild the countrys image, strengthen its competitiveness in attracting foreign visitors, and further stimulate domestic tourism. This will be done while protecting and preserving the environment, its sociocultural heritage, and the welfare and rights of women and children.

POLICY FRAMEWORK Tourism policy will be geared towards attracting more visitors, extending their length of stay, and increasing the attractiveness of tourist products to encourage travelers to spend more. Toward these ends, the government will improve the accessibility of tourist destinations, make tourist products better and more affordable, promote a culture of tourism among local residents, and work for the increased recognition of tourism. Accessibility will be enhanced by accelerating the development of infrastructure supporting the four tourism hubs: Manila, Cebu, Davao, and Laoag. Civil aviation will also continue to be liberalized to open new markets and facilitate travel into, within, and out of the country. Information and communications technology (ICT) will be harnessed to market and promote the country in international tourism markets. This will enable the Philippines to take advantage of increased travel to the Asia-Pacific region, which is projected to grow at an average of seven percent until 2020; and capture a considerable share of the Association of Southeast Asian Nations (ASEAN) market. Given the magnitude of resources needed to develop tourism, investments will be put on stream in partnership with the private sector and local government units (LGUs). To enhance the role of tourism in regional development, LGUs- with communities and civil society- will increasingly be relied on to develop and maintain tourism sites in their localities.

The Philippines will also pursue policies to make tourist products diverse, more affordable, and of high quality so that visitors will stay longer and spend more in the country. In partnership with the private sector, the government will upgrade tourism manpower skills to meet international standards of management and service. A culture of tourism will be instilled in all Filipinos, making use of volunteerism and partnership among all the stakeholders. Peace and order conditions will be improved to reduce threats to life and property of tourists. Tourism programs and policies will be gender-sensitive and founded on the preservation of cultural and natural resources, and sound use of the environment. The recognition of the real worth of tourism in the socioeconomic framework of the country will be undertaken in consonance with the declarations of ASEAN and Asia Pacific Economic Cooperation (APEC) leaders. The Philippine Tourism Master Plan will continue to be implemented to optimize the economic contributions of tourism and develop it on an environmentally-sustainable basis, enhance and contribute to social cohesion and cultural preservation, and promote target destinations, attractions, and markets.

ASSESSMENT AND CHALLENGES Visitor arrivals in the ASEAN region grew at an annual average of 7.6 percent from 1991 to 1999. Yet the Philippines has been less successful than its Asian counterparts in attracting foreign visitors. In 1999, the Philippines ranked fifth among ASEAN members in terms of visitor arrivals with 2.2 million tourists. It lagged behind Thailand (8.7 million), Malaysia (7.9 million), Singapore (6.9 million), and Indonesia (4.3 million). Hotel room rates were higher compared to its neighboring countries. Of the total number of tourists, 31.4 percent of the visitors stayed in hotels and 24.6 percent in the homes of friends and relatives. On a daily average basis, tourists spent more for accommodation ($47.00) relative to food and beverages ($26.70), entertainment and recreation ($22.60), and shopping ($20.00). Partly due to higher costs, the average daily expenditure in the country of $132.30 was higher compared to that in Malaysia ($74.30) and in Thailand ($98.50). In 2000, tourist arrivals declined to 1.5 million (January to September) or by 4.4 percent from 1.6 million in 1999 due to peace and order problems. Poor accessibility is another reason for the low tourist traffic volume. In 1999, the Philippines had 106,647 weekly air seats available, lower than in Malaysia (299,409), Singapore (359,314), and Thailand (310,491). Meanwhile, 41,521 tourists or only 1.9 percent of the total volume arrived by sea.

TARGETS AND STRATEGIES Targets

Visitor arrivals are projected to reach 1.9 million to 2.4 million in 2001 and increase to 2.3 to 3.0 million by 2004 (Table 5.1). Major markets will be East Asia (Japan, Korea, Taiwan, and Hong Kong), North America (United States and Canada) and Europe (United Kingdom, Germany, and France). New ones will, however, be explored as the World Tourism Organization (WTO) has anticipated greater outbound movement from China and Scandinavian countries. Attracting more visitors and convincing them to extend their stay will increase target tourist receipts to a range of $2.2 billion to $2.7 billion in 2001, and reach $2.6 billion to $3.4 billion in 2004. Direct and indirect employment will proportionately increase with the growth in visitor arrivals. By the end of 2001, tourism is expected to employ 3.8 million to 4.0 million workers across the upstream and downstream levels of the economy. In 2004, total employment in tourism will reach 4.6 million to 5.2 million as visitor arrivals continue to grow. Major sources of employment will be the hotel and restaurant sector, transportation, travel agency/tour operation, and retail trade. Strategies Improving accessibility of tourist destinations Develop tourism "hubs" Manila, Cebu, Davao, and Laoag will be developed as the countrys tourism "hubs" in view of the presence of international gateway and support infrastructure in these areas. The work programs of transport agencies will be integrated with the development of these tourism hubs and the upgrading and modernization of satellite areas. Efficient and adequate air, water, and land (road and rail) transport will be provided to bring visitors to the tourist destinations and attractions in Manila, Cebu, Davao, and Laoag and to areas contiguous to these hubs. An intermodal transport system will be installed to ensure the mobility and conveyance of visitors. Roads and bridges leading to existing and target tourist destinations and attractions will be repaired or constructed to make transport of visitors by land faster and more convenient. Provincial and municipal roads vital to tourism development will be converted to national roads to fasttrack their construction and facilitate conveyance of tourists. Services at the Ninoy Aquino International Airport (NAIA) and other international ports of entry in the tourism "hubs" and along routes to and within tourist destinations will be upgraded to become more efficient, flexible, fast, and connectivity-friendly in responding to the needs of visitors. The cleanliness of facilities as well as business and other establishments operating within the airport premises will be ensured. Support facilities (e.g., rest areas) and utilities (water, power, sewerage) will be installed. Traffic along major tourist thoroughfares will be decongested by structuring and implementing traffic rerouting schemes. Clean-up drives and beautification programs on the routes to and from international airports and other identified tourist thoroughfares will be continued. Liberalize civil aviation

The countrys accessibility to visitors will be improved by negotiating more and better air services agreements (ASAs) with partner countries to increase the weekly air seat capacity to levels at par with other ASEAN countries such as Thailand, Malaysia, and Singapore. The utilization and load factors of existing airlines for Japan, Korea, Taiwan, Hong Kong, Malaysia, Singapore, France, and the United Kingdom will be reviewed. The Philippines will increase the number of weekly seats available from the air carriers of its major markets for greater accessibility to tourists and investors. At the same time, air carriers of other countries with which the country has bilateral ASAs will be encouraged to maximize utilization of their entitlements (i.e., the number of flights in a week as allowed in the bilateral air agreements). A "trigger mechanism" will be institutionalized to facilitate the operationalization of additional seat capacity beyond the entitlement allowed in the pertinent ASA. This will automatically allow an airline already operating at an average load factor of 70 percent to add more seats to immediately respond to the increasing demand without the need for renegotiation with other countries. The amendment of Executive Order No. 125-A, which attached the Civil Aeronautics Board (CAB) to the Department of Transportation and Communication, will be pursued to facilitate the reorganization of CAB and provide for the membership of the Department of Tourism (DOT) in the board. This will enable DOT to actively participate in the formulation of civil aviation policies and in the approval and implementation of ASAs attuned to the demands of the tourism industry. Hand in hand with the liberalization of civil aviation will be the liberalization of visa requirements, particularly for tourist-generating markets such as China. Encourage investments in tourism The government will provide the enabling environment to further attract and expand private sector investments, especially in the identified tourism "hubs" and in potential tourist destinations. Investments will be encouraged in hotel construction, establishment of tourism estates, and in the provision of transport systems, telecommunication facilities, and other tourism-related infrastructure. Trade and investment liberalization, deregulation, and facilitation measures will continue to be adopted to further generate local and foreign investments and allow the international mobility of tourism manpower. The incentive regime will be simplified and clarified. Foreign participation in tourism development will be allowed through joint ventures consistent with existing laws. Enhancing tourist products and services Make products better and affordable Through discussions and dialogues, the private sector will be encouraged to provide reasonable and competitively-priced tourism goods, services, and facilities to enable the country to lure more foreign visitors and to promote local tourism. The private sector and LGUs will be encouraged to develop affordable tour packages and programs that will link tourism "hubs" with their local destinations/attractions as well as provide a diverse mix of products for the enjoyment of tourists. Coordination with the travel trade sector for the development and marketing of affordable tour packages in the provinces will be strengthened.

To develop a cultural tourism program, national historical landmarks will be restored, rehabilitated, and maintained in coordination with appropriate government agencies and concerned private organizations and entities. Invest in human resource development To meet and maintain international standards of management and service, the skills of tourism human resources will continuously be upgraded. Investment in training and education will be promoted through government-private sector partnerships to improve skills, productivity, and service quality. Human resource development programs will be continually reviewed to respond to the ever-changing needs of tourists. Existing curricula will be reviewed to promote greater professionalism and improve the quality of tourism graduates. The arrangement developed by the DOT and the Hotel and Restaurant Association of the Philippines in setting up the Hotel and Tourism Institute of the Philippines will be adopted in the establishment of tourism training centers in Baguio, Cebu, and Davao. Conduct niche- and mass-marketing campaigns A niche- and mass-marketing approach will be undertaken based on a diverse mix of special interest, vacation, resort, convention, exhibition, shopping, retirement, touring, and incentive travel products that the country can offer. The Philippines will be promoted as a prime tourist destination in Asia, highlighting the Filipinos "culture of tourism", the countrys tourism "hubs", and their unique products and attractions. Participation in international tourism exhibitions, fairs, and events will be aggressively carried out in partnership with the private sector and concerned LGUs. Joint promotional programs with other countries will be undertaken. These will involve advertising, development of tour packages, and production, distribution, and exchange of brochures and collateral materials. It will also include a "twinning program" whereby the Philippines and another country will promote and sell each others destinations in international events and encourage visitors to extend their visit to each others destinations. Information and communications technology will be harnessed to effectively promote the country (through e-commerce) in tourist-generating markets and expand business opportunities for small and medium tourism enterprises. Instilling a tourism culture Advocate for stronger law enforcement In coordination with concerned national and local authorities, the stronger enforcement of laws will be advocated to ensure a peaceful and orderly environment for the security and safety of visitors. The media will be harnessed to enhance and develop a positive image of the Philippines internationally. Conduct information campaigns to advocate a culture of tourism Information campaigns advocating a "culture of tourism" among all Filipinos will be launched. By highlighting its benefits (opportunities in terms of employment and business,

among others), Filipinos will be encouraged to keep their surroundings clean and take care of tourists, impressing in them that tourism means business and more tourists mean more jobs and greater income for communities. Tourism will also be integrated into the educational system at the primary and secondary levels to help instill the culture among young Filipinos. This will support efforts to create a better nation anchored on a deeper sense of identity, commitment, and pride of place among its citizenry. Integrate environmental considerations in tourism and promote ecotourism Utmost consideration will be given to the long-term environmental impacts of tourism activities. The private sector, LGUs, concerned national government agencies, and other stakeholders will jointly strive to create a rational and orderly balance between socioeconomic growth and environmental protection through the sustainable use, development, management, renewal, and conservation of the countrys natural resources, including the protection and enhancement of the environment. A national ecotourism strategy that will identify and establish the network of ecotourism sites and products, and the appropriate implementing set-up at the national and local levels will be formulated and implemented. The strategy will aim to encourage community participation, protect and preserve natural and cultural resources, promote environmental education and ethics, and foster economic benefits at the national and local levels. Community-based tourism will also be pursued to showcase the ingenuity and entreprenuership of the Filipino people, and continually provide alternative livelihood and employment to host residents. Mainstream gender and other social concerns in the sector Representation and participation of women will be established as an integral part of tourism planning to mainstream gender and development. Labor laws protecting women, youth, and children will be strictly enforced to preclude social problems. Equal access of women to education and training will be promoted. Intensify LGU participation in tourism development Local government units will be mobilized to perform devolved tourism functions in planning and development, promotion, and regulation pursuant to the Local Government Code (LGC). They will be encouraged to promulgate appropriate ordinances and local legislations pertaining to the maintenance of tourist facilities and attractions, as well as regulation and supervision of business concessions. They will also be encouraged to provide local incentives for tourism investments, preserve cultural heritage, and promote sustainable tourism practices and management. The capability of LGUs will be strengthened to enable them to effectively discharge their mandates under the LGC, implement DOTs Regional Tourism Master Plans (RTMPs), and harness the tourism potentials of their localities. Sharing of information and data between LGUs and DOT will be strengthened to facilitate the monitoring of the flow of tourists and investments and address the issues confronting the tourism industry. The cooperation of LGUs in the conduct of information drives and local awareness campaigns will be sought to encourage holiday travel and educational tours within the country while preserving a hospitable attitude towards tourists. Local tourism offices at the

provincial, municipal, and city levels will ensure the availability of a coordinating body for tourism at the local levels. LGUs will be encouraged to set aside resources for tourism development and promotion. Working for the recognition of tourism Establish the tourism satellite account and undertake research The Philippine tourism satellite account designed to measure the contributions of tourism to the economy will be completed, operationalized, and institutionalized. Utilization of this data base will enhance planning at the sectoral and national levels. Given the dynamic nature of tourism, continuing research will also be undertaken to support the preparation of tourism development plans and improve the countrys competitiveness as a tourist destination, and as an investment and convention site. Accordingly, the private sector and LGUs will be tapped to provide the pertinent data and reports, and share experiences, perceptions, and insights so that the socioeconomic benefits of tourism will be increasingly recognized. Tap resources for tourism development Official development assistance from the Japan Bank for International Cooperation, United Nations Development Programme, and WTO, among others, will be sought to fill the technical and financial resource gaps. New mechanisms for sourcing funds will also be explored and developed to augment the resources for tourism development. Local government units will be encouraged to exercise their powers and mandates in the LGC and avail of existing credit facilities, such as the Department of Finance Communitybased Resource Management Program to finance the development and maintenance of their tourist attractions and the implementation of RTMPs. Review and assess tourism development plans The implementation of tourism development plans at the national, regional, and local levels will be reviewed and assessed regularly. Existing facilities and services will be periodically evaluated vis--vis projected requirements and market demands. Tourism-related developments and trends will be frequently monitored to better respond to the changing needs of tourists.