philippine tourism industry (2013)
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2The Philippines is getting more and more rave
reviews for having some of the worlds mostbeautiful tourist destinations in the world. The
Boracay Island has been awarded the stature of
The Worlds Best Island for 2012 by the inter-
national travel magazine Travel + Leisure. This is
just one in a fast growing li st of must go Philip-
pine beaches which include Amanpulo in Pala-
wan, Caramoan in Camarines Norte and Panglao
Phil ippineTourism Industry
in Bohol. Since the declaration of the P
Underground River as one of the New 7ders of Nature, hotel accommodations
island have become fully booked until ne
This new image will hopefully start an u
edented surge in foreign visitors ying in
and experience the Philippines unique fu
culture in the backdrop of a tropical parad
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Figure 1: Top Ten Visitor MarketsSource: Department of Tourism Website
Figure 2: Visitor Arrivals to the PhilippinesSource: Department of Tourism Website
Tourism falls under the service industry of the country
which has been slowly but steadily growing since 2004.
According to the Tourism Investment Portfolio of the
Department of Tourism, the tourism industr y has been
recognized by the government as an impor tant source
of foreign exchange earnings, investments, revenue,
employment, and to the growth of the countrys output.
The inclusion of tourism as a major pillar in the MediumTerm Philippine Development Plan (MTPDP) has given
priority to a sector that has huge investment, employ-
ment and revenue potential. If developed in a sustainable
manner, it can be a powerful economic growth engine for
the country.1 By harnessing the countrys natural wealth
and famous Filipino hospitality, the tourism sector has a
rich natural resource to create wealth both in direct and
indirect business activities that generates a chain reaction
of enterprises and jobs. Tourism is also the perfect vehicle
for promoting cultural identity and responsible
stewardship of the environment.
According to the Department of Tourism, a total of
1,497,851 visitors came to the country from January to
April 2012, an increase of 14.61% over the previous years
volume of 1,306,944 for the same period. The monthof April recorded 349,779 visitors, an increase of
10.19% against its 317,443 arrivals for the same
month a year ago.2
Visitors from Korea continue to lead all other markets
as it recorded 330,343 arrivals with a share of 22.05% to
total visitor inow. This gure was higher by 15.50% than
the volume of 286,018 arrivals in the rst four months of
2011. The U.S. market ranked second as it account
16.02% of the total trafc. This market had an incre
4.70% with 239,978 arrivals compared to its contri
of 229,200 arr ivals last year.
Visitors from Japan accounted the third biggest arriv
count of 137,984 for a share of 9.21% to the visitor
volume. This market posted an increase of 6.78% vvis its output of 129,223 arrivals a year ago. The Ch
market supplied 123,262 as the fourth biggest inbo
visitors to the country. A double-digit increase of 7
was registered by this market versus its last years c
parative gure of 71,113 arrivals. Visitors from Taiw
likewise posted a two-digit growth of 34.51% contr
74,871 arrivals against its volume of 55,662 a year a
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Domestic travel is the strong backbone oPhilippine tourism, making it resilien
during times of external vulnerabilitieto health scares, terrorism, an
global financial crisis
Other markets with high growth r ates and consistently signicant volume are
Germany which grew by 15.36% (26,382 arrivals), Malaysia with 13.82% (32,363
arrivals), Australia with 13.38% (64,266 arrivals), United Kingdom with 12.92%
(41,759 arrivals) and Singapore with 11.38% (47,536 arrivals).
By regional grouping, the East Asian region topped with a 47.38% share to the
total or a volume of 709,728. Almost all of the countries from this region consis-
tently ranked among the top ve contributors of visitors with the biggest volume
coming from Korea while China recorded the highest growth. Following the East
Asian region was Nor th America, producing a combined total of 288,839 arrivals
or 19.28% share to the total visitor volume. The ASEAN region took the thirdspot in the regional ranking, capturing 7.83% of the total tourist inow by produc-
ing 117,224 arrivals.
Domestic travel is the strong backbone of Philippine tourism, making it
resilient during times of external vulnerabilities to health scares, ter-
rorism, and global nancial crisis, among others. In 2009 a group of 12
tourism destinations in the Philippines recorded a volume of 7.2 million
arrivals with domestic travelers accounting for 79% of the total. Another
indicator of the robust domestic travel market is the volume of domes-
tic air passenger trafc, increasing by 25.1% in 2009 (see Figure 4 and
Table 1).
Figure 3: Foreign Tourist Arrivals in RPby Origin, Mn, 1990-2009
Sources: DOT and NSCB
Figure 4: Domestic Air Travel PhilippinesMillions, Growth, 1990-2009Source: CAB
Table 1: Domestic Air Travel PhilippinesMillions, Growth, 1995-2009
Source: CAB
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Comparative ASEAN Arrivals
The Philippines ranked only 6th in attracting foreign tourist vis-a-vis its
ASEAN neighbours. Malaysia visitor arrivals in 2010 reached to 22.4 million
while Thailand attained 15 million, Singapore with 11.6 million, Indonesia
with 7 mi llion and Vietnam with 5 mi llion. The market shares of compet-
ing destinations in ASEAN have rapidly grown while the Philippines share
modestly expanded.
THE PHILIPPINES TOP 10 PRIORITY CLUSTERS
National Tourism Development Plan3
Under the proposed National Tourism Development Plan 2010-2016, the
Philippines was divided into 21 strategic and thematic tourism destina-
tion clusters covering 77 Tourism Development Areas (TDAs): 7 strategic
clusters are in Nor thern Philippines (Nor th Luzon, CAR, CALABARZON,
NCR) covering 27 tourism development areas; 7 strategic clusters in
Central Philippines (MIMAROPA, Bicol, The Visayas) covering 24 tourism
development areas; and 7 strategic clusters in the Southern Philippines
(Mindanao) covering 26 tourism development areas.
Of the 21 Inclusive Tourism Cluster Destinations, 10 have been designatedas Priority Cluster Destinations covering 39 Tourism Development Areas.
1. Laoag Vigan Tourism Clusters main gateway is the Laoag Inter
tional Airport. The themes for this cluster are beach resorts, histor
heritage, eco-tourism and events. LaoagPagudpud, Ilocos Norte a
Vigan, Ilocos Sur are the Tourism Development Areas for this clust
The development of the Tourism Enterprise Zones (TEZs) in Pagu
and Laoag, the improvement of the clusters 9 heritage sites that to
to PhP141,000,000 and linking the local communities to tourism s
chain will surely help the Ilocos Region to become a top tourist de
tion.
2. The Clark International Airport is the m
gateway for the Central Luzon Tourism Clu
The chosen themes for the cluster are ent
ment, amusement, sports, beach resort, eve
MICE, ecotourism, wellness, medical and re
ment tourism. There are seven (7) Tourism
velopment Areas for this cluster namely th
Clark- Tarlac Corridor, Nueva Ecija, Pamp
Bulacan, Zambales, Bataan and Aurora. Pro
development will focus on mixed used res
Clark, Zambales, Subic.
3. The Ninoy Aquino International Airport is the gateway to Metr
nila and other parts of the CALABARZON Tourism Cluster. The t
for this cluster are MICE, business, resort, history, medical, and well
events, sightseeing, entertainment and shopping. There are ve (5)
sen tourism development areas for this cluster: Metro Manila and
rons, Nasugbu-Looc-Ternate-Cavite, Laguna de Bay, Batangas and Q
zon. Product development projects include Tourism Enterprise Zo
Manila Bay and Batangas, and improvement to 15 heritage sites (P
Million). Note that there will be 8,100 additional rooms needed (2
2016) and 7,700 are planned or under construction for this cluste
4. Bicol Tourism Clusters main gateway is the Bicol International A
This clusters themes are resorts, marine li fe, ecotourism, water sp
and MICE. Camarines-Catanduanes, and Albay-Sorsogon-Masbate the chosen Tourism Development Areas. The projects for market a
Table 2: Visitor Arrivals in ASEAN Countries (*000)Source: World Tourism Organization/ ASEAN Secretariat
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and connectivity include the completion of the New Bicol International
Airport and the development of tourism roads.
5. Palawan Tourism Clusters main gateway is the Puer to Princesa Inter-
national Airport. The three Tourism Development Areas for this cluster
are Puer to Princesa, San Vicente-El Nido-Taytay, Southern Palawan. Some
projects that will help market access and connectivity include building a
New Terminal and Taxiway at Puerto Princesa Airport, building tourism
infrastructure in Puer to Princesa, San Vicente and El Nido and improve-
ment of their 6 heritage sites (Php 140 Million). The DPWH and DBM
included 7 road projects worth 1.38B in the national budget for 2012
develop tourism roads. The chosen themes of this cluster are coastal
Island resor t, ecotourism, sightseeing, MICE, and adventure.
6. The Western Visayas Tourism Cluster has two gateways, the Iloilo
International Airport and Kalibo International Airport. The Clusters
themes are coastal and island resort, ecotourism, marine sports, events,
and MICE. Bacolod-Silay, Iloilo-Guimaras and Boracay-Northern Antique
are the three (3) chosen Tourism Development Areas. Proposed Proj-
ects to increase market access is the completion of the Kalibo Airport
upgrade and providing international terminal service at the Iloilo Airport.
Destination and product development initiatives focus on the towns ofIloilo, Guimaras and Bacolod. DPWH and DBM have 11 road projects
for 2012 included in the national budget worth P1.27B. This cluster has a
shortage of 4,504 additional rooms that needs to be completes by year
2016.
7. Central Visayas Tourism Clusters main gateway is the Mactan-Cebu
International Airport. Themes for this cluster are MICE, Business Invest-
ments, Resorts, history, events, sightseeing, entertainment, shopping, and
ecotourism. The four (4) Tourism Development Areas of this cluster
are Northern Cebu-Bantayan-Malapascua, Metro Cebu-Mactan-Olango
Island, Southern Cebu, Negros Oriental-Dumaguete-Siquijor, and Tag-
bilaran-Panglao Island. Market access and connectivity projects include
Cebu terminal expansion and r unway improvement, gateway marketing
program (e.g. World Routes), seamless connection from Mactan A
to tourism development areas, 24 tourism road projects of DPW
and DBM wor th P2.86 billion in the 2012 national budget, the Tagb
terminal expansion and the need for a Bohol gateway.
Destination and product development includes Tourism Enterprise
in Cebu and Panglao, improvement to 17 heritage sites (Php 500 M
and linking communities to tourism supply chain. Note that this clu
needs to build 7,000 rooms by 2016 and only 5,000 rooms planne
under construction to date.
8. Zamboanga Peninsula Tourism Cluster has four (4) Tourism Dev
opment Areas Zamboanga Sibugay, Zamboanga City-Sta. Cruz-Isab
Pagadian City-Zamboanga del Sur and Dapitan-Dipolog. Its Main g
is the Zamboanga International Airport. The Destination and prod
development includes Tourism Enterprise Zones in Dipolog and D
9. Camiguin Island, Cagayan de Oro-Misamis Oriental, Iligan City-L
del Nor te, Misamis Occidental, and Bukidnon are the ve (5) Tour
Destination Areas of the Northern Mindanao Tourism Cluster. On
ority project that everyone is waiting for is the Laguindingan Airpo
Project. This project will help boost Laguindingan as a Tourism EnteZone and support the chosen themes of the tourism department
are island resorts, marine spor ts, historical places, sightseeing, event
ecotourism, adventure, business, MICE, and entertainment.
10. Davao International Airport is the main gateway for the Davao
and Coast Tourism Cluster. The Davao cluster was divided into thre
Tourism Destination Areas which are Davao City-Samal Island-Dav
Norte, Davao del Sur, and Compostela Valley-Davao Oriental. Ma
Davao International Airport as an International gateway of the sou
denitely develop market access and connectivity for this area. De
tion and product development include Tourism Enterprise Zones i
Ana Wharf and Samal Island.
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7
Medical Tourism
For decades, people have been traveling to the Philippines to
seek medical treatment, but only in recent years has the coun-
try been well-known as healthcare destination. This is because
of the phenomenal growth of foreigners visiting the country for
medical and health-related reasons. Medical tourists are gener-
ally residents of the industrialized nations of the world, the
countries they travel are typically the less developed ones withfavourable currency exchange ratios.
Currently, there are four hospitals in the Philippines that are
Joint Commission International (JCI) accredited.
These are: The Medical City in Pasig City, St.
Lukes Medical Center in Quezon City, Makati
Medical Center in Makati City and Chong Hua
Hospital in Cebu City.
However, there are clear differences between the pri vate health
facilities as compared to the public health system, which usually
do not offer the same quality care that patients receive from
private institutions. For medical tourists, it is advisable to avail
themselves of the medical tourism packages offered by private
hospitals and health facilities if they want to get the best health-
care services available.
Medical Tourism Philippines (MTP) welcomes tourists from all
over the world to visit the Philippines for their medical needs.
Medical tour packages are now available which offer travel and
hospital services, which take care of everything from visas, airfares,
accommodation, hospital costs for treatment and all transport.
The most common procedures are cosmetic and plastic surgery,
dermatology, weight loss surgery, ophthalmology, and dentistry.4
Cosmetic Surgery
The country has many skilled cosmetic surgeons who speci
face lifts, rhinoplastery, abdominal tucks, liposuction, and bre
mentation. These medical operations are more expensive in
of the developed countries. With many of the surgeons con
to be the best in their eld, tourists are travelling from arou
globe to have their cosmetic operations performed here.
Dental Tourism
There are many hospitals and clinics specializing in dentistry
across the country with plentiful competent dentists who a
perts in the eld offer lower dental cost works. All standard
dures are available as well as more complex ones such as th
of dental implants and bridges.
Health Spas
There are also many relaxation centers and health spas in th
try that offer therapeutic healing for the mind, body and so
natural healing resorts offer alternative treatments concentr
organic solutions. Packages that offer long stays with a detox
tion process, a natural and organic diet, meditation and masare available. After having a major operation, visiting a natur
ing center that offers these ser vices can greatly help the rec
process.
Medical tourism is an emerging industry, which is on track to
coming a multi-billion dollar industry in the years to come. N
conned to people who are sick who want to live more yea
also to people who want to look and feel better and more
they age.
Philippine medical tourism target is US$ 3 billion revenues b
The following are cost comparisons between medical procethe Philippines and equivalent procedures in the United Sta
Table 3)
Table 3: Cost of Medical Tourism in thePhilippines and USA
Source: Department of Tourism
Potentials of Philippine Tourism
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8
There were approximately 250,000 non-resident patients (foreign nationals and Filipino
expats/immigrants) who travelled in the countr y for various medical ser vices in 2006. At
least 100, 000 foreign patients visit the country each year for medical care. This has grown
extensively each year and in the rst quarter of 2009, approximately 200,000 medical
tourists have been documented as visiting the Philippines for medical care, with gures
expected to reach 600,000 by the end of the year. The vast Filipino Diaspora who settled
overseas return to the Philippines not only for family visits or vacations but also to un-
dergo minor medical, dental and other health procedures not covered by their medical
insurance in their countries of origin. In 2007 alone 180,000 Filipino expatriates visited the
country for such purposes and this is expected to increase in the coming years.
Hospitals for Medical Tourism in the Philippines
The Medical City (Pasig City)
St. Lukes Medical Center (Quezon City and Fort Bonifacio Global City)
Makati Medical Center (Makati City)
Asian Hospital and Medical Center (Muntinlupa City)
Retirement
There are plenty of reasons for foreigners to pick the Philippines as a retirement spot.
One of the factors that holds signicant appeal for retirees is the lower cost of li ving in thecountry compared to other more developed countries. Foreign retirees face the prospect
of living comfortably without having to spend as much as they would have in their own
countries. The favorable exchange rate of the peso as well as the ease of access to foreign
currency exchange shops also contribute to this appeal.
Aside from the economic reason is the natur al attraction of the Philippine environment.
With over 7,000 islands, numerous world-class tourist destinations and a warm tropical
climate, foreigners can breeze through their retirement surrounded by breathtakingly stun-
ning sights and landscapes.
The social atmosphere is also benecial considering that the second language of the Phil-
ippines is Engl ish, allowing for easier communication between citizens and foreign retirees.
But more than language, the Philippine people are widely renowned for their Filipino
hospitality. It is in the Philippine culture to be warm and receptive of others, creating an
environment that is inviting for foreign citizens to reside here in retirement.
Services with a SMILE (SWS)5
Services with a SMILE or SWS is an initiative by the Philippine Retirement Authority
serves as a contact center using various channels of communication with retirees t
answer their needs and offer the whole range of products and services provided by
pine Retirement Authoritys accredited facilities and merchant partners.
SWS streamlines the delivery of products and services of accredited retirement fac
and accredited merchant partners, to the retirees. SWS stands for Services with a
SWS will be a multi-channel service center to take the requests and orders of retire
The orders will be passed on to the retirement facilities and merchant partners.
The Philippine Retirement Authority (PRA) provides a range of ser vices to help the
tiree settle comfortably in the country:
1. Greet and AssistUpon the arrival at the airport, a PRA representative will meet and will lead
to your transportation vehicle to take you to your destination.
2. 24/7 Hotline
3. Assistance in Obtaining Basic Government Documents/Requirements
4. Assistance with Banking Matters5. Merchant Discounts
6. List of Hospitals and Doctors
MICE (Meetings, Incentives, Conferences and Exhibition)
Tourism can also be categorized according to tourism resources, activities engaged
tourists and their purpose or motivation for travelling. One of the many types of to
is MICE. Activities of MICE are par ticipating in meetings, conventions, attending and
viewing exhibits, which eventually lead to dining, sightseeing, shopping and other leis
activities.
The development of the Philippine convention industry became an ofcial governm
policy in 1976, a milestone year that marked the establishment of Southeast Asias
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full-edged convention center, the Philippine International Convention Center (PICC); and the creatio
of the Philippine Convention Bureau (PCB) as a government corporation dedicated to the promotion
Philippines as a meetings and convention destination. That same year, the Philippines successfully playe
to the International Monetary Fund-World Bank Joint Conference that signalled the entry of the Philinto the world conventions market.
Since then, the Philippines has hosted some of the biggest and most important international and regio
meetings, conferences, conventions, congresses, and events that have made its capital city, Manila, one o
acknowledged Convention Cities of the world.
MICE venues in the Philippines
SMX CONVENTION CENTER
Location: Mall of Asia, Pasay City
Type of Events: Trade Events, MICE, Car Shows,
Concerts, Entertainment Shows-Fashion Shows
WORLD TRADE CENTER
Location: Pasay City
Type of Events: Trade Events and MICE
PHILIPPINE INTERNATIONAL CONVENTION
CENTER (PICC)
Location: Manila
Type of Events: Medical Conventions, Concerts,
Political Gatherings, Graduations and MICE
CULTURAL CENTER OF THE PHILIPPINES (CCP)
Location: Pasay City
Type of Events: Theater Shows, Exhibits
CEBU CONVENTION CENTERLocation: Cebu City
Type of Events: MICE
BAGUIO CONVENTION CENTER
Location: Baguio
Type of Events: MICE, Graduations, Programs
SUBIC BAY EXHIBITION AND CONVENTIO
CENTER
Location: Clark, Pampanga
Type of Events: MICE
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0
Challenges Facing the Tourism Industry in the Philippines
The issues mostly affecting the growth of the tourism industry sector includes: 1) conges-
tion in the international airport; 2) inability to develop and expand air accessibility to key
growth markets; 3) undeveloped infrastructure works in gateways and destinations; 4)
lack of investor friendly environment; 5) low safety and security measures; 6) unimproved
quality and consistent levels of facilities and services; 7) overlapping institutional functions
between the national government and local government units resulting in uncoordinated,
fragmented and inefcient outcomes; and 8) low budgets for marketing and promotions.6
These constraints have made it difcult to implement plans and programs for the develop-
ment of the sector at the public sector level and discouraged private sector investment in
improved connectivity services and in tourist facilities and service at the destination level.
To address these constraints in the past, in 1990, the Department of Tourism with techni-
cal assistance from the UNWTO prepared a 20-year tourism master plan (1991-2010),
and subsequently corresponding tourism plans for most of the regions. In 2002, McKinsey
& Co prepared a strategy and action plan to accelerate implementation of the master
plan. More recently, the government has:
developed the Nautical Highway initiative to improve connectivity between the
Central Philippine islands and the Northern and Southern parts of the country;
prepared a sustainable tourism development plan for Central Philippines to de-
velop its outstanding potential for island, marine and resort-based tourism; and
promulgated a new tourism law (RA9593)
Tourism Act of 2009 (RA 9593)
The new tourism law of 2009 seeks to address key concerns in regard to transpor tation,
infrastructure, investment, quality standards, institutional arrangements and tourism plan-
ning.
The law mandates the representation of the tourism sector in the Civil Aeronautics Board
(CAB) that determines the nature of air services between the Philippines and foreign
points, as well to sit as an active member in all air servi ce agreement negotiations.
Its objectives are to accelerate tourism infrastructure development by mandating the
DOT to coordinate closely with the infrastructure agencies of the government, esta
the Tourism Infrastructure Enterprise Zone Authority (TIEZA) to focus on destinati
area infrastructure development and investment promotion, and to prepare an ann
tourism infrastructure development program.
It will also accelerate private sector investment in tourist facilities and services at th
nation level, the TIEZA is mandated to declare Tourism Enterprise Zones in which i
tors will receive a range of scal and non-scal incentives similar to those provided
the provisions of the Board of Investments law.
Into the Future
Over recent decades, the travel and tourism sector has increasingly become an imp
driver of economic prosperity and social progress. It stimulates growth through jobs
enterprise creation, and provides signicant foreign exchange revenues for many co
The sector generates opportunities for reducing pover ty and inequality, preserving
and cultural heritage, and upgrading infrastructure (World Economic Forum Asean
and Tourism Repor t Competitiveness Report 2012).7
The recent initiatives of the Philippine Government in the tourism sector will addre
many of the issues and constraints that have prevented the sector from achieving it
potential in the past. The tourism law provides a framework for putting in place the ning, institutional, coordination and resourcing network necessary to implement pro
and projects to accelerate the development of tourism to the highest levels.
Endnotes:
1 Department of Tourism, Tourism Invesment Portfolio
2 Department of Tourism, Visitor Arrivals
3 Department of Tourism, National Toruism Development Plan
4 Discover Medical Tourism.com, Medical Tourism in the Philippines.
5 Philippine Retirement Authority, Why retire in the Philippines?
6 Department of Tourism, NTDP
7 World Economic Forum, World Economic Forum ASEAN Travel and Tourism Competitiveness Report