IFC eyes more tourism exposure

By Elijah Joseph C. Tubayan
Reporter

THE INTERNATIONAL Finance Corp. (IFC) is looking to expand exposure to Philippine tourism given the sector’s “huge potential” to generate jobs especially in the provinces, a ranking official of the World Bank Group unit said.

“Tourism is something that we’d like to do a lot more in the Philippines because we clearly think there’s a huge potential in tourism in the Philippines, and I don’t think the Philippines is reaching its full potential,” Vivek Pathak, IFC regional director for East Asia and the Pacific, said in a Dec. 8 interview.

“I think it’s an important area. If you look at the benefits of tourism — international tourists provide foreign exchange, you provide employment, skilled employment, you create a value chain for agriculture, and services sectors.”

IFC is a global development institution forming part of the World Bank Group that provides financial resources and technical expertise to support private businesses worldwide.

Mr. Pathak cited an IFC case study that found that higher quality hotels generated the most employment — up to three jobs per room — or twice as many as do budget hotels.

“If you look at beaches at Palawan, Boracay, the water is as good as any other… Trust me I’ve been to a lot of beaches all over the world,” he said.

“But I just don’t find enough tourists.”

The Department of Tourism reported last Dec. 12 that foreign visitors grew 11.54% to 5.474 million as of October from 4.908 million in 2016’s corresponding 10 months. Tourism Secretary Wanda Corazon Tulfo-Teo said that she was “optimistic” the sector could hit a 6.5 million visitor target set by the 2017-2022 National Tourism Development Plan.

Furthermore, Philippine Statistics Authority data show that tourism’s share in gross domestic product has been on a steady rise since at least 2011 to 8.6% in 2016.

Mr. Pathak, however, cited lack of roads as one of the biggest hurdles to developing tourism sites and attracting more foreign visitors. “I think what’s critical for tourism that we’ve been talking with government about is infrastructure. You need to have connectivity. That is how you’re going to attract tourists,” said Mr. Pathak.

Nomura Senior Economist Euben Paracuelles, meanwhile, said that despite the government’s efforts to develop tourism in recent years, there is still plenty of room for improvement compared to the efforts of Southeast Asian neighbors.

Apart from infrastructure development — which Mr. Paracuelles said would be vital to developing hard-to-reach spots — the government should also bolster tourism campaigns.

“Beyond infrastructure, I think the government is under-utilizing the 10 million or so overseas Filipinos who can be the best promoters of the Philippines as a holiday destination,” he said in an e-mail yesterday.

“The ‘bring a friend’ program is a step in the right direction, but in my view the government needs to be more aggressive in running a campaign with similar initiatives, alongside more progress in infrastructure implementation,” the Nomura analyst added, noting that the country gets some of the lowest numbers of international visitors in Southeast Asia.

Moreover, Mr. Pathak said that tourism impact from the five-month battle in Marawi City, central Mindanao, between government forces and Islamic State-inspired militants should be minimal. “We haven’t seen adverse impact from that in the economy as a whole,” he said.

Last month, Discovery World Corp. signed a subscription agreement with IFC for the latter to infuse up to P650 million into the property firm “to meet the growing demand for hospitality infrastructure in the Philippines.” The leisure property developer will use the funds to finance construction of two hotels: one in El Nido, Palawan and another in La Trinidad, Benguet.

Apart from tourism, the IFC official said his group has been working with private firms here that are involved in infrastructure, manufacturing and financial services.

IFC’S overall committed portfolio in the Philippines totaled some $550.53 million as of July, according to its Web site.