Dissecting the Tourism Master Plan

From a modest base in 2010, tourism has blossomed into a $38.5-billion industry comprising 12.2% of GDP in 2017. Foreign visitors topped the 6.62 million mark while domestic travelers reached 96.7 million. Curious to note that the number of domestic tourists have already surpassed the 2022 target of 86.2 million four years ahead of schedule. The industry has so far created 5.3 million jobs, most of which are in the countryside.
In the first seven months of 2018, foreign arrivals achieved a 9.47% growth despite the closure of Boracay. Foreign visitors will likely surpass the 7.4 million target this year while domestic travelers are seen to break the one hundred million threshold.
By 2022, Tourism Secretary Berna Romulo-Puyat aims to attract 12 million foreign visitors into our shores. Targets have not been adjusted yet for domestic travelers but I suspect that it will be in the vicinity of 125 million. Collectively, the tourism industry aims to generate some $71.8 billion in revenues by the time President Duterte finishes his term. It will be large enough to help, in a substantial way, balance our budget and fill the deficit in our current account.
The Department of Tourism has charted a methodical master plan to attain its goals. This master plan is embodied in the National Tourism Development Plan for 2016 to 2022. I recently spoke to Secretary Berna and Usec. Bong Bengzon (on separate occasions) and both of them appraised me on the key points of the plan. This is what I came away with.
THE STRATEGIC DIRECTION
At the heart of the plan are four objectives — to foster growth and enhance the competitiveness of the industry, while ensuring sustainability and inclusiveness.
Sec. Berna is a fervent advocate of sustainable tourism. This is what sets her apart from the ministers that preceded her. Under her baton, we can expect no natural wonder nor heritage site to be environmentally compromised in the name of short-term gain. Four months into the job and she has already gone on an offensive to ensure that the Boracay catastrophe does not happen to other tourist sites. I know for a fact that she has since banned the use of fireworks in Boracay and ordered to regulate the number of visitors that inundate Oslob. The Secretary vows to strike a balance between maximizing revenues and social responsibility.
In as far as the pursuit of growth is concerned, the biggest challenge that faces the industry is the country’s underdeveloped transport infrastructure. To address this, the DoT now works in close collaboration with both the DoTr and DPWH. The three departments sit in the same Cabinet cluster for closer coordination.
The shortage of air traffic capacity is the biggest impediment to tourism growth. To give you an idea of how acute the shortage is, as of 2015, the total capacity of our international airports (NAIA, Clark, Cebu, Davao, Iloilo, Kalibo, Caticlan, etc.) stood at 42.8 million passengers. Air traffic reached 56.5 million that year. We were operating 32% above capacity. The situation is worse today what with air traffic well over 60 million.
Air traffic is seen to reach 89.5 million by 2022 on the back of increased foreign arrivals and domestic tourism. Hence, the need for a new national gateway in Bulacan as well as auxiliary airports in Panglao, Puerto Princesa, Bacolod, Davao, Iloilo and Lagundian cannot be over emphasized. The good news is that these airports are all scheduled for successive opening within the next three years, save for the Bulacan airport which is now being obstructed by the Department of Finance.
In terms of land connectivity, the DPWH must ramp up construction of roads within tourist clusters to facilitate seamless land transfers in and around them. For those unaware, tourist clusters are groupings of touristic sites within a certain locality (eg. the Clark, Subic, Tarlac and Pampanga corridor). Between 2018 to 2022, the plan calls for the DPWH to construct 6,480 kilometers of roads within 49 tourism clusters across the country.
In terms of maritime tourism, sadly, the Philippines has not been able to cash in on the lucrative cruise line market the way Singapore and Hong Kong have. This is due to the absence of a proper cruise line terminal. Government has no plans of building a state-owned marina but ICTSI has an unsolicited proposal to build one in front of its Solaire complex. It is still unclear if ICTSI’s proposal will merit DoTr and NEDA consideration.
Investments in airports and roads will amount to some $55 billion. This comprises 99.6% of the National Tourism Development Plan’s budget.

Absorption capacity is another issue. To efficiently service the increased number of tourists, the DoT will promote private sector investments in on-the-ground logistic facilities. This includes integrated resort estates, hotels, ferry vessels, tourist coaches, and the like. This will be undertaken hand in hand with TIEZA and TEZ.
The DoT has also earmarked a budget to improve heritage sites, recreational estates and national parks.
Advertising and promotions are a vital component to the DoT plan. I was pleased to hear that the “Its more Fun in the Philippines” campaign will continue to be used. As I write this, negotiations are under way with various advertising agencies including J. Walter Thompson, Evident Communications and BBDO Guerrero, all of whom are pitching to refresh the “Its more Fun” campaign. Apart from promoting the Philippines as a tourist destination, the DoT also plans a parallel digital campaign to promote new destinations such as La Union, Romblon and Siquijor, among others.
Ad spending will focus on our 12 major markets. They are: Korea, China, Japan, Canada, USA, Germany, the UK, France, Australia, New Zealand, Singapore, and Malaysia. Budget allocations are also earmarked for opportunity markets that include Spain, Italy, Israel, Turkey, Russia, India, Indonesia, Saudi Arabia, Indonesia, Thailand, and Cambodia. Altogether, the DoT has appropriated $172 million for promotions.
An important component to the plan is to enhance skills and elevate service standards among tourism practitioners, especially the front-liners. The DoT will spearhead training seminars among LGUs to develop a culture of professionalism and competence, as well as proficiency in English, Korean, Chinese, and Japanese.
RESPONSIBLE AND SUSTAINABLE TOURISM
As mentioned earlier, sustainable tourism is the cornerstone of Sec. Berna’s agenda.
Apart from ensuring that our touristic sites have preservation measures in place, the secretary plans to expand the number of cultural offerings to widen our menu of tourism products. This will lessen the wear and tear of existing tourist sites whilst making the financial benefits of tourism available to other communities.
Many countries have succeeded in their tourism programs using low-impact ecotourism as its principal product. Costa Rica, Peru, Namibia, and South Africa are among them. The DoT plans to include these offerings in the Philippine menu as revenues derived from it can go towards funding environmental protection programs.
Given the frequency of natural disasters in the country, Sec. Berna will also invest in risk reduction programs in and around tourist destinations. A budget of P89 million will go towards this purpose.
The Department of Tourism has all the components in place to achieve its goals. It has a sensible road map, a decent budget, a competent army of undersecretaries and assistant secretaries as well as a bright, hard working and honest Secretary to lead the charge. Above all, it has the full support of the Palace.
With this, there is no reason why the DoT should fail. The DoT is a bright spot of this administration and one we are all banking on.
 
Andrew J. Masigan is an economist