By Marissa Mae M. Ramos, Researcher
THE Philippine Statistics Authority (PSA) now estimates tourism’s contribution to the economy in 2018 at nearly an eighth of Gross Domestic Product (GDP), pointing to the magnitude of the expected setback this year with travel devastated by the pandemic.
The PSA’s revised Philippine Tourism Accounts released Thursday indicate that tourism’s direct gross value added (TDGVA), accounted for 12.3% of the gross domestic product (GDP) in 2018, bigger than the sector’s 11.7% share in 2017.
The new estimate for TDGVA’s share of GDP for 2018 was revised downward from the initial 12.7%.
The combined economic contribution of tourism activities in 2018 was P2.2 trillion at current prices, up 15.2%.
According to the PSA, the revisions were made after the rebasing of the Philippine National Accounts to the 2018 base year from 2000 previously. The rebasing was done earlier this year to make indicators more reflective of goods and services available in the market, as well as the current condition of the economy.
The share of TDGVA to GDP averaged 7.4% between 2000 and 2018, according to the PSA.
Food and beverage services accounted for 24.3% of the gross value added in 2018, followed by transport services (18.8%), and accommodation services for visitors (15.5%).
The PSA has yet to release 2019 figures.
Asian Institute of Management Adjunct Faculty and Dr. Andrew L. Tan Center for Tourism Associate Director John Paolo R. Rivera said tourism’s contribution to GDP last year is “expected to exceed” 2018 levels.
“This is on the basis of more intensive promotions of the Philippines as a tourism destination worth visiting given the refreshed ‘It’s More Fun in the Philippines’ campaign. This expected increase in growth for 2019 can be ascribed to the steady growth of domestic tourism expenditure on accommodations, food, and transportation. It is domestic tourism that mostly drives the tourism contribution to the economy,” he said in an e-mail.
Domestic tourism expenditures were estimated at P2.85 trillion in 2018, up 21%. This was equivalent to 21.5% of household spending that year.
Meanwhile, spending by non-resident tourists amounted to P445.58 billion in 2018, down 1.6%.
THE 2020 OUTLOOK
The economy cannot rely on tourism this year as the pandemic has restricted travel and postponed vacation plans.
“The situation is different for 2020. There will be a drastic decline due to the nature of the virus prompting border closures and stay-at-home measures. This certainly affected the tourism industry reversing most, if not all, of the gain in 2018 and 2019,” Mr. Rivera said.
Mr. Rivera added that travel and tourism will “slowly, but surely reboot” once the necessary safety measures are put in place and a vaccine is developed.
“Of course, given the safety concerns, domestic tourism will be the first to take off, most likely within a year after lifting/relaxing of stay-at-home protocols. The numerous surveys conducted by different organizations across the tourism industry would verify and shed more light on this,” he said.
“The Department of Tourism (DoT) is on the right track in prioritizing domestic tourism post-COVID-19. International tourism can wait,” he added.
Earlier this month, the DoT reported a sharp decline in international arrivals to 1.3 million in the four months to April from 3.4 million a year earlier. It also said it would prioritize the promotion of domestic land travel to offset this loss in foreign tourist arrivals.
The DoT also noted tourist businesses that it certifies may operate in areas now under general community quarantine. Hotels and hotel restaurants must also secure DoT clearance.
Mr. Rivera said employment in tourism was on track to rise before the pandemic.
“The value chain of the tourism industry has expanded so much, providing employment to those who are participating directly and indirectly in the industry. With COVID-19, the business model of tourism has to be redesigned so businesses can stay afloat to continue giving employment. If it takes time for tourism to adjust to the impact of COVID-19, then it will also take time for employment to recover,” he said.
Employment in tourism in 2018 was 5.37 million against 5.27 million in 2017. In 2000 the total was 2.64 million. The share of employment in the industry was 13.0% of the total in 2018, slipping from the record 13.1% in 2017.