The Philippine tourism industry is readied to become the muscle behind the country’s job generation machine, employing 7.4 million people by 2016, up from the current 3.8 million working in the sector, through the support of a heavily tourism-focused central government geared towards beefing up the sector’s infrastructure.
“[President Benigno Aquino III] is the most tourism-oriented president in Philippine history,” Department of Tourism (DOT) Secretary Ramon Jimenez, Jr told Inside Investor.
“[He] has been very clear about it: This is not about counting South Koreans coming out of an airplane, it’s about creating jobs and businesses and income opportunities,” Secretary Jimenez added.
In the run up to 2016, the last year of President Aquino’s term in office, the tourism sector will be the beneficiary of billions of dollars from a state-led thrust that will lay down new entertainment complexes in Manila, the bedrock of emerging destinations in the Central Philippines and the roadwork to support the industry’s drive forward.
“By 2016, tourism will employ 7.4 million people, or about 18.8 per cent of the total workforce, contributing 8 per cent to 9 per cent to our GDP, a very significant goal post for the Philippines, making the tourism sector one of the biggest players in the service sectors, which will continue to be led by manufacturing,” Secretary Jimenez said.
As of the latest figures from 2011, the industry employed 3.8 million Filipinos, or 10.2 per cent of national employment, according to the data gathered by the National Statistical Coordination Board.
Yet in the Southeast Asian nation once derided as a “sick man,” its archipelagic nature and poor image with foreign investors have left hurdles in the way of the industry’s growth.
“Tourism will definitely play a large role [in job creation], mainly because we believe that our tourism industry has never maximised its potential due to infrastructure constraints,” Executive Director Peter Perfecto of the Makati Business Club said.
Meanwhile, road infrastructure in the Philippines scored a low 3.1 in the 2012-2013 Global Competitiveness Report of the World Economic Forum (WEF), with only Vietnam getting a poorer ranking in ASEAN.
To address the immature groundwork, the DOT has been allocated a separate infrastructure budget devoted to tourism.
“[The DOT has] a conversion budget for tourism with the Department of Publics Works and Highways, which is a segregated budget, meaning that funds allocated here are strictly used for tourism projects,” Secretary Jimenez pointed out.
“In 2013, a budget of $295 million has been amassed just for road infrastructure, and it is expected that $6.5 billion will be earmarked to support the tourism sector up through to 2016 to help ensure we fill room gaps, add airport connections and more.”
On top of that, emerging destinations, such as San Vicente in Palawan, will be the target of government funds as well, with massive infrastructure work planned over the next three years. Development of San Vicente, a 13- to 14-kilometer strip of white sand compared to Boracay’s four, is to be led by the private sector, which is currently scrambling over plots of land.
Tourism’s pocket “ace”
The Philippine tourism industry has become the recipient of greater attention thanks to an effective advertising campaign – “It’s more fun in the Philippines” – boosting arrival numbers like never before. Asian markets remain the fastest growing source of tourists, prompting analysts to purchase interests in the high potential of the sector’s gaming and entertainment segment.
According to DOT figures, arrivals to the Philippines from Malaysia grew 24 per cent in 2012, followed by the 10.46 per cent increase from Taiwan to 216,500 and 3.86 per cent from Japan to 412,400.
To meet the spike in demand from entertainment-seeking arrivals, four mixed entertainment complexes are slated to come up in the National Capital Region by end-2013, including the Solaire Resort & Casino, a high-end complex in Parañaque City.
“Ever since the [It’s more fun in the Philippines] campaign came out, people have been noticing the Philippines a lot more, and coincidentally the gaming industry has been opening better casinos,” Certified Securities Representative Liam Ong at Accord Capital told Inside Investor.
“Solaire is opening on March 16, and for now I think that’s the ace in the gaming industry.”
The state-led project will open with 500 rooms, taking on an additional 800 rooms by 2014, and growing to over 2,000 rooms by 2016.