Some of the more outstanding accomplishments of the Arroyo Administration can be found in the Department of Tourism. This is the conclusion of an independent study conducted by the Center for Research and Communication and funded by the Asia Foundation and the Agency for International Development. Whereas the number of international arrivals never exceeded 2 million in the past twenty years, compared to 10 million or more in such neighboring countries as Thailand and Malaysia, the Philippines finally hit the 3 million mark in 2007, a growth of 72% from its 2001 level. The volume still managed to grow by 1.5% in 2008, despite the initial impact of the global financial crisis. A decline of 3% could not be avoided in 2009 which got the full impact of the Great Recession. The market is expected to recover in 2010 with an average growth of 2.5% from the 2009 value.

In 2007, before the full impact of the global economic crisis, the 3 million foreign tourists spent some US $2.96 billion. 72% higher than that spent in 2001, the first year of the Arroyo Administration. These receipts slowed down to $2.5 billion in 2008 and $2.4 billion in 2009 because of the economic slowdown in the countries of Northeast Asia — especially Japan and South Korea — which account for some 40% of total arrivals. Receipts from international tourists accounted for 23% of Philippine service exports services. It has become the fourth largest contributor of foreign exchange to the country, following electronics and semiconductors, overseas Filipinos workers remittances and business process outsourcing.

It must be pointed out, however, that domestic tourism remains the strong backbone of Philippine tourism.

In line with the consumption-led recovery during the crisis, it is Filipinos traveling to other places in the Archipelago outside their usual places of residences that result in high rates of occupancy of hotels and other tourism facilities. The Department of Tourism assigned a high priority to promoting domestic tourism, instead of only focusing on international visitors.

The Philippine Nautical Highway and other significant improvements of the road network, such as SLEX and NLEX, have contributed in no small amount to stimulating domestic tourism.

During the crisis year of 2009, a group of 12 destinations recorded a volume of 7.2 million arrivals, 101% more than the level of 2000. Of this 7.2 million, domestic travelers accounted for 79% in terms of share to the total arrivals and grew by 88.6% from its 2000 record. These 12 destinations have become more popular to foreign travelers as evidenced by the very high growth rate of 167.3 from 2000 to 2009. These 12 are Cebu, Camarines Sur, Baguio City, Davao City, Boracay, Cagayan de Oro, Bohol, Palawan, Camiguin, Cagayan Valley, Negros Oriental, and Ilocos Norte. The most spectacular growth in total arrivals was registered by Camarines Sur (CAMSUR) at almost 3,000% growth from 2000 to 2009. This performance can be attributed largely to the leadership of Governor Elrey Villafuerte, who should be a role model for other local officials who are promoting tourism in their respective cities or provinces.

To illustrate the impact on a community of an investment in a tourism facility, let us cite the case of The Imperial Palace in Mactan Island. Owned and operated by South Koreans, the project has 556 rooms and had an investment cost of 2.5 billion pesos. It employs some 714 workers who earn a total of 5.4 million pesos monthly. The hotel has an annual demand of about 5 to 7 million pesos for vegetables, fruits, pork, fish, seafood, eggs, chicken and other food items that Cebu and other nearby provinces can supply if they are able to attain the necessary quality standards. This case illustrates the great multiplier effect of tourism establishments on other sectors of the Philippine economy. At the macro level, tourism industry contributes to total employment by generating 3,255,000 million jobs (2007 figures). It generates business revenues from foreign visitors of almost six billion pesos, as calculated by the CRC economists from the input-output table of the Philippines. The leading sectors that are intertwined with tourism are hotels and other forms of accommodation, food and beverage, guide tours, entertainment, local transport, and shopping.

There is no question that the foundation has been laid for a rapid growth of both foreign and domestic tourism in the coming five to six years. It would be wise for the next Government to retain the existing leadership so that the momentum will not be lost. I have said in several occasions that the only Secretary from the Arroyo team that I would like to see in the new Cabinet is Secretary Ace Durano, who has been very effective in putting the Philippines in the tourism map of Southeast Asia. For comments, my e-mail address is bvillegas@uap.edu.ph.