DoT sees sustained growth in tourism sector

The Department of Tourism (DoT) said it expects to sustain industry growth following last year’s performance, citing the administration’s prioritization of tourism.

“The President’s prioritization of the industry enabled it to achieve record-breaking numbers and notable milestones in 2023,” said Tourism Chief Maria Esperanza Christina G. Frasco in a statement sent over the weekend.

“The DoT is optimistic about achieving even greater heights for Philippine tourism this year and in the coming years,” she added.

Ms. Frasco noted that 2023 became a banner year for the tourism sector, contributing 8.6% to the country’s gross domestic product, marking the highest growth rate in tourism direct gross value added in 24 years.

The sector also recorded a $2.45 billion net trade surplus last year, the first in 15 years, and P509 billion in investments, a 34% increase from the previous year.

The industry exceeded its 4.8 million international arrival target for last year by welcoming 5.45 million international visitors in 2023, a 75.3% increase from the previous year.

As of July 19, the country had already received 3.33 million international arrivals, representing 43% of the DoT’s 7.7 million target for 2024.

Meanwhile, January-to-June tourism earnings grew 32.8% to P282.17 billion from P212.47 billion in the same period last year.

Ms. Frasco said that with Mr. Marcos’ support, the DoT was able to craft and implement innovative programs that enhanced the quality of tourism services and expanded opportunities nationwide, resulting in longer stays and increased spending.

“Together with our partners across government agencies and the private sector, we have worked collaboratively toward the President’s aspiration for the Philippines to take its rightful position on the global tourism stage,” she added.

Source: Business World

Philippines’ move to upper middle-income level unlikely by 2025

The Philippines is unlikely to achieve the government’s goal of becoming an upper middle-income country by 2025, analysts said.

Analysts said Philippine gross domestic product (GDP) needs to expand by at least 6% annually in the near term to ensure a significant growth in Filipino incomes.

“The Philippines can still become an upper middle-income country if it grows by 6-6.5% every year for the next two to three years,” University of Asia and the Pacific Senior Economist Cid L. Terosa said.

The Marcos administration is aiming to achieve upper-middle income status for the country by 2025, but this may take longer as the World Bank raised the income classification levels again.

To become an upper middle-income country, the Philippines now needs to have an estimated gross national income (GNI) per capita of $4,516 to $14,005. This is higher than the previous range of $4,466 to $13,845.

According to the World Bank’s latest income classification data, the Philippines remained a lower middle-income country with a GNI per capita of $4,230 in 2023, higher than $3,950 in 2022.

The World Bank now classifies a country as lower middle-income if the GNI per capita level is at $1,146 to $4,515. This is higher than the $1,136 to $4,465 level set last year.

The World Bank computes a country’s GNI through the Atlas method, which serves as the basis of its income classifications — low, lower-middle, upper-middle and high. GNI refers to the total amount of money earned by its residents both inside and outside its borders.

“Upper middle-income status is just a number but there are strong reasons to doubt if the Philippines will achieve even that in 2025,” IBON Foundation Executive Director Jose Enrique A. Africa said citing the economy’s slowing growth over the past year.

“This continues a general slowdown that actually started in 2017 and was momentarily camouflaged by the pandemic lockdowns, contraction and rebound,” he said.

Last week, National Economic and Development Authority Secretary Arsenio M. Balisacan said the country can reach the upper middle-income status by late 2025 or early 2026.

The Philippines has been classified as a lower middle-income country since 1987.

“In a way, the administration has implicitly recognized that it won’t reach upper middle-income as scheduled when it lowered the growth target in April,” Filomeno S. Sta. Ana III, executive director and co-founder of Action for Economic Reforms, said.

Economic managers are targeting 6-7% GDP growth this year.

Earlier, the World Bank has said that it may take up to three years before the Philippines can reach the upper middle-income level.

“To do this, the government should raise productivity and increase the number and quality of jobs. In this regard, the country should prioritize infrastructure, institutional integrity and efficiency, education, and technology,” Mr. Terosa said.

Mr. Sta. Ana said the government should focus on addressing constraints to economic growth, such as elevated inflation, tight fiscal space, and high power rates.

“(The) administration’s time is eaten up by too much politicking, which has also distorted economic policy making,” he said.

For Mr. Africa, reaching upper middle-income status does not guarantee the country’s situation will improve.

“The Philippines cannot but eventually reach upper middle-income status — population growth alone will ensure that this will happen sooner or later. But this is just an aggregate number and won’t mean that chronic poverty for the poorest, bloating disguised joblessness or worsening inequity have been resolved. That aggregate number of GNI or GDP per capita will hide all sorts of development sins,” he said.

Other lower middle-income economies in Southeast Asia include Cambodia, Laos, Myanmar and Vietnam.

Indonesia, Malaysia and Thailand are classified as upper middle-income countries, while Singapore is considered a high-income economy.

Source: Manila Times

Travel, tourism seen exceeding 2019 GDP contribution this year

The Philippine travel and tourism industry is expected to surpass its pre-pandemic performance with an over P5.4 trillion contribution to the economy in 2024, the World Travel and Tourism Council (WTTC) said.

Citing its 2024 Economic Impact Research, WTTC said that 2024 will be a record-breaking year for the industry’s economic contribution, job generation, and visitor spending.

“According to the latest data, the sector’s contribution to the national economy is set to surpass P5.4 trillion this year, marking almost 25% year-on-year growth and soaring 7.1% above the previous 2019 peak,” the WTTC said.

It said travel and tourism currently represent 21.3% of gross domestic product (GDP).

“This data also signals a remarkable year for employment, growing beyond the 2019 peak to surpass 9.5 million jobs, or 20% of the national workforce,” it added.

The WTTC said international and domestic visitor spending is expected to beat records in 2024, exceeding 2019 levels by 5.7% and 1.8%, respectively.

“The remarkable progress of the Philippines’ travel and tourism sector highlights the government’s dedication, putting it at the forefront of its national agenda and continuing to improve infrastructure,” WTTC President and Chief Executive Officer Julia Simpson said.

“This unwavering commitment has not only driven economic growth but also enhanced the global standing of the Philippines as a top travel destination,” she added.

In the next decade, the WTTC forecasts Philippine travel and tourism to increase its annual GDP contribution to P9.5 trillion, or nearly 22% of the economy.

Meanwhile, employment in the industry is projected to exceed 11.9 million by 2034.

Travel and tourism accounted for P4.34 trillion in economic output last year, 14% below 2019 levels.

In 2023, the industry created more than 608,000 jobs, bringing the total to 9 million, also still below 2019 level.

“Domestic demand… was sluggish, while the late reopening of borders resulted in a slower than expected recovery last year,” the WTTC said.

Last year, international and domestic spending grew 104.2% and 83.4% to P630 billion and P2.9 trillion, respectively.

As a region, WTTC expects travel and tourism in Southeast Asia to grow by 20.6% to P21 trillion this year, accounting for 9.7% of the region’s economy, while jobs are expected to reach over 42.4 million.

Although domestic visitor spending is expected to surpass 2019 levels and grow 15.8% to P10.3 trillion in the region, international spending is seen to grow 33.2% to P8.6 trillion, still below 2019 levels.

“WTTC is forecasting that travel and tourism across the region will continue to grow over the next decade, with the GDP contribution set to reach almost P36 trillion,” WTTC said.

“Jobs are forecast to exceed 56.5 million, creating more than 14 million new jobs,” it added.

Source: Business World