Tourism share in GDP lowest in over 10 years

by Elijah Felice Rosales (The Philippine Star), 17 Jun 2021

MANILA, Philippines — Tourism’s contribution to gross domestic product (GDP) last year fell to below P1 trillion, its lowest in more than a decade, as expenditures on travel declined by double digits due to border restrictions put in place by the government.

In a report, the Philippine Statistics Authority (PSA) said gross value added (GVA) in tourism sank by more than 61 percent to P973.31 billion in 2020 from P2.51 trillion in 2019.

As such, tourism’s share plunged to 5.2 percent of GDP, from 12.8 percent, in a display of how grave the quarantine restrictions gripped the movement of people.

Tourism revenue generated last year was the lowest in 11 years since the P868.23 million recorded in 2009. GVA grew from P1.04 trillion in 2010 to an all-time high of P3.28 trillion in 2019.

Broken down, inbound tourism expenditure last year shrank by roughly 78 percent to P132.58 billion, from P600.07 billion. On the other hand, cash spent by domestic travelers also dropped by over 82 percent to P556.89 billion from P3.14 trillion.

Likewise, the PSA reported that outbound tourism expenditure fell by more than 73 percent to P91.77 billion from P340.15 billion.

Inbound tourism expenditure, or the spending made by foreign guests and Filipinos permanently living overseas, accounted for 2.9 percent of 2020’s total expenditures.

The travel sector also endured an over 18 percent decline in the number of its workers to 4.68 million, from 5.72 million, as tourism’s share in the country’s labor force slipped to 11.9 percent from 13.6 percent based on PSA data.

Since March last year, the government has enforced a blanket ban against foreign nationals on leisure trips to contain the spread of the virus as well as new variants. In the absence of foreigners, tourism enterprises rely on domestic visitors to generate revenue.

However, government agencies, headed by the Department of Tourism, continue to look for ways to safely reopen the borders for international travel. A small working group is assessing a proposal by the DOT to set up green lanes at airports to facilitate the entry of vaccinated passengers.

In coordination with the International Air Transport Association, the green lane seeks to remove the requirement of quarantine for vaccinated travelers.

Last year, arrivals in the country declined by over 82 percent to 1.48 million from 8.26 million in 2019.