Tourism’s share in GDP shows minimal improvement

MANILA, Philippines — The tourism industry barely improved its contribution to the national economy over the past year, according to latest data from the Philippine Statistics Authority.

Data showed that tourism’s share to gross domestic product (GDP) was at 5.2 percent in 2021, a minimal increase from the 5.1 percent during the height of the pandemic in 2020. In nominal terms, gross value added (GVA) reached P1 trillion, up 9.2 percent from the P917.2 billion in 2020.

This marks the return of the sector to the trillion peso-mark after briefly declining in 2020. GVA of tourism has been at the trillion-peso level since 2014. However, this is still far from the pre-pandemic level of P2.51 trillion or a 12.9 percent share to GDP.

Nonetheless, ING Bank senior economist Nicholas Mapa said the latest tourism figure is a good sign and can improve more as the economy reopens further.

“Although it looks small on a percentage basis, at least it shows an improvement from the year before,” he said.

However, the current recovery is being threatened by economic challenges other than COVID, such as rising inflation.

UK-based The Economist Intelligence Unit earlier said the persistent elevated price of commodities is seen to impede tourism recovery in the Philippines and the rest of Asia, even as economies reopen from the pandemic.

It added that inflation would be a major dampener for consumer sentiment as more expensive food and fuel are also expected to be passed on to consumers, thereby lowering demand.

Mapa maintained that reopening would be key as the country deals with inflation and what could be a fresh pickup in COVID cases.

“Higher inflation will likely sap some consumption momentum but so far spending has held up. How long inflation stays at these levels will be key,” he said.

Broken down, inbound tourism expenditure or those spent by foreigners and visiting Filipinos shrank for two straight years now at 79 percent to P27.62 billion from P132.58 billion.

On the other hand, domestic tourism expenditure or the cash spent by Filipino travelers went up 38.7 percent to reach P782.5 billion.

Further, the travel sector saw an almost five percent increase in the number of its workers to 4.9 million from 4.68 million. Despite the improvement, this is still quite far from the pre-COVID level of 5.72 million workers.

Unfortunately, tourism’s share in the country’s labor force slipped to 11.1 percent from 11.9 percent in 2020.

Farm tourism launched

In a bid to develop new and sustainable tourist attractions, the Department of Tourism yesterday launched a digital campaign to promote farm tourism.

In a statement, the DOT said it released the “Future Farms” campaign to promote farm tourism, which was described as one of the sector’s promising gems.

“Future Farms is the fruit of the government agency’s efforts to redevelop tourism products and seek out new types of destinations and activities for travelers in the new normal,” the DOT said.

The program would allow farm owners to “maximize the potential of their property, employ more people, and give tourists more destinations to discover and agri-tourism products to enjoy,” it added. – Ralph Edwin Villanueva