By Rosalina Palanca-Tan and Len Patrick Dominic Garces
ON July 28 the Department of Tourism (DOT) confirmed that the Philippines will host the Miss Universe 2016, the 65th edition of the international beauty pageant, months after the crowning of Pia Alonzo Wurtzbach as Miss Universe 2015. The pageant, which will be held on January 30, 2017, marks the third time the country has hosted the pageant, the first two being held in 1974 and 1994. Supporting activities surrounding the main pageant are slated to take place in Cebu, with organizers aiming to promote the region as the emerging international hub in the Philippines outside of Metro Manila. As such, the entire event is expected to serve as a major springboard of Philippine tourism, given the substantial domestic and international tourist traffic that the event is projected to attract.
The tourism industry in the Philippines has expanded rapidly in recent years, due primarily to intensified marketing of the country’s rich geographical and biological diversity and its historical and cultural heritage. In 2000 to 2010, the tourism sector consistently made substantial contribution to the Philippine economy, averaging about 5.8 percent of GDP on an annual basis. Over the succeeding five years, tourism’s contribution to GDP further expanded year by year, from 6.8 percent in 2011, to 8.2 percent in 2015. Recent data from the DOT indicate that international tourist arrivals for the first half of 2016 totaled 2,978,438, a 13.7-percent climb from last year’s count of 2,619,625. The increase in estimated visitors’ receipts was even greater at 14.7 percent. During January to June, international tourists brought in P127.37 billion, compared to only P111.05 billion in the same period in 2015.
With its extensive forward and backward linkages—transport, hotel and restaurant, wholesale and retail trade, banking and finance, construction, food processing, agriculture and livestock, and manufacturing, etc.,—the tourism industry promises to have a high-income generating potential that can spur growth of local economies and the national economy as a whole. However, the sector is associated with negative externalities, such as environmental degradation and crimes. These are social costs that are shouldered by residents of the tourist destinations, and which must be addressed appropriately if the government is to continue its tourism-led development policy that is aimed at effectively and sustainably raising people’s welfare with income and quality of life components.
Using data from 16 regions in the country for the years 2009 to 2011, we looked into the crime externality of tourism in the Philippines. Several theories in economics and psychology suggest a positive link between tourism and crime. Tourists are “suitable crime targets” as they carry money and valuable objects, on a holiday mood and, hence, tend to be less prudent, and are perceived to be “safer” targets since they rarely report crime to the police. Some tourism activities may also arise from the demand for illegal goods and services, as in the case of sex tourism and tourism for substance abuse, a phenomenon that is also suspected to prevail in the country. Likewise, there are studies that suggest a negative relation between tourism and crime. There are two possible explanations for a negative link. First, visitors increase demand for goods and services, which can lead to increase in wages and employment for low-skilled workers. And second, a place that is frequented by tourists is likely to experience and undergo modernization and development programs, which can make the area less conducive to criminal activity. Thus, the effect of tourism on crime may be ambiguous, depending on the relative strengths of the positive and negative effects.
In our study, we differentiated between foreign and overseas Filipino tourists. We focused only on the three types of crimes that are most likely to involve tourists, i.e., crimes against persons, robbery and theft (taking personal property belonging to another without consent). Our analysis reveals that foreign tourist arrivals is positively associated with robbery and theft, while overseas Filipino tourist arrivals is negatively related
with robbery.
Our estimates indicate that an increase in foreign tourists of 1,000 translates into an increase in robbery cases of four per 10,000,000 population. For the National Capital Region (NCR), where population is roughly 12 million, 1,000 more foreign tourists translates into five more robbery cases. The magnitude of the effect of foreign tourism in the theft equation is about double that in the robbery equation; an increase in foreign tourists of 1,000 translates into an increase in the incidence of theft of eight per 10,000,000 population (or 10 additional theft cases in the case of NCR). Overseas Filipino arrivals, on the other hand, is significantly and negatively correlated with robbery. For every 1,000 increase in overseas Filipino tourists, incidence of robbery cases falls by three per 1,000,000 population. Again, taking NCR as an example, 1,000 additional overseas Filipino tourists is associated with 36 less robbery cases.
It, therefore, appears that robbers and thieves distinguish between overseas Filipinos and foreign travelers, with foreigners considered to be more “suitable” targets associated with a lower propensity to report a crime and more material possessions. These results are also reflective of overseas Filipino tourists’ knowledge and awareness of the conditions in different areas of the Philippines and their decisions to choose the relatively more developed and safer regions. Potential offenders, aware of these traits of overseas Filipino tourists, may be labeling these tourists as “less suitable targets” and are, thus, not “motivated” to pursue crimes in areas frequented by this type of tourists.
Our findings suggest that efforts in abating the tourism sector’s crime externality must take into consideration the demographics of tourist flows. As our study also provides strong statistical evidence for the negative relationship between crime and the police force efficiency, it is recommended that this potential deterrent factor be put to maximum use in areas where they are most essential, i.e., the areas frequented by foreign tourists. Thus, in light of the upcoming Miss Universe pageant and the consequent tourist influx, the best maneuver in preventing any untoward activities is a conspicuous and effective security force.
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Dr. Rosalina Palanca-Tan is professor of Economics at the Ateneo de Manila University, while Mr. Len Patrick Dominic Garces is instructor of Economics and Mathematics, also at the Ateneo de Manila.