Boracay closure could lead to government loss of over P6.7 billion in taxes

In Photo: Manny Casidsid, president of Masboi Paraw Association, expresses the group’s concern if the announced total closure of Boracay Island will push through, at a news conference organized by the Boracay Tourism Stakeholders held on Thursday in Makati City.

THE government is seen losing over P6.7 billion in taxes from the closure of Boracay Island.

“This is just on the sales taxes alone,” said Jose Clemente III, president of the Tourism Congress of the Philippines (TCP), who estimated it based on the 12-percent value-added tax from the P56-billion tourism receipts earned by the economy from Boracay last year. “If you add the corporate income tax, it will be more,” he stressed at a joint news conference of tourism stakeholders on Thursday.

The Philippine Tour Operators Association, Boracay Foundation Inc., the Masboi Paraw Association, the Organization of Hotel Sales and Marketing Professionals, the Motorboat Association of Boracay and the Boracay Island Hopping Association also attended the news conference.

The stakeholders requested for the government to be “transparent” in its rehabilitation program for the island, and a proper dialogue with those who will be affected by the closure. “We need to be informed of what it [the government] plans to do,” Clemente stressed. They also proposed “60 days for stakeholders to undertake individual rectification, cleanup and rehabilitation of their respective properties,” and the closure of establishments that have violated environmental and zoning regulations.

As this developed, several stakeholders have already reported anxious tourists and a drop in their income since the island’s closure was raised by members of Task Force Boracay this month. In an interview with the BusinessMirror, Peter Tay, managing director of Boracay Adventures Travel and Tours, a tour operator on the island, said: “I’ve already received several inquiries from Chinese clients abroad, as well as clients in Malaysia and Singapore if they should push through with their trips to Boracay. Honestly, I didn’t know what to answer them because we don’t know what the government’s plans really are. Will they close Boracay? If so, when?”

He said if the island is closed by April 26, as the Department of Tourism (DOT) had proposed recently, “I stand to lose about P8 million”  from Chinese clients alone. Tay, a swimming and lifeguard instructor as well as PADI Master Instructor, said these clients are booked for 15 days in eight groups for his  rescue training course.

Tasked by the Chinese Em-bassy in Manila to liaison with Chinese tourists on Boracay, Tay also intimated that there would have been an “additional seven direct flights a day from China [to Kalibo],” on top of the existing seven daily flights. But with the impending closure, these plans have been put on hold. Of the 6.6 million visitor arrivals in 2018, China accounted for 14.63 percent or 968,447 tourists. “This year they are expecting 2 million Chinese tourists; but most of them want to go to Boracay!” he stressed.

Also at the news conference was Manny Casidsid, president of the Masboi Paraw Association, who said his members have already begun feeling the effects of the possible closure of Boracay.

“Usually po mga P300 to P600 a day ang kita namin kada araw. [We usually earn about P300 to P600 a day],” he told this paper. “Lahat po yan napupunta sa pagkain ng mga pamilya namin, sa pag-aral ng mga anak namin. Pag maisara ho kahit dalawang buwan, ano ho’ng gagawin namin? Lalo pa kung umabot ng isang taon. Huwag naman sana. [That all goes to feeding our families and sending our kids to school. If the island is closed for two months, what are we going to do? What more if the closure reaches a year. I hope not],” He said these days, his members who number about 700, now earn about half of their usual daily income.

Pressed what they would do if the government proceeds to close the island for a year, Casidsid said, “Balik nalang po sa dati naming gawi, magbungkal sa lupa, mangingisda [we’ll go back to what we used to do, farming and fishing].”

The paraw, a traditional Aklanon fishing boat with two outriggers and a sail, usually caters to tourists in Boracay who go on a sunset cruise or tours around the island where they snorkel and go to other beaches.

For his part, BFI Board Director Leonard Tirol pointed out that White Beach and Puka Beach have already been cleaned up and many resorts, which received notices of violations, have already complied with the orders of the government to make immediate remedies. He noted that the local government has already closed Boracay West Cove, an establishment that was found to be operating without the necessary government permits.

All these measures already being undertaken by the local government and resort owners, he said, show that the closure of the island is unnecessary. “[Environment] Secretary Cimatu has already seen the progress that’s been made on the island.”

Task Force Boracay, which Cimatu heads, has recommended the island be put under a state of calamity for six months, and closed for a maximum of one year. Tourism Secretary Wanda Corazon T. Teo, also a member of the task force, has said she is standing pat on her agency’s proposal for the closure to be only two months. (See, “Teo admits 2018 arrivals goal imperiled by Boracay closure,” in the BusinessMirror, March 22, 2018.)

Meanwhile, the regional office of the Department of Labor and Employment (DOLE) in Western Visayas said it will need additional funds if the number of displaced workers in the looming closure of Boracay breaches 17,000 mark.

DOLE-Region 6 Director Johnson G. Cañete expressed the concern after it was reported by some tourism stakeholders that the number of displaced workers in the island resort may reach 17,000 to 36,000 people.

He said currently they only confirmed 7,735 workers that will be affected by the proposed closure, in the local government unit of Malay, Aklan.

“We have a budget for displaced workers, but if 17,000 workers will be displaced, the Region 6 fund for the same may not be enough. Hopefully DOLE Central  can spare funds or the President…if the fund will be enough,” Cañete told the BusinessMirror in a text message.

The Boracay Industry Tripartite Council, headed by Cañete, said it is still hoping the government will still reconsider the closure.

“As of the moment the companies are still hopeful that the closure will not happen, they rather opt for selective closure and to declare Boracay in state of calamity so that they can use the environmental fee for rehabilitating the island,” Cañete said.

In a news report, the Borcay Foundation, a group comprised by business establishments in Boracay, estimated that 17,000 workers in the informal sector and 19,000 in the informal sector will be displaced because of the closure.

With Samuel P. Medenilla


Image credits: Alysa Salen

  1. 56 billion in taxes, 10 billion might have been enough to rehabilitate the island, but none of it was used for the benefit of boracay. Kalibo was renovated at the expense of Air Asia and Caticlan airport was expanded by SMC. Your greed will be your downfall.

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