By Ma. Stella F. Arnaldo | Special to the BusinessMirror
AS many look forward to the lifting of the Luzon-wide enhanced community quarantine (ECQ) by the end of April, as well as the suspension of various lockdowns in several parts of the country implemented to contain the spread of the coronavirus disease (Covid-19), tourism stakeholders are crossing their fingers they will be able to jumpstart their respective businesses and renew relationships with their clients.
Tourism Congress of the Philippines (TCP) President Jose C. Clemente III predicts “virtually no business for the remainder of the year, as projections when the Covid-19 situation will improve still cannot be determined.”
A study by the National Economic and Development Authority (Neda) on the impact of Covid-19 on the economy indicated the tourism sector would post a loss in gross value added of between P77.5 billion and P156 billion. This is equivalent to 0.40-0.8 percent of the gross domestic product, and will likely reduce the number of people employed in the sector to 56,600 from 90,400.
Much needs to be done to get back the record-breaking inbound arrivals the Philippines has recorded in the past. Under the National Tourism Development Plan for 2016-2022, the government had targeted foreign tourist arrivals to reach 9.2 million this year, from 8.26 million in 2019, while inbound tourist receipts were targeted to hit P661 billion this year, from the P482.15 billion earned in 2019.
DOT finalizing recovery program
The Department of Tourism (DOT) is expected to unveil a recovery plan for the industry soon; much of it will probably depend on the availability of funding for promotions and marketing overseas, as it tries to regain the interest of key markets. It will take a lot of persuading to get people to travel again, and believe that it’s more fun in the Philippines. It recently turned over some P10 billion to the Department of Finance for use in the government’s fight versus Covid-19, after the Bayanihan Law allowed the realignment of the national budget.
In a Viber message, DOT Spokesman and Undersecretary for Tourism Development Planning Benito C. Bengzon Jr. told the BusinessMirror, “Two weeks ago the Secretary signed the Department Order directing the development of a Tourism Response and Recovery Program (TRRP) and the creation of a Program Management Committee. The objective is to craft a set of measures that will aid in the recovery of the tourism industry.”
He added, “The TRRP shall be based on the National Disaster Risk Reduction and Management Council Planning Guide. The plan shall consider local and international best practices in tourism response and recovery. Consultations with stakeholders have been and will continue to be conducted as part of the needs assessment. The plan will encompass interventions in infrastructure, social services and livelihood, business continuity, strategic communications, and marketing, market and product development.”
According to DO No. 2020-02 signed by Tourism Secretary Bernadette Romulo Puyat on March 30, several committees were set up to identify projects, address bottlenecks and potential issues in certain aspects such as funding and coordination with other government agencies, with the private sector, through the TCP and its various member-groups and associations, taking an active role.
Displaced workers
In a news statement, the DOT said, it has already submitted to the Department of Labor and Employment (DoLE) the list of displaced workers from various tourism-related enterprises for cash assistance. According to Bengzon, “A total of 6,292 workers from 428 establishments have applied with DOLE for assistance. We don’t have info yet on how many actually were given financial help.”
He added, there may be more tourism establishments which applied for subsidy for their employees as they are supposed to coordinate with their respective DOLE regional offices. Under the government’s Covid-19 Adjustment Measures Program (CAMP), approved beneficiaries—of companies with flexible working hours or have temporarily closed—will receive a P5,000 subsidy.
The DOT reported that as of December 2019, it had accredited 8,990 tourism enterprises in the country, of which 7,806 were primary tourism enterprises (accommodation establishments, travel and tour agencies, tourist transport, tour guides, MICE operators and facilities).
The agency likewise lobbied the DOLE to include tourism frontliners as recipients of hazard pay for the duration of the ECQ, especially those who work in hotels that house health workers and repatriated overseas Filipino workers who are required to be quarantined before returning to their homes.
The DOT said it has been communicating with the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) to extend financial assistance to tourism enterprises. It said the DBP has identified the tourism industry as qualified under its program called Rehabilitation Support Program on Severe Events (Response), which aims to provide rehabilitation financing support through low-interest loans to businesses adversely affected by calamities. Land Bank of the Philippines will also assist tourism stakeholders under its program, Rehabilitation Support to Cushion Unfavorably Affected Enterprises by Covid-19 (I-Rescue) Lending Program.
The DOT said that, after discussions with the Social Security System (SSS), Pag-IBIG Fund and PhilHealth, the three agreed to extend their respective deadlines for remittance of members’ contributions. For PhilHealth, the deadline is two weeks after the lifting of the ECQ, without any penalty. For Pag-IBIG, the deadline is extended to April 30. For SSS members, deadline is now June 1, 2020.
Stakeholders’ recommendations
TCP has forwarded its recommendations to kickstart the recovery of the industry. In his letter to Romulo Puyat dated April 2, 2020, Clemente said, “The road ahead will be uncertain and difficult but we are confident that, in close partnership with the DOT, we will be able to gradually rise again and reassume our role as one of the prime drivers of the economy.”
Among the group’s recommendations for the short term, or until December 2020, is for the DOT to “allocate funds for the staging of mega familiarization trips from our major markets, continue funding marketing to the domestic market, [increase the] budget for media placements with international media networks, [and assist] the MICE sector to eventually bid for events to be held in the Philippines.”
The TCP also asked the DOT to intervene to halt the Department of Transportation’s modernization program for the land tourist transportation sector, as this entails a significant amount of capital, which the sector does not have right now.
The stakeholders group likewise urged the government to expedite “low- or interest-free loans” from government banks for accredited enterprises; suspend employer/employee contributions to the SSS and Pag-IBIG; and lower rent for offices and event spaces, among others.
For the medium term, or from January 2021 to December 2022, the TCP said it was vital to maintain as many airline routes as possible, and thus low-interest loans for airlines should also be extended to help them cope with their losses this year.
The government should also continue to promote “holiday economics,” temporarily suspend the collection of terminal fees and airline surcharges to help boost domestic travel.
Economic relief pressed
The TCP stressed that the government can also waive the corporate and individual income taxes of accredited tourism enterprises this year, as well as permits and licenses for 2020 and 2021.
It asked for tax credits and discounts “for companies that continue to stay in operation as the recovery continues.” The group also urged the continued availability of soft loans from government banks “so that capital expenditures are not postponed.”
Clemente said that, aside from these recommendations, tourism stakeholders are waiting for the mechanics of the Small Business Wage Subsidy Program recently announced by the Department of Finance (DOF). In a news statement, the DOF said the program covers businesses “not belonging to the top 2,745 large taxpayers of the BIR [Bureau of Internal Revenue]” and will make available a subsidy from P5,000 to P8,000 to qualified beneficiaries for a period of two months.
“The DOF is also studying the proposal to guarantee loans of small businesses affected by the Covid-19 pandemic. This will provide them easier access to bank financing,” according to President Duterte’s Report to Congress on Monday.
DOT chief Romulo Puyat stressed that the agency is doing everything within its mandate to help the stakeholders of the tourism industry in light of the Covid-19 health crisis.
“To cushion the impact, the DOT and its attached agencies, even before the lockdown, laid out the response and recovery plan during the initial stages of the Covid-19 outbreak in the country with the tourism sector taking a direct hit early on.” The DOT will extend a wide range of assistance not only to tour operators, but to the entire travel and hospitality sector, she said.
Aside from initiating sweeper flights to evacuate foreign tourists from key destinations to their home countries, it has also waived accreditation fees, participation fees for expos abroad, and looked for hotels to house returning OFWs.
The DOT said it has made the necessary representations with relevant government agencies on proposals from the tourism stakeholders regarding the deferment of corporate income-tax payments. It added, it will raise the other recommendations to Congress, as inputs for legislation granting a fiscal stimulus package to the tourism industry.
For TCP’s Clemente, while the industry is eager to welcome guests into the country again, “We still have a long way to go, and every bit of direly needed assistance from the government to help us get back on our feet will be greatly appreciated.”
Image credits: Nonie Reyes, Roy Domingo