WORKING capital. That is what the tourism industry needs the most to get back on its feet, according to 17 of the biggest stakeholder groups in the country.
In separate letters to House Speaker Alan Peter Cayetano and Senate President Vicente Sotto III dated August 9, 2020, the groups asked both chambers to review the provisions of House Bill 6953 (An Act Providing for Covid-19 Response and Recovery Interventions and Providing Mechanism to Accelerate the Recovery and Bolster the Resiliency of the Philippine Economy, Providing Funds therefor, and for other Purposes). This, they said, had “stripped” the Department of Tourism (DOT) the needed funding to “[support] tourism enterprises through low-interest loans, credit facilities, funding for marketing and product development, grants for capacity building for the industry in the new normal, funding for the use of information technology in tourism and establishing Covid-testing centers, and other similar programs”—the intent of said bill.
They pointed out, “In Section 4 (g) of Senate Bill 1564, the DOT had been allocated P10 billion to implement these programs. Instead, in Section 7 of HB 6953, the congressmen “allocated that crucial funding” to the Tourism Infrastructure and Enterprise Zone Authority (Tieza),” the infrastructure arm of the DOT. They said Tieza “is not mandated to provide this kind of broad-based assistance to the industry.” HB 6953 is the House of Representatives’ version of SB 1564, or Bayanihan 2 bill.
The groups said, “While we understand the infrastructure is important to tourism development, it is not the need of the stakeholders at this time. We have been consistent from the beginning of the pandemic, in consultations with the DOT and even with the House of Representatives, that financial assistance for our working capital is what will be needed as we navigate through this situation. The country cannot afford a collapse of the tourism industry.”
Both letters were signed by the presidents of the Tourism Congress of the Philippines, Philippine Tour Operators Association, the Philippine Travel Agencies Association, the Hotel Sales and Marketing Association, Philippine Association of Congress/Exhibition Organizers and Suppliers, Pacific Asia Travel Association-Philippines Chapter, Cebu Association of Tour Operators, Bohol Federation of Travel and Tour Operators, Eastern Visayas Tour Association, Cebu Tours and Travel Association, Davao Travel Agencies Association, Davao Association of Tour Operators, Philippine IATA Agents Travel Association, Bulacan Association of Travel Agencies, Quezon City Travel Agencies Association, Philippine Association of Amusement Parks and Attractions.
In a separate text message to the BusinessMirror, Philippine Hotel Owners Association President Arthur Lopez stressed, “What we need is working capital. It’s useless to give [that P10 billion funding] to Tieza. And P100 million to train tour guides??? What a waste.”
The House approved HB 6953 on third reading late Monday. Bicameral conference committee meetings start on Wednesday to reconcile the House and Senate versions of Bayanihan II.
Separately, the DOT also sent a position paper to the principal authors of both bills, i.e., Senators Imee Marcos, Sonny Angara, Ralph Recto, Sotto, Miguel Zubiri, Pia Cayetano, Cynthia Villar and Reps. LRay Villafuerte, Martin Romualdez, Mike Defensor, Jose Antonio Sy-Alvarado, and proposed the reconciliation of the conflicting provisions.
The DOT proposed that the reconciled version of the bills instead provide P9.5 billion to finance DOT programs to assist the critically impacted businesses in tourism through low-interest loans or issuances of loan guarantees through GFIs (government financial institutions), for maintenance and operating expenses; and credit facilities through GFIs for upgrading, rehabilitation, or modernization of current establishments or facilities to be compliant with the new health and safety standards. The balance of P500 million is for setting up Covid-19 testing centers in tourist destinations as identified by the DOT, to stimulate tourism and generate employment, in partnership with local government units and the DOH (Department of Health) and/or private entities.
The DOT said the Development Bank of the Philippines and the Land Bank of the Philippines can be the conduits for the low-interest credit facilities.
The tourism stakeholders reminded lawmakers of their industry’s huge contribution to the economy, having accounted for 12.7 percent of the gross domestic product and 13.5 percent of national employment in 2019.
The economy shrank by 16.5 percent in the second quarter of 2019 year-on-year, led by the contractions in industry (22.9 percent) and services (15.8 percent), as well as a 15.5-percent drop in consumer spending.