Tourism ‘critical’ as 7-month receipts dip 71.5%

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LIKE a patient afflicted with severe Covid-19, the tourism industry is already in critical status.

This was the assertion of Tourism Secretary Bernadette Romulo Puyat, as she renewed her call to lawmakers to allocate funds for credit facilities and low-interest loans specific to tourism stakeholders.

“As we, the Department of Tourism (DOT), have written in our position paper on the Bayanihan 2 bill, our tourism stakeholders need working capital and not infrastructure,” she told the BusinessMirror in a Viber message on Thursday, as the Bicameral Conference Committee started deliberations on how to reconcile the House and Senate versions of said bill.

She stressed that the industry is already on the brink of collapse. “How will we bring tourists to our destinations using those new roads, if the tour operator or travel agent has already closed shop, kasi nalugi na [because of huge losses]?”

Citing figures from the Philippine Statistics Authority (PSA), she added, an estimated 4.8 million employed in the tourism-related industries have been affected by the implementation of various levels of community quarantines in the country.

“Even before the community quarantines, the DOT has been monitoring the condition of our tourism stakeholders. Like a Covid patient, they are already in critical condition. The cure they need, and which they have been begging for, is financial assistance. Being legislative ‘frontliners,’ our lawmakers can give that much-needed treatment to our stakeholders,” stressed Romulo Puyat.

71.5% decline

Latest DOT data showed visitor receipts in the first seven months of 2020 amounted to P81.05 billion, a 71.5-percent decrease from P284.82 billion in the same period last year. From January to July 2020, foreign visitor arrivals slumped by some 73 percent to 1.32 million, with zero arrivals recorded from April to July.

The Bayanihan 2 bill (House Bill 6953) stripped the industry of P10 billion in funds for working capital, and reallocated this instead to tourism infrastructure to be implemented by the Tourism Infrastructure and Enterprise Zone Authority (Tieza). Tieza is the infrastructure arm of the DOT.

HB 6953 also allocated P100 million to finance training and subsidies to tour guides.

Leaders of the House of Representatives insisted after Thursday’s bicameral conference committee meeting on the Bayanihan 2 bill that the P10-billion allocation for Tieza could generate P35 billion in economic activity for the tourism sector.

Jose C. Clemente III, president of the Tourism Congress of the Philippines, said they estimated the industry “needs P80 billion to survive until the end of the year. So in the grand scheme of things, that P10 billion we’re asking for is just a drop in the bucket.”

PSA recently reported the tourism industry accounted for a 12.7-percent share in last year’s economic output, as expressed in the gross domestic product. Inbound tourism expenditure posted the highest growth in 2019 at 23.2 percent, followed by domestic tourism expenditure at 10.4 percent, and outbound tourism expenditure at 2.6 percent.

In its position paper, the DOT proposed P9.5 billion to assist tourism businesses through low-interest loans and issuance of loan guarantees via government financial institutions (GFIs), and P500 million to establish Covid-19 testing centers in tourist destinations.

Of the P9.5-billion proposed allocation for working capital loans, the accommodation sector’s share will be P6.4 billion, which will benefit 1,266 enterprises; travel and tour agencies P207.95 million (416 companies), tourism transport P967.14 million (193 companies), other primary tourism enterprises P73.42 million (15 firms), and secondary enterprises P1.92 million (381 establishments). Some 2,300 tourism enterprises are expected to benefit from the working capital loans, and over 6,000 employees.

The DOT proposed that the low-interest loans or loan guarantees of GFIs will have a term of five years for maintenance and operating expenses. It added, credit facilities may also be made available through GFIs for the “upgrade, rehabilitation or modernization of current establishments of facilities to be compliant with the new health and safety standards.”

In an online forum on Wednesday, some 400 tourism stakeholders across the country jointly pleaded to the Bicam conference committee to reinstate the P10-billion allocation for working capital loans to their sector.  (See, “Tourism sector loses P190 billion in March-July,” in the BusinessMirror, August 13, 2020.)

The stakeholders underscored their urgent need for financial assistance to be able to survive, until they can recover lost business when community quarantines and international travel restrictions are finally lifted. Many of them said they continued to pay rent and salaries of employees despite being shuttered, and not earning any revenues.

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