TRAVEL taxes paid by citizens and visitors leaving the Philippines are projected to fall by 83 percent this year, owing to the continued international travel restrictions implemented to contain the spread of Covid-19.
This was the estimate of Tourism Infrastructure and Enterprise Zone Authority (Tieza) Chief Operating Officer Pocholo D. Paragas at the recent House Appropriations Committee’s hearing of the Department of Tourism’s (DOT) budget for 2021. “Based on our computation, we are actually projecting a drop of 83 percent for this year, which is totaling roughly about P1.2 billion. This is a difference from 2019 that the travel tax collection was P7.2 billion,” he said.
Of total travel taxes collected by government, Tieza, the infrastructure arm of the DOT, gets 50 percent—or P3.6 billion in last year’s case—70 percent of which goes to fund its operations. The remaining 30 percent or P1.98 billion was supposed to have funded Tieza’s projects.
Paragas said they project the collection of travel taxes would probably normalize by 2024. He made this disclosure as several lawmakers followed up on their respective infrastructure projects which had been promised to be funded out of Tieza’s budget.
“The moment travel tax collections increase again, we can start reviewing [your project] and possible implementation,” he said, responding to a question by Baguio City Rep. Mark Ocampo Go on a project in his city. Last November, the Tieza board approved P400 million to rehabilitate Burnham Park.
Tieza, however, has been heavily criticized by Finance Secretary Carlos G. Dominguez III, who said the agency had been slow in implementing projects. “They have been hoarding it,” Dominguez told the BusinessMirror last year, referencing some P14 billion in travel taxes collected by Tieza since 2009. The finance department eventually took over said Tieza funds for initial Covid-19 projects.
Data obtained by this paper showed, of the P2.95-billion share in travel taxes of Tieza in 2017, it was only able to disburse P568.97 million for infrastructure projects that year. In 2018 Tieza received P3.18 billion in travel taxes, of which, only P730 million was disbursed for infra projects. In 2019 Tieza’s share in travel taxes was P3.43 billion, but it only disbursed P845.13 million for infra projects. This reflects an average disbursal rate of 21.67 percent every year.
Tieza recently figured in the tiff between DOT and House leaders who were pushing to have P10 billion in Bayanihan 2 funds allocated to the agency for tourism infrastructure projects. This, as stakeholders had been arguing that they needed working capital more than infrastructure to help them survive the pandemic. (See, “Tourism sector loses P190 billion in March-July,” in the BusinessMirror, August 13, 2020.)
At the same recent budget hearing, DOT Undersecretary for Tourism Resource, Coordination and Revenue Generation Arturo Boncato Jr. said the P1 billion allocated for tourism infrastructure projects under the Bayanihan 2 Act will be “spread equally among regions,” or P70 million per region.
The P1 billion was allocated to the Department of Public Works and Highways (DPWH) and, in an agreement between its secretary Mark A. Villar and DOT chief Bernadette Romulo Puyat, “to hasten the use of said funds we will be continuing roads identified in 2016-2021” under the agencies’ Tourism Roads Infrastructure Program.
Boncato explained that the long-standing convergence program between the DOT and the DPWH identifies projects using a bottom-up proposal scheme, starting from the municipal level to the regional development council. “Not one project emerges without the approval of the RDC,” he underscored, before these are elevated to the technical working group of both government agencies, for final approval and implementation using DPWH funds.
Image credits: Nonie Reyes