This week, Colliers Research provides insights on the Philippine Statistics Authority reporting that the share of tourism to the country’s economy in 2021 reached 5.2%, up from the 5.1% in 2020, due to more relaxed travel restrictions and improved Covid-19 vaccination rates. Furthermore, the Philippine Economic Zone Authority (PEZA) recently signed a memorandum of agreement with the Department of Environment and Natural Resources (DENR) to develop more ecozones, which will be pilot-tested in the Caraga Region. According to PEZA, about 12 million hectares of government land need to be tapped for agro-industrial and aquamarine ecozones to ensure stable food supply.
Philippine tourism’s share to economy inches up in 2021
Data from the Philippine Statistics Authority reveal that the share of tourism to the country’s economy in 2021 reached 5.2%, up from the 5.1% in 2020, due to more relaxed travel restrictions and improved Covid-19 vaccination rates. Domestic tourism expenditures rose by 38.7% to PHP782.5 billion (USD14.2 billion) in 2021. However, this is still lower than the PHP3.1 trillion (USD56.3 billion) spent in 2019. Meanwhile, foreign expenditures dropped by 79% to PHP27.6 billion (USD500 million) in 2021 from PHP132.6 billion (USD2.4 billion) in 2020 due to travel restrictions. Total employment in the tourism industry was estimated at 4.9 million in 2021, higher than the 4.7 million employed in 2020. This accounted for about 11.1% of total employment in the country in 2021.
Colliers is optimistic that local and global air travel will recover soon. Data from the Department of Tourism (DOT) showed that foreign arrivals as of 5M 2022 reached 517,516, this is up from 46,322 arrivals a year ago. The International Air Transport Association (IATA) also projects that global passenger traffic may return to pre-Covid-19 levels by 2023, a year earlier from its previous forecast due to pent-up travel demand. In the hospitality segment, average hotel occupancies in Metro Manila reached 44% as of the end of 2021 from 24% in H1 2021 as mobility restrictions were eased and consumer spending started to pick up. Colliers recommends that hotel operators continue implementing strict health and safety protocols especially now that more tourists are raring to travel and spend. Training and refresher programs to existing staff must also be implemented to provide efficient and seamless hotel experience for guests post-Covid-19.
PEZA calls for agro-industrial, aquamarine ecozones on gov’t land
According to the Philippine Economic Zone Authority (PEZA) about 12 million hectares of government land need to be tapped for agro-industrial and aquamarine economic zones (ecozones), to ensure stable food supply. On May 31, the investment promotion agency signed a memorandum of understanding (MoU) with the Department of Environment and Natural Resources (DENR) to develop more ecozones. The program will be pilot-tested in the Caraga Region. PEZA and the DENR have identified seven sites in the region viable for ecozone development. PEZA noted that once proclaimed, these will be in addition to the 23 operating agro-industrial ecozones across the country.
Aside from addressing the food crisis, Colliers believes that the creation of more agro-industrial zones will help raise the supply of industrial space and facilities across the country. The development of more agro-industrial zones is in line with PEZA’s thrust of diversifying industrial investments into the country. Previously, the IPA identified Clark Green City and Taguig as ideal agro-industrial hubs. The creation of agro-industrial zones should also present an opportunity especially for developers planning to expand industrial footprint outside of traditional industrial hubs such as central and Southern Luzon. In our view, these agro-industrial initiatives should also raise the demand for warehouses and cold-storage facilities.