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Tourism investment in 2019 at P569B

tourism investment in 2019 at p569b 816x445 - Tourism investment in 2019 at P569B

INVESTMENT in tourism totaled P569.09 billion in 2019, providing a pre-pandemic baseline for spending in an industry expected to undergo a long recovery in the next few years.

Tourism gross fixed capital formation (GFCF) rose 3.6% last year.

The indicator counts investment in assets such as cruise ships, hotels, and convention centers, as well as non-specific assets such as hotel laundry facilities and computer systems, the Philippine Statistics Authority (PSA) said Thursday.

Growth in 2019 marked a rebound from the 2018 decline of 34.5% in tourism GFCF.

In 2019, these investments made up 10.7% of all fixed-asset investment, down from 11% in 2018.

The bulk of the investment went to visitor accommodation and other non-residential buildings for tourism industries, which totaled P367.31 billion.

This was followed by machinery and equipment specialized for the production of “tourism- characteristic products” at P93.03 billion; passenger transport equipment P86.12 billion; and other tourism-specific assets P22.64 billion.

Meanwhile, government spending associated with the “support and control” of the tourism sector, including legislation and regulation on receiving and serving of visitors, development of tourism policies and visitor promotion, and provision of support to specific tourism-oriented investment, hit P94.1 billion in 2019, up 23.5%.

These expenditures account for 3.8% of the government’s total consumption expenditure, up from 3.5% in 2018.

Administrative services made up the highest share of government spending at P44.6 billion, followed by non-specialized retail trade services with P23.43 billion; services to the community P20.68 billion; sports and recreational sports services P4.53 billion; museum and preservation services P624 million; news agency services P120 million, and other education and training services P117 million.

The PSA released these two indicators for the first time as part of the prescribed metrics in the international guide of the United Nations Statistics Division in reporting Tourism Satellite Accounts. These data cover the periods 2012-2019.

“This is unsurprising because for the past few years, the Philippines has been very aggressive in strengthening the country’s tourism infrastructure, facilities, and services… to facilitate better travel experiences for all tourists,” said Associate Director at the Dr. Andrew L. Tan Center for Tourism at the Asian Institute of Management John Paolo R. Rivera in an e-mail.

“Since (the country) invested heavily in capital formation in the previous years, it is likely that they will not be used as intended, given the temporary halt of tourism operations due to the pandemic,” Mr. Rivera said, adding that future funding will likely be diverted to job preservation and short-term items like overhead.

Mr. Rivera also noted the government’s economic stimulus package of P27 billion reported in March, whose biggest allocation was given to the tourism sector at P14 billion.

“Once the stimulus package and other forms of government assistance are disbursed, government spending on tourism is still expected to grow. This stimulus package is a coordinated effort to increase government spending to stimulate the economy out of an impending/existing recession,” he said.

Previously, the PSA reported the tourism sector accounted for 12.7% of gross domestic product (GDP) in 2019 while also employing 5.7 million Filipinos.

A United Nations Conference on Trade and Development (UNCTAD) report released on July 1 projects the Philippine tourist trade to lose up to $22.64 billion, which is equivalent to 7% of GDP. It assumed the tourism standstill caused by the pandemic extends to 12 months. — Marissa Mae M. Ramos

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