Along with remittances from Overseas Filipino Workers (OFWs), business process outsourcing, and the tourist industry, the Philippines’ external payments situation and general economic progress are significantly impacted by the sector. As one of the largest employers in the nation, it offers numerous opportunities for companies and people from all societal groups and fosters consistent structural foreign exchange (FX) inflows.
But since it relies so heavily on human interaction, the tourism industry has been severely impacted by the COVID-19 pandemic. Despite this, expectations for a revival in the travel industry are improving amid major vaccination campaigns and loosened travel restrictions
One of the biggest sources of foreign exchange inflows into the country’s balance of payments is travel services (BOP). It represents around 20% of all service exports, growing consistently at an average rate of 15% from 2010 to 2021 (before the pandemic).
The country’s recent increase in demand for tourism and travel-related services is partially attributable to the industry’s strong growth in the hotel and travel the growth of the casino and gaming industries, and the resort business.
With the nation regarded as one of Asia’s top cruise ship destinations, international cruise and nautical tourism have also been expanding. In a similar vein, the Philippines came in eighth place among the world’s top locations for medical tourism.
The proportion of the tourism industry to the national economy
One of the main drivers of the Philippine economy’s steady expansion before the epidemic was the tourism sector. The nation’s tourist direct gross value added (TDGVA)4 increased nearly five-fold in the last ten years, measured in current prices.
The Philippine tourism industry is severely affected by the COVID-19 pandemic, many nations have closed their borders and implemented strict quarantine regulations to stop the virus’ spread.
All tourist businesses experienced major income losses and a spike in unemployment as a result of the abrupt decline in demand for travel and tourism-related activities.
2020 was dubbed “the worst year on record” for travel due to a 74% decline in international visitor numbers worldwide. As a result, US$1.3 trillion in receipts, or $1 billion, were lost.