Taking Philippine tourism to the next level

sonny M. angara

Better Days

ThEr E was a lot of brouhaha over the launch of the Department of Tourism’s new slogan “Love the Philippines,” which replaces the 12-year-old “It’s More Fun in the Philippines” campaign conceptualized during the administration of the late former President Benigno Aquino III. The controversy was rooted in the promotional campaign as conceptualized by the advertising agency tapped by the DOT with its use of stock photos from other countries as part of its presentation. While the entire incident was regrettable, what is important is that the DOT, under Tourism Secretary Christina Garcia Frasco, took immediate steps to address the issue, including the termination of the contract of the DOT with the ad agency. I personally do not see any problem with the new slogan. Not only does it present reasons for non-Filipinos to love the Philippines, but it also encourages Filipinos to show more love and appreciation for what we have and to take greater care of our resources, including our tourist attractions.

What should not be overlooked, as far as tourism is concerned, are the numerous more serious problems that have hounded the country for years that, if left unchecked, could derail the progress we are making as a premier tourist destination. One of the first things that immediately come to mind is the state of our airports. As the gateway to the Philippines, this is the first thing that tourists see when they land. It may be cliché to say that first impressions last, but this still holds true to many people, particularly those who only come for a brief visit. In general, our airports in Manila are quite congested. We have people who are sitting and even lying down on the floors of the airports while waiting for their flights. There are not enough restaurants and cafes to cater to travelers and on occasion, there is a problem with air-conditioning, so hungry passengers also have to deal with uncomfortable temperatures.

Then there are the power outages that hit our airports every so often.

Last June 9, 2023 the Ninoy Aquino International Airport Terminal 3 experienced a blackout for over an hour, which led to long lines of passengers at the immigration counters and directly affected several flights. It was the fourth incident since September of 2022 and includes the severe power outage that affected the central air traffic control system of the Ninoy Aquino International Airport on January 1, 2023 and caused the delay, cancellation or diversion of 282 flights. Around 56,000 passengers at the Manila airports were affected.

These incidents can easily derail the gains we have been making in terms of attracting tourists and the campaign to make the Philippines one of the major tourist destinations in the region and even the world. We are actually doing very well right now in attracting tourists to the country post-pandemic. The latest data from the DOT shows that a total of 2.7 million tourists arrived in the country for the first half of the year.

At this pace, the DOT and tourism stakeholders are confident that we can breach the government’s target of 4.8 million international tourist arrivals by the end of the year.

Tourism is a major contributor to the Philippine economy. Many local government units rely heavily on tourism, particularly on the employment front, and small businesses benefit also with the foot traffic. The Philippine Statistics Authority (PSA) registered a total of 5.35 million indi- viduals employed in the tourism industry in 2022. This was 9.3 percent higher than the 4.9 million recorded in 2021, but of course this was at the point when our economy was still in the process of opening up after the pandemic. Tourism represented 11.4 percent of total employment in the country. The contribution of tourism industries to the economy as measured by tourism direct gross value added was 6.2 percent of the total economic output of the country.

Clearly, we should prioritize the improvement of our infrastructure if we are to sustain the growth momentum of our tourism sector. I cannot overemphasize the importance of this because mobility and connectivity or the lack of it can make or break the ability of LGUs to attract tourists. I am optimistic that under the Marcos administration we will be able to see the development and completion of more infrastructure projects.

The 2023 General Appropriations Act contains a total of P17.7 billion for the Tourism Road Infrastructure Program (TRIP). Rest assured we will continue to support this program and other efforts to grow our tourism sector once we go over the 2024 national budget in the coming months.

Senator Sonny Angara has been in public service for 18 years—9 years as Representative of the Lone District of Aurora, and 9 as Senator. He has authored, co-authored, and sponsored more than 330 laws. He is currently serving his second term in the Senate.

Competitiveness: Much ado about nothing?

the greatest fall. All the subfactors under this factor have declined from the previous year, with public finance going from 51st to 55th, tax policy from 13th to 14th, institutional framework from 53rd to 56th, business legislation from 52nd to 57th, and societal framework from 50th to 53rd.

LAST Wednesday, July 5, the Asian Institute of Management rizalino S. Navarro Policy Center for Competitiveness, through its partnership with the International Institute for Management Development (IMD), and with support from Konrad-Adenauer-Stiftung Philippines, held a forum to discuss the Philippine results of the 2023 World Competitiveness Yearbook (WCY). This event took place at the Asian Institute of Management in Makati City.

First published in 1989, the IMD WCY has been a leading annual publication in ranking the competitiveness of countries based on official statistics and an executive opinion survey. It provides benchmarking and trends, as well as statistics and survey data based on extensive research. It analyzes and ranks countries according to how they manage their competencies to achieve longterm value creation.

So, how has the Philippines fared in the latest report? The country, sadly, has dropped four spots amid global uncertainties ranging from inflation to geopolitical issues. From

48th place last year, the Philippines ranks 52nd out of 64 countries this year. Also, compared to its peers in the Asia-Pacific region, the Philippines places 13th out of 14 countries.

A closer look at the report shows that the Philippines has registered declines in three out of the four main factors of competitiveness. The business efficiency factor has fallen from 39th place in 2022 to 40th place in 2023. The infrastructure factor has also dropped from 57th place in 2022 to 58th place in 2023.

Dropping four places from 48th in 2022 to 52nd in 2023, the government efficiency factor has exhibited

By contrast, the economic performance factor has improved by 13 places, from 53rd in 2022 to 40th in 2023. The subfactors under this factor that have seen improvements this year are domestic economy (from 48th place to 30th place), employment (from 19th place to 9th place), and prices (from 58th place to 39th place). Exhibiting declines are international trade (from 59th place to 60th place) and international investment (from 42nd place to 46th place).

To kick-start the discussion, the forum moderator, Dr. Jamil Paolo S. Francisco, posed a thought-provoking question: “Why does competitiveness matter, and how does it affect the average Filipino?”

A simple answer is that human beings are the most precious productive asset of an economy. After all, there would be no economy if there were no people. So, with their skills, knowledge, and talents, people create value by responding to each other’s needs. Mutually beneficial exchanges of goods, services, money, and income can make everyone better off, at least materially.

Nevertheless, as revealed in the latest IMD WCY results, the Philippines has done well in terms of real GDP growth (ranked 6th out 64 countries), but it has done poorly in terms of real GDP per capita (ranked 62nd out of 64 countries). This means that the benefits of economic growth are not trickling down to the average Filipino. Moreover, perennially low agricultural productivity has led to food insecurity, which, in turn, has contributed to hunger and malnutrition, especially among Filipino children who will eventually join the workforce. Indeed, hungry and malnourished children cannot perform well in school, so poor education outcomes foreshadow a decline in productivity that will hamper the long-term growth potential of the economy.

When people discuss competitiveness, though, is there really much ado about nothing? Filipinos seem to be okay with other countries surpassing them in terms of agricultural productivity, manufacturing, exports, education outcomes, and other areas. No one seems to care about being See “Eagle Watch,” A15

By Josh Boak | The Associated Press

WAShINGTON—The politics of inflation took a sharp turn Wednesday with a report showing consumer prices rose at the slowest pace since the early months of Joe Biden’s presidency.

Republicans have hammered Biden over the cost of groceries, gasoline, utilities and more, saying his $1.9 trillion pandemic relief package and push for electric vehicles were responsible for pushing inflation to a four-decade high. The GOP argument has resonated with voters, but the report on consumer prices for June suggests that inflation has eased dramatically without any of the job losses that some economists and Republican leaders said would occur.

Prices have risen just 3 percent from a year ago, compared with 9.1 percent in June 2022, and it’s the lowest reading since March 2021.

Unlike a year ago, inflation is mainly coming from a government measure of shelter based on what it would cost to rent a home. This makes the inflation argument somewhat nuanced as data from AP VoteCast, a sweeping survey of the national electorate, shows that the majority of voters last year—83 percent of Republicans and 73 percent of Democrats—own their homes and are largely insulated from higher rental prices.

Biden’s team was quick to seize on the inflation report as proof that its policies are delivering results. Defying expectations that Federal Reserve efforts to combat inflation would cause layoffs, the unemployment rate is healthy at 3.6 percent.

“Inflation is down by two-thirds over the past year,” said Jared Bernstein, chair of the White House Council of Economic Advisers. “It is particularly notable and highly consistent with Bidenomics to see this steep a decline in the rate of inflation while employment remains so uniquely strong.”

The president was quick to take credit, with the White House issuing a statement from him: “Good jobs and lower costs: That’s Bidenomics in action.”

Sen. Rick Scott, R-Fla., said Biden was “delusional” for saying his policies are helping US families.

“We’ve got to get this skyrocketing inflation and reckless spending under control and stop expecting our kids and grandkids to pay the bill,” Scott said. “That’s how we protect the American dream.”

The office of House Speaker Kevin McCarthy, R-California, issued a statement saying that “Bidenomics continues to cost all Americans” because of higher prices since he took office. It called on the president to “join House Republican efforts to increase American energy production to drive down costs for hardworking families across the country.”

Republicans are tweaking the data they use on inflation, putting a greater emphasis on total price increases over the entire Biden presidency instead of the annual and monthly figures that economists commonly use. The office of Senate Minority Leader Mitch McConnell, R-Ky., issued a breakdown of price

Eagle Watch . . .

continued from A14 overtaken and slipping in competitiveness rankings. Filipinos seem to be okay with merely surviving on a day-to-day basis—a low-level equilibrium trap, as it were.

Tragically, perhaps, it is this collective fatalistic mindset that will hinder Filipinos from “enjoying a stable and comfortable lifestyle, secure in the knowledge that they have enough for their daily needs and unexpected expenses, that they can plan and prepare for their own and their children’s future.” AmBisyon

Natin 2040, which is just 17 years increases over the entirety of Biden’s tenure to say that inflation is still a problem, citing a 39 percent increase in airfare, 18.8 percent increase in furniture prices and 52 percent increase in gas. from now, could well be an unattainable goal.

The administration wants voters to focus on the downward trend. One key statistic being measured by the White House is how many gallons of gas can be purchased on average for an hour of work. Republican lawmakers and candidates blasted Biden for record prices at the pump last year, a message that helped the GOP secure a House majority in 2022.

But by an internal White House analysis, this argument looks outdated: A single hour of work 12 months ago could only pay for 5.5 gallons of gas, a figure that has since risen to a bit more than 8 gallons. The increase appears to reflect a 27 percent drop in prices at the pump compared with a year ago, and also average wage gains of about 5 percent.

Biden has long denied that his $1.9 trillion in Covid-19 relief money helped to spark inflation. Broken supply chains and Russia’s invasion of Ukraine, he said, were the main culprits. This argument had limited appeal in last year’s elections. AP VoteCast found that 54 percent of voters blamed Biden’s politics for the higher inflation, while 46 percent said higher prices were due to factors outside his control.

Biden’s aides largely attribute the decline in inflation to giving the Fed the independence to raise interest rates as needed and the unsnarling of supply chains and other efforts, such as last year’s Inflation Reduction Act, that signaled the government would find ways to lower prices for prescription drugs and promote investments in clean energy and manufacturing.

The White House also feels reasonably positive about the path of inflation because housing is behind much of the current increase in prices. The government’s measure of shelter inflation depends on rents, and a forecast by White House economists suggests home rental prices will ease in the months to come.

As the 2024 presidential election approaches, Biden has gone on the offensive about the economy, giving speeches that try to draw a link between his actions and new construction projects and investments by companies. The economy has been a vulnerability for Biden, with just 34 percent approving of his leadership on the issue in a June AP-NORC poll.

Still, the change in the composition of what is driving inflation could be critical for how voters think about prices and politics.

In 2022, VoteCast found that nearly all voters said inflation was at least a minor factor in their votes. That included 47 percent who said groceries and food costs were the most important element for them; the majority of these voters backed Republicans.

If the Philippines should become a prosperous middle-class society, then, as Mr. Guillermo M. Luz sharply mentioned during the forum, the country needs to pursue an investment strategy to enhance labor productivity. It is really the government, with all its vision and plans, that should, with dogged determination, implement the strategies to address basic needs such as food, health, education, and shelter, which all redound to increased productivity.