Results And Discussion
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CHAPTER V RESULTS AND DISCUSSION
Overview of Tourism in the Philippines Visitor Arrivals Visitor arrival is one of the determinants to assess the performance of the tourism industry since it affects the tourist receipts that can be accumulated by the country. In fact, the interrelationships between income or tourist receipts can be mathematically expressed as ΔY= ΔTr, such that the increments or change in income or tourist receipts(ΔY) is directly proportional to the change in tourist arrivals (ΔTr). Table 5.1 provides the data of the visitor arrival from 1998 to 2007 and illustrated in Figure 5.1.
Table 5.1 Visitor Arrivals to the Philippines from 1998- 2007 Year Volume % 1998 2149357 -3.3 1999 2170514 1 2000 1992169 7.6 2001 1796893 -1.3 2002 1932677 7.6 2003 1907226 -1.3 2004 2291352 20.1 2005 2623084 14.5 2006 2843345 8.4 2007 3091993 8.7 Source: DOT Resource Center
Based on Figure 5.1, visitor arrivals in the Philippines show an increasing trend from the period of 2003-2007. It was lowest in the 2001 which fall by 1.3 from 2000. As the trend predicts, it was in 2007 when the Philippines experienced the highest influx of visitors at the volume of 3,091,993 visitors. The visitor influx increased at an average rate of 8.7 from 2006 which is the highest growth rate experienced from 1998-2007.
Figure 5.1 Visitor Arrivals to the Philippines from 1998- 2007 3500000 3000000
Volume
2500000 2000000 1500000 1000000 500000 0 1998
1999
2000 2001
2002
Year
2003
2004
2005
2006 2007
Visitor Receipts Visitor receipt is one of the most important indicators of the performance of tourism industry since it reflects the income received by the country due to tourism activities. It is measured in term of US dollar. Table 5.2 provides the data on the tourist receipts in the Philippines from the year of 1998 to 2007.
Table 5.2 Visitor Receipts (in million USD) in the Philippines from 1998-2007
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Volume 2412.88 2553.66 2133.8 1722.7 1740.06 1522.68 1990.81 2236.05 3465 4885.37
Growth Rate (%) --5.8 -16.4 -19.3 1 -12.5 30.7 12.3 55 41
Source: DOT Resource Center
6000
Volume (US $)
5000 4000 3000 2000 1000 0 1998
1999 2000
2001 2002 2003
2004 2005
2006 2007
Ye a r
Figure 5.2 Visitor Receipts (in million USD) in the Philippines from 1998-2007 Consistent with the trend exhibited by the tourism arrivals data, the data on visitor receipts shows an increasing trend from 2003 to 2007. Generally from 1998 to 2003, there is a steady decline in visitor receipts. However, the country experienced a significant increased in 2004 with a growth rate of 30.7%. Highest increased in tourist receipts was experienced in 2006 followed by 2007 with a rate of 55% and 41%, respectively. Data shows that 2007 has the highest tourist receipts of USD 4885.37 million.
Length of Stay As expected, the longer the visitor preferred to stay in the country, the larger would be their expenditures. Thus, length of stay is also an important indicator. Table 5.3 Average Length of Stay of Visitors in the Philippines from 1999-2007 Year Length of Stay (nights) 1999 8.91 2000 8.79 2001 9.53 2002 9.12 2003 9.17 2004 8.06 2005 8.55 2006 12.06 2007 16.7 Source: DOT Resource Center
Figure 5.3 Average Length of Stay of Visitors in the Philippines (1999-2007) 18
Average Length of Stay (Nights)
16 14 12 10 8 6 4 2 0 1999
2000
2001
2002
2003
2004
2005
2006
2007
Ye a r
Figure 5.3 shows that the average length of stay is almost the same from 1999 to 2005 ranging from eight to nine days/nights. However, it increased dramatically from 2005 to 2007. In 2006, the average length of stay increased to 12 nights from an average of 8 nights in 2005. It was highest in 2007 with 16 nights which is almost double of the usual eight to nine nights in usual years.
Table 5.4 Comparison of the Length of Stay of Foreign Visitors and Overseas Filipinos (1999-2007) Source: DOT Resource Center
The comparison of the length of stay between foreign visitors and overseas Filipinos is
Foreign visitors Overseas Filipinos
1999 8.5
2000 8.3
2001 9.02
2002 8.78
2003 8.01
2004 7.95
2005 8.41
2006 10.98
2007 13.88
18.62
20.25
18.36
17.38
17.74
14.13
21.47
48.02
44.21
also worth-noting. Figure 5.4 provides the comparison in the length of stay of foreign visitors and overseas Filipinos. As the data shows, there is a wide gap in the length of stay of foreign visitors and overseas Filipinos. Overseas Filipinos prefer to stay longer in the country as compared to foreign visitors wherein their average length of stay is almost double that of the foreigners. The largest gap was experienced in 2006 and 2007 in which overseas Filipinos preferred to stay almost three times longer than the foreigners.
Figure 4.4 Comparison of the Length of Stay of Foreign Visitors and Overseas Filipinos
2000 2001
foreign visitors overseas filipinos
2002
Year
2003 2004 2005 2006 2007
0
10
20
30
40
50
Volume
from 1999-2007
60
Purpose of Visit Another important data that helps in assessing the structure of tourism in the country is through the purpose of visits. The length of stay of the visitors is said to be affected by the purpose of visits. Thus, the classification of tourist arrivals by purpose of visit is a useful indicator.
Holiday Visit friends/relatives Business Official mission Health/medical Convention Others not specified
1999 39.4 4 28.7 9 19.1 2 0.14 1.62 10.8 8
2000 40.0 8 28
2001 41.5
2002 43.7 6 27.1
2003 43.3 4 28.4 27.9 4 8 18.4 17.2 16.2 14.9 6 3 4 8 0.13 0.13 0.13 0.11 1.41 1.24 1.24 1.3 11.92 11.46 11.55 12.2 9
2004 47.5 8 32.2 3 8.77 0.1 0.86 10.4 6
2005 45.3 8 26.8 2 12.8 2 0.1 1.2 12.6 8
2006 46.9 9 26.6 6 13.1 8 0.11 1.2 11.7
2007 47.3 1 25.5 9 13.5 0.11 0.21 1.2 12.0 6
Table 5.5 Purpose of Visit in the Philippines from 1999-2007
Source: DOT Resource Center
Figure 5.5 shows the percent share of the purposes of tourists for visiting the country from 1999 to 2007. The primary purpose of their visits includes holiday or vacation, visits to friends or relatives, business purposes, official mission, convention, health and medical purposes. Out of the total visitors from 1999 to 2007, 43.93 percent came to the Philippines primarily for holiday or vacation. It is followed by visits to friends and relatives which has an average share of 27.96 percent. Another major reason is for business purposes which has an average share of 14.92. Other purposes cited include conventions and official missions. Meanwhile, the data for medical purposes was taken into account only in 2007.
Figure 5.5 Purpose of Visit in the Philippines from 1999-2007 50 45
holiday visit f riends/relatives business of f icial mission health/medical convention
40
Percentage
35 30 25
others not specif ied
20 15 10 5 0 1999
2000
2001
2002
2003
Year 50 45 holiday
40
visit f riends/relatives business of f icial mission health/medical convention others not specif ied
Percentage
35 30 25 20 15 10 5 0 2004
2005
2006
2007
Year
Tourist Expenditure The impact of tourism in a country depends on the amount of money spent by tourists during their stay in the country. These expenditures reflect the income of tourist-oriented firms and have repercussive effects in the economy. As such, it is an important component in estimating the impact of tourism. Table 5.6 provides the average daily expenditure in the Philippines from 1999 to 2007.
Table 5.6 Average Daily Expenditure per Visitor in the Philippines from 1999-2007 Year Average Daily Expenditure (USD) 1999 132.26 2000 117.49 2001 102.89 2002 100.92 2003 88.25 2004 96.03 2005 83.61 2006 83.91 2007 82.96 Source: DOT Resource Center
Figure 5.6 suggests that there is a negative trend in the daily expenditure of the visitors. There is a steady decline in the average expenditure from 1999-2007. It only slightly increased in 2003 but remain low in 2006 and 2007. From 1999-2007, the average daily expenditure is USD 98.71 for each visitor.
Figure 5.6 Average Daily Expenditure in the Philippines from 1999-2007
Average Daily Expenditure (US $)
140 120 100 80 60 40 20 0 1999
2000
2001
2002
2003
Year
2004
2005
2006
2007
It is also important to provide a comparison of the daily expenditure between foreigners and overseas Filipinos since it determines the source of the expenditure. Table 5.7 provides this comparison and shown in Figure 5.7. Table 5.7 Comparison of the Daily Expenditure of Foreign Visitors and Overseas Filipinos
Foreign Visitors
1999
2000
2003
2004
2005
2006
2007
47.04
120.37 105.17 102.89 89.45
96.46
84.06
84.7
83.89
50.24
73.64
39.76
55.78
50.36
Overseas 26.74 Filipinos
2001
2002
49.06
52.67
48.49
from 1999-2007 Source: DOT Resource Center
Comparison of the average daily expenditure of foreign visitors and overseas Filipinos suggests that foreign visitors spend more than the overseas Filipinos. In fact, there is a wide disparity in their daily expenditure such that the average expenditure of the overseas Filipinos for the period of 1999-2007 is USD 49.64 compared to USD 95.87 of the foreigners. Thus, foreigners spend almost twice as the overseas Filipinos per day.
Figure 5.7 Comparison of the Daily Expenditure of Foreign Visitors and Overseas Filipinos from 1999-2007
Average Daily Expenditure (US $)
140 120 100 80
Foreign Visitors Overseas Filipinos
60 40 20 0 1999
2000
2001
2002
2003
Year
2004
2005
2006
2007
Breakdown of Tourist Expenditure Table 5.8 shows the breakdown of the daily expenditures on major items. This provides a picture on which item the visitors spends most of their money, and explain which tourist-oriented firms receives most of the income from tourists. The breakdown of the visitor expenditure from 1999 to 2007 were classified into major items including accommodation, food and beverage, guided tour, entertainment and recreation, local transport shopping and miscellaneous.
Table 5.8 Breakdown of the Total Average Daily Expenditure on Major Items Major Items
2007
2006
2005
2004
2003
2002
2001
2000
1999
Accommodation
24.58 25.72
26.94
25.27
33.94
39.71
41.88
41.98
47.04
Food and beverages 23.87 20.39
18.39
19.54
16.82
17.23
19.44
21.24
26.74
Guided tour
0.13
0.36
0.42
0.07
0.11
0.1
0.27
0.27
0.63
Entertainment/ recreation
7.09
7.02
10.96
12.55
8.95
9.49
12.11
16.61
22.59
Local transport
3.83
4.71
6.73
5.68
6.12
6.04
6.72
3.99
6.51
Shopping
21.59 22.01
18.06
24.65
14.99
14.81
13.25
15.31
19.97
Visit to cultural/ 0.04 historical sites, museums, national parks, others
0.08
0.09
----
----
----
----
----
----
Miscellaneous
2.01
2.03
8.27
7.33
13.54
9.22
18.09
8.78
1.83
from 1999 to 2007(Percentage) Source: DOT Resource Center
Figure 5.8 illustrates the percent share of these major items from the total average daily expenditure of the visitors. On average, data suggest that the major expenditure incurred by the visitors is for accommodation with a percent share of 34.11 from 1999 to 2007.
Another major expenditure is allocated for the food and beverages which has an average share of 27.49 percent. Shopping is also another major expenditure with an average share of 18.29 percent. Other major expenditures are on entertainment/recreation, local transport, and guided tour.
Figure 5.8 Breakdown of the Total Average Daily Expenditure on Major Items from1999 to 2007 (Percentage)
Airlines and Scheduled Flights
The number of airlines and scheduled flights are supplementary data that are also worth-noting. The influx of visitors depends on the capacity of the airlines to cater the prospective tourists. Thus, the number of airlines, along with the scheduled flights, may affect the number of visitors in the country.
Table 5.9 shows the trend in the number of airlines and weekly scheduled flights from 1998 to 2007. It is illustrated in Figure 5.9.
Table 5.9 Trend of the Number of Airlines and Weekly Scheduled Flights 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total no. of airlines 35
30
32
31
29
29
25
26
27
27
Weekly flights
323
349
387
427
399
262
437
442
507
scheduled 357
from 1998 to 2007 Source: DOT Resource Center
Figure 5.9 Trend of the Number of Airlines and Weekly Scheduled Flights from 1998 to 2007 600
500
Volume
400
total no. of airlines w eekly scheduled flights
300
200
100
0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
As the figure shows, there is a steady trend in the total number of airlines with an average of 29 airlines from 1998 to 2007. Meanwhile, there is a fluctuation in the weekly scheduled flights. It is increasing until 2002 but suddenly drop in the weekly scheduled flights in 2004. However, in 2005, the weekly scheduled flights increased significantly and continue to increase in 2006 and 2007. With 357 flights, 2007 has the highest record in terms of the weekly scheduled flights from 1998 to 2007.
Total seat 1998 1999 2000 2001 2002 2003 2004 capacity 104647 95636 100710 100697 114519 109230 73922 per week
2005
2006
2007
123364 118230 126962
Table 5.10 Trend in the Total Seat Capacity per Week from 1998 to 2007 Source: DOT Resource Center
Furthermore, Table 5.10 presents the data on the total seat capacity per week from 1998 to 2007. This provides an overview on the performance of airlines that caters to the visitors bound to the Philippines. This data is also supplemental since this may affect the number of visitors in the country. Figure 5.10 Trend in the Total Seat Capacity per Week from 1998 to 2007 140000
Total Seat Capacity per Week
120000 100000 80000 60000 40000 20000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
As shown in Figure 5.10, the total seat capacity per week shows a fluctuating trend wherein a dramatic fall was experienced in 2004. This may be explained by the sudden dropped in weekly scheduled flights in 2004 as shown in Figure 5.9. Fortunately, it managed to increase significantly in the subsequent years. For the period of 1998-2007, the average total seat capacity per week is 106,780. As observed, the total seat capacity data is consistent with the trend of the weekly scheduled flights. Total Tourism Expenditure By using the determinants of tourism discussed in the previous part, the total tourism expenditure is computed using the following formula: Total Tourism Expenditure = No. of Visitors * Daily Expenditure/visitor *Length of Stay As shown, to get the total tourist expenditure, the number of visitor arrivals is multiplied by the daily expenditure of each visitor and by the average length of stay of the visitors.
Table 5.11 Computation of the Total Tourism Expenditure from 1999 to 2007 (in million USD) Total Daily exp. Length Expenditur Year Visitors per Visitors of Stay e 1999 2170514 132.26 8.91 2557.81 2000 1992169 117.49 8.79 2057.39 2001 1796893 102.89 9.53 1761.93 2002 1932677 100.92 9.12 1778.82 2003 1907226 88.25 9.17 1543.43 2004 2291352 96.03 8.06 1773.51 2005 2623084 83.61 8.55 1875.15 2006 2843345 83.91 12.06 2877.34 2007 3091993 82.96 16.7 4283.75
Figure 5.11 shows that the total tourist expenditure decline from 1999 to 2003 but it managed to increase at a low rate from 2003 to 2005. Fortunately, a large boost in total tourist expenditure happened in 2006 and 2007. Figure 5.11 Trend of the Total Tourism Expenditure from 1999 to 2007(in million USD)
Total Tourism Expenditure of Major Items of Tourism Using the computed total tourism expenditure, the direct impact of expenditure on the sectors providing the major tourism items was computed. The share on the major items of tourism on the total expenditure is obtained by multiplying the total expenditure by the percentage share of each item as shown in table 5.8. .
Table 5.12 Total Tourism Expenditure of Major Items of Tourism from 1999 to 2007 (in million USD)
As shown in figure 5.12, a large part was recorded as miscellaneous expenditure because it includes the shopping expenses of the tourist. It has a declining trend from 1999 until 2003 and significantly increased in 2005 to 2007. Accommodation also Year 1999 2000 2001 2002 2003 2004 2005 2006 2007
Accommodation
Food and beverages
1203.20 863.69 737.90 706.37 523.84 448.17 505.17 740.05 1052.94
683.96 436.99 342.52 306.49 259.60 346.54 344.84 586.69 1022.53
Guided tour
16.11 5.55 4.76 1.78 1.70 1.24 7.88 10.36 5.57
Entertainment
577.81 341.73 213.37 168.81 138.14 222.58 207.20 204.29 305.43
Local transport
166.51 82.09 118.40 107.44 94.46 100.74 126.20 135.52 164.07
Miscellaneous
2557.81 2057.39 1761.93 1778.82 1543.43 1773.51 1875.15 2877.34 4283.75
receives a large portion of the expenditure, followed by food and beverages sector, entertainment sector, transport sector and guided tour. Figure 5.12. Share of the Major Items on Total Tourism Expenditure from 1999 to 2007 (in million USD)
Identification of the Tourism sub-sector in Input-Output Table
Since tourism cannot be defined as a single-independent- industry, it requires products from different tourism-oriented firms. It does not have a homogenous product, thus, it is not simple to identify the tourism sub-sector. The input-output (IO) table does not readily offer information on what items should be included as tourism-subsector. The Philippine Tourism Satellite Accounts (PTSA) conducted by the NSCB provides the description of tourism-specific industries, products and services that relates to the tourism consumption expenditure (see Appendix A). This definition was employed to determine the tourism subsector in the input-output table. Based on the PTSA definition, the tourism consumption expenditure has seventeen (17) corresponding industries in the input-output table. This is indicated in Table 5.13. The tourism consumption expenditure is divided into major items namely accommodation, food and beverages, transportation, guided tour, entertainment and recreation, and miscellaneous tourism services.
Tourism-Related Sectors In the study, the 240-sector provided by the NSCB was aggregated into 50 sectors. The way of aggregation among industries was done to have a tourism sector. For this portion of the analysis, the tourism sector includes accommodation and restaurant facilities since a large portion of industry can attributed to these industries (see Appendix B for aggregation).
Table 5.13 Relationship between Tourism Consumption Expenditure and Input-Output industries
With the use of transaction table and technical coefficient matrix it is possible to provide perspective about the production and consumption behaviors among sectors in the economy. Tourism Consumption Expenditure Accomodation Food and Beverages Transportation
I-O Industries Hotels and motels Other short-stay accommodation Restaurants, bars, canteens and other eating and drinking places Rail Transport Services
IO sector No. 223 224 225 181
Road Transport Services -Busline operation -Public utility cars and Taxicab operation -Jeepney, tricycles (motorized and non-motorized) and other -road transport -Tourist Buses and cars including chartered and rent-a-car
182 183 184 185
Water Transport Services
Guided Tour Entertainment/ recreation Miscellaneous Tourism Services
-Sea and Coastal water transport -Inland water transport (including renting of ship with operator)
187 188
Air Transport Services
190
Tour and Travel Agencies Motion picture and video production and distribution Motion picture projection Radio and Television activities Other recreational and cultural services Retail trade
191 234 235 236 237 198
Tourism-related sectors, in this context, refer to other sectors that have a relationship with the tourism sector either as producer of the inputs needed by the sector or as purchaser of the products of tourism. Reading down a column of the direct coefficient table describes the proportion of purchases made from each of the sector, thus depicting the inter-industry purchases of inputs for production from other sectors. Technical coefficient represents the proportion of inputs required to produce one peso value of output. Table 5.14 depicts the top 20 sectors that have a highest proportion of inputs required by the tourism sector to produce additional one peso value of output. Table 5.14 Top 20 Sector- Producer of Tourism Inputs Technical Sector Code Coefficient Food manufactures 019 0.2490141 Meat 016 0.0970578 Beverage 020 0.0577412 Fishery 012 0.0341520 Commercial services 046 0.0214274 Dairy, milk and butter 017 0.0190287 Fuel, electricity and water 037 0.0175273 Trade 040 0.0163083 Vegetables 005 0.0159001 Chemical products 027 0.0125822 Fruits 006 0.0117062 Coconut 003 0.0100588 Financial Activities 041 0.0093897 Coconut and vegetable oil 018 0.0093353 Poultry 011 0.0089469 Textile 022 0.0083981 Paper, wood 024 0.0068468 Metal 031 0.0066559 Appliances/ Electrical 033 0.0045994 Petroleum and asphalt 029 0.0044120
As shown, most of the inputs required by the tourism sector can be categorized as food products. Specifically, twenty-five percent (25 %) of the inputs required come from other food manufactures, followed by the meat, beverage and fishery at 9%, 5% and 3% respectively. Moreover other food products such as dairy, vegetables, fruits, coconut and oils, and poultry products also comprise the major inputs purchase by the tourism sector. Other purchases of the sector are the commercial services (2.14%), fuel, electricity and water (1.75%), trade (1.63%), chemical products (1.25%) and financial services (0.9%). Aside from these, a certain proportion of inputs also comes from textile, paper and wood, metal, appliances and electrical, and, petroleum industry.
Table 5.15 Top 20 Sector- Purchaser of Tourism Output Technical Sector Code Coefficient Media 049 0.0467677 Other services 050 0.0467677 Financial Activities 041 0.0304784 Commercial services 046 0.0259091 State mgt & defense 045 0.0145206 Education 043 0.0112846 Health and Social Work 044 0.0111500 Textile 022 0.0039318 Chemical products 027 0.0035282 Real Estate 42 0.0023763 Construction 036 0.0019953 Beverage 020 0.0014465 Other food manufactures 019 0.0011835 Other manufactured goods 035 0.0008228 Science and Technology 048 0.0007132 Transport Services 038 0.0005897 Appliances/ Electrical 033 0.0005701 Hotel and tourism 047 0.0002803 Garments and Footwear 023 0.0001589 Tanneries & leather 026 0.0001203
Reading across the table rows provides an alternative interpretation wherein the sales of each sectors to other sectors is depicted. Similarly, using the technical coefficient, it is possible for the tourism sector to track the sectors to whom the sales are being made. Table 5.15 depicts the top 20 sectors that have the highest proportion of purchases from the tourism sector for an additional one peso value of output produced by the sector. Aside from being a purchaser of products from other sectors, tourism sectors also produces and sells products to other sectors. A certain proportion of the output is sold to media and other services at both 4.68%. It is followed by financial and commercial services at 3.04% and 2.59 % respectively. Other purchaser of tourism products includes state management and defense, education, health and social work, textile, chemical products, real estate and construction industries. Tourism also sold to sectors such as beverage, other food manufactures, other manufactured goods, science and technology, transport services, appliances and electrical, garments and footwear, tanneries and leather industries, and even to hotel and tourism industry itself. Sectoral Impact of the First-round Expenditures Allocation of Tourism Payments To provide a supplementary view on the sectoral impact of tourism, the input-output (I-O) table was further aggregated into 13-sector (see Appendix C for aggregation). Using the 2000 I-O table, the extent in which other industries are influenced directly by tourism sector can be determined. As shown in the technical coefficient table (see Appendix D for 13-sector coefficient matrix), the amount received from tourism was allocated to these different sectors in the economy. Then, these receiving industries pay, likewise to other industries, so that there is a continuous turnover of money.
Table 5.16 provides the sectoral impact of the first-round spending of tourism payments. It is known that tourism sector purchase goods and services from other sectors, thus, it also pays for other sectors. In this case, the distribution of tourism payments is shown in the transaction table. These payments are multiplied by the ratio of purchases of each sector to other sectors as shown in the technical coefficient tables. Appendix E provides an example on how an initial tourism payment affects the agricultural sector. This was also done to obtain the impact for other sectors (See Appendix F for the detailed impact for other sectors).
Table 5.16 Sectoral Impact of the First-round Spending of Tourism Payments (in Thousand Pesos) DESCRIPTION Intermediat Primary Total e Inputs Inputs impact per sector Agriculture 5,931.44 16,882.22 22,813.66 Mining 2,101.39 14,007.17 16,108.56 Food Manufacture 8,692.59 6,560.33 25,252.93 Manufacturing 4,688.44 9,160.09 13,848.53 Construction and 1,603.01 16,014.92 17,617.93 Real Estate Fuel, electricity and 1,512.65 13,666.11 15,178.76 water Transportation 4,445.06 14,433.58 18,878.64 Telecommunications 2,261.21 13,002.49 15,263.70 Trade 5,025.01 14,824.98 19,849.99 Financial Activities 1,300.42 14,026.27 15,326.69 Government 3,011.43 17,577.81 20,589.25 Services Commercial 2,752.80 12,542.85 15,295.65 services Hotel and Tourism 35,531.90 7,509.35 43,041.25
Figure 5.13 Sectoral Impact of the First-round Spending of Tourism Payments (in Thousand Pesos)
Although, the transaction matrix is for the year 2000, it is still useful to identify which sector is greatly affected by the initial tourism payment. As shown, a large share of tourism payments goes to the hotel and tourism sectors itself, followed by the food manufacture sector. Notably, for these two sectors, large proportion impact is attributed to the intermediate inputs. Agriculture is the third affected sector followed by government services which provides the highest proportion of primary inputs, trade and transportation sector. Other sectors, which also benefitted from the turn-over of tourism payments includes construction and real estate, finance, mining, telecommunication, commercial services, manufacturing, and, fuel, electricity and water.
Impact Results
The impact of tourism expenditure on output, income, indirect taxes, import and export of the country is computed by following the equations discussed in the previous chapter. For this analysis, it was focus only for the impact on the tourism subsector as provided by the PTSA. The 17 sector identified was further group into major items similar to the grouping provided by the DOT data namely (1) accommodation, (2) food and beverages, (3) transportation, (4) guided tour, (5) entertainment and recreation, (6) and miscellaneous tourism services (see Table 5.11 for the aggregation). The coefficients in the inverse matrix is multiplied by a certain ratio specific to output, income indirect taxes, import and export , and to the vector of tourist expenditure. It must be noted that inverse matrix captures not only the direct but also indirect sectoral output requirements which depicts the sum of the long chain of interaction in the production process.
Table 5.17 Product of Inverse Matrix Coefficient and Specific Coefficients for Income, Tax Import, Export for Each Group of Tourism Sector Items Income Tax Import Export Accommodation Food and beverages Transportation Guided Tour Entertainment/recreation Miscellaneous tourism services
0.7040 0.1436 13.4685 0.3079 3.1637 0.1902
0.0778 0.0308 0.1636 0.0423 1.5789 0.0117
0.0000 0.0247 0.6213 0.0011 0.0159 0.0074
0.0220 0.0414 0.1522 0.0031 0.0024 0.0241
Table 5.17 shows the results of multiplying the inverse matrix by specific ratios. For income, inverse matrix is multiplied by the ratio of wages or compensation to gross
output of each sector. In terms of tax, the net indirect tax coefficients are used. In addition, the sectoral imported input coefficients and the sectoral exported input coefficients are multiplied to the inverse matrix to achieve the ratio for import and export. The output effect, on the other hand, is reflected in the inverse matrix itself to be multiplied by the tourist expenditure. The ratio achieved in table 5.17 was further multiplied to the vector of tourist expenditure to achieve the complete picture of the impact of tourism on output, income, indirect taxes, import and export. It should be noted that the values obtained in this analysis is not only for direct impact but the total of direct and indirect impact of tourism. Total impact Table 5.18 Average Total Impact on Output, Income, Tax, Import and Export of Tourism Expenditure per Year from 2000-2007 (in million USD) IMPACT Average Impact Output 5325.92 Income 1485.07 Tax 288.24 Import 32.98 Export 90.03 The results suggest that tourist expenditure from 2000 to 2007 has a largest impact on output with an average impact of 5325.92 million USD per year. It is followed by income/compensation impact with an average of 1485.07 million USD per year and tax impact of 288.24 million USD. Meanwhile, export is slightly higher than import at 90.03 million compared to 32.98 million impacts on imports. Figure 5.14 Average Total Impact of Tourism Expenditure on Output, Income, Tax,
Import and Export from 2000-2007 (in million USD)
Table 5.18 provides the average total tourism impact for output, income, tax, import and export from 2000 to 2007. Table 5.19 and Figure 5.15 show the trend of the impact on these five areas.
Figure 5.15 Trend of the Impacts of Tourism Expenditure on Output, Income, Tax, Import and Export from 2000-2007
Output impact shows a decreasing trend from 2000 to 2003. It increased from 2003 to 2004 and boosted on 2005 to 2007. Income, on the other hand, has a more steady
movement wherein there is a low rate of decline from 2000 to 2003 and similarly low rate of increase from 2004 to 2007. Moreover, import and export depict an almost constant trend from 1999 to 2007. Impact on Output Table 5.25 Average Output Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Output Items Impact Accommodation 1471.62 Food and beverages 486.71 Transportation 42.16 Guided Tour 282.84 Entertainment/recreation 586.37 Miscellaneous tourism services 2456.23 Total output impact 5325.92
Figure 5.16 Trend of the Output Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
The impact
of
tourist expenditure in terms of output from 2000 to 2007 is shown in Table 5.20 and table 5.25. The total impact on tourism output is approximately 5325.92 million USD per year
from 2000 to 2007.As figure 5.16 suggests, the largest impact on output of approximately 2456.23 million USD on the average, is on the miscellaneous tourism services which includes shopping and retail trade and others. It also has significant impact on accommodation sector. Both impacts on these sectors follow the trend which decreases until 2003 and increases until 2007. Next affected sector is the entertainment and recreation with an average impact of 586.37. It is followed by food and beverages, guided tour and transportation sector which have relatively more stable trends.
Impact on Income Table 5.26 Average Income Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Income Items Impact Accommodation 490.86 food and beverages 65.44 transportation 65.39 Guided Tour 69.34 Entertainment/recreation 367.35 Miscellaneous tourism services 426.69 Total income impact 1485.07 Income impact, in this analysis, refers to the amount of income generated in terms of wages due to tourism demand. Based on the results provided in table 5.21 and table 5.26, three sector groups are the most affected namely the accommodation, entertainment and recreation, and miscellaneous tourism services with an average impact of 490.86, 367.35, and 426.69 million USD, respectively. For these three sectors, the income dramatically increased from 2005 to 2007. The other three sectors, on the other hand, remains more steady for the period of 2000 to
2007. The total income impact on this tourism sectors is 1485.07 million USD, on the average, from 2000 to 2007.
Figure 5.17 Trend of the Income Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Impact on Taxes Table 5.27 Average Tax Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Tax Items Impact accommodation 54.22 food and beverages 14.05 transportation 0.79 Guided Tour 9.51 Entertainment/recreation 183.34 Miscellaneous tourism services 26.32 Total tax impact 288.24 Figure 5.18 Trend of the Tax Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Tourism expenditure also contributed to the taxes of these sector groups that must be paid to the government. For the period of 2000 to 2007, it has an average total impact of 288.24million USD per year. As table 5.22 and 5.27, the largest tax-paying sector due to tourism is the entertainment and recreation which poses a wide gap compared to others with an average tax impact of 183.34 million USD. Next is accommodation sector with average impact of 54.22 million USD. It is followed by miscellaneous tourism services, food and beverages and guided. The least affected sector in terms of tax is the transportation sector which has an almost constant trend from 2000 to 2007.
Impact on Import Table 5.28 Average Import Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Items accommodation food and beverages transportation Guided Tour Entertainment/recreation Miscellaneous Total import impact
average import impact 0.01 11.27 3.02 0.26 1.85 16.57 32.98
Figure 5.19 Trend of the Import Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Tourism also contributed to the imports of tourism sectors in order to meet the demand of the tourists. Based on the results in table 5.23 and table 5.28, miscellaneous and food and beverages sector has the largest import due to tourism with an average of 16.57 and 11.27 million USD per year from 2000 to 2007. It is followed by the transportation sector which has a relatively fluctuating trend, with an average 3.02 million USD worth of imports. The two which has the least import due to tourism are the entertainment or recreation at 1.85 million USD and the guided tour at 0.26 million USD per year. For the period of
2000 to 2007, the average impact on import per year on these sectors totaled to 32.98 million USD.
Impact on Export Table 5.29 Average Export Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) average Items export impact accommodation 15.36 food and beverages 18.85 transportation 0.74 Guided Tour 0.70 Entertainment/recreation 0.27 Miscellaneous tourism services 54.11 Total export impact 90.03
Figure 5.20 Trend of the Export Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
On the average, the total export impact contributed by tourism is 90.03 million USD per year, as depicted in table 5.24 and table 5.29. Miscellaneous tourism services has the largest export impact and experienced a large increased from 2005 to 2007. Food and
beverages and accommodation sector also have a large export impact with an average of 18.85 and 15.36 million USD per year. Meanwhile, transportation, guided tour, and entertainment and recreation provide a small proportion of impact on export and almost constant trend from 2000 to 2007.
Overview of Tourism in the Philippines Visitor Arrivals Visitor arrival is one of the determinants to assess the performance of the tourism industry since it affects the tourist receipts that can be accumulated by the country. In fact, the interrelationships between income or tourist receipts can be mathematically expressed as ΔY= ΔTr, such that the increments or change in income or tourist receipts(ΔY) is directly proportional to the change in tourist arrivals (ΔTr). Table 5.1 provides the data of the visitor arrival from 1998 to 2007 and illustrated in Figure 5.1.
Table 5.1 Visitor Arrivals to the Philippines from 1998- 2007 Year Volume % 1998 2149357 -3.3 1999 2170514 1 2000 1992169 7.6 2001 1796893 -1.3 2002 1932677 7.6 2003 1907226 -1.3 2004 2291352 20.1 2005 2623084 14.5 2006 2843345 8.4 2007 3091993 8.7 Source: DOT Resource Center
Based on Figure 5.1, visitor arrivals in the Philippines show an increasing trend from the period of 2003-2007. It was lowest in the 2001 which fall by 1.3 from 2000. As the trend predicts, it was in 2007 when the Philippines experienced the highest influx of visitors at the volume of 3,091,993 visitors. The visitor influx increased at an average rate of 8.7 from 2006 which is the highest growth rate experienced from 1998-2007.
Figure 5.1 Visitor Arrivals to the Philippines from 1998- 2007 3500000 3000000
Volume
2500000 2000000 1500000 1000000 500000 0 1998
1999
2000 2001
2002
Year
2003
2004
2005
2006 2007
Visitor Receipts Visitor receipt is one of the most important indicators of the performance of tourism industry since it reflects the income received by the country due to tourism activities. It is measured in term of US dollar. Table 5.2 provides the data on the tourist receipts in the Philippines from the year of 1998 to 2007.
Table 5.2 Visitor Receipts (in million USD) in the Philippines from 1998-2007
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Volume 2412.88 2553.66 2133.8 1722.7 1740.06 1522.68 1990.81 2236.05 3465 4885.37
Growth Rate (%) --5.8 -16.4 -19.3 1 -12.5 30.7 12.3 55 41
Source: DOT Resource Center
6000
Volume (US $)
5000 4000 3000 2000 1000 0 1998
1999 2000
2001 2002 2003
2004 2005
2006 2007
Ye a r
Figure 5.2 Visitor Receipts (in million USD) in the Philippines from 1998-2007 Consistent with the trend exhibited by the tourism arrivals data, the data on visitor receipts shows an increasing trend from 2003 to 2007. Generally from 1998 to 2003, there is a steady decline in visitor receipts. However, the country experienced a significant increased in 2004 with a growth rate of 30.7%. Highest increased in tourist receipts was experienced in 2006 followed by 2007 with a rate of 55% and 41%, respectively. Data shows that 2007 has the highest tourist receipts of USD 4885.37 million.
Length of Stay As expected, the longer the visitor preferred to stay in the country, the larger would be their expenditures. Thus, length of stay is also an important indicator. Table 5.3 Average Length of Stay of Visitors in the Philippines from 1999-2007 Year Length of Stay (nights) 1999 8.91 2000 8.79 2001 9.53 2002 9.12 2003 9.17 2004 8.06 2005 8.55 2006 12.06 2007 16.7 Source: DOT Resource Center
Figure 5.3 Average Length of Stay of Visitors in the Philippines (1999-2007) 18
Average Length of Stay (Nights)
16 14 12 10 8 6 4 2 0 1999
2000
2001
2002
2003
2004
2005
2006
2007
Ye a r
Figure 5.3 shows that the average length of stay is almost the same from 1999 to 2005 ranging from eight to nine days/nights. However, it increased dramatically from 2005 to 2007. In 2006, the average length of stay increased to 12 nights from an average of 8 nights in 2005. It was highest in 2007 with 16 nights which is almost double of the usual eight to nine nights in usual years.
Table 5.4 Comparison of the Length of Stay of Foreign Visitors and Overseas Filipinos (1999-2007) Source: DOT Resource Center
The comparison of the length of stay between foreign visitors and overseas Filipinos is
Foreign visitors Overseas Filipinos
1999 8.5
2000 8.3
2001 9.02
2002 8.78
2003 8.01
2004 7.95
2005 8.41
2006 10.98
2007 13.88
18.62
20.25
18.36
17.38
17.74
14.13
21.47
48.02
44.21
also worth-noting. Figure 5.4 provides the comparison in the length of stay of foreign visitors and overseas Filipinos. As the data shows, there is a wide gap in the length of stay of foreign visitors and overseas Filipinos. Overseas Filipinos prefer to stay longer in the country as compared to foreign visitors wherein their average length of stay is almost double that of the foreigners. The largest gap was experienced in 2006 and 2007 in which overseas Filipinos preferred to stay almost three times longer than the foreigners.
Figure 4.4 Comparison of the Length of Stay of Foreign Visitors and Overseas Filipinos
2000 2001
foreign visitors overseas filipinos
2002
Year
2003 2004 2005 2006 2007
0
10
20
30
40
50
Volume
from 1999-2007
60
Purpose of Visit Another important data that helps in assessing the structure of tourism in the country is through the purpose of visits. The length of stay of the visitors is said to be affected by the purpose of visits. Thus, the classification of tourist arrivals by purpose of visit is a useful indicator.
Holiday Visit friends/relatives Business Official mission Health/medical Convention Others not specified
1999 39.4 4 28.7 9 19.1 2 0.14 1.62 10.8 8
2000 40.0 8 28
2001 41.5
2002 43.7 6 27.1
2003 43.3 4 28.4 27.9 4 8 18.4 17.2 16.2 14.9 6 3 4 8 0.13 0.13 0.13 0.11 1.41 1.24 1.24 1.3 11.92 11.46 11.55 12.2 9
2004 47.5 8 32.2 3 8.77 0.1 0.86 10.4 6
2005 45.3 8 26.8 2 12.8 2 0.1 1.2 12.6 8
2006 46.9 9 26.6 6 13.1 8 0.11 1.2 11.7
2007 47.3 1 25.5 9 13.5 0.11 0.21 1.2 12.0 6
Table 5.5 Purpose of Visit in the Philippines from 1999-2007
Source: DOT Resource Center
Figure 5.5 shows the percent share of the purposes of tourists for visiting the country from 1999 to 2007. The primary purpose of their visits includes holiday or vacation, visits to friends or relatives, business purposes, official mission, convention, health and medical purposes. Out of the total visitors from 1999 to 2007, 43.93 percent came to the Philippines primarily for holiday or vacation. It is followed by visits to friends and relatives which has an average share of 27.96 percent. Another major reason is for business purposes which has an average share of 14.92. Other purposes cited include conventions and official missions. Meanwhile, the data for medical purposes was taken into account only in 2007.
Figure 5.5 Purpose of Visit in the Philippines from 1999-2007 50 45
holiday visit f riends/relatives business of f icial mission health/medical convention
40
Percentage
35 30 25
others not specif ied
20 15 10 5 0 1999
2000
2001
2002
2003
Year 50 45 holiday
40
visit f riends/relatives business of f icial mission health/medical convention others not specif ied
Percentage
35 30 25 20 15 10 5 0 2004
2005
2006
2007
Year
Tourist Expenditure The impact of tourism in a country depends on the amount of money spent by tourists during their stay in the country. These expenditures reflect the income of tourist-oriented firms and have repercussive effects in the economy. As such, it is an important component in estimating the impact of tourism. Table 5.6 provides the average daily expenditure in the Philippines from 1999 to 2007.
Table 5.6 Average Daily Expenditure per Visitor in the Philippines from 1999-2007 Year Average Daily Expenditure (USD) 1999 132.26 2000 117.49 2001 102.89 2002 100.92 2003 88.25 2004 96.03 2005 83.61 2006 83.91 2007 82.96 Source: DOT Resource Center
Figure 5.6 suggests that there is a negative trend in the daily expenditure of the visitors. There is a steady decline in the average expenditure from 1999-2007. It only slightly increased in 2003 but remain low in 2006 and 2007. From 1999-2007, the average daily expenditure is USD 98.71 for each visitor.
Figure 5.6 Average Daily Expenditure in the Philippines from 1999-2007
Average Daily Expenditure (US $)
140 120 100 80 60 40 20 0 1999
2000
2001
2002
2003
Year
2004
2005
2006
2007
It is also important to provide a comparison of the daily expenditure between foreigners and overseas Filipinos since it determines the source of the expenditure. Table 5.7 provides this comparison and shown in Figure 5.7. Table 5.7 Comparison of the Daily Expenditure of Foreign Visitors and Overseas Filipinos
Foreign Visitors
1999
2000
2003
2004
2005
2006
2007
47.04
120.37 105.17 102.89 89.45
96.46
84.06
84.7
83.89
50.24
73.64
39.76
55.78
50.36
Overseas 26.74 Filipinos
2001
2002
49.06
52.67
48.49
from 1999-2007 Source: DOT Resource Center
Comparison of the average daily expenditure of foreign visitors and overseas Filipinos suggests that foreign visitors spend more than the overseas Filipinos. In fact, there is a wide disparity in their daily expenditure such that the average expenditure of the overseas Filipinos for the period of 1999-2007 is USD 49.64 compared to USD 95.87 of the foreigners. Thus, foreigners spend almost twice as the overseas Filipinos per day.
Figure 5.7 Comparison of the Daily Expenditure of Foreign Visitors and Overseas Filipinos from 1999-2007
Average Daily Expenditure (US $)
140 120 100 80
Foreign Visitors Overseas Filipinos
60 40 20 0 1999
2000
2001
2002
2003
Year
2004
2005
2006
2007
Breakdown of Tourist Expenditure Table 5.8 shows the breakdown of the daily expenditures on major items. This provides a picture on which item the visitors spends most of their money, and explain which tourist-oriented firms receives most of the income from tourists. The breakdown of the visitor expenditure from 1999 to 2007 were classified into major items including accommodation, food and beverage, guided tour, entertainment and recreation, local transport shopping and miscellaneous.
Table 5.8 Breakdown of the Total Average Daily Expenditure on Major Items Major Items
2007
2006
2005
2004
2003
2002
2001
2000
1999
Accommodation
24.58 25.72
26.94
25.27
33.94
39.71
41.88
41.98
47.04
Food and beverages 23.87 20.39
18.39
19.54
16.82
17.23
19.44
21.24
26.74
Guided tour
0.13
0.36
0.42
0.07
0.11
0.1
0.27
0.27
0.63
Entertainment/ recreation
7.09
7.02
10.96
12.55
8.95
9.49
12.11
16.61
22.59
Local transport
3.83
4.71
6.73
5.68
6.12
6.04
6.72
3.99
6.51
Shopping
21.59 22.01
18.06
24.65
14.99
14.81
13.25
15.31
19.97
Visit to cultural/ 0.04 historical sites, museums, national parks, others
0.08
0.09
----
----
----
----
----
----
Miscellaneous
2.01
2.03
8.27
7.33
13.54
9.22
18.09
8.78
1.83
from 1999 to 2007(Percentage) Source: DOT Resource Center
Figure 5.8 illustrates the percent share of these major items from the total average daily expenditure of the visitors. On average, data suggest that the major expenditure incurred by the visitors is for accommodation with a percent share of 34.11 from 1999 to 2007.
Another major expenditure is allocated for the food and beverages which has an average share of 27.49 percent. Shopping is also another major expenditure with an average share of 18.29 percent. Other major expenditures are on entertainment/recreation, local transport, and guided tour.
Figure 5.8 Breakdown of the Total Average Daily Expenditure on Major Items from1999 to 2007 (Percentage)
Airlines and Scheduled Flights
The number of airlines and scheduled flights are supplementary data that are also worth-noting. The influx of visitors depends on the capacity of the airlines to cater the prospective tourists. Thus, the number of airlines, along with the scheduled flights, may affect the number of visitors in the country.
Table 5.9 shows the trend in the number of airlines and weekly scheduled flights from 1998 to 2007. It is illustrated in Figure 5.9.
Table 5.9 Trend of the Number of Airlines and Weekly Scheduled Flights 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total no. of airlines 35
30
32
31
29
29
25
26
27
27
Weekly flights
323
349
387
427
399
262
437
442
507
scheduled 357
from 1998 to 2007 Source: DOT Resource Center
Figure 5.9 Trend of the Number of Airlines and Weekly Scheduled Flights from 1998 to 2007 600
500
Volume
400
total no. of airlines w eekly scheduled flights
300
200
100
0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
As the figure shows, there is a steady trend in the total number of airlines with an average of 29 airlines from 1998 to 2007. Meanwhile, there is a fluctuation in the weekly scheduled flights. It is increasing until 2002 but suddenly drop in the weekly scheduled flights in 2004. However, in 2005, the weekly scheduled flights increased significantly and continue to increase in 2006 and 2007. With 357 flights, 2007 has the highest record in terms of the weekly scheduled flights from 1998 to 2007.
Total seat 1998 1999 2000 2001 2002 2003 2004 capacity 104647 95636 100710 100697 114519 109230 73922 per week
2005
2006
2007
123364 118230 126962
Table 5.10 Trend in the Total Seat Capacity per Week from 1998 to 2007 Source: DOT Resource Center
Furthermore, Table 5.10 presents the data on the total seat capacity per week from 1998 to 2007. This provides an overview on the performance of airlines that caters to the visitors bound to the Philippines. This data is also supplemental since this may affect the number of visitors in the country. Figure 5.10 Trend in the Total Seat Capacity per Week from 1998 to 2007 140000
Total Seat Capacity per Week
120000 100000 80000 60000 40000 20000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
As shown in Figure 5.10, the total seat capacity per week shows a fluctuating trend wherein a dramatic fall was experienced in 2004. This may be explained by the sudden dropped in weekly scheduled flights in 2004 as shown in Figure 5.9. Fortunately, it managed to increase significantly in the subsequent years. For the period of 1998-2007, the average total seat capacity per week is 106,780. As observed, the total seat capacity data is consistent with the trend of the weekly scheduled flights. Total Tourism Expenditure By using the determinants of tourism discussed in the previous part, the total tourism expenditure is computed using the following formula: Total Tourism Expenditure = No. of Visitors * Daily Expenditure/visitor *Length of Stay As shown, to get the total tourist expenditure, the number of visitor arrivals is multiplied by the daily expenditure of each visitor and by the average length of stay of the visitors.
Table 5.11 Computation of the Total Tourism Expenditure from 1999 to 2007 (in million USD) Total Daily exp. Length Expenditur Year Visitors per Visitors of Stay e 1999 2170514 132.26 8.91 2557.81 2000 1992169 117.49 8.79 2057.39 2001 1796893 102.89 9.53 1761.93 2002 1932677 100.92 9.12 1778.82 2003 1907226 88.25 9.17 1543.43 2004 2291352 96.03 8.06 1773.51 2005 2623084 83.61 8.55 1875.15 2006 2843345 83.91 12.06 2877.34 2007 3091993 82.96 16.7 4283.75
Figure 5.11 shows that the total tourist expenditure decline from 1999 to 2003 but it managed to increase at a low rate from 2003 to 2005. Fortunately, a large boost in total tourist expenditure happened in 2006 and 2007. Figure 5.11 Trend of the Total Tourism Expenditure from 1999 to 2007(in million USD)
Total Tourism Expenditure of Major Items of Tourism Using the computed total tourism expenditure, the direct impact of expenditure on the sectors providing the major tourism items was computed. The share on the major items of tourism on the total expenditure is obtained by multiplying the total expenditure by the percentage share of each item as shown in table 5.8. .
Table 5.12 Total Tourism Expenditure of Major Items of Tourism from 1999 to 2007 (in million USD)
As shown in figure 5.12, a large part was recorded as miscellaneous expenditure because it includes the shopping expenses of the tourist. It has a declining trend from 1999 until 2003 and significantly increased in 2005 to 2007. Accommodation also Year 1999 2000 2001 2002 2003 2004 2005 2006 2007
Accommodation
Food and beverages
1203.20 863.69 737.90 706.37 523.84 448.17 505.17 740.05 1052.94
683.96 436.99 342.52 306.49 259.60 346.54 344.84 586.69 1022.53
Guided tour
16.11 5.55 4.76 1.78 1.70 1.24 7.88 10.36 5.57
Entertainment
577.81 341.73 213.37 168.81 138.14 222.58 207.20 204.29 305.43
Local transport
166.51 82.09 118.40 107.44 94.46 100.74 126.20 135.52 164.07
Miscellaneous
2557.81 2057.39 1761.93 1778.82 1543.43 1773.51 1875.15 2877.34 4283.75
receives a large portion of the expenditure, followed by food and beverages sector, entertainment sector, transport sector and guided tour. Figure 5.12. Share of the Major Items on Total Tourism Expenditure from 1999 to 2007 (in million USD)
Identification of the Tourism sub-sector in Input-Output Table
Since tourism cannot be defined as a single-independent- industry, it requires products from different tourism-oriented firms. It does not have a homogenous product, thus, it is not simple to identify the tourism sub-sector. The input-output (IO) table does not readily offer information on what items should be included as tourism-subsector. The Philippine Tourism Satellite Accounts (PTSA) conducted by the NSCB provides the description of tourism-specific industries, products and services that relates to the tourism consumption expenditure (see Appendix A). This definition was employed to determine the tourism subsector in the input-output table. Based on the PTSA definition, the tourism consumption expenditure has seventeen (17) corresponding industries in the input-output table. This is indicated in Table 5.13. The tourism consumption expenditure is divided into major items namely accommodation, food and beverages, transportation, guided tour, entertainment and recreation, and miscellaneous tourism services.
Tourism-Related Sectors In the study, the 240-sector provided by the NSCB was aggregated into 50 sectors. The way of aggregation among industries was done to have a tourism sector. For this portion of the analysis, the tourism sector includes accommodation and restaurant facilities since a large portion of industry can attributed to these industries (see Appendix B for aggregation).
Table 5.13 Relationship between Tourism Consumption Expenditure and Input-Output industries
With the use of transaction table and technical coefficient matrix it is possible to provide perspective about the production and consumption behaviors among sectors in the economy. Tourism Consumption Expenditure Accomodation Food and Beverages Transportation
I-O Industries Hotels and motels Other short-stay accommodation Restaurants, bars, canteens and other eating and drinking places Rail Transport Services
IO sector No. 223 224 225 181
Road Transport Services -Busline operation -Public utility cars and Taxicab operation -Jeepney, tricycles (motorized and non-motorized) and other -road transport -Tourist Buses and cars including chartered and rent-a-car
182 183 184 185
Water Transport Services
Guided Tour Entertainment/ recreation Miscellaneous Tourism Services
-Sea and Coastal water transport -Inland water transport (including renting of ship with operator)
187 188
Air Transport Services
190
Tour and Travel Agencies Motion picture and video production and distribution Motion picture projection Radio and Television activities Other recreational and cultural services Retail trade
191 234 235 236 237 198
Tourism-related sectors, in this context, refer to other sectors that have a relationship with the tourism sector either as producer of the inputs needed by the sector or as purchaser of the products of tourism. Reading down a column of the direct coefficient table describes the proportion of purchases made from each of the sector, thus depicting the inter-industry purchases of inputs for production from other sectors. Technical coefficient represents the proportion of inputs required to produce one peso value of output. Table 5.14 depicts the top 20 sectors that have a highest proportion of inputs required by the tourism sector to produce additional one peso value of output. Table 5.14 Top 20 Sector- Producer of Tourism Inputs Technical Sector Code Coefficient Food manufactures 019 0.2490141 Meat 016 0.0970578 Beverage 020 0.0577412 Fishery 012 0.0341520 Commercial services 046 0.0214274 Dairy, milk and butter 017 0.0190287 Fuel, electricity and water 037 0.0175273 Trade 040 0.0163083 Vegetables 005 0.0159001 Chemical products 027 0.0125822 Fruits 006 0.0117062 Coconut 003 0.0100588 Financial Activities 041 0.0093897 Coconut and vegetable oil 018 0.0093353 Poultry 011 0.0089469 Textile 022 0.0083981 Paper, wood 024 0.0068468 Metal 031 0.0066559 Appliances/ Electrical 033 0.0045994 Petroleum and asphalt 029 0.0044120
As shown, most of the inputs required by the tourism sector can be categorized as food products. Specifically, twenty-five percent (25 %) of the inputs required come from other food manufactures, followed by the meat, beverage and fishery at 9%, 5% and 3% respectively. Moreover other food products such as dairy, vegetables, fruits, coconut and oils, and poultry products also comprise the major inputs purchase by the tourism sector. Other purchases of the sector are the commercial services (2.14%), fuel, electricity and water (1.75%), trade (1.63%), chemical products (1.25%) and financial services (0.9%). Aside from these, a certain proportion of inputs also comes from textile, paper and wood, metal, appliances and electrical, and, petroleum industry.
Table 5.15 Top 20 Sector- Purchaser of Tourism Output Technical Sector Code Coefficient Media 049 0.0467677 Other services 050 0.0467677 Financial Activities 041 0.0304784 Commercial services 046 0.0259091 State mgt & defense 045 0.0145206 Education 043 0.0112846 Health and Social Work 044 0.0111500 Textile 022 0.0039318 Chemical products 027 0.0035282 Real Estate 42 0.0023763 Construction 036 0.0019953 Beverage 020 0.0014465 Other food manufactures 019 0.0011835 Other manufactured goods 035 0.0008228 Science and Technology 048 0.0007132 Transport Services 038 0.0005897 Appliances/ Electrical 033 0.0005701 Hotel and tourism 047 0.0002803 Garments and Footwear 023 0.0001589 Tanneries & leather 026 0.0001203
Reading across the table rows provides an alternative interpretation wherein the sales of each sectors to other sectors is depicted. Similarly, using the technical coefficient, it is possible for the tourism sector to track the sectors to whom the sales are being made. Table 5.15 depicts the top 20 sectors that have the highest proportion of purchases from the tourism sector for an additional one peso value of output produced by the sector. Aside from being a purchaser of products from other sectors, tourism sectors also produces and sells products to other sectors. A certain proportion of the output is sold to media and other services at both 4.68%. It is followed by financial and commercial services at 3.04% and 2.59 % respectively. Other purchaser of tourism products includes state management and defense, education, health and social work, textile, chemical products, real estate and construction industries. Tourism also sold to sectors such as beverage, other food manufactures, other manufactured goods, science and technology, transport services, appliances and electrical, garments and footwear, tanneries and leather industries, and even to hotel and tourism industry itself. Sectoral Impact of the First-round Expenditures Allocation of Tourism Payments To provide a supplementary view on the sectoral impact of tourism, the input-output (I-O) table was further aggregated into 13-sector (see Appendix C for aggregation). Using the 2000 I-O table, the extent in which other industries are influenced directly by tourism sector can be determined. As shown in the technical coefficient table (see Appendix D for 13-sector coefficient matrix), the amount received from tourism was allocated to these different sectors in the economy. Then, these receiving industries pay, likewise to other industries, so that there is a continuous turnover of money.
Table 5.16 provides the sectoral impact of the first-round spending of tourism payments. It is known that tourism sector purchase goods and services from other sectors, thus, it also pays for other sectors. In this case, the distribution of tourism payments is shown in the transaction table. These payments are multiplied by the ratio of purchases of each sector to other sectors as shown in the technical coefficient tables. Appendix E provides an example on how an initial tourism payment affects the agricultural sector. This was also done to obtain the impact for other sectors (See Appendix F for the detailed impact for other sectors).
Table 5.16 Sectoral Impact of the First-round Spending of Tourism Payments (in Thousand Pesos) DESCRIPTION Intermediat Primary Total e Inputs Inputs impact per sector Agriculture 5,931.44 16,882.22 22,813.66 Mining 2,101.39 14,007.17 16,108.56 Food Manufacture 8,692.59 6,560.33 25,252.93 Manufacturing 4,688.44 9,160.09 13,848.53 Construction and 1,603.01 16,014.92 17,617.93 Real Estate Fuel, electricity and 1,512.65 13,666.11 15,178.76 water Transportation 4,445.06 14,433.58 18,878.64 Telecommunications 2,261.21 13,002.49 15,263.70 Trade 5,025.01 14,824.98 19,849.99 Financial Activities 1,300.42 14,026.27 15,326.69 Government 3,011.43 17,577.81 20,589.25 Services Commercial 2,752.80 12,542.85 15,295.65 services Hotel and Tourism 35,531.90 7,509.35 43,041.25
Figure 5.13 Sectoral Impact of the First-round Spending of Tourism Payments (in Thousand Pesos)
Although, the transaction matrix is for the year 2000, it is still useful to identify which sector is greatly affected by the initial tourism payment. As shown, a large share of tourism payments goes to the hotel and tourism sectors itself, followed by the food manufacture sector. Notably, for these two sectors, large proportion impact is attributed to the intermediate inputs. Agriculture is the third affected sector followed by government services which provides the highest proportion of primary inputs, trade and transportation sector. Other sectors, which also benefitted from the turn-over of tourism payments includes construction and real estate, finance, mining, telecommunication, commercial services, manufacturing, and, fuel, electricity and water.
Impact Results
The impact of tourism expenditure on output, income, indirect taxes, import and export of the country is computed by following the equations discussed in the previous chapter. For this analysis, it was focus only for the impact on the tourism subsector as provided by the PTSA. The 17 sector identified was further group into major items similar to the grouping provided by the DOT data namely (1) accommodation, (2) food and beverages, (3) transportation, (4) guided tour, (5) entertainment and recreation, (6) and miscellaneous tourism services (see Table 5.11 for the aggregation). The coefficients in the inverse matrix is multiplied by a certain ratio specific to output, income indirect taxes, import and export , and to the vector of tourist expenditure. It must be noted that inverse matrix captures not only the direct but also indirect sectoral output requirements which depicts the sum of the long chain of interaction in the production process.
Table 5.17 Product of Inverse Matrix Coefficient and Specific Coefficients for Income, Tax Import, Export for Each Group of Tourism Sector Items Income Tax Import Export Accommodation Food and beverages Transportation Guided Tour Entertainment/recreation Miscellaneous tourism services
0.7040 0.1436 13.4685 0.3079 3.1637 0.1902
0.0778 0.0308 0.1636 0.0423 1.5789 0.0117
0.0000 0.0247 0.6213 0.0011 0.0159 0.0074
0.0220 0.0414 0.1522 0.0031 0.0024 0.0241
Table 5.17 shows the results of multiplying the inverse matrix by specific ratios. For income, inverse matrix is multiplied by the ratio of wages or compensation to gross
output of each sector. In terms of tax, the net indirect tax coefficients are used. In addition, the sectoral imported input coefficients and the sectoral exported input coefficients are multiplied to the inverse matrix to achieve the ratio for import and export. The output effect, on the other hand, is reflected in the inverse matrix itself to be multiplied by the tourist expenditure. The ratio achieved in table 5.17 was further multiplied to the vector of tourist expenditure to achieve the complete picture of the impact of tourism on output, income, indirect taxes, import and export. It should be noted that the values obtained in this analysis is not only for direct impact but the total of direct and indirect impact of tourism. Total impact Table 5.18 Average Total Impact on Output, Income, Tax, Import and Export of Tourism Expenditure per Year from 2000-2007 (in million USD) IMPACT Average Impact Output 5325.92 Income 1485.07 Tax 288.24 Import 32.98 Export 90.03 The results suggest that tourist expenditure from 2000 to 2007 has a largest impact on output with an average impact of 5325.92 million USD per year. It is followed by income/compensation impact with an average of 1485.07 million USD per year and tax impact of 288.24 million USD. Meanwhile, export is slightly higher than import at 90.03 million compared to 32.98 million impacts on imports. Figure 5.14 Average Total Impact of Tourism Expenditure on Output, Income, Tax,
Import and Export from 2000-2007 (in million USD)
Table 5.18 provides the average total tourism impact for output, income, tax, import and export from 2000 to 2007. Table 5.19 and Figure 5.15 show the trend of the impact on these five areas.
Figure 5.15 Trend of the Impacts of Tourism Expenditure on Output, Income, Tax, Import and Export from 2000-2007
Output impact shows a decreasing trend from 2000 to 2003. It increased from 2003 to 2004 and boosted on 2005 to 2007. Income, on the other hand, has a more steady
movement wherein there is a low rate of decline from 2000 to 2003 and similarly low rate of increase from 2004 to 2007. Moreover, import and export depict an almost constant trend from 1999 to 2007. Impact on Output Table 5.25 Average Output Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Output Items Impact Accommodation 1471.62 Food and beverages 486.71 Transportation 42.16 Guided Tour 282.84 Entertainment/recreation 586.37 Miscellaneous tourism services 2456.23 Total output impact 5325.92
Figure 5.16 Trend of the Output Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
The impact
of
tourist expenditure in terms of output from 2000 to 2007 is shown in Table 5.20 and table 5.25. The total impact on tourism output is approximately 5325.92 million USD per year
from 2000 to 2007.As figure 5.16 suggests, the largest impact on output of approximately 2456.23 million USD on the average, is on the miscellaneous tourism services which includes shopping and retail trade and others. It also has significant impact on accommodation sector. Both impacts on these sectors follow the trend which decreases until 2003 and increases until 2007. Next affected sector is the entertainment and recreation with an average impact of 586.37. It is followed by food and beverages, guided tour and transportation sector which have relatively more stable trends.
Impact on Income Table 5.26 Average Income Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Income Items Impact Accommodation 490.86 food and beverages 65.44 transportation 65.39 Guided Tour 69.34 Entertainment/recreation 367.35 Miscellaneous tourism services 426.69 Total income impact 1485.07 Income impact, in this analysis, refers to the amount of income generated in terms of wages due to tourism demand. Based on the results provided in table 5.21 and table 5.26, three sector groups are the most affected namely the accommodation, entertainment and recreation, and miscellaneous tourism services with an average impact of 490.86, 367.35, and 426.69 million USD, respectively. For these three sectors, the income dramatically increased from 2005 to 2007. The other three sectors, on the other hand, remains more steady for the period of 2000 to
2007. The total income impact on this tourism sectors is 1485.07 million USD, on the average, from 2000 to 2007.
Figure 5.17 Trend of the Income Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Impact on Taxes Table 5.27 Average Tax Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) Average Tax Items Impact accommodation 54.22 food and beverages 14.05 transportation 0.79 Guided Tour 9.51 Entertainment/recreation 183.34 Miscellaneous tourism services 26.32 Total tax impact 288.24 Figure 5.18 Trend of the Tax Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Tourism expenditure also contributed to the taxes of these sector groups that must be paid to the government. For the period of 2000 to 2007, it has an average total impact of 288.24million USD per year. As table 5.22 and 5.27, the largest tax-paying sector due to tourism is the entertainment and recreation which poses a wide gap compared to others with an average tax impact of 183.34 million USD. Next is accommodation sector with average impact of 54.22 million USD. It is followed by miscellaneous tourism services, food and beverages and guided. The least affected sector in terms of tax is the transportation sector which has an almost constant trend from 2000 to 2007.
Impact on Import Table 5.28 Average Import Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Items accommodation food and beverages transportation Guided Tour Entertainment/recreation Miscellaneous Total import impact
average import impact 0.01 11.27 3.02 0.26 1.85 16.57 32.98
Figure 5.19 Trend of the Import Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
Tourism also contributed to the imports of tourism sectors in order to meet the demand of the tourists. Based on the results in table 5.23 and table 5.28, miscellaneous and food and beverages sector has the largest import due to tourism with an average of 16.57 and 11.27 million USD per year from 2000 to 2007. It is followed by the transportation sector which has a relatively fluctuating trend, with an average 3.02 million USD worth of imports. The two which has the least import due to tourism are the entertainment or recreation at 1.85 million USD and the guided tour at 0.26 million USD per year. For the period of
2000 to 2007, the average impact on import per year on these sectors totaled to 32.98 million USD.
Impact on Export Table 5.29 Average Export Impact of Tourism Expenditure for Each Group of Tourism Sector from 2000 to 2007 (in million USD) average Items export impact accommodation 15.36 food and beverages 18.85 transportation 0.74 Guided Tour 0.70 Entertainment/recreation 0.27 Miscellaneous tourism services 54.11 Total export impact 90.03
Figure 5.20 Trend of the Export Impact in the Philippines for Each Group of Tourism Sector from 2000 to 2007 (in million USD)
On the average, the total export impact contributed by tourism is 90.03 million USD per year, as depicted in table 5.24 and table 5.29. Miscellaneous tourism services has the largest export impact and experienced a large increased from 2005 to 2007. Food and
beverages and accommodation sector also have a large export impact with an average of 18.85 and 15.36 million USD per year. Meanwhile, transportation, guided tour, and entertainment and recreation provide a small proportion of impact on export and almost constant trend from 2000 to 2007.
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