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Statistically Speaking by Dr. Romulo A. Virola1
Looking Forward to a Greater Contribution of Tourism
to the Philippine Economy 2
Around the world, it has been put forward that Travel and Tourism is one of the “paradigm service industries” that will drive the service-led economies in the 21st century. Indeed, international trend shows this industry as catalyst to economic growth and development.
The Philippines, having an economy driven by the service sectors3, is expected to benefit from any positive progress in the tourism industry.
According to the definition adopted internationally4, “Tourism” comprises the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. Hence, statistics on tourism will be centered on the persons referred to in the definition and who are called by statisticians as “visitors”. 5
What do indicators tell about the tourism situation in the country?
In the first half of 20066, visitors from abroad reached more than 1.4 million individuals, 10.4 percent higher than the visitor arrivals in the same period last year. Most of our visitors are coming from USA, Korea and Japan, ranked accordingly. Considerable number of visitors also came from China, Taiwan, Australia, Hong Kong, Canada, Singapore, United Kingdom, Germany and Malaysia.
Through the years, the trend of visitor arrivals has generally moved well, particularly in the latest periods. The total number of visitors climbed up from 1995 to 1997 but their number gradually declined from then on until 2001, in which the least number of visitors was recorded. This might have been affected by the difficulties brought about by the Asian financial crisis in 1997 in addition to the critical political uncertainty and peace and order situation in the country at the onset of the third millennium. However, from 2001 until the present, statistics show the comeback of a significant number of visitors. In 2005, total visitor arrivals reached more than 2.6 million individuals, the highest number ever recorded.
But let us take a look how near or how far we are from our targets viz-a-viz the Medium-Term Philippine Development Plan (MTPDP) 2004 – 2010!
Based on the plan, it is expected that between 2000 and 2010, international arrivals shall grow to five million visitors. The 2.6 million visitors tally in 2005 is 14.5 percent higher compared to the total arrivals in 2004. Should we maintain that growth rate for the next five years, surely we will hit the target, with an estimated number of 5.1 million tourists in 2010. In relation to the supply of tourism services, it is noted that Hotels and restaurants grew by just 2.6 percent in 2005 from 7.0 percent in 2004 with its share to GDP remaining at less than two percent over the years. Certainly this cannot speak for our success in tapping tourism as catalyst in our economic development!
And who are our visitors?
In 2005, 56.3 percent of the visitors to the Philippines came from Asia. In particular, Korea and Japan topped the Asian visitors with shares of 18.7 and 15.8 percent, respectively. America (which is comprised of North, Central and South America) had 23.1 percent, mostly coming from North America. USA nationals, covering almost 90% of visitors from North America, contributed the most with a share of 20.15 percent of the total arrivals in the Philippines, making them consistently the most frequent visitor among all countries.
From 1996 to 2005, USA produced the highest number of visitors in the Philippines averaging around 20 % of the total. Japan ranked next with an average share of more than 17%.
Our Korean friends, who contributed only about 7% of the total visitors from 1996 to 2000, surged to an average of 16 % over-all in the period 2001 – 2005. They in fact surpassed Japan in 2005, with a share of 18.7 percent against 15.8 percent of the Japanese. Could this be the prize of being a Kapuso and Kapamilya to the Korean Stars? They not only came to visit our country but touched our hearts as well. Interestingly, Korean arrivals peaked at the moment in time when we lovingly dropped a lot of teardrops as we followed the journey of Jewel in the Palace Jang Geum in the Royal Kitchen, who with our unconditional and unwavering support, fought and survived all conspiracies as well as intrigues.
On the other hand China, which sent only around 15 thousand to 40 thousand visitors to the Philippines from 1996 to 2004, sent 107, 456 individuals in 2005 contributing 4.1 % of the total, significantly higher than their share in previous years. If only we could attract even one percent of the Chinese population to visit us!
Neighboring countries like Hong Kong and Taiwan, however, seemed to be contributing less visitors as years passed by. Taiwan, which shared more than 10% of the total in the mid 90’s, gradually slowed down. While their number at around 123,000 in 2005 is the highest for the past five years, it is much lower compared to the average of 195, 690 arrivals from 1996 until 1999. Historically, visitors from Hong Kong were more than 7% of the total visitors every year but in 2005, they only constituted around four percent. The 107,195 arrivals from Hong Kong in 2005 is also the lowest in the last 10 years.
European countries’ shares have also been declining from around 13 % percent in 1996 to only around nine percent from 2002 to 2005. However, data for 2004 and 2005 showed that Europeans are back with 210,295 and 243,928 visitors respectively. Wish we could invite again 281,704 or more, to match this average number of visitor arrivals from Europe in 1996 to 2000!
In terms of age, most visitors are 25 to 54 years old. On the average, for the period 1996-2005, 20.6 % are 25-34 years old, 24.6% are 35-44 years old while 21.2 percent are 45-54 years old. Meanwhile, 8.4 % are under 15 years old while 11.2 percent are 55-64 years old. Those over 65 years old constitute 6.4 percent of the total visitors. Will ecotourism and medical tourism change this profile?
And how do we compare with other ASEAN countries? According to the International Visitor Arrival statistics for 2004 and 2005 from the ASEAN Secretariat, the Philippines ranked 6th among ten member countries. We are behind Malaysia, Thailand, Singapore, Indonesia and Vietnam but we are still ahead of Cambodia, Lao PDR, Myanmar and Brunei Darussalam. Tough challenge for the DOT and our LGUs!
However, we are second favorite destination of the visitors from the United States of America. Statistics showed that of the total 2.3 million Americans who visited ASEAN in 2005, around 528 thousand came to the Philippines constituting 23 percent of the total, behind Thailand which captured 25 percent of the American visitors to the ASEAN. Is it possible for us to be the top destination of Uncle Sam in the next few years? Let us hope DOT has the right answer!
Why are visitors coming to our country?
Over the years, holiday is still the major purpose of visit in the Philippines. Around 45 % percent of the total visitors are coming because of that! Visiting friends and relatives comes next with 26.5 percent while 16.9 percent are coming for business. Other specific purposes identified were convention attendance, official travel and incentive travel.
However, more visitors from the USA are coming because they want to visit friends and relatives. In 2005, 57.3 percent came for that purpose while only around 23 percent came for holidays. Hurray to our balikbayans from the States who didn’t mind the distance and cost just to see their loved ones in their native Pinas! The pasalubong they would bring back home will naturally be appreciated by those they left behind to pursue their dreams!
How are the visitors coming? Over the years, as expected, air transportation remained the most common form of travel to the Philippines. Only around one percent entered the country through sea transportation.
Meanwhile, it may be worth noting that Tagaytay was the most visited place outside Metro Manila constituting 18.0 percent in 2004, 15.7 percent in 2003 and 14.8 percent share in 2002 surpassing erstwhile topnotcher Cebu with 15.1 percent in 2004, 12.8 percent in 2003 and 14.5 percent in 2002. In 2000 and 2001, Cebu was visited the most with 22.8 and 16.2 percent share, respectively, while Tagaytay ranked only second having 12.6 percent in 2000 and 10.4 percent in 2001. Other favorite places are Cavite, Boracay and Baguio.
These statistics on tourism are generated by the Philippine Statistical System through the Department of Tourism (DOT). The DOT summarizes these and other statistics in the Compendium of Philippine Tourism Statistics, the latest of which is for 2005. The compendium provides data and indicators needed in the analysis of the Philippine Tourism Industry. With this compendium, the DOT is able to integrate available tourism data into one publication and make tourism statistics available to a wider audience, thereby maximizing the benefit from investments on data collection and processing. The information in the said compendium is sourced from various statistical reporting systems such as the Annual Visitor Sample Survey (AVSS), Travel and Tourism Statistical System (TTSS), as well as administrative reports from tourism establishments and DOT offices.
But, Tourism analysis doesn’t end with these indicators. Globally, tourism offers excellent opportunities for economic growth brought about by the influx of foreign exchange earnings coming from tourist expenditures. Hence, the impact of Tourism Industry to the country’s economy must be measured. We want to know what portion of our Gross Domestic Product (GDP) is brought about by Tourism or how much it contributes to the GDP growth for a specific period of time. Up until recently, the economic reality of the tourism industry has not been fully measured statistically.
Due to the growing interest on Tourism Satellite Account (TSA) at the local and international front, the Philippine Statistical System (PSS) through the Inter-agency Committee on Tourism Statistics (IAC-TS)7 is reinvigorating efforts towards the measurement of the economic contribution of Tourism. The Philippines has been one of the pioneers in developing the TSA. In 1988, NSCB and DOT collaborated on a research study using the input-output table to estimate the contribution of tourism to GDP. In 1996, the same two agencies signed a memorandum of agreement (MOA) to support the development of the Philippine Tourism Satellite Accounts (PTSA) and in 1999, the initial compilation of the PTSA was pursued covering the years 1994 and 1998.
However, it is recognized that the preliminary results of the PTSA are very limited in scope and coverage due to data constraints, which hinder the analysis of the link between tourism consumption and the supply of goods and services. Moreover, the initial compilation methodology must be refined and further efforts must likewise be undertaken to gain a deeper conceptual understanding on the indirect effects of tourism activities.
Just recently, the NSCB PTSA team was reconstituted to pursue the development of the Philippine Tourism Satellite Accounts. The Team will try to harmonize Tourism Consumption and Supply, strengthen the analysis of employment and non-monetary indicators and ultimately, come up with more reliable estimates of the contribution of tourism to the Philippine Economy. By that time, hopefully, Dustin and Allison’s Love Story in Harvard will have an ending that says, “till death do us part”.
Reactions and views are welcome thru email to the author at fs.polistico@nscb.gov.ph
1 Secretary General of the National Statistical Coordination Board (NSCB) and Chairman of the Statistical Research and Training Center (SRTC). He holds a Ph. D. in Statistics from the University of Michigan in Ann Arbor, USA and has taught mathematics and statistics at the University of the Philippines. He is also a past president of the Philippine Statistical Association.
2 This article was written by Florande S. Polistico (fs.polistico@nscb.gov.ph) Statistical Coordination Officer I at the Economic Indicators and Satellite Accounts Division (EISAD) of the NSCB. Mr. Polistico is the Team leader of the Philippine Tourism Satellite Accounts (PTSA) Team of the NSCB and sector specialist in Ownership of Dwellings and Real Estate (ODRE) in the Philippine System of National Accounts.
3 With 37% average share in 1946 to early 1980’s, Services accounted for 47.9 % of the Philippine GDP in 2005
4 The definition was based on the Tourism Satellite Account: Recommended Methodological Framework (TSA: RMF) formulated by the Commission of the European Communities (EUROSTAT), Organization for Economic Cooperation and Development (OECD), World Tourism Organization (WTO) and United Nation Statistics Division (UNSD)
5 Dr. Romulo A. Virola of NSCB and Ms. Milagros Y. Say, Chief of Tourism Research and Statistics Division of DOT attended the International Workshop on Tourism Statistics last July 17 – 20, 2006 in Madrid, Spain. Dr. Virola presented a paper entitled “1993 Recommendations on Tourism Statistics and the Philippine Tourism Satellite Accounts” and chaired one session during the workshop while Ms. Say presented “Concepts and Forms of Tourism: Philippine Experience”.
6 Data were sourced from the Department of Tourism; Other indicators were compiled in the Philippine Statistical Yearbook (PSY) and Monthly Economic Indicators (EI) of NSCB.
7 Previously called Inter-agency Committee on the Development of a Satellite Account on Tourism (IAC-DSAT) thru NSCB Memorandum Order No.3, Series of 1997. It later became the Inter-Agency Committee on Tourism Statistics (IAC-TS) thru NSCB Memorandum Order No. 011, series of 2003. The committee is chaired by NSCB and co-chaired by DOT. Other members are National Statistics Office (NSO), University of the Philippines – Asian Institute of Tourism (UP-AIT), Bangko Sentral ng Pilipinas (BSP), Department of Interior and Local Government (DILG), National Economic and Development Authority (NEDA), Bureau of Immigration (BI), Civil Aviation Board (CAB), Hotel and Restaurant Association of the Philippines (HRAP), Board of Airline Representative (BAR), Philippine Tour Operators Association (PHILTOA) and Philippine Travel Agencies Association (PTAA).
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