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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
expressed as ΔY= ΔTr, such that the increments or change in income or tourist
Table 5.1 provides the data of the visitor arrival from 1998 to 2007 and illustrated in
Figure 5.1.
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.
3500000
3000000
2500000
2000000
Volume
1500000
1000000
500000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
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
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
Growth
Year Volume Rate (%)
1998 2412.88 ---
1999 2553.66 5.8
2000 2133.8 -16.4
2001 1722.7 -19.3
2002 1740.06 1
2003 1522.68 -12.5
2004 1990.81 30.7
2005 2236.05 12.3
2006 3465 55
2007 4885.37 41
Source: DOT Resource Center
6000
5000
4000
Volume (US $)
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,
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
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
18
16
14
Average Length of Stay (Nights)
12
10
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
The comparison of the length of stay between foreign visitors and overseas Filipinos is
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
2002 overseas filipinos
2003
2004
Year
2005
2006
2007
0 10 20 30 40 50 60
Volume
from 1999-2007
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.
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
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
40 visit f riends/relatives
business
35
of f icial mission
30 health/medical
Percentage
convention
25
others not specif ied
20
15
10
0
1999 2000 2001 2002 2003
Year
50
45
holiday
40
visit f riends/relatives
35 business
of f icial mission
30
Percentage
health/medical
25 convention
others not specif ied
20
15
10
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
component in estimating the impact of tourism. Table 5.6 provides the average daily
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
140
Average Daily Expenditure (US $)
120
100
80
60
40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
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
Table 5.7 Comparison of the Daily Expenditure of Foreign Visitors and Overseas Filipinos
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
140
120
Average Daily Expenditure (US $)
100
80 Foreign Visitors
Overseas Filipinos
60
40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
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
The breakdown of the visitor expenditure from 1999 to 2007 were classified into
major items including accommodation, food and beverage, guided tour, entertainment
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/ 7.09 7.02 10.96 12.55 8.95 9.49 12.11 16.61 22.59
recreation
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 0.08 0.09 ---- ---- ---- ---- ---- ----
historical sites,
museums, national
parks, others
Miscellaneous 1.83 2.01 2.03 8.27 7.33 13.54 9.22 18.09 8.78
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
Figure 5.8 Breakdown of the Total Average Daily Expenditure on Major Items
from1999 to 2007 (Percentage)
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
Table 5.9 shows the trend in the number of airlines and weekly scheduled flights from
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 scheduled 357 323 349 387 427 399 262 437 442 507
flights
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
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
Total seat 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
capacity
104647 95636 100710 100697 114519 109230 73922 123364 118230 126962
per week
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
Figure 5.10 Trend in the Total Seat Capacity per Week from 1998 to 2007
140000
120000
100000
Total Seat Capacity per Week
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
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
By using the determinants of tourism discussed in the previous part, the total tourism
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.
managed to increase at a low rate from 2003 to 2005. Fortunately, a large boost in total
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
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
from different tourism-oriented firms. It does not have a homogenous product, thus, it is
The input-output (IO) table does not readily offer information on what items should be
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.
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).
perspective about the production and consumption behaviors among sectors in the
economy.
-Busline operation
-Public utility cars and Taxicab operation 182
-Jeepney, tricycles (motorized and non-motorized) and other 183
-road transport 184
-Tourist Buses and cars including chartered and rent-a-car
185
Water Transport Services
with the tourism sector either as producer of the inputs needed by the sector or as
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
Table 5.14 depicts the top 20 sectors that have a highest proportion of inputs required
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
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
(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
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
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
provides the highest proportion of primary inputs, trade and transportation sector. Other
sectors, which also benefitted from the turn-over of tourism payments includes
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).
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 0.7040 0.0778 0.0000 0.0220
Food and beverages 0.1436 0.0308 0.0247 0.0414
Transportation 13.4685 0.1636 0.6213 0.1522
Guided Tour 0.3079 0.0423 0.0011 0.0031
Entertainment/recreation 3.1637 1.5789 0.0159 0.0024
Miscellaneous tourism 0.1902 0.0117 0.0074 0.0241
services
Table 5.17 shows the results of multiplying the inverse matrix by specific ratios. For
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
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
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
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
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,
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
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
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
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)
average import
Items impact
accommodation 0.01
food and beverages 11.27
transportation 3.02
Guided Tour 0.26
Entertainment/recreation 1.85
Miscellaneous 16.57
Total import impact 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
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