TOURISM IMPACTS

ON ECONOMY
BY: LUMANTA, VENNICE
RIVERA, JERAMIE
GONZALES, DANICA
DUCLAYAN, ERFZ
Introduction
 Theimportance of tourism on the
economy cannot be over-
emphasized. It is of very few industries
that has been identified as a
cornerstone of the Philippine
economy.
Objectives:
At the end of this lesson, you are expected to:

 Differentiate the differences among direct, indirect, induced and dynamic

impacts of tourism on the economy;
 Explain the concept of Tourism Satellite Account, and the reason for its adoption;
 Provide examples of the industries that benefit from the tourism in the home
community, transit zones, and the destinations;
 Identify the positive and negative impacts of tourism on the economy;
 Discuss the factors that determine the direction and degree of economic impacts;
and
 Suggest ways to maximize the economic benefits from tourism, and minimize its
costs.
Direct, Indirect, Induced and Dynamic Impacts

According to the WTTC (2015)…

Direct Effects are produced when tourists spend for such commodities as accommodation,
transportation, entertainment, and attractions.

Indirect Contribution of tourism to the economy comes in the form of investments in tourism,
government spending in tourism, and the effect of purchase from suppliers (WTTC 2015).

Induced Effects are the collective spending by direct and indirect employees on food and
beverage, recreation, clothing, housing, and household goods (WTTC 2015).

Dynamic Effects refer to the longer-term macro-level effects, such as general enhancement of skills
within the economy, provision of better social services (health, education, security), and
infrastructure (roads, airports, Internet).
 Tourism and the Philippine Economy

Tourism is an important sector for Philippine economy. In

2015, the travel and tourism industry contributed 10.6% to
the country's GDP. Its beaches, heritage towns and
monuments, mountains, rainforests, islands and diving
spots are among the country's most
popular tourist destinations.

The Philippine Tourism Satellite Accounts (PTSA)

provides a set of information on tourism that
facilitates its analysis in the context of
macroeconomic accounts.
How the Government earn from
the tourism?
There are several resources of tourism-related revenue for the government:
 Passport processing fee
 Fees for National Statistic Office (NSO)
 Certificates required for securing:
o Passport
o Travel tax
o Documentation fee (for travel tax exemption)
o Airport terminal fee
o Airport space rental fees
o Parking area fee
How the Government earn from
the tourism?
Government collects value-add tax from the tourism-related business
establishments:

 Business permit fees

 Barangay Clearance
 Tax paid (by employees in Tourism establishment)

The Government also collect value-added tax from tourism-related

business: establishment, business permit fees, barangay clearance,
and taxes paid by employees in tourism establishments.
Factors that determine the direction and degree
of economic impacts

 Other factors that determine a nation’s

economic performance include the level of
corruption, openness of capital markets,
competitiveness of financial system and flexibility
of prices.
Positive and Negative impacts of tourism on
the economy
Positive impacts
 Contribution to government revenues.
 Employment generation.
 Direct contribution are generated by taxes on incomes from tourism
businesses.
Positive and Negative impacts of tourism on
the economy
Negative Impacts
 Tourisms drawbacks lie in leakages, opportunity costs, poor
quality of jobs, overdependence on tourism , inflation of ; price
and food ,land , houses, and service
 Seasonality and underemployment.
Beneficial impact of tourism on the economy
According to swarbrooke (1999), the main beneficial impacts of tourism on the economy are
job creation, livelihood generation, tax revenues , and economic regeneration.

 Job
Tourism generates jobs, with the most optimistic estimate being one job created for every tourist
receive by the country. For example in hotel, entry level jobs include front desk clerks, porter,
concierges, room attendants, waiters or waitresses, and kitchen staff.

 Livelihood Generation
Tourism provides economic opportunities for other industries. Farming communities can venture
into agritourism, offering farm-related experiences to tourist.Income from tourism can help the
farmers families tide it over during the lull period between planting and harvesting seasons.
end