Travel tax collections plunge 83% to P870 million as of August 2020

Travel tax collections dove by 83% to P870 million as of August 30, according to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) on Monday, October 19.

In the budget hearing of the Department of Tourism (DOT) and its attached agencies, TIEZA Chief Operating Officer Pocholo Paragas said that of the total collections, around P435 million went to the agency as part of its 50% share for tourism infrastructure projects.

In 2019, the Philippine government collected about P6.8 billion in travel taxes. Around P3.5 billion went to TIEZA, said Paragas.

Given the dismal collection, Senate Minority Leader Franklin Drilon said the infrastructure program under TIEZA "is almost kaput."

In response, Paragas noted that at least P12 billion has been remitted by the agency for the government's coronavirus efforts – at least P10 billion of which were originally part of their infrastructure funds.

"What we are looking at is to make sure we have retained earnings so that all of our ongoing projects – the 117 – are continuous next year," said Paragas.

"What we're trying to look for now – in terms of projecting the travel tax collection – is the continuance of the suspended projects.… Within the P10 billion, we're looking at around P5 billion for implementation," he added.

Under the Bayanihan to Recover as One Act (Bayanihan 2) , TIEZA is supposed to receive P1 billion. However, Tourism Secretary Bernadette Puyat said the entire P10 billion for tourism under Bayanihan 2 has yet to be released by the Department of Budget and Management.

Shift to domestic tourism

As foreign tourist arrival numbers are expected to decline in 2021, Puyat told senators that the DOT is pushing to revive domestic tourism instead.

The tourism chief cited a survey conducted by the department, which showed that at least 77% still want to visit a tourist destination in the absence of a vaccine.

"It (tourism arrivals) won't be the same numbers as before. We are piloting antigen testing because a lot of people want to travel but they find RT-PCR (reverse transcription-polymerase chain reaction) tests expensive," said Puyat in a mix of English and Filipino.

The DOT is currently implementing a "test before travel" policy in areas which have already opened up for tourism activities. Swab test prices range from P4,000 to P8,000, while processing could take 3 days. There are also hospitals offering cheaper swab tests at around P1,750 to P2,000.

For the antigen testing pilot run, the government chose Baguio City. Like RT-PCR tests, antigen tests use swab samples collected to test for COVID-19. The main advantages of an antigen test are its faster turnaround time and cheaper cost.

"We are continually looking for alternatives as effective as RT-PCR such as the antigen testing and the one that uses the saliva [to check for coronavirus infection]," said Puyat.

In the past month, several domestic destinations such as Boracay and Baguio City have opened up to local tourists.

In 2019, domestic tourism contributed 10.98% to the Philippines' gross domestic product. There were about 110 million local trips last year, according to Puyat.

Pre-pandemic, the target number of foreign tourist arrivals for 2021 was at 10 million, but Puyat said the government is no longer pushing for that figure. The DOT has yet to set a new target for 2021. – Rappler.com

Aika Rey

Aika Rey covers the Philippine Senate for Rappler. Before writing about politicians, she covered budget, labor, and transportation issues.

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