English 2 - Research Paper

Writing in the Discipline

Summer term (2016-2017)

Philippines, July 2017

ECONOMIC AND ENVIRONMENTAL IMPACTS OF

TOURISM IN THE PHILIPPINES

Car Angelique E. Noel1

Isah Mae M. Ramos2

Abstract. This study determines about the impacts of tourism in the Philippines in terms of economic
and environment. Results showed that Philippines is one of the most frequently visited over the other
attractions. The common problem encountered by the tourism industry in the Philippines is lack of
promotion. Among the economic benefits, they strongly agree on employment opportunities. Tourism
means more jobs for the people and improvement of their standard of living.

Car Angelique E. Noel1

carangeliquenoel@gmail.com1
+6397523856871
Isah Mae M. Ramos2
isahramos0927@gmail.com2
+6391587713662

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I. Introduction

Background of the Study

Through the years, the tourism industry in the Philippines has been playing a key role in promoting
mutual understanding among nations, and as an instrument of national and economic development
through poverty alleviation and conservation of fragile natural and cultural resources. The tourism
industry is one of the sectors that can aid in the development and growth of the Philippine
economy but at the same time it creates environmental problem in the country. (Philippine Tourism,
2013)

Tourism has been a fast growing industry that has become a top priority of the economic agenda of a
number of countries. It encompasses all free movements of persons away from their places of
residence and work, as well as the service industries created to satisfy the needs resulting from
these movements. Tourism has traditionally acted as major source of income within many developing
countries. The huge amounts of investment put into this sector points to the important role it plays in the
growth of the economy and the development of economic potential of all sectors of the life of nation. It is
believed that tourism can be used as a tool to solve problems like unemployment and poverty in
developing countries. (Tourism, 2013)

Tourism has a positive impact on the economy. Tourism produces new ventures, therefore, it causes
increase of new employments and source of income for the locals. Tourism results in additional income
earned by local enterprises from goods and services bought by tourists, wages to households in
connection with tourism-related employment and income to the government through-related taxation and
fees.

The most impact of Tourism industry is the creation of jobs that benefits the citizens especially the
poor of the Philippine society. The industry generates local employment. Tourism is more labour
intensive than other non-agricultural sectors. Tourism employment comparatively is more beneficial to
the marginalized sector as a higher proportion of women workers compared to other similar industries are
employed. Tourism industry also provides work for more semi-skilled and unskilled labour. Tourism
industry also benefits other related industries like the Hotel Industry. According to the survey conducted
by the Department of Tourism (2004), 34.7 % of the average daily expenditure of a tourist was spent in
accommodations in 2004. Other sectors that benefit from tourism are the restaurant and retail industries.
In 2004, the restaurants industry accounts for an average of 21 % and the retail industry an average of
18.6 % of the average daily expenses of a tourist in 2004. In addition, tourism industry impacts the local

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economy by involving global associations and foreign expertise that lead to technology and knowledge
transmission. A general model in the Philippines’ hospitality industry is for a hotel or resort to be
controlled through a management contract with an international company that has outstanding
management skills as well as brand recognition, market profile ad marketing and reservation
technologies. Management contracts allow local owners to access internationally aggressive management
and marketing while preserving their equity in the property.

According to Tourism and more (2006) there are some major current issues confronting tourism. First
is, tourism is a highly taxed industry. Few people, outside of the tourism and travel industry, realize just
how many taxes travellers pay. Look at the percentage of taxes paid on an airline ticket, a hotel room, or a
rental car. In some locales almost 40% of the commodity’s cost comes from add-on taxes. Second, global
standardization has produced less unique locales. The globalized marketplace means that often the same
products are available throughout the world. If part of the reason for travel is to learn about or have the
opportunity to explore the unique and different, then the sameness factor is a major tourism challenge. For
example, shopping malls around the world often seem to offer the same products and many travelers find
hotels to be so standardized that they almost forget in what county the hotel is located. Third, Tourism
and travel are highly dependent on the cost of fuel. The recent rise in the price of fuel such as gasoline has
a major impact on the entire industry. Summer is the high season for travel and with the cost of gasoline
on the rise; many travelers may have to adjust their spending in order to pay for additional fuel charges.
Fourth is the growing issue of climate change. Tourism may be one of the easiest means to achieve
inclusive growth in the Philippines, but extreme weather conditions such as typhoon Yolanda threaten the
country’s fastest-growing sector. Ignoring the problem of climate change will give rise to alarming
realities such as rising temperature, dropping food and water levels that may threaten the existence of
island nations. Lastly, security is a major challenge to the tourism and travel industry. The tourism and
travel
That’s why the researchers present this paper about the Economy and Environmental Impacts of
Tourism on the of the Philippines to understand how it changed this country: positively or
negatively.
Thesis Statement

Tourism industry has a great positive impact in the Philippines because it provides more employment
for the people in a certain area and hence in a way increases their standard of living but it causes
environmental problems in the country.

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 Statement of purpose
This study intends to help us clarify the beliefs or misconceptions about the impacts of
tourism in the Philippines.

II. Discussion
2.1 Economic Impact

Travel & Tourism is an important economic activity in most countries around the world. As
well as its direct economic impact, the industry has significant indirect and induced impacts. The
UN Statistics Division – approved Tourism Satellite Accounting methodology (TSA:RMF 2008)
quantifies only the direct contribution of Travel & Tourism. But WTTC recognises that Travel &
Tourism’s total contribution is much greater, and aims to capture its indirect and induced impacts
through its annual research.
According to the Department of Tourism the international tourist receipts to the Philippines
grew 19.60% which reached a total of 532,757 compared to last year of May visitor count of 445,449. It
could be noted that from 2016 to 2017, the month of May only generated more than 300,000 visitors
while it produced more than 400,000 visitors last year. For the first time this year, visitor arrivals in May
surpassed the 500,000 mark providing a bright outlook for Philippine tourism. This positive growth in
arrivals can be attributed to aggressive marketing efforts and international events which included the
ASEAN@50 meetings held in the country. (Travel and Tourism, 2017)

Figure 2.1

Sources of Data: A/D Cards

& Shipping Manifests

Significant events that occurred this month have translated to the country’s continuing growth
such as receiving the “Destination of the Year” award from TTG Asia Media’s Travel Trade
Publishing Group; as well as Palawan (No.1) and Boracay (No.12) being judged as among the
Top 30 Islands in the World by international travel magazine Condé Nast Traveler.

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 Figure 2.2

The Philippines welcomed 2.882 million tourists coming from Asian countries, generating over
half of the aggregate international arrivals with 59.54%, followed by the Americas (18.52%),
Europe (11.26%), Australia/Pacific (4.89%) and Overseas Filipinos (2.22%) visiting the
Philippines.
The direct contribution of Travel & Tourism to GDP reflects the ‘internal’ spending on
Travel & Tourism (total spending within a particular country on Travel & Tourism by residents
and non – residents for business and leisure purposes) as well as government 'individual' spending
– spending by government on Travel & Tourism services directly linked to visitors, such as
cultural (e.g. Museums) or recreational (e.g. National parks). The direct contribution of Travel &
Tourism to GDP is calculated to be consistent with the output, as expressed in National
Accounting, of tourism – characteristic sectors such as hotels, airlines, airports, travel agents and
leisure and recreation services that deal directly with tourists. The direct contribution of Travel &
Tourism to GDP is calculated from total internal spending by ‘netting out’ the purchases made
by the different tourism sectors.
The total contribution of Travel & Tourism includes its ‘wider impacts’ (i.e. the indirect and
induced impacts) on the economy. The ‘indirect’ contribution includes the GDP and jobs
supported by: Travel & Tourism investment spending – an important aspect of both current and
future activity that includes investment activity such as the purchase of new aircraft and
construction of new hotels; Government 'collective' spending, which helps Travel & Tourism

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activity in many different ways as it is made on behalf of the ‘community at large’ such as
tourism marketing and promotion, aviation, administration, security services, resort area security
services, resort area sanitation services, etc.; Domestic purchases of goods and services by the
sectors dealing directly with tourists - including, for example, purchases of food and cleaning
services by hotels, of fuel and catering services by airlines, and IT services by travel agents. The
‘induced’ contribution measures the GDP and jobs supported by the spending of those who are
directly or indirectly employed by the Travel & Tourism industry.
Visitor exports are a key component of the direct contribution of Travel & Tourism. In
2013, Philippines generated PHP221.0bn in visitor exports. In 2014, this is expected to grow by
2.0%, and the country is expected to attract 4,697,000 international tourist arrivals. By 2024,
international tourist arrivals are forecast to total 7,880,000, generating expenditure of PHP455.7bn,
an increase of 7.3% pa.
Figure 2.3

Travel & Tourism is expected to have attracted capital investment of PHP81.3bn in 2013.
This is expected to rise by 3.8% in 2014, and rise by 3.9% pa over the next ten years to
PHP123.9bn in 2024. Travel & Tourism’s share of total national investment will fall from 3.6%
in 2014 to 3.2% in 2024

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 Figure 2.4

.
Leisure travel spending (inbound and domestic) generated 71.1% of direct Travel & Tourism
GDP in 2013 (PHP668.9bn) compared with 28.9% for business travel spending (PHP271.4bn).
Business travel spending is expected to grow by 5.5% in 2014 to PHP286.4bn, and rise by 4.8%
pa to PHP458.0bn in 2024. Leisure travel spending is expected to grow by 3.2% in 2014 to
PHP690.2bn, and rise by 5.7% pa to PHP1,198.5bn in 2024.

Figure 2.5

Domestic travel spending generated 76.5% of direct Travel & Tourism GDP in 2013
compared with 23.5% for visitor exports (ie foreign visitor spending or international tourism
receipts). Domestic travel spending is expected to grow by 4.4% in 2014 to PHP751.1bn, and
rise by 4.8% pa to PHP1,200.7bn in 2024. Visitor exports are expected to grow by 2.0% in
2014 to PHP225.5bn, and rise by 7.3% pa to PHP455.7bn in 2024.

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 Figure 2.6

The total contribution of Travel & Tourism to GDP is its direct contribution.

2.2 Environmental Impact

Tourism attracts people into an area of exceptional history, beauty and grandeur. Hence, it
means an inflow of people that includes (1) tourist, (ii) investors or entrepreneurs, (iii) artisans
and (iv) job – seekers. As a result, there is increased congestion as more residential and
commercial establishments are built. An area limited in size then struggles to support the ever-
increasing people. With increased population and infrastructures a settlement once pristine and
fresh starts to become degraded. Aside from increased visitor numbers, tourism leads to
development projects impinging the area. Improperly – built infrastructure affects land stability and
impacts on water resources. Unplanned construction pollutes and destroys food and water resources,
ultimately degrading the liveability of the community. Rivers once teeming with fish are transformed
into sewage dumpsites. The crisp, clean air becomes polluted with noxious gases spewed by
transport vehicles and industries. The once tranquil environment starts to be overwhelmed with
traffic noise and raucous enter entertainment.

Negative impacts from tourism occur when the level of visitor use is greater than the
environment's ability to cope with this use within the acceptable limits of change. Uncontrolled
conventional tourism poses potential threats to many natural areas around the world. It can put
enormous pressure on an area and lead to impacts such as soil erosion, increased pollution,

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discharges into the sea, natural habitat loss, increased pressure on endangered species and
heightened vulnerability to forest fires. It often puts a strain on water resources, and it can force
local populations to compete for the use of critical resources.

Golf course maintenance can also deplete fresh water resources. In recent years golf tourism has
increased in popularity and the number of golf courses has grown rapidly. Golf courses require
an enormous amount of water every day and, as with other causes of excessive extraction of
water, this can result in water scarcity. If the water comes from wells, over pumping can cause
saline intrusion into groundwater. Golf resorts are more and more often situated in or near
protected areas or areas where resources are limited, exacerbating their impacts.

Tourism can create great pressure on local resources like energy, food, and other raw
materials that may already be in short supply. Greater extraction and transport of these resources
exacerbates the physical impacts associated with their exploitation. Because of the seasonal
character of the industry, many destinations have ten times more inhabitants in the high season as
in the low season. A high demand is placed upon these resources to meet the high expectations
tourists often have (proper heating, hot water, etc.).

Important land resources include minerals, fossil fuels, fertile soil, forests, wetland and
wildlife. Increased construction of tourism and recreational facilities has increased the pressure on
these resources and on scenic landscapes. Direct impact on natural resources, both renewable and
non-renewable, in the provision of tourist facilities can be caused by the use of land for
accommodation and other infrastructure provision, and the use of building materials.

Transport by air, road, and rail is continuously increasing in response to the rising number
reported that the number of international air passengers worldwide rose from 88 million in 1972
to 344 million in 1994. One consequence of this increase in air transport is that tourism now
accounts for more than 60% of air travel and is therefore responsible for an important share of
air emissions. One study estimated that a single transatlantic return flight emits almost half the
CO2 emissions produced by all other sources (lighting, heating, car use, etc.) consumed by an
average person yearly. (Mayer, 1996).

In areas with high concentrations of tourist activities and appealing natural attractions, waste
disposal is a serious problem and improper disposal can be a major despoiler of the natural
environment - rivers, scenic areas, and roadsides. In mountain areas, trekking tourists generate a great
deal of waste. Tourists on expedition leave behind their garbage, oxygen cylinders and even

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 camping equipment. Such practices degrade the environment with all the detritus typical of the
developed world, in remote areas that have few garbage collection or disposal facilities.

Construction of hotels, recreation and other facilities often leads to increased sewage pollution.
Wastewater has polluted seas and lakes surrounding tourist attractions, damaging the flora and
fauna. Sewage runoff causes serious damage to coral reefs because it stimulates the growth of
algae, which cover the filter-feeding corals, hindering their ability to survive. Changes in salinity
and siltation can have wide-ranging impacts on coastal environments. And sewage pollution can
threaten the health of humans and animals.

Often tourism fails to integrate its structures with the natural features and indigenous
architectural of the destination. Large, dominating resorts of disparate design can look out of
place in any natural environment and may clash with the indigenous structural design. A lack of
land-use planning and building regulations in many destinations has facilitated sprawling
developments along coastlines, valleys and scenic routes. The sprawl includes tourism facilities
themselves and supporting infrastructure such as roads, employee housing, parking, service areas,
and waste disposal.

Attractive landscape sites, such as sandy beaches, lakes, riversides, and mountain tops and
slopes, are often transitional zones, characterized by species-rich ecosystems. Typical physical
impacts include the degradation of such ecosystems.

An ecosystem is a geographic area including all the living organisms (people, plants, animals,
and microorganisms), their physical surroundings (such as soil, water, and air), and the natural
cycles that sustain them. The ecosystems most threatened with degradation are ecologically fragile
areas such as alpine regions, rain forests, wetlands, mangroves, coral reefs and sea grass beds.
The threats to and pressures on these ecosystems are often severe because such places are very
attractive to both tourists and developers.

III. Conclusion

The researchers concluded that in terms of economy, they can’t deny that the field of tourism
has the largest contribution. It can provide enough jobs for the locals, even though they can’t
always have a large number of visitors. Since tourism is known for being seasonal. And, in terms of
the environmental aspect of the Philippines, tourism is a devastative occurrence to the mother
nature. Tourism leads to modernization of rural and woodland areas. The researchers concluded these
concepts based on their research.

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