PHILIPPINE

TOURISM MASTER PLAN

EXECUTIVE SUMMARY
1. INTRODUCTION

History shows the long term development of tourism in the Philippines

has been influenced by the interaction of a wide range of internal and
external factors. These factors include:

 the relative attractiveness of the country over time, its proximity

to markets, the availability of tourist infrastructure and superstructure,
and the extent to which its role as a promoter of economic and social
development is recognized;

 the location of the Philippines within one of the planet’s most

active typhoon, volcanic and earthquake belts: and

 almost total dependence on Manila, and the resulting

vulnerability to externally and internally produced dislocation.

In combination, these factors have produced a modest annual average

growth curve, punctuated by long periods of stagnation and decline,
followed by brief burst of rapid growth which in fact occurred in 1988 and
1989. This pattern of development is highly debilitating not only on the
economy but also on the industry.

The availability of a master plan to guide tourism development on a course

that minimized the impact of negative factors, while maximizing the positive
and generates a sustainable growth curve, is essential, if the contribution of
tourism to national, regional and local development goals and objectives are
to be optimized. The main mission of the Master Plan for tourism
development in the Philippines is to provide this course.

2. CURRENT POSITION OF TOURISM IN THE

PHILIPPINES

The tourism sector of the Philippines, which currently caters to the needs of
around 1 million foreign and 2 million domestic tourists, is concentrated
largely on the National Capital Region (NCR). It is a relatively small and
well informed market, and responds quickly to adverse news, so that rapid
reversals in tourism flows can be experienced. Despite its small scale, its
over-concentration into the NCR and its volatility, tourism makes a
significant contribution to the Philippine economy. In 1990, it has been
estimated that tourism:

 generated over P60 billion (US$ 2.47 billion in gross revenue;

 accounted for 4.9% of Gross Domestic Product based on a

contribution of P52 billion;

 employed an estimated 660,000 people; and

 earned P25 billion (US$ 1.04 billion)in net foreign exchange for
the Philippines.

Studies indicate that with proper control and planning, even a modest
increase in tourism flows could significantly increase the economic
benefits that tourism can bring. For example, if tourism contribution
to GDP increased by an average of 7% p.a., and national GDP grows
at 5.5%, then the GDP contribution of tourism would increase from
4.9% current by the year 2010.

In the above context, the question must be asked , to what extent is it

possible to expand the tourism sector, given the factors that control its
development.

3. SCOPE FOR EXPANSION

The main conclusions of studies undertaken by the project team on the
scope of the sector to expand at a macro scale are;

 the market and the competitive attraction in the Philippines to

match them with are available, and can be delivered at a standard
and price that is competitive in ASEAN ; and

 the capability of the economic, social and ecological environment

to handle growth is still considerable despite the fact that there is
a crisis in each sphere.

However, the physical and capacity of the tourism sector is limited by:
  its inability to move large volumes of tourists to other parts of the
Philippines outside NCR;

 the lack of trained human resources at the required standard and

quantity:

 institutional overlap and human resource shortages in the tourism

planning development, financing, and management area:

 strong competition for public and private sector finance;

 land use planning and development policies that makes it difficult

to readily develop large resort estates; and

 unpredictable events such as earthquake, volcanic eruption,

regional conflicts, internal political disputes and insurgency;

These factors place a limit on the total volume of foreign and domestic
tourism that the Philippines could expect to host in the short term and in the
medium to longer term, unless a program of action is taken to remove
unreasonable restraints to expansion.

4. TOURISM GOALS, OBJECTIVES, STRATEGIES &

TARGETS
The extent to which there can be a commitment to expanding tourism,
using increasingly scarce public sector resources, especially in light of
the need to divert funds to disaster relief, will depend upon the level
of investment involved, and ultimately on the extent to which this will
contribute to economic, social and environmental goals and
objectives.

At a national level, the main goals of tourism master plan must be to:

 optimize the contribution of tourism to economic growth at a

national and regional level;

 enhance and contribute to social cohesion and cultural

preservation at a local level;
  develop tourism on an environmentally sustainable basis; and

 develop a diversity of destination, attractions and markets to

minimize exposure to major internal threats to tourism activities.

The results of an evaluation of the alternative strategies available to

achieve these goals and objectives concluded that the best strategy
would be to:

 adopt a cluster development approach based on the establishment

of three main international gateways and associated satellite
destinations;

 adopt a niche/mass market approach based on diverse mix of

special interest, vacation, resort, convention, exhibition, touring
and incentive travel products; and

 work towards a balance of development between foreign and

domestic tourism

Given the restraint on the provision of infrastructure in the short to

medium term, the implementation of strategic objectives will need to
be phased. Up to 1993, the focus should be on:

 completing the development of key infrastructure projects;

 planning strategic infrastructure and resort development;

 making the best use of existing tourist attractions, facilities and

markets;
 unlocking policy constraints and streamlining the institutional
structure; and
 developing contingency plans.

Between 1994 and 1996, expanding strategic infrastructure projects,

developing new resort estates in emerging destinations and
establishing training facilities would be necessary actions. In the
longer term, moving to the full establishment of the three cluster
development concept including continued development of emerging
and potential destination areas.
 Given the national tourism goals, objectives and strategic thrust
recommended, Table 1 sets out the target tourism levels considered as
sustainable over the short, medium and longer term.

Table 1
DOMESTIC & FOREIGN TOURISM TARGETS
(000’S VISITORS AND NIGHTS)

PERIOD SHORT TERM MEDIUM TERM LONG TERM

TO 1993 TO 1996 TO 2010
Domestic Markets:

Visitors* 2,344 2,685 5,118

Nights 9,000 10,310 19,653

Foreign Markets:

Visitors 1,500 1,710 5,365

Nights 10,666 14,604 40,767

TOTAL:

Visitors 3,844 4,395 10,483

Nights 19,666 24,914 60,420
Source: Tourism Master Plan Project Office
*Estimated domestic visitors using commercial accommodation

The main source of the foreign markets are targeted from East Asia which is
projected to increase its share from 43% to 59% by 2010. The bulk
of the foreign market will be holiday based (72% by 2010) of which
resorts would account for a major proportion.

5. POLICY IMPLICATION

The successful implementation of the recommended development strategy

and associated tourism targets, will require the adoption of new policy
positions on cluster destination strategies, tourist accommodation facilities,
transportation infrastructure priorities and services, marketing, product
development, manpower training, development standards and guidelines.
The main policy thrust in each area is reviewed below.
 5.1 Cluster Development Areas

The development of tourism in the Philippines should be based

on a policy that is tuned to creating three tourism development
clusters. Each cluster should be served by one or two major
international gateways, linked to a variety of satellite
destinations. The three cluster destination areas are:

* the Luzon cluster including Palawan, Mindoro and Marinduque

based on positioning it as a multi- faceted destination providing
attractions for all markets;

* the Visayas cluster including Cebu, Bohol, Samar, Leyte,

Negros Occidental and Oriental, and Panay, based on
positioning it as a resort and cultural heritage destination; and

* the Mindanao cluster including Davao, Zamboanga del Sur and

del Norte, Cagayan de Oro, Surigao del Norte and del Sur,
Misamis Oriental and Occidenrtal, based on positioning it as an
exotic wilderness and cultural destination.

Within this cluster gateway structure, there should be existing,

emerging and potential satellite destinations, each with their own
unique positioning theme. The hierarchical structure of proposed
cluster development strategy is illustrated on Section 6.2 of the Long
Range Plan.

Within the context of this structure, and the objective of bringing

about a fair distribution of tourism in the Philippines, Table 2 sets out
the target volume of foreign and domestic tourists for each
development cluster.

Table 2
DISTIRBUTION OF TARGET VISITORS
WITHIN THE PHILIPPINES
(000’S)

YEAR 1993 1996 2010

LUZON: Domestic* 3,117 3,593 7,037

Foreign 1,072 1,158 2,682
 TOTAL 4,189 4,751 9,719

VISYAS: Domestic* 1,341 1,520 2,815

Foreign 344 417 1,663
TOTAL 1,685 1,937 4,478
MINDANAO: Domestic* 1,400 1,593 1,989
Foreign 84 136 1,019
TOTAL 1,484 1,729 3,008
TOTAL: Domestic* 5,858 6,706 11.841
Foreign 1,500 1,711 5.3665
TOTAL 7,358 8,417 17,206

*Domestic visitors using commercial accommodations and estimated non-commercial

accommodation

It can be seen from this that over time, the sector’s reliance on Luzon, and
hence its exposure to internal dislocation will be significantly reduced, while
the benefits of tourism, more widely distributed.
5.2 Accommodation Development Policies

Since the NCR will experience an oversupply of accommodation up to

1996, and as the main thrust of tourism development strategy is to
reduce exposure to one centre, the main aim of policy should be to
encourage tourist accommodation development outside the NCR,
especially in the Visayan and Mindanao clusters. This can be achieved
by:

* focusing development incentives to encourage up-grading and

development of accommodation outside the NCR within the
recommended satellite destination hierarchy:

* introducing an overseas marketing development growth scheme

to assist resorts located outside the NCR to market their
facilities in foreign markets;

* creating major resort estates in the Visayas and Mindanao

clusters as well as in the northern part of the Luzon cluster;
and
* coordinating the provision of transportation infrastructure and
services with the development of proposed resort estates.

To ensure that resort accommodation also caters to the requirements

of the price sensitive domestic market, policy should focus on
encouraging the development of designs that are not only appropriate
to travel requirements, but also tailored to the budget of this market.

5.3 Transportation Policies

The strategy for tourism development requires a re-setting of existing

policies mainly in the air transport sector. Here, it will be necessary
to:

* adopt a more flexible approach to approving inbound air

inclusive charters and provision of scheduled air services on the
part of other carriers;

* designate other domestic and international carriers to service

secondary airports in the Philippines;

* expand domestic and international terminal facilities at the main

gateways to handle growth; and

* de-regulate the economics of domestic air operation and

introduce greater competition on all domestic routes.

In case of road sea and rail transportation policies, the main

thrust should be to:

* give priority to up-grade and develop road connections between

air sea ports and centres of tourism activity;

* focus on the development of inter-island cruising activities for

the foreign market and improving the quality of domestic ferry
services to a standard at least matching that of the Aboitiz
Super Ferry line currently in service in the Philippines; and
 * in terms of railway development policy, the needs of tourism
should be factored into existing up-grading programs.

5.4 Marketing Policies

Marketing policy should be developed and implemented in three

phases:

1. In the short term, the policy should be to address immediate

problems (up to 1993 ).

* poor utilization of existing facilities;

* image with regard to stability and security;

* image for tourism investors which implies uncertainty;

and

* improved service and access to entertainment,

restaurants, shopping and tours.
2. In medium term, the policy should be to start to project the
Philippines as a major and revived tourist destination aiming at
a wide spectrum of markets, but particularly at the emerging
domestic and East Asian leisure markets (between 1994 and
1996).

3. In the long term, the policy should seek to build upon the
initiatives in the medium term but diversify the Philippines into
a major world tourist destination (beyond 1996)

5.5 Product Development Policies

The main thrust of product development policy should be to upgrade

and diversify the existing range of products available to the
Philippines by:

* focusing on doing one or two attractions well in each gateway

location;
 * creating at least one “must see” attraction close to each
cluster/gateway;

* improving access to, and information on, existing products;

* improving the standard of existing tour products and programs;

* encouraging the development of additional day visitor activities

at destination areas;

* improving the reliability of domestic transportation services;

and

* creating new resort, special interest tour products based on the

unique competitive features of the Philippines.

5.6 Manpower Training Policies

By 1995, it is estimated that there will be a need for additional 36,600

trained staff in the hospitality and travel service sector. The current
training system will not be able deliver this demand in the quantity
and at the quality required. To deliver the necessary trained manpower
at the quantity and standard necessary, the main thrust of training
policies should be to establish:

* a Tourism Industry Training Board (TITB), based on the

existing Hotel and Restaurant Board Foundation Inc. but
strengthening its ability to implement policy through
legislation;

* regional training centres in the three development clusters;

* an internationally acceptable standard setting and certification

program; and
 * a faculty trainer development program, aimed at teaching
hospitality industry professionals the teaching skills.

The TITB should be attached to the National Tourism Office (NTO).

5.7 Development Standards & Guidelines

At present, tourism falls under the open space recreation category in

the Zoning Ordinances. The developments are this without any
regulations and guidelines.

From a policy of view, tourism development should be based on:

* a suitability study based on location, land use, social values,

landscape and the environment;

* assessment of the capacity and density standards based on the

suitability study;

* site planning standards related to earthworks, roads, parking,

construction works and landscape protection;

* housing standards based on style, building heights, setbacks and

materials; and

* utility standards for solid waste disposal, sewage treatment,

power, water, drainage, fire and communications.

All municipalities (LGUs) with jurisdiction over areas designated for

tourism development, should, in coordination with DOT, submit a
proposal to HLURB for re-zoning of these areas to tourism zones.
The process for approval of re-zoning plans are the same as that for
approval of a Zoning Ordinance. The approved re-zoning will then be
submitted to HLURB for ratification.