Boost RP’s Tourism Through Infrastructure

Mr. Cole, a British national working in Manila, who occasionally writes  for Action for Economic Reforms (ww.aer.ph). He has visited a lot of places in the Philippines that begin with a letter B. This piece was published in the in the April 6, 2009 edition of the BusinessWorld, pages S1/4 and S1/5.

Change is inevitable. Progress is not. That should be borne in mind by
those interested in the tourism sector (and all the planners in the
Philippines). I was originally intending to write this article about the lack of a
Department of Tourism (DOT) and Wow! Philippines campaign (at least in
the UK), but then I saw an ad on the BBC news website that changed my
opinion. Whoever green-lighted that deserves a pat on the back! Having
said that, I still don’t understand why a giraffe is used to advertise
“Wacko over Wildlife.” Why would I travel to the Philippines to see
endangered African animals? Surely I would travel to Africa; the
Philippines has enough endangered animals of its own – why diversify
when you can specialize?

The global tourism industry is worth some $3 billion a day. A day! That
has probably declined a little now that all hell is breaking loose in
the world’s economies, but that really is still a figure all but
impossible to grasp.

The entire region of South East Asia is the sixth most visited place by
tourists. If you count Europe as one block (it has no internal border
control and great transport infrastructure), SEA would move to third.
The Philippines’ share of this tourism is minimal; it is not even in
the Top 50 (2008) of most visited places in the world (Thailand is
18th). In 2007, it ranked 43rd in terms of revenue with just over $4.9
billion a year– which is not that much really – way less than 1% of
total of world tourism revenue, and just over 1% of national GDP
(compared to Thailand’s 6.7% of GDP- it also has double the per capita
income).

So why isn’t the Philippines attracting tourists? Filipino service is
excellent. Apart from Manila and the big cities most places seem fairly
idyllic. Festivals and Fiestas potentially offer great opportunity for
touristic growth. Imagine for a moment you have never seen a carabao,
you come to the Philippines, laze on a pristine beach and travel to
Bulacan to witness possibly the most bizarre thing ever: the semi-religious carabao festival would certainly be something to talk about when returning to rainy, dreary home; creating demand. Some places still have excellent biodiversity (usually places without mining) and that is a growth tourism sector. The beaches of Boracay are good, as are the ones a bit more off the beaten track like Palawan and Baler, which are superb.

Tourism in the Philippines faces many problems; armed insurgency is one
of the major ones that springs to mind! But that is a problem shared by
several neighbors, and recently there have been major bombings in
London and New York and Madrid. Is it not interesting though, that all
these attacks occurred on transport? Planes, trains, undergrounds and
buses: the method of travel for tourism and business! One day the
conflict will be resolved, but that takes time.
Something that can be done now – especially given the current economic
climate – is infrastructure investment so that when tourists arrive
they get around easily. It also undoubtedly helps though i.e. not
‘U-turn slots to heaven’ or bus stops literally in the middle of the
EDSA-Pasig Bridge domestic businesses in a myriad of ways.
Infrastructure developments should be useful (which, in case you were
wondering was a bus stop created, operated, and demolished by the MMDA
in the space of  five working days. I hope the person behind it was
laughed out of their office).
But before the tourists can use the infrastructure they have to get here.
To get to the Philippines from pretty much anywhere outside of SEA is a
time consuming and in terms of business and tourism that is not good;
time is money after all! Of course, there are burgeoning markets in
Asia (India and China alone account for 1/3rd of the worlds population)
and they could and should be tapped. When my parents left Australia in
the early 80s they left a tin shack of airport in Cairns (my dad said
it was literally a tin shack) and flew to the then Marcos airport as
the hub for their return to the UK. The Manila airport then was modern
and an area hub apparently. Cairns’ airport is now far bigger and more
impressive than Manila’s NAIA (the small city has tapped majorly into
the lucrative British backpacker trade). Other places such as Thailand
and Hong Kong also invested heavily in infrastructure such as airports.
But NAIA, for example, is so outdated that not only is it not in the
same league as its neighbours, it is barely playing the same game.
Infrastructure is a day to day problem in the Philippines but unlike
peace treaties it is relatively easy to solve. It has the added
benefits (if you follow Keynes) of really helping the economy out
during downturns. The government has recognised this and is putting a
lot of money up towards infrastructure development, which is certainly
a good idea. But remember: Change is inevitable; progress is not. They must get the most bang for their buck, and make sure that any bridges they build actually go somewhere!

Whilst things like the Skyway in Manila is a sort of good idea-in the
short term- for cutting traffic it is an eyesore from ground level and
looks like something from ‘Escape from New York.’  Many different
traffic management policies – from toll gates on EDSA, to bicycle
lanes, to higher taxes! – could have been pursued which could make
things look better, run better, and have more net benefit for people
and environment (incidentally the coding system of traffic management
was disproved both in theory and in practice in 2001; it is more
polluting and more congesting) .
We are currently living in interesting times. During a world wide
slump, tourism as an industry is not going to be doing much as people
stay at home and save money. What the government should probably be
doing is borrowing heavily (interest rates in the UK and the US are 0
-0.5) and investing  infrastructure, build a completely new airport and
a train line from it directly into the heart of manila, link up all the
MRTs ( and why aren’t these underground?) so that you don’t have to get
off and change, and so it is easy and safe to use. Darkness and
concrete do not encourage the feelings of safety for the tourist, or
the worker! Build spend build spend, create jobs and create growth. But
make sure what you are building looks good, and operates well! That is
a very simple and dictatorial take on a complicated and challenging
issue I admit. Why? Because when the tourists start flying again the Philippines should be in a position to compete with Thailand (who shot themselves in the national foot this year), Vietnam, India and Australia. And by creating useful infrastructure you strengthen the domestic economy
(remember the Php100b locked in traffic?), and that attracts business,
meaning you get back a lot more than your initial infrastructure
investment aka the multiplier effect.

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