Philippines Tourism Set for Full Recovery by 2025: Key Markets & Infrastructure Investments Driving Growth
Philippine Tourism Set for Full Recovery by 2025, According to Maybank Securities
December 11, 2024 – Manila, Philippines – Maybank Securities Inc. has forecasted that the Philippine tourism sector is on track for a complete recovery by 2025, reaching levels last seen in 2019 before the COVID-19 pandemic disrupted global travel. This anticipated resurgence is attributed to a robust influx of travelers from key international markets.
While the current year has seen a slower-than-expected recovery from mainland China, which historically contributed significantly to tourist arrivals, analysts remain optimistic about future growth prospects. Maybank’s report highlights the importance of ongoing infrastructure investments, particularly in airport upgrades, which are expected to enhance the overall tourism appeal of the Philippines in the long run.
Optimistic Outlook for Visitor Arrivals
Ronalyn Joyce Lalimo, an analyst at Maybank, expressed confidence in the Philippines’ potential to recover fully from the pandemic’s effects. She stated, “We believe that 2025 will mark the Philippines’ full [post-pandemic] recovery, as the country is strategically positioned to continue benefiting from a strong influx of tourists from its key markets, including South Korea, the United States, Japan, and Australia.” She emphasized the deep historical and cultural ties that these nations share with the Philippines, further supporting this positive outlook.
So far, visitor statistics for the first 11 months of 2024 indicate a total of just over 5.35 million arrivals, which includes 432,439 entries by overseas Filipinos. The Department of Tourism had set an ambitious target of 7.7 million arrivals for the entirety of 2024. However, Maybank noted a significant shortfall, primarily due to lower-than-expected arrivals from China, which made up only 5.6 percent of total visitors in the first 11 months of 2024, a steep decline from 21.2 percent in 2019.
Key Sources of Tourist Arrivals
South Korea maintains its position as the leading source of tourists to the Philippines, contributing nearly 1.44 million arrivals from January to November, which accounts for 26.8 percent of total visitors. The United States and Japan follow, with 839,635 and 352,630 arrivals, respectively.
In light of the changing tourism landscape, the Philippines’ government has prioritized the implementation of e-visa services for select markets, including China and India. Maybank suggests that this initiative could significantly enhance travel ease and convenience, further encouraging tourists to visit.
Infrastructure Investments and Airport Upgrades
To bolster its tourism infrastructure, the Philippines is currently pursuing 43 projects valued at PHP2.74 trillion (approximately USD 47 billion) under the “Build Better More” program. This initiative includes five major airport upgrade projects, with a total investment of PHP938.5 billion aimed at modernizing critical transport hubs like Ninoy Aquino International Airport (NAIA) and the New Manila International Airport (NMIA).
Once the upgrades are completed, NAIA is projected to accommodate 62 million passengers annually, a notable increase from its current capacity of 35 million. The NMIA is expected to become the country’s largest airport, capable of handling up to 100 million passengers each year.
Enhanced Visitor Experience and Spending
In addition to infrastructure improvements, the recent implementation of a value-added tax (VAT) refund program for foreign visitors who spend over PHP3,000 at accredited stores is anticipated to stimulate tourism spending in the Philippines. Maybank’s report suggests that tourism expenditure is likely to surpass pre-pandemic levels, driven by increased visitor numbers, longer stays, and heightened per-tourist spending.
In summary, while the Philippine tourism industry faces challenges in the short term, particularly regarding visitor arrivals from China, significant investments in infrastructure and a strong focus on enhancing visitor experiences position the country for a robust recovery and growth in the years to come.