The Philippine tourism industry is seen to rebound toward pre-pandemic activity this year driven by the expected influx of Chinese tourists, a report by MUFG Bank Ltd. stated.
In its ASEAN tourism outlook: The return of Chinese tourists in 2023 report, MUFG said the Philippines is among the Southeast Asian nations that would likely benefit from Chinese tourists’ “revenge travel” in 2023.
This comes after China’s pandemic restrictions were loosened in late last year, and as Japan, South Korea and Australia take more protectionist stances by requiring Covid-19 tests for China travellers.
“The return of Chinese tourists will likely significantly benefit tourism in the Philippines,” MUFG said, noting that China was the second largest source of tourist arrivals in 2019, accounting for 1.7 million or 22.2 percent of total.
For 2023, MUFG expects the Philippine gross travel receipts to hit $6 billion to $8 billion, or around 60 percent to 80 percent of its pre-Covid levels.
In the third-quarter last year, the country’s gross travel receipts already hit $1.26 billion, or 52 percent of July to September 2019 levels.
Manila had progressively reduced travel restrictions in 2022 after President Marcos approved the removal Covid-19 test requirements for incoming visitors and lifting the mask wearing mandate for indoor settings last October.
To recall, tourist arrivals was only three percent of pre-pandemic levels in December 2021. However, this has climbed to 56 percent by December 2022, supported by ASEAN tourists, at 55 percent of 2019 levels.
Travel from China also slightly improved from 0.9 percent of 2019 levels in December 2021 to 7.2 percent in December 2022, but this was not as rapidly as other regions due to China’s zero-Covid policies.
But despite the tourism sector’s rebound, MUFG said that this will not have significant impact on the country’s economy.
“The positive impact on the Philippines will likely be modest, due to the economy’s primary reliance on domestic private consumption,” MUFG said. “The improvements from tourism, further boosted by travel from China, will likely benefit all tourism related sectors.”
Pre- pandemic, major inbound tourism expenditure was on transport (36.6 percent of total), accommodation (31.9 percent), as well as food and beverage (22.5 percent).
The accommodation and food services sectors employed two million mn workers in 2019, accounting for almost five percent of total employment.