The Philippine tourism industry’s recovery from the pandemic remains incomplete despite showing signs of resilience, according to a report by the state-run Philippine Institute for Development Studies (PIDS).

While the sector has demonstrated an ability to adapt to shocks, noted that key indicators such as visitor spending and sectoral investments have yet to return to their pre-Covid-19 growth trajectories, PIDS researchers John Paolo R. Rivera, John Joseph S. Ocbina, and Marga Clarence P. Bolalin wrote in a Dec. 17 discussion paper.

Prior to the pandemic, the industry’s real economic contribution, measured by Tourism Direct Gross Value Added, showed a steady and strong expansion that has since turned subdued.

The study cited a disconnect between regional innovation and national recovery. While Luzon develops heritage corridors, the Visayas focuses on wellness clusters, and Mindanao promotes agro-cultural products, systemic hurdles persist.

Stakeholders also cited weak domestic linkages between tourism and sectors such as agriculture and manufacturing, which leads to economic leakages and reduced value added.

Infrastructure and coordination gaps also remain a primary concern. PIDS noted that many challenges, including data governance and accreditation, fall outside the Department of Tourism’s direct mandate. According to PIDS, this necessitates a “whole-of-government” approach to reform rather than isolated policy changes.

The think tank called for an overhaul of Republic Act 9593, the nation’s primary tourism law, to better reflect digital trends and shifting traveler behaviors. A specific pain point is the current accreditation system, which Micro, Small, and Medium Enterprises—comprising 99 percent of the industry—find administratively burdensome.

PIDS recommended a transition to tiered, incentive-based models and digital compliance systems to help smaller players join an “AI-ready” ecosystem.

For the medium and long term, the report urged the government to upgrade tourism circuits into commercially viable products and pursue a full digital transformation of the visitor economy.

It also recommended that local government units reinvest environmental fees directly into conservation and product upgrades rather than general funds.

Looking toward future growth, PIDS suggested the Philippines pivot toward emerging markets, specifically travelers from the Association of Southeast Asian Nations, the expanding Indian outbound segment, and the Filipino diaspora.

Future research should also evaluate the efficacy of government-led digital tools like the Travel PH app and the Hop-on Hop-off bus system to ensure technological shifts remain inclusive for rural destinations.