S&P: Tourism is a key growth driver for the Philippine economy

MANILA, Philippines – The rebound of the Philippines’ tourism sector is expected to drive significant growth this year, according to S&P Global Market Intelligence.

In a statement released yesterday, S&P Global Market Intelligence Asia-Pacific chief economist Rajiv Biswas said last year’s easing of travel restrictions triggered by the pandemic has allowed the gradual reopening of domestic and international tourism in the Philippines.

„This will provide a major boost to the economy in 2023,” he said.

From January 1 to May 12 this year, international visitor arrivals to the country reached a total of two million.

Last year, international visitor arrivals to the country reached 2.65 million, generating P210 billion worth of tourism revenue.

Data from the Philippine Statistics Authority showed that the tourism sector’s contribution to the gross domestic product (GDP) was 6.2 percent last year, which is projected to be 5.2 percent in 2021.

Before the pandemic or in 2019, the tourism sector’s share of the country’s GDP was estimated at 12.7 percent, including international and domestic tourism spending.

In the same year, international tourism spending was estimated at P549 billion, while domestic tourism spending was at P3.1 trillion.

„Due to the importance of domestic tourism in tourism’s overall contribution to GDP, a recovery in domestic tourism will be a significant growth driver in 2023,” Biswas said.

The government has pegged economic growth at 6 to 7 percent for this year.

The economy grew by 6.4 percent in the first quarter.

In the Asia-Pacific region, Biswas said international tourism flows continued to recover in the first half of the year, benefiting from China’s reopening of international borders.

The recovery in international tourism in the Asia-Pacific region is expected to continue and reach pre-pandemic peaks by next year, he said.

In the medium term, the region is poised to return to rapid growth in domestic and international tourist arrivals, he said.

„This will be driven by the continued rapid increase in household incomes in the large emerging markets of the APAC region, particularly in countries with high populations such as China, India, Indonesia, the Philippines and Vietnam,” he said.