The Return of Travelers

Things are looking up for the tourism industry in 2023 despite the airport system glitch on January 1 at the Ninoy Aquino International Airport and on January 11 in the United States.

Authorities have immediately restored normal airport operations and are doing the right things to assure travelers that a similar incident won’t occur again.

Most economists expect the reopening of the economy, removal of restrictions on people’s mobility and business operations to boost domestic demand, employment, services and trade to sustain the gross domestic product growth this year. There is a growing consensus that economic growth will reach 6 percent to 7 percent in 2023, supported by our growing labor market.

The reopening of tourism and educational establishments generated millions of jobs that effectively reduced the unemployment rate in the Philippines in the fourth quarter of 2022.

International visitor arrivals topped the 2-million mark last year, which, along with the recovery of domestic tourism, breathed new life into the transport, hotel, restaurant and retail sectors. While the number was still significantly below the 8-million arrivals registered in the years prior to the pandemic, it showed we are moving forward to recovering lost grounds.

The recovery of the travel and tourism sector supported the growth in the labor market in the fourth quarter of 2022. Per Philippine Statistics Authority data, the unemployment rate in the Philippines eased to a 17-year low of 4.2 percent in November 2022 from 4.5 percent in October 2022, and 6.5 percent in November 2021, as the labor market sustained its return to the pre-pandemic level. It would have further improved in December, as holiday activities further increased domestic demand.  

We now have one of the largest labor markets in Southeast Asia, with 49.7 million Filipinos employed as of November 2022, or up 4.2 million jobs over the past 12 months. The PSA attributed this to the increase in the ranks of wage and salary workers, specifically those employed in private establishments, which made up 48.1 percent of the employed population.

Results of the November 2022 Labor Force Survey showed the labor force participation rate climbed to 67.5 percent in November, the highest since April 2005.

Finance Secretary Benjamin Diokno estimated that the labor market has recovered 7.2 million jobs since the start of the pandemic in January 2020, attesting to the country’s strong economic recovery.

The services sector, which includes travel and tourism, posted the biggest gains in employment. In fact, accommodation and food services generated 749,694 new jobs, while transportation and storage added 490,586.

A newly-reopened restaurant could easily create five to 10 direct jobs, while a medium-sized resort or hotel could add dozens, in addition to indirect opportunities created in the transport, logistics, retail and services sectors.

The tourism sector, by the estimate of Tourism Secretary Christina Frasco, has generated over 5 million tourism-related jobs since the start of the pandemic. The rise in international travelers visiting the Philippines seems to support her estimates. 

International receipts generated from visitor arrivals reached P208.9 billion from February to December 2022, representing a 24-fold increase from P8.5 billion in 2021. The Philippines began reopening its borders to all types of travelers in February 2022.

From just 163,879 international visitors in 2021, foreign arrivals hit 2.65 million in 2022. It also surpassed the 1,482,535 arrivals in 2020, which had a strong first quarter before the pandemic forced authorities to close our borders in mid-March.

The government expects international visitor arrivals to further improve to 4.8 million in 2023, although the figure would still be below the 8.26 foreign arrivals registered in 2019 before the pandemic.

Of course, it would be a challenge to match the pre-pandemic tourism figures, given the persistent threats of new Covid-19 variants. Just like the Philippines, other nations have yet to fully regain their tourism milestones. Thailand, one of the world’s top destinations, recorded just 10 million foreign visitors in 2022, or just a fourth of the 40 million arrivals it received in 2019.

There is also the matter of enhancing airport management systems, which has become complicated during the pandemic because of the additional health protocols needed to prevent the spread of the virus among passengers. We hope authorities will find ways to reduce the long queues at the airport, prevent delayed flights and make travel experience comfortable for millions of passengers, while ensuring that we observe the best global health protocols.

Our government officials have considered the best possible solutions to keep the Covid-19 situation in check, while allowing our economy, including the travel and tourism sector, to sustain the recovery.

To sum it up, the return of travelers represents the final phase of our economic recovery, which I am confident will be sustained this year.