INVESTOURISM

INVESTOURISM

Presented by:

Evelyn B. PantigUndersecretary of Tourism

Worldwide Visitor Arrivals and Receipts, 1994 - 2003

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Visitor Arrivals(In Millions)

550 550 595 613 664 652 687 684 703 694

Visitor Receipts(In US$ Billion)

353 401 434 443 441 457 477 464 474 514

Source: World Tourism Organization

INTERNATIONAL TOURISM ARRIVALS, 2001 - 2003

Region 2000 2001 2002 2003

Europe 403 390.8 399.8 401.5

Americas 129 120.0 114.9 112.4

Asia and the Pacific

118 121.1 131.3 119.1

Africa 28 28.3 29.1 30.5

Middle East 21 23.6 27.6 30.4

Total 699 684.1 702.6 694.0

Growth Rate (.47%) 2.70% (1.22%)

Top Tourist Destinations Worldwide, 1994 - 2003

(In Million)1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

France 61 60 62 67 70 73 77 75 77 75

Spain 39 39 41 62 68 72 74 76 52 53

United States

45 43 46 48 46 48 51 45 42 40

Italy 27 56 57 58 58 59 62 60 40 39

United Kingdom

20 23 25 26 26 25 25 22 24 25

Germany 14 14 15 16 17 17 19 18 18 18

Greece 10 10 9 10 11 12 13 14 14 n/a


Top Tourist Earners Worldwide 1994 - 2003

(In US$ Billion)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

United States

n/a 61.1 69.9 75.0 71.3 74.9 82.0 72.3 65.5 65.1

Spain 21.4 25.7 27.4 26.6 29.7 32.5 31.5 32.9 33.6 41.7

France 24.7 27.5 28.3 28.3 29.9 31.5 30.8 30.0 32.3 36.6

Italy 23.7 27.7 28.7 30.0 29.9 28.4 27.5 25.8 26.9 31.2

Germany 13.9 17.0 16.4 16.4 16.4 16.7 18.5 17.2 19.1 23.0

United Kingdom

15.0 18.6 19.2 20.6 21.0 20.2 19.50 16.3 17.6 19.4

Greece 3.9 1.4 3.7 3.8 6.2 8.8 9.2 n/a n/a n/a


Tourist Arrivals to the Asia - Pacific Region, 1994 - 2003

(In Million)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

China 21.0 20.0 22.8 23.8 25.0 27.0 31.2 33.1 36.8 33.0

Hongkong 9.3 10.2 13.0 11.2 10.1 11.3 13.0 13.7 16.6 15.5

Malaysia 7.1 7.5 7.1 12.6 10.9 13.9 17.2 23.0 13.2 10.6

Thailand 6.1 7.0 7.2 7.5 8.2 9.1 10.0 10.8 10.9 10.0

Singapore 6.9 7.1 7.2 7.1 6.2 7.0 7.7 7.5 7.6 6.1

Vietnam 1.0 1.3 1.6 1.7 1.5 1.8 2.1 2.3 2.6 2.4

Source: NTOs Reports, World Tourism Organization

Tourist Receipts of Selected Destinations in the Asia - Pacific Region, 1994 - 2003

(In US$ Billion)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

China 7.3 8.7 10.2 12.0 12.6 14.0 16.2 17.8 20.3 17.4

Hongkong 8.2 9.6 10.8 9.2 7.1 7.2 7.9 8.2 10.1 n/a

Thailand 5.8 7.7 8.7 7.0 5.9 6.7 7.1 6.7 7.5 n/a

Malaysia 3.3 3.5 2.6 2.8 2.2 3.2 4.6 6.3 6.8 n/a

Singapore 7.0 8.3 7.9 6.8 5.1 n/a 6.0 5.3 5.1 n/a

Vietnam 85 86 87 n/a n/a n/a n/a 1.3 1.6 n/a

Source: NTOs Reports, World Tourism Organization

Visitor Arrivals and Receipts to the Philippines, 1994 - 2004

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004*

Visitor Arrivals(In Million)

1.57 1.76 2.04 2.22 2.14 2.17 1.99 1.80 1.93 1.90 2.50

Visitor Receipts(In US$ Billion)

2.28 2.45 2.70 2.83 2.41 2.55 2.13 1.77 1.74 1.52 2.25


*Estimated

VISITOR ARRIVALS TO THE PHILIPPINES, January – July 2004

Country Jan – July 2004 Jan – July 2003 Growth Rate

USA 292,777 216,557 35.2%

Japan 217,986 176,131 23.8%

Korea 210,219 157,230 33.7%

Hongkong 96,745 72,531 33.4%

Taiwan 69,456 47,906 45.0%

Australia 48,688 35,890 35.7%

Canada 36,139 27,220 32.8%

Singapore 34,448 26,905 28.0%

U.K. 33,165 26,907 23.3%

Germany 25,604 21,186 20.9%

China 22,911 17,264 32.7%

Guam 21,124 16,564 27.5%

PHILIPPINE TOURISM

INVESTMENT LAWS AND POLICIES

TOURISM INVESTMENT TOURISM INVESTMENT PRIORITIES PLANPRIORITIES PLAN


OMNIBUS INVESTMENTS CODE OF 1987 (EO 226)

TOURISM PRIORITY ACTIVITIES (2004 Investment Priorities Plan)

• Tourism Estates (P/NP)• Accommodation Facilities (P/NP)

(Hotels, Tourist Inns, Apartment Hotels, Pension Houses, Resorts)

• Historico-Cultural Heritage Projects• Ecotourism and Agri-tourism Facilities• Health/Medical Tourism

P = Pioneer NP = Non-Pioneer




PIONEER STATUS CRITERIA

For Hotels (De Luxe & First Class only)

• OUTSIDE METRO MANILA - US $100,000 / room• IN LESS DEVELOPED AREAS - US $50,000 / room but not

less than US $5 million per project

For Resorts (Class “AAA” only)

• OUTSIDE METRO MANILA - US $ 10 million per project• IN LESS DEVELOPED AREAS - US $ 5 million per project




INCENTIVES TO TOURISM PRIORITY PROJECTS

Income Tax Holiday Tax- and Duty-Free importation of capital equipment Employment of foreign nationals



IMPORTATION OF CAPITAL EQUIPMENT (pursuant to EO No. 313)

0-1% duty on equipment Granted to enterprises registered with

BOI on after June 6, 2004 Can be availed until June 6, 2006.



INCOME TAX HOLIDAY UNDER EO 226

New Projects (Pioneer) - 6 years New Projects (Non-Pioneer) - 4 years Expansion Projects - 3 years Projects in Less Developed - 6 years

Areas (regardless of status) Modernization Projects - 3 years

SPECIAL INVESTOR’S RESIDENT SPECIAL INVESTOR’S RESIDENT VISA (SIRV) UNDER E. O. NO. 63VISA (SIRV) UNDER E. O. NO. 63SPECIAL INVESTOR’S RESIDENT SPECIAL INVESTOR’S RESIDENT VISA (SIRV) UNDER E. O. NO. 63VISA (SIRV) UNDER E. O. NO. 63

RATIONALE

Development of international tourism through infusion of capital by foreign investors

Disposition of government tourist-related assets for management of the private sector

Grant of benefits and incentives to attract foreign investments in tourism

INCENTIVES GRANTED INCENTIVES GRANTED UNDER E. O. NO. 63UNDER E. O. NO. 63

INCENTIVES GRANTED INCENTIVES GRANTED UNDER E. O. NO. 63UNDER E. O. NO. 63

Special Investor’s Resident Visa (SIRV) to investor, wife and unmarried minor children

Remittance of Earnings Repatriation of Capital Right of succession

QUALIFICATIONS OF QUALIFICATIONS OF APPLICANTAPPLICANT


He has not been convicted of a crime involving moral turpitude

He is not afflicted with AIDS or any loathsome, dangerous or contagious disease

He has not been institutionalized for any mental disorder or disability

He is willing and able to invest at least US $50,000 in a tourism related project



In the case of foreign corporation which is willing to invest the amount of at least US$50,000.00 in a tourist-related project, the SIRV may be issued to the corporation’s Chief Executive Officer.

TOURISM RELATED TOURISM RELATED INVESTMENT LAWSINVESTMENT LAWSTOURISM RELATED TOURISM RELATED INVESTMENT LAWSINVESTMENT LAWS

OWNERSHIP OF PRIVATE LANDS

General Rule

Nationality Requirement under the Philippine Constitution

up to 40% foreign equity

LEASING OF PRIVATE LANDS

General Rule per PD 471• 25 years - original• 25 years - renewable

Exception per RA 7652 or Investor’s Lease Act

• Minimum investment of US $5 million for tourism projects

• 50 years - original• 25 years - renewable

TOURISM RELATEDTOURISM RELATEDINVESTMENT LAWSINVESTMENT LAWSTOURISM RELATEDTOURISM RELATEDINVESTMENT LAWSINVESTMENT LAWS


FOREIGN INVESTMENTS ACT OF 1991 (RA 7042 AS AMENDED BY RA 8179)

Domestic market is open to foreign investors as long as the activity is not restricted in the Foreign Investment

Negative List

• Ownership of private lands (up to 40% foreign equity)

• Tourist Transport Operation (up to 40% foreign equity)


Minimum paid-in equity capital of US $200,000.00 for domestic market enterprises with more than 40% foreign equity participation.

(not applicable if applying for fiscal incentives with BOI whereby pioneer status criteria under EO 226 must be complied with)

R. A. 6957, AS AMENDED BY R. A. 7718 (BOT LAW)

Authorizes the financing, construction, operation and maintenance of infrastructure projects by the private sector.



INCENTIVES UNDER THE BOT LAW

Financial assistance from direct government appropriation and/or from Official Development Assistance (ODA) of foreign governments or institutions not exceeding 50% of the project cost

Minimum government regulations and procedures

Special government undertakings in support of private sector


RETAIL TRADE LIBERALIZATION ACT OF 2000 (R. A. 8762)

Extent of foreign equity in Restaurants

• Below US $ 2.5M capital - no foreign equity

• US $ 2.5M capital or more - up to 100% foreign equity

SPECIAL ECONOMIC ZONE ACT (R.A. 7916)

MOA between DOT and PEZA

• Signed October 7, 2002

Guidelines for Registration of TEZs

• Effective November 12, 2002

TOURISM ECOZONES (TEZs)TOURISM ECOZONES (TEZs)TOURISM ECOZONES (TEZs)TOURISM ECOZONES (TEZs)

Components of a zone

Adequate access, accommodations, and attractions to meet tourist needs

One-stop-shop for investors to facilitate investments in hotels and critical attractions

Secure, orderly, clean and tourist friendly area

Environmentally friendly practices

Duty-free importation

Develop Tourism Infrastructure

Definition of a Zone

Large tracts of land that have tourism potential, and where investment will be focused

Could be:- Contiguous or a

group of islands- Entirely new or

a re-development of an existing area

TOURISM ECO ZONES (TEZ)

Development of viable action plan that can attract support by investors and donors

Fast-track infrastructure development through prioritization of government projects, private sector incentives and/or negotiation with multi-laterals

Revitalize existing tourist destinations through grant of incentives

Strategy and support for investor marketing (e.g., one-stop shop, incentives) and destination marketing

DESIGNATION AS A TOURISM ECOZONE (TEZ)

DESIGNATION AS A TOURISM ECOZONE (TEZ)

Institutionalized public and private sector commitment to ensure alignment and continuity

Enforcement of standards and programs to ensure preservation of environment and cultural heritage

Investment in education to develop a culture of tourism

Job creation

Fast-tracked economic development

Unity

Sustainable tourism

Human resource and community development


Registrable Activities

Tourism Ecozone Developers/Operators Tourism Ecozone Locators

• Sports and Recreational Centers• Accommodation• Convention & Cultural Facilities• Theme Parks• Special Interest

Attraction/Activities/Establishments



Registrable Activities

Enterprises establishing and operating airports, seaports/marinas



Incentives to Tourism Ecozone Developers & Locators

Tax and duty free importation of Capital Equipment Income Tax Holiday Employment of foreign nationals Exemption from national and local taxes, in lieu thereof, 5% Gross Income Tax Rate SIRV under E.O. 63 Incentives under BOT Law


DOT COMMITMENT TO TEZ INVESTORS

DOT COMMITMENT TO TEZ INVESTORS

Infrastructure development

Funding

Investor marketing

Stakeholder coordination

• Prioritize and direct infrastructure to ensure easy access to and within zones and high quality attractions and facilities

• Facilitate private investment by streamlining processes and granting incentives to mitigate risk

• Fast-track legal resolution of issues

• Coordinate among various stakeholders to ensure long-term institutional commitment to master plan (e.g. tour operators, LGU)

• Develop standards and programs to create an optimal tourist environment, stabilize peace and order, and ensure consistent delivery of tourist services

Destination marketing

• Mobilize funding at destination and national level to market zone

• Coordinate tour operators and travel agents to develop attractive packages


ENDORSED ECOZONES TO PEZA

PROJECT NAME PROJECT COST(in P Million)

STATUS

Panglao Island Tourism Economic Zone (Jimbart Land Ventures)

210.00 Change of name to Blue Sky Resort Corp

Boracay Eco-Cultural Village Resort

381.56 Awaiting approval from PEZA

Fort Ilocandia Tourism Ecozone

565.00 Proclaimed

TOTAL 1,156.00

Priority Areas

Laiya Aplaya, Batangas

Laiya Aplaya, Batangas

Development Directions

• Forestry reserve and trekking destination with beach front recreation.

• Phase I development will cover 151 hectares to be done by private group called Aplaya Laiya Corporation – one or more hotels with 750 room capacity, beach front facilities with 675 rooms, retirement village with 200 units ranch and camp site, convention center, commercial center and sports facilities.

Additional Development

• Hotel-villas on west and east side of beach• Golf and country club on the hilly and rolling terrain.

Pagudpud-Bangui

Pagudpud-Bangui


• Coastal development to house a number of international grade hotels, and residential and recreational facilities for sailing, diving, sports and social recreation.

Palawan

PalawanDevelopment Directions

• Establishment of tourism estates in Busuanga and El Nido such as hotels and resorts, theme parks and gardens, sports facilities, shopping and business centers.

• Development of an integrated transport system (air, land and water) to provide linkages between the different tourism centers and to serve not only the tourism sector but the local communities as well.

• Development of destinations, products and tourism circuits in the south.

Boracay Island

Boracay Island


• upgrading of current facilities and infrastructure (Kalibo Airport, ferry landing, public beach restrooms, standard tourist reception systems, environmental protection mechanisms)

Panglao Island

Panglao IslandDevelopment Directions

• Tourism estate development – resort hotels and residential villas with high, medium and low density clusters which can accommodate a total of 7,000 tourists at a time

• 18-hole golf course• Retirement village• Marina and other facilities for sailing, diving,

fishing, boating, and a variety of water sports• About 30% of estate’s land area will be for

support facilities – green wedges, plazas, roads, boulevards and reforestation areas.

Samal Islands

Samal IslandsDevelopment Directions• A total of 20 development sites covering 6,000 hectares. • From these will rise 3,000 resort units of various configurations – from hotel rooms and apartments to villas and beachfront bungalows. • Various projects are still open for investors.• The Philippine government’s major contribution to the development of Samal is in the form of vital public infrastructure:

18.7 kilometers of roads and bridges a water supply system solid and liquid waste disposal berthing facilities; a jetty.

• Power supply provisions

Samal IslandsDevelopment Directions

• In 1998, Ekran Berhad of Malaysia, the primary developer of Samal, opened the first 300 rooms out of the 1,720 it has committed to build, just in time for the start of Samal Casino Resort’s full operation.

• The DOT, LGUs, business sector and community are committed to provide the attractive climate for new businesses and for sustaining the existing ones.

Investment Promotion Services

• Databanking and opportunities generation surveysPreparation of Area Investment FoldersPreparation of Investment Brochures

• Organization of/participation in investment promotion missions

• Holding of investment fora and business matching sessions

• Assistance to potential investors Inbound missions Inquiries

• Assistance to local proponents

Investment Promotion Services

• Investment Communications Tourism Investment Updates bulletin Primers Website

(www.wowphilippines.com.ph)

EXPO 2005 WORLD EXPOSITION

• Participation in the investment seminar (end of May or early June)

• Local proponents (private sector and local government units) encouraged to join to meet potential investors

• To cover Tokyo-Osaka-Nagoya• Collaterals/AV presentations should

be bi-lingual

For additional information, please contact

Office of Tourism Coordination Tel. No. (632) 526-76-54; (632) 536-03-26 (fax)

e-mail: [email protected]

Or Office of Tourism Standards

Tel No. (632) 525-32-57; (632) 524-98-24); e-mail: [email protected]. ph

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