* This is my article in BusinessWorld on April 11, 2019.
The Philippines, with more than 7,500 islands and islets, lots of white sand beaches, waterfalls and mountain resorts, has a huge potential in tourism yet we are not optimizing it due to certain policy and infrastructure bottlenecks like small airports and small number of airlines per airport.
The busiest airports in the world are those in the US and China. In 2018, of the top 50 busiest airports in Asia, China had 19; Japan, five; India, four; South Korea, three. The numbers on average daily airplane takeoffs are also presented here.
The Mactan-Cebu International Airport (MCIA) has 144 flights a day, #70 in Asia in average daily takeoffs. Last week I went to Cebu. The first thing I did upon landing was to feed my curiosity, check the new Terminal 2 for international flights. Since I was not an international passenger, I could not go inside but I took a peek and it is indeed beautiful — both exterior and interior, check in area — compared to the previous one. There is a new vehicle ramp going to the 2nd floor departure area and the hallway before entering the terminal is wide and huge.
I like the integrated PPP scheme of MCIA, the private sector shouldered the cost of construction then operation and maintenance (O&M), unlike the hybrid PPP scheme of Dutertenomics where construction is funded via foreign loans or the annual budget (i.e., paid by taxpayers) and the private sector only undertakes the O&M.
But the terminal fee here is expensive, P850 per departing international passenger, higher than P750 in NAIA. This is on top of P1,620 travel tax for Filipinos traveling abroad. Budget-conscious travelers then must endure paying P2,470 each and they have not left the country yet, the air fare with VAT and other taxes not included yet. This high cost of not-flying-yet should be one of the many reasons why the Philippines is not able to optimize its tourism potential.
Among the Market-Oriented Reforms for Efficiency (MORE) in the country’s tourism and aviation sector are (1) abolition of the travel tax, (2) more airlines liberalization, and (3) lower terminal fee, perhaps only P400 or less via more budget terminals, less glitzy but fine, like the budget terminals in Changi-Singapore and Kuala Lumpur.
MCIA, NAIA are now more beautiful compared to their previous structures but they are not the destination of passengers, local and foreign. They stay at the departure lounge only one or two hours before their flights. The three suggested reforms will further enhance tourism and everything there that generates jobs — hotels and restaurants, airlines and shipping lines, malls and shops, travel guides and boatmen.-----------------
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