PHILIPPINES...Filipino nationals in tourism-related enterprises • Support the establishment of...

PHILIPPINESSTATUS OF TRADE IN TOURISM SERVICES

PHILIPPINE DELEGATIONMADELAINE MONTERAMOS – National Economic Dev Authority

(NEDA)JEWEL UDARBE – Center for International Trade Exposition & Mission

(CITEM)BENJAMIN F. SANTIAGO – Department of Tourism, (DOT) Region V

Performance of the Tourism Sector:The Philippines compared to

the rest of the ASEAN

Source: ASEAN Secretariat

Tourist arrivals in ASEAN: Overall trendIn

Tho

usan

ds

81,229

89,225

102,199 105,084 108,904

-

20,000

40,000

60,000

80,000

100,000

120,000

2011 2012 2013 2014 2015

-

5

10

15

20

25

30

35

2011 2012 2013 2014 2015

Brunei Darussalam Myanmar Lao PDR CambodiaThe Philippines Viet Nam Indonesia SingaporeMalaysia Thailand

In M

illio

nsTourist arrivals in ASEAN: Philippine Performance


5%

In M

illio

nsTourist arrivals in ASEAN: Member-state trend


-

5

10

15

20

25

30

35

2011 2012 2013 2014 2015

Brunei Darussalam Myanmar Lao PDR CambodiaThe Philippines Viet Nam Indonesia SingaporeMalaysia Thailand

GATS & AFAS:Philippine

Schedules of Specific Commitmentsin the Tourism Sector

• General Agreement on Trade in Services (GATS)• ASEAN Framework Agreement on Services (AFAS)


Philippine Schedule of CommitmentsTOURISM AND TRAVEL RELATED SERVICES SECTOR

The industry-specific section of the schedules essentially consists of a matrix wherein countries have identified market access and national treatment commitments on each service industry in relation to one or more possible delivery channels or “modes of supply.”

Modes of Supply:

(1) Cross-border supply(2) Consumption abroad(3) Commercial presence(4) Presence of natural persons

GATS:Philippine


Source: GATS Secretariat

Philippine Schedule of CommitmentsUnder the General Agreement on Trade in Services (GATS)

TOURISM SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence

(4) Presence of natural persons

Subsector Limitation on Market Access Limitation on

National Treatment

Tourism accommodation facilities: hotel, resort, pension house, tourist inn, apartel

(1) Unbound(2) None(3) Subject to foreign equity limitation of 40 per

cent for pension house, tourist inn and apartel(4) As a general rule, only citizens of the Philippines

can be employed in tourism-oriented establishments. However, for hotels and resorts, aliens may be employed subject to the pertinent provisions of the Tripartite Agreement among the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration

(1) Unbound(2) None(3) None (4) None


Subsector Limitation on Market Access Limitation on

National Treatment

Specialty Restaurants

(1)Unbound(2)None(3)No foreign equity is allowed if the specialty

restaurant is not part of the facilities of a hotel.

(4)Aliens may be employed in specialty restaurants subject to pertinent provisions of the Tripartite Agreement among the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration






Subsector Limitation on Market Access Limitation on National

Treatment

Professional CongressOrganizers

(1) Unbound(2) None(3) Subject to foreign equity

limitation of 40 per cent (4) None


Travel Agencies (1) Unbound(2) None(3) Subject to foreign equity

limitation of 40 per cent (4) Managers and executives

must be resident Filipino citizens

(1) None(2) None(3) None (4) None




AFAS:Philippine


Philippine Participation in the AFAS

• AFAS is critical to the formation of the ASEAN Economic Community (AEC)

• ASEAN has concluded 9 packages• The Philippines signed the 9th Protocol which is

undergoing the ratification process• The 10th AFAS is under completion


Philippine Schedule of CommitmentsFor the 9th Package of Commitments under ASEAN Framework Agreement on Services

TOURISM AND TRAVEL RELATED SERVICES SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence


SubsectorLimitation on Market

Access Limitation on National

Treatment

Hotel, resort, pension houses, tourist inns apartelles lodging services (CPC 64110)

(1) None(2) None(3) None


Meal Serving Services with Full Restaurant Service (CPC 64210)




SubsectorLimitation on Market

Access Limitation on National

Treatment

Beverage Serving Services for consumption on the premises (CPC 6431 - 6431(2)



Travel agencies and tour operators services (CPC 7471)

(1) None, (2) None(3) Up to 70% foreign equity is allowed


Others: Hotel management services

(1) None, (2) None(3) Up to 70% foreign equity is allowed


Convention Services (1) None, (2) None(3) Up to 60% foreign equity is allowed


Philippine Schedule of CommitmentsFor the 9th Package of Commitments under ASEAN Framework Agreement on Services

TOURISM AND TRAVEL RELATED SERVICES SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence


Philippine Schedule of Commitments to GATS & AFAS (Tourism Sector): Summary

In the Uruguay Round of Negotiation (1994) for the General Agreement on Trade in Services (GATS), the Philippines’ schedule is moderately restrictive concerning travel and tourism services. The exact extent of coverage under each subsector is difficult to determine because the Philippines did not specify CPC codes to identify its travel-related services.

But in the ASEAN Framework Agreement on Services (AFAS), we see the Philippines’ schedule of commitments being liberalized with some minor limitations. The Philippine’s full commitment creates the most liberal trading environment by guaranteeing full market access or national treatment to foreign service providers.

POLICIES IN THE DEVELOPMENT AND LIBERALIZATION OF TOURISM SECTOR

Republic Act 9593 (Tourism Act of 2009)

• Mandates for the development of a national action plan to be adopted and implemented both by national and local government

• Grant preferential treatment to the employment of Filipino nationals in tourism-related enterprises

• Support the establishment of Tourism Enterprise Zone (TEZs)

5 Classifications of TEZ:

1.Cultural Heritage Tourism Zone2.Health and Wellness Tourism Zone 3.Eco-Tourism Zone 4.General Leisure Tourism Zone 5.Mixed Use Tourism Zone

Entities eligible to apply for the designation of an area as a TEZ

Any entity duly incorporated under the Corporation Code and other relevant laws…may qualify as an applicant for the designation of an area as a TEZ.

TIEZA INCENTIVES FOR TEZ: Fiscal

• Income Tax Holiday• 5% Gross Income Taxation Rate• Tax and Duty Free Importation of Capital

Investment and Equipment• Transportation Equipment and Spare Parts• Tax and Duty Free Importation of Goods

and Services• Special Responsibility Incentive• Net Loss Carry Over

Source: TEIZA

TIEZA INCENTIVES FOR TEZ: Non-Fiscal

• Employment of Foreign Nationals• Special Investors Resident Visa• Foreign Currency Transactions• Exemption from requisition of

investment• Lease and ownership of land

Source: TEIZA

PRIORITY AREAS THAT NEED TO BE ADDRESSED TO SUPPORT THE DEVELOPMENT OF THE TOURISM SECTOR

Improving Access & Connectivity• Route development• Intermodal transport systemTravel Facilitation• To extend Visa-Free Travel to other non-ASEAN

qualified travelers/tourists• Extending validity of visas to all travelers/

touristsAggressive Tourism Investment Promotion

Thank You!

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