Chapter 14 ECONOMIC ANALYSIS 14.1 Economic Benefits Tourism is an option for socio-economic development. Its impact to the region and to the country may be assessed in terms of receipts from tourist expenditures for various items from accommodations to food to shopping and recreational activities; linkage with other production/economic sectors parti larly in serving as stimulant to the growth of cottage and small scale industries; flow of direct investments for the establishment and operation of tourist and touristrelated facilities and services and relatedly, construction impact which are one-time in nature, as facilities and buildings are constructed; generation of employment opportunities; payment of taxes by owners of hotels, resorts/lodging facilities, tourist-related establishments, shopping centers, entertainment/recreational establishments, tourist buses/coaches operators; and ancillary spin-offs as money earnings are respent or what is referred to as the multiplier effect of the tourism industry in terms of output, income and jobs. The first two items, i.e. tourist expenditure for tourist and tourist related facilities and services and purchases of various products of the province, may be generally categorized as those with direct impact. Construction of facilities and buildings, on the other hand, are those categorized under the one-time impact . The third form, which arise from both the direct impact and the one-time impact and are linked to the over-all effect of money respent or invested, is referred to as the total impact. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) 14.1.1 Tourist Receipts A review of the tourist expenditure pattern would indicate that every peso/dollar spent by the tourist, whether foreign or domestic, is distributed as follows: 1988 1990 (Combined) 1993 Particulars Domestic Foreign Domestic Foreign Domestic Foreign Accommodation 22.9 57.6 25.2 25.2 35.5 I 23.5 Food and Beverage 31.3 12.5 21.3 21.3 25.5 16.3 Sightseeing 1.6 3.5 6.6 6.6 1.7 4.7 Entertainment & Recreation 36.7 7.3 17.5 17.5 4.4 9.7 Local Transport 2.1 5.4 3.8 3.8 4.1 5.4 - 9.2 16.6 16.6 26.7 30.7 5.4 4.5 9.0 9.0 2.2 9.8 Shopping Miscellaneous Source: Study on Regional Travel, Department of Tourism In a study undertaken by the Asian Institute of Tourism (AIT ) for the Department of Tourism, it was established that the average daily expenditures of the tourist increased by 88.37% from P688.37 in 1988 to P1296.70 in 1993. Expectedly, the foreign tourist average daily expenditure was higher than the domestic tourist. In 1988, the foreign tourist spent, on the average, P854.50 per day and in 1993, P1070 or an average increase of 4.02 %. yearly. On the other hand, the domestic tourist spent an average of P522.25 in 1988 and about P925 in 1993, a rise of 77.11% over the six year period or an annual increase of approximately 12.85 percent. In a visitors sample survey undertaken by the study group between December 1996 to January 1997, average expenditure of the foreign tourist was placed at P4081.06 while average daily expense of the domestic tourist was estimated to be P2611.63. This is significantly higher than the 1993 figures per study undertaken by the AIT. This maybe due in part to the significant rise in expenditures for major items as accommodations and food and beverages, upward bias resulting from responses obtained of tourists coming from the Clark Special Ecozone and Subic Freeport Zone. Moreover, these _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) figures, as explained in the limitations of the study, should be viewed to serve as trend indicators and are not comparable to the AIT study since the methodology of study is significantly different. Given the AIT data for 1988 to 1993 tourist expenditure, vis-a-vis the 1996 data obtained, some form of trend may be established: YEAR DOMESTIC1/ FOREIGN2/ COMBINED 1988 P522.25/day P854.50/day P688.37/day 19903/ NI NI P1296.70/day 1993 P925/day P1070/day P939/day 19964/ P2611.63/day 4081.06/day P3720/day Thus, the magnitude of direct receipts from tourists can immediately be estimated utilizing the figures on forecasted visitor arrivals vis-a-vis average expenditure spending (adjusted for projected inflation rate) and the average length of stay. By year 2000, estimated receipts is placed at P3793.1 M increasing to P8057.89 M in 2005 and P14964.09M in 2010. In terms of remittances to the government coffers, this translates into P568.97M by 2000, P1208.68M in 2005 and P2244.61 M in 2010. YEAR AVERAGE PROJECTED TOTAL TAX AVERAGE STAY PERSON RECEIPTS REMITTANCES5/ EXPENSE/DAY (Room Nights) VISITS (in PM) (in PM) 2000 3.36 288,172 P 3,917.45 3,793.10 568.97 2005 3.70 416,944 P 5,223.26 8,057.89 1,208.68 2010 4.06 564,511 P 6,529.08 14,964.09 2,244.61 It should be noted however, that the figure on the average length of stay of visitors in the region may have some upward bias inasmuch as the average is unduly affected _____________________________ 1/ Average growth rate of domestic expenditure pegged at 10% annually_ , using 1996 data as base figure. 2/ Average growth rate of foreign expenditure pegged at 10% annually, using 1996 data as base figure. 3/ Data for 1990 not included in computation, basic data does not distinguish foreign and domestic expenditures and therefore may not be comparable. 4/ Indicative figures as per random interview of regional visitors. 5/ Tax remittances equal to 15% of total receipts. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) by some very long stays particularly by overseas Filipino Balikbayans or by the children of Australian and German nationals permanently staying and doing business in the Pampanga area, who are visiting their families on holidays. In the study undertaken by AIT, no segregation/cross analysis was made to establish the length of stay of those who come to the region for pure leisure or business trips as against those who come for other purposes. Vis-A-vis expenditure item, the largest expense among the domestic tourists is for accommodations and food and beverage, from 54% in 1988 to 61% in 1993. In 1996, this figure decreased to about 37%. Foreign tourist, on the other hand spent about 70% of their money for accommodations, food and beverage. This ratio, however, declined in 1993 with only 40% of every dollar spent to defray these expenses. In 1996, this increased to 42%. In terms of absolute figures, this translates to: domestic tourist expenditure for accommodations, food and beverage was P283 in 1988, P326 in 1990, P308 in 1993 and P1106 in 1996; and foreign tourist expenditure for accommodations, food and beverage was P599 in 1988, P326 in 1990, P425 in 1993 and P1929 in 1996. Other major expenditure items include entertainment and recreation and shopping. While 1988 figures showed that a greater percentage was spent for recreation and entertainment, the reverse occurred in 1993. This may be attributable to the opening up of the highly-patronized duty-free shops in the region, on the one hand, and the temporary slowdown of entertainment businesses and subsequently the adverse effects of the Mt. Pinatubo eruption and the pull-out of US military personnel, on the other hand. Moreover, the growth of major commercial and retail establishments linked up to tourism was very conspicuous during this period : from shops selling the traditional pasalubongs - the ensaymada, fruit preserves, tocino and longganisa, pastillas and chicharon to the more utilitarian handicrafts as the mixed media, boneinlaid furniture, terra cota, the linen and linen-based embroideries, garments, ceramics, quilts, macrame and the like. 14.1.2 Flow of Direct Investments An indicator of tourist-related investments flowing into the region can be surmised from the development cost of various tourism-related projects in the major anchor centers, namely: Clark Special Economic Zone in Pampanga, the Subic Bay Freeport Zone, the Hacienda Luisita in Tarlac, the row of beach facilities including resorts as along the Bagac-Morong belt and Mariveles satellite in Bataan. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) (a) Clark Special Economic Zone (CSEZ) As of October 31, 1996, there are 159 investor firms in the CSEZ of which sixty five (65) are involved in industrial projects, sixty (60) in commercial projects, fourteen (14) in service-oriented projects, seven (7) in aviation-related projects, five (5) in tourism estate projects, four (4) in housing projects, one educational institution project and three (3) in utility projects. Of the 159 investors, 121 are covered by lease agreements, 32 by sub-leases, the remaining by other agreements as Memorandum of Agreement. Of the 4 tourism estate projects, 1 is operating and the other 4 are under planning stage. The 5 tourism estates shall cover an area of 496.62 hectares with a committed investment of P1.084 Billion within the first year and P4.444 Billion within the next five years. Committed employment, on the other hand, is 4,050 workers within a year and 9,660 workers within the next five years. Already existing and operating in the complex is the Mimosa Resort Complex, a 187 hectare entertainment and leisure center. It currently operates a 27 hole championship golf course, a hotel and 272 villas. Other facilities either under construction or proposed for development by the Mondragon Leisure and Resorts Corporation are: expansion of hotel resort complex , another 9 hole golf course, three theme casinos (Las Vegas type), water theme park, botanical garden and a new hotel, extension of the golf course, casino, club facilities, cinema and shopping arcade. The Crown Leisure and Resorts Inc., which is presently operating the Crown Peak Gardens, shall be undertaking the construction of a convention, entertainment and amusement center, hotel, shopping mall and theme park. Under the planning stage is the development of tourism and recreational theme park, hotels, condominiums, convention hall, business and shopping center by the Fun Avenue Development Corporation. The Hacienda Golf Company, on the other hand, is finalizing its plans for a tourism resort complex comprised of a 36 hole golf course, clubhouse, luxury villas, casino, hotel, restaurants, shopping mall, water theme park, and other tourist amenities. Other tourist related facilities are the shopping malls, duty free shops, restaurants/ fastfoods, amusement centers numbering some 31. Of this, 13 are operational, 13 are under construction/rehabilitation and 5 are in the planning stage. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) Included under the recreational and entertainment components of the Clark New Town Master Plan are: 1. Centennial Exhibition. The Centennial Exposition, slated to open in 1998, will serve as a major venue for celebration relating to the 100th anniversary of Philippine Independence. It will highlight the cultural history and development of the Philippines, and serve as an active center welcoming visitors to theme activities and exhibitions, day and night. It will feature restaurants, musical and dance shows, amusement rides, heritage events and other reset uses. 2. Resort Hotels and Golf Courses. The plan envisions several resort hotels and golf courses as a recreational magnet for people of all ages. The resort component aims to incorporate activities for families and children as well as amenities for adults and business executives. Range of activities included are world class hotel accommodations and services, swimming pools, restaurants, water sports, health spa, shopping facilities, banquet facilities, golf courses and a variety of other leisure activities to satisfy guests seeking relaxation and recreation. The area is envisioned to adjoin the Centennial site and the Mimosa Complex and will be developed in a coherent manner to create a belt of recreational and entertainment activities. The area shall also include some residential development adjacent to the golf courses. 3. Airport Hotel Accommodations. Attendant to the establishment of the regional hub airport are the opportunities to provide conveniences for fly-in meetings and conferences. A prevailing practice is for executives of companies to travel to a central location to discuss new products or conduct training in conference facilities located in the vicinity of an airport. With a short travel time to the conferences including short ground times, participants can comfortably return to their homes the same day. Other events will be overnight stays requiring airport hotel accommodations. 4. Duty Free Shops (DFS). These special retail establishments presently sell tax and duty exempt imported consumer goods. Balikbayans, OCWs and travelers are allowed to buy from these shops up to US $2,000 within 48 hours upon arrival in the Philippines. While the privilege temporarily granted US $ 200 per year shopping privileges to other Filipinos, 18 years of age in December 1995, the DFS privilege was limited to residents within the periphery of free trade zones. For Clark, only residents of Angeles City, Mabalacat and Porac in Pampanga and Capas and Bamban in Tarlac are entitled to the US $100 per month DFS privilege. The DFS occupy some 33 hectares, the biggest operators of which are PX Club, Demagus Trading, Puregold, Royal Duty Free, Zaxxons and JC Mall. An indicator of _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) the heavy patronage of these shops is shown by its brisk sales. In 1995, DFS sales reached P3.5 Billion. 5. Mixed use retail mail. These consist basically off shopping centers/malls, restaurant and amusement centers, banking facilities, electronic data processing and computer services, laundry/warehousing, printing press and other service oriented establishments. In the Business Development Update of the Clark Development Corporation in October 1996, there were 60 listed commercial establishments and 14 service oriented establishments either operational, under construction/rehabilitation or under the planning stage. Corollary to this are complementary attractions as listed in the Master Plan: 1. Mixed use town center which will be a highly developed area with buildings up to 10 storeys in height lining urban scaled streets. Major streets will have required arcades to encourage street activity and shopping along primary building frontages. With convenient access to teleconferencing center, the civic center, the residential area and the major recreational activities, the town center will offer a unique business location within the country, offering a variety of leasable area for small to medium size commercial tenants. 2. Teleconference Center which will be a key service resource for businessmen who require advanced telecommunication and conference services from video conferences to high density data transfers. It is envisioned to contain state-of-the art facilities for globally oriented businesses. 3. Civic center which will provide the site with needed facilities to enhance the quality of life of both residents and visitors. This will include a library, post office and theaters. Industrial development comprised primarily of an industrial park will cover an area of 320 hectares. The tourism complex, which will include a recreational area, is estimated to occupy about 260 hectares. The commercial area, on the other hand, will include the commercial zone proper of 70 hectares and a business park covering 60 hectares. A total of 115,800 direct jobs are expected to be generated by the Clark development, 35% of which would be by the industrial component. The tourism and the airport development components would account for 46% of total job opportunities. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) Total development cost of the five zones is estimated to be US $ 1.6 Billion or Phil Peso 47.9 Billion. The airport and tourism component accounts for 59% of the total zone development or P28.26B and is estimated to generate direct jobs of 52,500. The industrial component, estimated to cost about $188M or 8.6% of the total zone development cost, is estimated to generate 34.5% of the 115,800 jobs. (b) Subic Bay Freeport Zone (SBFZ) There are 258 establishments in the Subic Bay Freeport as of November 1996, breakdown of which is as follows: 82 in the manufacturing and assembly including the Subic Bay Industrial Park Phase I and II; 80 service related firms; 52 tourism related establishments including concessionaires; 26 warehousing and transshipment firms, 11 banks and 7 utilities. Estimated capitalization of all these firms is about $1.945B with an actual employment level of 17,179. The industrial component of the SBFZ is approximately 284 hectares covering the Public Works Center, Naval Supply depot (core area, east and north areas) and Boston Wharf areas. Tourism development covers an area of 2,298 hectares to include: Grande Island, Subic Bay/Binictican Golf Course, the area north of the ship repair facility (SRF), the beach south of Cubi Point, the central area and the Naval Magazine. The 2, 000 hectare Naval magazine area is reserved as nature, preserve for eco-tourism and research activities. Earmarked used are marine park, adventure tourism, resort complex and nature park. Existing tourism facilities within the Grande Island and Binictican Golf Course shall be developed with the construction of additional cottages and the provision of other amenities. Recreational packages are envisioned for the area north of the SRF to include various types of water sports, marina and related facilities. North of the Cubi point is planned for beach resort development. Along the central area, 4 hotels are proposed together with other tourism /recreational facilities. The commercial development, covering an area of 90 hectares, covers part of the Central area, SRF, Naval Exchange and Cubi Point. Development of the area is closely related to the development of tourism and recreational facilities. The focus of the retail and professional service activities is at the Central Area and is tied in with tourism development while secondary commercial activities are to be located in the Naval Exchange and Cubi Point areas. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) Total development cost for the industrial, tourism and commercial areas is estimated to be US $ 818 M or P22.08 B, representing about 50% of the total development cost of P44.18B. Direct jobs to be created is estimated to be 101,490'. Data obtained from the Tourism Department of the SBMA would show that: local visitors in 1994 was estimated to be 3.129M and declined to 2.458M in 1995. For the period January to October 1996, estimated number of local visitors was 1.375M; foreign visitors numbered 11,341 in 1994, increasing by 54.06% to 17,472 in 1995. During the period January to October 1996, magnitude of visitors far exceeded the 1995 level by 147% or 43,151 visitors; about 98.7% of total visitors at Subic are from the Philippines, while the remaining 1.3% are predominantly ASEAN and Americans; and among domestic tourist, 42.1% comes from Zambales, 7.8% from Bataan. 4.35% from Pampanga. Manila visitors account for 24% and the remaining come from other regions. (c) Silanguin Bay Project. Of significant impact in terms of tourism investment flow is the proposed Silanguin Bay. The Emerald Bay Project, located at the southwestern tip of the province of Zambales covers an area of 3,740 hectares (47%) of land area and 4,190 hectares (53%) of water. It is a high end tourism resort development The total declared Tourism Ecozone is 7,930 hectares of land and water. About 15% of the total area has been identified for development, with the remaining preserved in its natural state. Development interventions in the site are envisioned to be environment-friendly, featuring state-of-the-art water conservation and waste water recycling components. Two 18 hole Masters Golf Courses are proposed intended to complement the three (3) hotel chain locators and two (2) recreational facilities locators. The three hotels shall consist of 1,800 rooms including villas clustering along the golf fairways and on the slopes. Other features include: full range aqua-sports facilities consisting of yachting; rowing, scuba diving, jet-ski, angling and other aquatic sports to complete the landwater recreational activities; and Town Administrative Center. ___________________________________________ Source: Strategy for Conversion .... vol 1. 62 , figures apply ~ to building area and direct _jobs _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) The natural fresh water river system will be protected and enhanced by developing a rain-forest area around it and constructing a dam for hydro-power and a waterfall to camouflage the dam. The surrounding area can be used for boating. Clientele coming from Europe via Hongkong can be flown via Subic International Airport and ferried by boat to the place. (d) Hacienda Luisita. While the 6,000 hectares estate remains predominantly for agro-industrial use, its development plan calls for other land uses which would ideally serve as a magnet for both business and leisure tourists. Presently, it boasts of its world-class golf course where golf club shares, pegged at about P1.3M has a present membership of about 250 and can still allow for an additional membership of about 150; Inn on the Park, a 20-room standard inn and the commercial mall strategically located along McArthur Highway. The Hacienda's sugarcane milling operations remains as the major hub of activities and is frequented by visitors for educational trips. Its existing internal railways and "bagon" has potentials for use as a unique mode of transport for adventurous tourists who can view the vast sugarcane plantations and the milling process. Moreover, a museum to feature evolution of sugar milling equipment including the now uncommon carabao-driven processing facility can supplement the provincial trade display center which would feature, among others, sugar based native products, i.e. tinaclob, muscovado, inuyat, etc. The Luisita industrial park and special economic zone presently houses fourteen (14) locators: (8 presently operational, 6 in progress/plans being revised). Total employment generated by the locator industries is placed at 1,307 direct jobs. Investments of these locators is approximately P1.185 B for the period January to September 1986. The newly-inaugurated commercial mall, with a floor area of about 8,000 sq.m., houses, specialty stores, fast-food and 3 cinemas. Its ten-year development plan calls for the full development of the 120 hectares industrial park construction of a 50-room hotel, a commercial center, residential area (Las Haciendas Villas and the Family Parkhomes) supplementing existing housing for Luisita employees/workers and executive houses of locator industries, sports center, educational center, storage/processing/distribution centers. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) (e) Fontana Leisure Parks The Fontana Leisure Parks, located within the Clark Ecozone, is a blend of various cultural influences on a sprawling tree lined property. It captures the lazy enchantment of the Spanish countryside and exudes French elegance and refinement. Its accommodations include:(a) Fontana Resort and Country Club consisting of 544 villas inspired by French, Italian and Spanish architectural influences complete with five-star hotel standard facilities; (b) 300-room Mercure Grand Hotel for use by members, and (c) Mercure Grand Villas, which are five star quality single detached grand villas. Other than the clubhouse which features a 2.2hectare swimming pool with water slides, bars, coffee shops, gift shops, and restaurants, it also boasts of shopping arcade, day care center, health spa, health center, medical and dental clinics, and ballrooms. Other amenities included are the business and conference center (10,000 sq.m. - 5000 persons capacity convention center), recreation facilities as lagoon with boating facilities, fishing island, remote control boating and hatchery, playgrounds and mink parks in every cluster, jogging lanes, aviary, botanical garden, petting zoo, giant musical fountain, remote control car racing tracks and others. 14.1.3 Linkages with Other Economic Sectors Related to the development of tourism is the increase in the demand for the following which are produced in the region, to wit: (a) Requirements of Hotels/Restaurants agricultural products particularly rice, fish, poultry, swine, beef, fruits and vegetables, sea foods (crabs, lobsters/ulang), etc.; furniture's made from native/indigenous materials such as wood, rattan, bamboo, terra cota, marble, metal (used individually or combined as mixed media), carved/bone-inlaid furniture. A survey undertaken revealed the preponderant use of local-material based furniture by local inns/lodging houses and even luxury resorts as those found in Clark SEZ and Subic Freeport Zone; fixtures and furnishings made of local materials as quilts, lamps, mirror frames, various decorative items made of marble, clay pots, baskets, macrame, etc.; and plants for landscaping and flower arrangements. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) (b) Requirements of Tourists Souvenir items as bags, woodcrafts, papercraft and leathercraft products, guitars, buntal hats, bone-inlaid items, antiques and reproductions; clothes/garments; embroidered linens and linen-based products; and food items/delicacies for pasalubong such as processed meats (tocino, longganisa, batutay), chicharon, putong pakwan, pastillas, ensaymada, minasa, araro cookies and other bakery products, fresh fruits as water melon, mango, papaya, tamarind, star apple, sweetsop and candied fruits/preserves. In the course of the study, the following issues and concerns were noted: 1. Long haul tourists from Europe combine the Philippines with Hongkong and Singapore, indicative of the lack of shopping attractions. This situation engenders lost business opportunity and also adversely affects its competitiveness as tourist destinations. Within the region, except for the duty-free shops and some scattering of shopping malls, there is a dearth of shops offering varied, attractive, quality goods. Although the integrated shopping-food-entertainment-service-exhibit center predominant in Metro Manila, is not something which the tourist looks forward to in the region, the region is beset by the long distance or contiguity/facility of reaching areas to shop. Tourism shopping is poorly developed with better quality outlets very difficult to find. This is due primarily to the lack of information on how to access them. Even the ubiquitous marketplace or palengke, which is the microcosm of the people's lifestyle, traditions and economic activities, offers very limited goods particularly during nonmarket days. 2. Quality crafts and products of each province are difficult to locate. Attempts to display various crafts/ products of Bulacan was made with the establishment of the strategically-located Bulacan International Trade Center (BITC). The products on display, unfortunately, did not bring into fore the best of what Bulacan could offer. Stalls/establishments along the Angeles City's Friendship Highway, used to effectively serve as an informal yet integrated display area for its various handicrafts, furniture, gifts/toys and housewares (GTH) until the Pinatubo eruption. However, except for some shops which remain open, this commercial section has ceased to perform this function. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) 3. Food served in hotels were of limited variety and were poorly prepared It did not speak well of the culinary talents which the region prides itself of. 4. Weak linkage between the tourism industry and other economic sectors vis-a-vis tourism planning/programs. Appreciation of the vertical and horizontal linkages of tourism to agriculture, commerce and other industries is minimal, not organized nor effectively linked. A case in point is the "one barangay-one product" movement of the Department of Trade and Industry. This program focuses on fragmented livelihood programs by developing livelihood programs or products which are socially unique but globally accepted products and services. This can serve as the staging point/take off for an inter-industry symbiotic relation where each contributes to the development/enhancement of the other. Presently, the Regional DTI is promoting various products which can be potential attractions. The pervading rationale of this project is for the community to identify an existing product, a site, a festivity, etc. which they can be truly proud of and identify and relate with. However, hardly any of the tourism council officers interviewed/appeared to be aware of this movement. This is regrettable considering that not only would it serve to provide anchor to small entrepreneurs and promote community-based enterprises but would effectively enhance the tourism industry. This takes on added importance inasmuch as the primordial development thrust pursued is the community-based tourism. Among the projects which could be linked are: Product Municipality/Barangay Ilang-ilang Anao, Tarlac Antique Furniture Tarlac, Tarlac Bags Panasahan, Malolos, Bulacan Fireworks Santa Maria, Bulacan Sampaguita Lubao, Pampanga Meat products San Fernando, Pampanga Mango Limay, Bataan Mango Sta. Cruz, Zambales _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) Related to the production and training facility as envisioned for the Philippines are the Jewelry Center in Meycauayan, Bulacan, the Marble Production and Training Center also in Bulacan and the Furniture Center in Pampanga. Opportunities are ripe to use these as take-off points for tourism programs. Similarly, agricultural schools which excel in their particular field of endeavor as the Central Luzon State University (CLSU) can be linked to tourism, if planned out well. Other opportunities which may be explored include: use of locally produced furniture and furnishings for tourist and tourist-related establishments. Among those found to possess enormous potentials include: Municipality/Province Product furniture (wood, wood combined with Betis, Pampanga wrought iron, terra cota, bamboo, rattan); guitar, hand-carved furniture San Mateo, Santo Tomas, Pampanga terra cota quilted throw Along Friendship Highway, Angeles City bedcovers, pillows, wall hangings, comforters; mixed media furniture, macrame; baskets, hampers made of wrought iron woven with rattan and wicker Baliwag, Bulacan bone-inlaid furniture, 3-D papier tole nito & pingwikiw baskets, miniature Various municipalities within Bataan nipa huts, stuffed toys, hand-painted tshirt Hermosa, Bataan handpainted jars Lahar affected municipalities of Pampanga, Tarlac and Zambales lahar-based products _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) 14.2 Proposed Strategies Economic-related strategy underscores the development of the market for products in line with tourism development. This would respond to the constraint of "limited domestic market demand", one of the identified critical problems for growth of industrial sector. 1. Linkage with tourism development will serve the market for a variety of food products and souvenirs (particularly those which have utilitarian values, a growing trend noted among tourists), enhancing cottage industries and SMEs involved in food processing, hat making, jewelry making, furniture making, gifts, toys and housewares (GTH ) and the like. 2. Corollary to this is the priority development of SMEs including micro and cottage industries which are identified as source of livelihood and the "mainstay of employment generation, component of sub-contracting, main actor of industrial clusters and platform of spin-off ventures". 3. Another strategy which likewise applies to the tourism industry is the building of effective institution. Mode recommended is through the promotion of cooperatives and the strengthening of the NGOs' roles. Establishment of industry associations by SMEs and by specific interest groups has contributed in strengthening their capability and in addressing common problems. This augurs well in their expansion and in improving their bargaining position as major producers/suppliers. Cooperatives, on the other hand, have been found to be viable instruments to promote equity, social justice and people empowerment. Coops are granted a wide range of privileges and incentives which would be advantageous to certain endeavors in the industry. NGOs like the local Chamber of Commerce and Industry, can be active development partners of government agencies/institutions in areas of skills development, organizational development and strengthening, market linkaging, information dissemination, etc. The Bulacan Chamber of Commerce and Industry typifies the dynamism of an organization vis-à-vis the promotion of local products linked up to tourism. 4. Establishment of strategically located venues for the display of the province's products and the institutionalization of trade and food fairs and "fangges".This may be in terms of one-stop shops as envisioned in the Bulacan International Trade Center and presently operated/managed by the Bulacan Chamber of Commerce and Industry or it may be less structured, taking off from the set-up found along the Friendship Highway in Angeles City or the Friday tiangge at the Apo Church in Angeles. The pervading idea is to provide a highly accessible area which would regularly display _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) products of the province at the same tirne provide vital information on how and where to access these products. Alongside, this is the exploration of ways and means to expand/improve market places/palengke of the municipalities to serve as readily accessible places where the domestic tourist can readily shop and get a glimpse of socio-economic microcosm of the municipality within a very short time. This augurs well if viewed against the preponderance of excursionists and domestic visitors who only stay for a day or two in the municipalities. 5. Maximizing use of present facilities as the Paskuhan Village and the various productivity centers. Options to consider are the sale of export over-runs or products produced in the economic zones of Clark, Subic, Bataan, in consonance with the provision of the law, which provides for sale to domestic market of 30% of the produce provided taxes on foreign components are paid. 6. Concentrating on domestic tourism possesses the added advantage of minimizing business risks since it is less influenced by economic and political considerations. A direct relationship exists between the magnitude of foreign tourist inflow and investments in tourism-related facilities and exogenous factors as political stability and operating economic environment. With this as the region's thrust, continuing flow of tourists is certain. 14.3 PLANS AND PROGRAMS 1. Establishment of community trade display centers in identified strategic areas of the provincial capital and /or city and at the CSEZ and SBFZ. The purpose of these establishments is to showcase/ highlight the best products the province could offer and concurrently serve as business center. With this, requirements of those leisure tourists interested in purchasing some of the products and those of the business tourists on the look-out for business opportunities, could be viably addressed. Conceptually, the scheme would involve: Non-government organizations (NGOs)/associations comprised of micro, cottage, small and medium enterprises (MCSMEs) shall spearhead the project the local government unit (LGU) can provide the necessary infrastructures or allot certain sections in any of the LGU-owned buildings for use as trade display. DTI and DOT shall serve as advisory bodies, assisting primarily in facilitating identification of marketable/quality products. DTI, shall take the lead in providing _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) technical assistance along areas of product development, product design and packaging (through Product Development. and Design Center), and market linkaging. The NGO with LGU, DTI and DOT in advisory capacities, shall jointly screen and evaluate products to be displayed. the trade display center shall be operated and managed by the NGO/ local chamber of commerce and industry (under an expanded membership to include MCSMEs). It shall also function in endorsing products for display. a three tiered or graduated schedule of fees shall be paid by the lessees based on their financial capability and magnitude of business operations. A cross subsidy arrangement shall be effected to ensure project viability and at the same time afford the "infant but promising" industries opportunities to grow and mature. sale of items shall be encouraged with a prescribed percentage being ploughed back to defray operations and maintenance of the center profile/business directories shall be maintained in the center together with sample displays provided in the exhibit center. sharing of salespersons shall be encouraged to reduce overhead expenses for sales personnel trade display centers shall double up as business incubators. For this purpose, recommended facilities to be provided are conference rooms to serve as venue for trainings and for meeting prospective clientele, facilities as telephones, facsimile, reproduction/mimeographing machines, etc. regular conduct of training courses covering organization development and strengthening, enterprise development, business management, business laws and regulations, product development, product and productivity improvement; provision of business counseling services. At the CSEZ and SBFZ, it is recommended that the designated areas within the Duty Free Shops (DFS) or adjacent to the DFS serve as display/trading centers for local handicrafts and products not only of the provinces of Pampanga and Zambales, respectively, but of all provinces comprising the region. 2. One Barangay One Product (OBOP). - Program involves the identification and development by the community of a particular product to which they could identify and relate with. Mechanics involved are the mobilization of the people in the barangay to _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) jointly support a specific product, and pursue it vigorously till excellence is achieved. Viewed against the tourism industry, this OBOP movement, may refer to tourism products as attractive places, monuments, cultural celebrations, fiestas or model farms which one could be proud of and can be visited. It may also refer to service products as food, restaurant, hotel or resorts or identified crafts/products of the area. 3. Crafts/artisan village - The pervading concept of this proposal is to provide a community-based fora where production of specialized products of the province can be viewed by the tourist supplementing the regular display/sales center. These villages normally house common service facilities (e.g. kiln, lathe, etc.), warehouses to stockpile raw materials, and include seminar rooms where courses on product and productivity development, institutional development/entrepreneurial values formation and management, production management, enterprise development and productivity improvement are conducted. In addition, periodic business clinics and funding clinics can be held here. 4. Market day/tiangge - institutionalization of the tiangge as part and parcel of the tourism activities to attract bargain hunters in keeping with the thrust of promoting Central Luzon as a shopping paradise/haven. This same theme of shoppers paradise may be incorporated in the over-all plan to "reinvigorate" the Paskuhan Village. Items sold would not only be local products but items produced in the various ecozones within the region, the latter forming the greater bulk of merchandise sold. Arrangements may be made to systematically handle the "exportover runs and seconds" subject to the payment of the required taxes pursuant to existing laws and regulations. 5. Encourage use of local materials and products for furniture fixture and furnishings, construction materials via continuing/sustained assistance through product development, design promotions and market linkages; encourage the growth of symbiotic relations between producers and tourist facility owners through discounts/deferred payments to be given by chamber of furniture makers to owners of hotels/lodging facilities, restaurants and other tourist-related establishments who shall patronize these products. Hotels, on the other hand, can allow sections of their establishments for periodic displays of crafts/products locally produced and are being promoted to tourist. Variables of consignment arrangements may be further explored. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) 6. Use of local materials such as marble and bricks for construction vis-a-vis architectural designs which are in keeping with the local color/ambiance. A scheme which may be pursued to obtain the best use of indigenous materials would be through architectural competition conducted by the United Architects of the Philippines or of CREBA/REBAP. Province Product Bulacan Marble Nueva Ecija Bricks Tarlac Bricks 7. Culinary arts/gastronomic uniqueness of the province which could be served in hotels, restaurants, festivities/cultural activities food fairs scheduled culinary tours, joint trade and food festivals/exhibits etc. Bulacan has successfully promoted its various cuisine through food festivals in strategic venues in Metro Manila. This, combined with the display of local handicrafts, may be replicated by other provinces, initially on a per province basis, subsequently as a regional effort. Province Cuisine/Food Pampanga Preserved meat products, aligi ng talangka, camaro, Spanish-influenced specialty food (retort packaged instant meal type) Bulacan ensaymada, candied preserves, chicharon, pastillas Bataan dried and smoked fish, araro cookies, crabs & shrimps Tarlac litson kawali/bagnet, adobong usa/baboy ramo/bayawak/sawa Nueva Ecija batute (sausages) _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) 8. Popularized/intensify marketing of souvenir items/gifts, toys and housewares which the tourist can purchase Product Barangay/Municipality/Province Soft educational toys, quilts Angeles City, Pampanga Embroidered linen and linen-based products, garments Pandi and Sta. Maria, Bulacan furniture and furnishings (antiques and reproductions) marble products (lamp stand, ashtrays, utility boxes, etc. Norzagaray and San Ildefonso, Bulacan 3-D papier tole/craft/paper based frames, buntal hats, bone-inlay Baliwag, Bulacan bags Panasahan, Malolos, Bulacan candied fruit preserves, pastillas and processed foods San Miguel, Bulacan gold jewelry, leathercrafts Meycauayan, Bulacan jewelry Marilao, Bulacan 14.3.1 Taxes Remitted to the Government Assuming that fifteen percent of the gross receipts from tourist are to be remitted to government as payment for taxes and various fees/permits, this immediately translates to about P504.09M in 2000, P1,420.14M in 2005 and P3,489.89N by 2010. Considering further tax payments of restaurants, bars, entertainment and recreational establishments, tourist bus operators, etc. , at an assumed one to one ratio, this means that the actual revenues flowing into the government coffers would be further augmented . This subsequently translates to additional money to be used to defray expenditures for infrastructures and social services. 14.3.2 Employment Generation Tourism is labor intensive, therefore, it readily affords itself as a major employment generator. Based on typical development patterns found in other similar projects, direct job creation assumptions include: 5 jobs/100 sq.m. of tourism space; 4 jobs/ 100 sq.m. for commercial space, it is estimated that total jobs to be generated would be very significant. Using the Philippine input-output multiplier table (Table 14.2) as basis for estimating additional employment generated, it would be noted that with a job multiplier _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) coefficient of 1.29, for every direct hiree of a tourist establishment, there would still be an additional 1.29 jobs created. Based on the studies on the impact of the Triangle Development Scenario primary core are where significant population growth and increased economic activity is expected to occur, consisting of Subic-Olongapo, Clark-Angeles and the area from San Fernando to the northern fringe of Metro Manila, it is expected that about 230,000 direct jobs would be generated at full build-out. Using a multiplier of 1.292, an additional 269,700 jobs could be produced. Extrapolating further, direct Job generation vis-a-vis economic support magnitude of one job providing support to 3 persons,3 with the development of Clark-Subic, it is projected that livelihood support can be provided to at least 1.499 Million people. Employment growth for the third anchor is estimated at 135,000 jobs, while the corridor areas connecting the 3 growth zones are estimated to provide about 100,000 jobs. The total job potential of the 3 zones would be about 735,000 benefiting some 2.2M people. While the problem of hiring foreign consultants/managers to manage tourist facilities represents leakage in the economy, this is not deemed to be very significant in the region. In a survey conducted, except for those hotels/resorts within the CSEZ and SBFZ, the upper rungs of management are held by Filipinos. Likewise foreign exchange remittances of foreign equity holders and expense for imported items/products used for operations, may alter the over-all figure (in terms of the multiplier coefficient derivatives) but not significant enough to reduce dramatically the impact of the industry to the economy 14.3.3 Multiplier Effect. The effects of tourism pervades many sectors in the economy, from construction including industries vertically and horizontally linked to it, to food, entertainment and recreation, to shopping and transport. A unit of peso or dollar expenditure translates to more than the original amount initially spent by the tourist. The multiplier analysis or the actual impact every peso spent vis-a-vis the number of times the peso is respent by other recipients in the chain or as it works its way through the trading relationships established among the sectors; thus provides a better indicator of the over-all effect of visitor's expenditure. It is these trading relationships which constitute the linkages and _________________________________ 2 Refer to Table 1-1.1. Philippine Input-Output Multiplier as reflected in the Inter-industry Accounts of the Philippines 3 Source: IBRD Subic Master Plan _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) vary proportionately to the breadth of the economic base, which in turn serves to distinguish one region from another. The higher the multiplier, the greater the ability of an area to meet the demands of the tourists from within its own production capabilities. Several case studies, estimation procedures and survey articles have been made on the multiplier effect. In estimating the multiplier factor, income taxes and social insurance contribution are considered as direct leakage of income from the local economy, the same being normally deducted at source and paid outside the area and therefore reduces the magnitude of the disposal income of the household which is respent. For this particular study on the economic impact of tourism in Central Luzon, the computed mean for national economies is adopted to provide an indicator (low estimate) of the over-all impact of each peso received by the industry. Since the simple multiplier is always the inverse or reciprocal of the marginal propensity to save (i.e. not to consume), it is equal to 1/1- marginal propensity to consume (MPC). The adoption of multiplier factor of 1.671/ simply means that the chain of secondary consumption respending for every peso of primary investment, there is an extra of secondary consumption equal to 1.67 which occurs. If one were to consider the input-output multiplier study of the Philippines, a higher multiplier is obtained. As noted in Table 14.2, income multiplier is placed at 10.51 and an output multiplier of 1.80. Although a multiplier higher than 10 is rather difficult to rationalize, the same should simply be appreciated as an indicator of the magnitude the industry impacts on the economy of the country. 14.4 Costs a. Direct Cost Cost of Infrastructure, Utilities and Other Ancillary Facilities. Capital expenditures or outlay such as land acquisition, civil works as construction, expansion and/or improvement of the various infrastructures (roads, bridges) and utilities (power, water, telecommunications) have to be sourced either locally or from foreign resource institutions. Whether these expenditures are funded through ______________________________ 1/ Refer to Table 14.2 for stud- of tourist income multiplier under various environment/economics _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) budgetary allocations of the various government agencies/ LGUs, through loans, bond floatation, or private investor's equity, these represent cost to the economy. It represents a rechanneling of funds from other purposes/projects where the socioeconomic impact may be comparatively higher. b. Indirect Cost 1. Competition in Use of Funds. As the country's economic development accelerates, alternative investment opportunities vie for use of limited funds. Strong competition is offered by other sectors all on the look-out for cheap and liberal credit. Except for the Social Security System (SSS) which provides financing to hotels through the Development Bank of the Philippines under its KASAPI IV program, credit window for the establishment/expansion of tourism facilities are generally available from local commercial banks. Funding from external resource institutions remain limited. Among existing ODA institutions, no credit window is open for tourism facilities per se. What is available are multilateral and bilateral loans for support facilities and utilities such as power, road, railways, telecommunications, ports, water supply, sanitation system, for environmental conservation, for other sectors which relate or have bearing to tourism such as human resource development, vocational training/education, cooperative development, agricultural production, MCSMEs. Nature of intervention is both for capital and technical assistance, project and commodity grants. 2. Conflicts in Land Use. Proposed massive industrial developments may adversely affect the natural environment and image which Central Luzon is promoting as a tourist destination. Development plans for these major infrastructures, unless undertaken in tandem with other sectors, may reduce the attractiveness of the region. On the other hand, the development of anchor tourist areas may affect identified prime agricultural lands. Other indirect costs of tourism which impact on the environment particularly on the adverse effect of mass tourism, social carrying capacity, the demonstration effect phenomena and health and social cost are discussed extensively in other sections of the study. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP) Table 14.1 Philippines Input-Output Multipliers Output Multiplier Sector No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Sector Name Crops Livestock and Poultry Fishery Forest and Logging Metallic Mining Non-Metallic Mining Food Processing Beverage and Tobacco Manufactures Textiles & Leather Products Wood and Wood Products Paper, Publishing and Printing Chemicals and Chemical Products Petroleum Products Non-Metallic Mineral Products Basic Metals Metal Products and Machine Miscellaneous Manufactures Construction Electricity, Gas and Water Transportation, Communication, Storage Wholesale & Retail Trade Finance, Insurance, Real Estate Government Services Private Services Type I3/ 1.30 2.06 1.42 1.31 1.64 1.53 2.28 2.09 2.17 2.14 2.30 2.30 2.04 2.12 2.67 2.44 2.18 2.00 2.30 1.92 1.40 1.30 1.00 1.80 Type II4/ 3.70 4.10 3.20 2.70 3.04 3.50 4.19 3.40 4.03 3.00 3.94 3.98 3.37 3.56 3.79 4.11 4.06 3.51 3.77 3.81 2.93 2.34 5.60 3.96 Income Multiplier Job Multiplier 2/ Direct Coefficient 0.45 0.23 0.31 0.24 0.20 0.33 0.06 0.10 0.10 0.11 0.12 0.10 0.01 0.11 0.04 0.16 0.09 0.17 0.12 0.25 0.25 0.15 1.00 0.03 Type I 1.15 1.88 1.24 1.24 1.49 1.27 5.10 2.89 2.26 3.11 2.88 3.26 21.31 2.87 5.90 2.27 2.16 1.88 2.71 1.61 1.30 1.42 1.00 15.10 Type II 1.86 3.03 2.00 2.00 2.40 2.04 0.20 4.65 3.64 5.00 4.64 5.24 34.29 4.62 9.49 3.66 3.47 3.03 4.35 2.59 2.09 2.28 1.61 24.29 Type I 1.17 1.17 1.17 1.17 1.81 1.81 19.34 3.83 2.30 4.30 2.69 5.25 66.60 5.00 4.07 3.20 3.54 2.25 3.58 1.70 1.29 1.68 1.00 1.29 Type 11 1.62 1.62 1.62 1.62 4.57 4.57 29.70 5/ 6.78 4.02 6.55 4.63 9.86 155.34 5/ 12.51 5/ 7.80 7.26 6.51 44.40 5/ 8.43 3.53 2.38 3.49 2.36 2.36 5/ Notes: 1/ Private services include educational, medical and health, business, recreational, personal, hotel, restaurant and other miscellaneous services. 2/ Direct Coefficient = Household Row in Matrix of Technical Coefficients (25 by 25) 1993. 3/ Type I Multiplier = Direct and Indirect/Direct. This represents estimates of an open economy, used here to represent regional impact. 4/ Type II Multiplier = Direct, Indirect and Induced and Induced/Direct. This assumes a closed national economy and tends to overestimate the impact. 5/ Numbers over 10 are well beyond any reasonable estimation and should be interpreted only as indicative of the magnitude of these industries' importance in the economy. Source: The Interindustry Accounts of the Philippines: 1983 Update Table 14.2 Tourists Income Multiplier AREA MEAN RANGE NO. OF STUDIES National Economies 1.67 1.23-1.98 4 Island Economies 0.85 0.39-1.59 18 US States and Countries 0.68 0.44-1.30 7 UK Regions & Countries 0.35 0.29-0.47 7 UK Cities and Towns 0.28 0.19-0.40 7 Sources: Archer, B. H. "The Value of Multipliers and Their policy Implications" Tourism Management 1c-62, (3) 236-241; Archer B.H. "Tourism and Island Economies,: Impact Analysis" Progress in Tourism, Recreation and Hospitality management 1989 (1) 125-134; Flethcher, J.E. "Input-Output Analysis and Tourism Impact Studies" Annals of Tourism Research 1989 (16) 514529, Wanhill, S.R.C. "Measuring the Economic Impact of Tourism", The Service Industries Journal 1983 (3) 9-20. _____________________________________________________________________________________________ Final Report for the Tourism Master Plan for Region III (Central Luzon) Engineering and Development Corporation of the Philippines (EDCOP)