Tourism In Philippines Assignment

Running head: TOURISM IN PHILIPPINES
Tourism in Philippines
Name of the student
Name of the university
Author Note:

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1. Executive Summary:
The report below shows the importance of tourism development in the underdeveloped nations
like Philippines. Nations like Philippines which are still shifting from largely agriculture based
economies to industrialised ones, can utilise tourism to bring about economic development. This
is because tourism attracts foreign reserve which can be used to import goods till the
manufacturing sectors of the countries gain sufficient robustness to meet the needs of the
countries. However, in the absence of industrial development, the tourism sector in nations like
Philippines remain largely dependent on foreign markets. This impairs the development of the
resident tourism firms, ultimately weakening the development of the tourism market on the
whole. The government should take strong steps to develop the countries economically and boost
the development of the tourism market in the country.

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Table of Contents
1. Executive Summary:................................................................................................................1
2. Introduction:............................................................................................................................4
2.1. Context of the research:........................................................................................................4
2.2. Aim of the report:.................................................................................................................5
2.3. Structure:...............................................................................................................................5
3. Destination profile for Philippines:.........................................................................................6
4. Main body:...............................................................................................................................6
4.1.1. About Philippines:.............................................................................................................6
4.1.2. Impact of tourism on the economy of Philippines:............................................................8
Generation of revenue:................................................................................................................8
Earner of foreign currency reserves:............................................................................................9
Generation of employment and economic development among the local communities:..........10
Promotes environmental sustainability in Philippines:..............................................................10
4.2. External factors effecting tourism industry in Philippines (PESTEL):..............................12
4.2.1. Political factors:...............................................................................................................12
Political stability:...................................................................................................................12
Bilateral relationships of the government of Philippines:.....................................................13
4.2.2. Economic factors:............................................................................................................14
Gross Domestic Product or GDP:..........................................................................................14

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Foreign exchange rates:.........................................................................................................15
4.2.3. Social factors:..................................................................................................................16
4.2.4. Technological factors:.....................................................................................................17
4.2.5. Environmental factors:.....................................................................................................18
4.2.6 Legal factors:....................................................................................................................18
Corruption:.............................................................................................................................18
Laws regarding the tourism industry:....................................................................................19
4.3. Porter’s Five Forces analysis of Philippines’s tourism industry:.......................................19
4.3.1. Threats of new entrants:...................................................................................................19
4.3.2. Bargaining power of buyers:...........................................................................................19
4.3.4. Bargaining powers of suppliers:......................................................................................20
4.3.5. Threats of substitutes:......................................................................................................20
4.3.6. Threats of rivals:..............................................................................................................20
4.3. Analysis of the findings:.....................................................................................................21
Evaluation of comprehensive plan and its value for tourism business development:...................22
Strategies (Strategy proposals and directions) to develop a chosen tourism destination-
Philippines:....................................................................................................................................22
Identify areas for tourism development, related tourism facilities and supporting infrastructure:23
Specify the major programs, roles and responsibilities of key players, institutional arrangements
and resource requirements for achieving the vision......................................................................23

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5. Conclusion:............................................................................................................................23
6. Recommendations:................................................................................................................24
References:................................................................................................................................25
Appendix:..................................................................................................................................30
2. Introduction:
2.1. Context of the research:
Tourism is one the most impost important service sector industry in the world. The
global tourism industry has surpassed a value of US$ 8.27 trillion (Prnewswire.com. 2019). The
tourism industry is responsible for ushering several benefits in the economies concerned like
generation of revenue, foreign reserve, tax income and employment generation. The industry is
credited for generation of as high as 5% of the GDPs of developed markets like Spain (Bruce-
Lockhart 2019). The emerging economic giants like India and Brazil have already gained strong
competitive advantages in the industry owing to factors like rich natural resources and culture
(Timesofindia.indiatimes.com. 2019). The industry is even capable of boosting economic growth
in the less developed countries like Philippines. As per an article released by the Philippines
News Agency, Republic of Philippines in 2019, tourism alone contributed to about 12.7% of the
country’s GDP in 2018 (Pna.gov.ph. 2019). This release clearly indicates the importance of
tourism in the economic development of countries and the global economic development in
totality. That is why governments of various countries form plans to promote their respective
tourism industry. For example, the Government of Philippines, in order to promote the tourism

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sector in the country and reap the economic development from it has formed The National
Tourism Development Plan 2016-2022 (Tourism.gov.ph. 2020).
2.2. Aim of the report:
The aim of the report would be exploring the impact of the tourism on the economy of
Philippines and the factors impacting it.
2.3. Structure:
The research would be inspired to a great extent from The National Tourism
Development Plan 2016-2022prepared by the Department of Tourism, Republic of the
Philippines and destination profile map shown in the report. The crux of the research would be
divided into two main parts namely, impacts of tourism on the economy of Philippines and
factors affecting the industry. The analysis of the factors affecting tourism in Philippines would
be divided into two parts, namely PESTEL analysis and the Porter’s five forces analysis. The
findings from these analyses would be further dissected to present recommendations for further
improvement in the tourism industry in Philippines. However, prior to embarking on the
research, it would be noteworthy to gain some basic ideas about the country Philippines.

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3. Destination profile for Philippines:
Destination profile for Philippines
Name of Destination Philippines
Capital City Manila
Population size 100 million(approx)
Language(s) spoken English and Filipinos
Currency PHP
Composition of the hospitality market International brands like Hilton Worldwide have already
arrived at the market
Major tourist attractions
islands like Batanes (indicated as NP1 on the map of
The National Tourism Development Plan 2016-2022),
beaches and heritage sites (like Ilocos region marked as
NP2 in the The National Tourism Development Plan
2016-2022)
Tourist seasons (Seasonality) January highest, September lowest
Tourist Data https://www.dti.gov.ph/resources/statistics/tourist-
arrivals
4. Main body:
4.1.1. About Philippines:
Philippines is an island country located in the Pacific Ocean. The area of the country is
3000000 km2and its population of 100 million. The country is located on the Pacific Ring of Fire
which is extremely prone to volcanic activities and earthquakes. The country once mainly an
agriculture based economy, has started manufacturing products like electronic goods and
transport equipment. However, the country is still dependent on imports for basic requirements
like iron and steel, so important for development of the tourism infrastructure (Psa.gov.ph.
2020). The graph below shows that the exports of the country showed a sharp decline while its
imports increased in May 2019. This actually points out to the lack of development in the
industries like IT and iron and steel industries in the country which in return results in lower
GDP. The tourism in the country aids in raising the GDP in the country by contributing to as
high as 12.7% (Pna.gov.ph. 2019). The main offerings of the tourism sector in Philippines are

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islands like Batanes (indicated as NP1 on the map of The National Tourism Development Plan
2016-2022), beaches and heritage sites (like Ilocos region marked as NP2 in the The National
Tourism Development Plan 2016-2022) (Tourism.gov.ph. 2020). However, the tourism
industry in Philippines in spite of its immense offerings in terms of tourists attractions, faces
severe competition from other nations, many of which are either developed or emerging boasting
massive tourism industries of their own. For example, Philippines faces competition from
markets like the United States of America, India, Japan and China, all of which are far more
developed and capable of supporting robust tourism industries (Prnewswire.com. 2019).
Philippines faces several environmental issues like destruction of wildlife and illegal trading of
animal parts (Environews.ph. 2020). These environmental issues would be detrimental to be
tourism in the country and the economic development of the country on the whole.
Figure 1. Graph showing import and export of Philippines
(Source: Psa.gov.ph. 2020)