Department of Tourism Secretary Christina Garcia Frasco has urged private sector investors to capitalize on the country’s growing tourism industry, citing a looming shortage of more than 120,000 hotel rooms by 2028.
Speaking at the Big Bold Reforms: The Philippines 2026 Investment Briefing on Jan. 16, Frasco said the sector now contributes nearly 9 percent to the gross domestic product.
“The foundations of Philippine tourism are firm, and the demand for it is real. Therefore, the opportunity to invest is open. We invite you to partner with us in seeing the Philippines rise to its rightful place as a tourist powerhouse,” Frasco said.
She described the industry as one of the country’s most vital economic pillars, supported by a significant surge in both domestic and international travel.
The Philippines has 335,592 hotel rooms nationwide, but Frasco noted that current demand projections indicate a substantial shortfall within the next two years. She identified this gap as an opportunity for sustainable and regionally balanced investments in urban centers, leisure destinations and emerging secondary hubs.
Tourism delivers some of the highest returns among key sectors, with Frasco estimating that every P1 invested generates a return of about 450 percent.
The industry’s growth has been bolstered by a robust domestic market. In 2024, the country recorded more than 134 million local trips, representing the highest domestic travel share in Southeast Asia with a value exceeding $70 billion.
International metrics also showed resilience. Bureau of Immigration data for 2025 reported 5.94 million international tourist arrivals. When including 543,085 returning overseas Filipinos, total foreign visitor arrivals reached 6.48 million.
Inbound visitor spending reached a peak of P694 billion in 2025. Frasco said these figures were achieved despite a series of natural disasters in late 2025 and a reduction of more than 93 percent in the department’s promotions budget.
To support the influx of visitors, the government launched 19 new international routes in 2025. These routes link major gateways including Manila, Cebu, Clark, Iloilo and Kalibo to key overseas markets.
Frasco said the administration of President Ferdinand Marcos Jr. has aligned various government incentives to attract further capital. These include 4- to 6-year income tax holidays, customs duty exemptions for tourism-related imports and enhanced deductions for training and research. Investors may also opt for a 20 percent corporate income tax rate under the enhanced deduction regime.
