THE government stands to lose between P18 billion to P20 billion in revenue from the six-month closure of Boracay Island to tourists, Local Government Assistant Secretary Epimaco Densing III said Thursday.
In a Palace briefing, Densing said the government might lose roughly P20 billion in gross receipts if the closure of the island lasts half a year.
He said it was “not in the interest of everybody” to go the full six months in cleaning up the iconic destination, and that it was possible to open Boracay again in four months if all concerned parties participated in the government-led environmental rehabilitation efforts.
In other developments:
• The Philippines will struggle to meet its 7.4-million visitor target for 2018 with the closure of Boracay, ending three years of double-digit percentage gains, a Sydney-based aviation industry group said.
• Boracay’s closure has forced the country’s three main airlines to cancel both domestic and international flights to and from Caticlan and Kalibo airports, as the island accounts for approximately 6 percent of air traffic for Cebu Pacific, 22 percent of the smaller AirAsia, and an unspecified percentage for Philippine Airlines, the same industry group noted.
• Senator Nancy Binay, chairman of the Senate Committee on Tourism, said the government is still missing a detailed plan for the estimated 35,000 workers who will be affected by the closure.
Malacañang also said the P2 billion mentioned by President Rodrigo Duterte, who has called the island in Aklan province a “cesspool,” will be a fund for Boracay’s displaced workers.
“There will be a declaration of a state of calamity [for Boracay], but the President was insistent that the funds that will be spent will go only to the workers who will be displaced. He will not let any resort owners benefit from any sort of a calamity fund,” Presidential Spokesman Harry Roque said. Vito Barcelo, Macon Ramos-Araneta, Joel Zurbano and Darwin Amojelar
Tourism Assistant Secretary Frederick Alegre, in another press briefing, called on all stakeholders to cooperate and help the government to restore Boracay’s pristine condition and “reduce the time” to rehabilitate the world-renowned island.
Still, the short-term impact on tourism in the Philippines and the country’s three main airlines “could be significant,” the CAPA-Centre for Aviation said in a detailed analysis on its website published Wednesday.
“Philippines tourism authorities will need to invest heavily in marketing alternative tourist destinations, and work closely with the impacted airlines, to avoid a decline in overall visitor numbers,” the Sydney-based industry group, formed in 1990, added.
It noted that Boracay attracts two million visitors yearly – close to half of them foreigners — and is the third-largest aviation market in the country after Manila and Cebu.
About 15 percent of visitors to the country spend time in Boracay, which is also the most popular holiday destination for local tourists, CAPA-Centre for Aviation said. Nearly all the traffic at the Kalibo and Caticlan airports — the sixth and seventh-largest airports in the Philippines — consists of visitors heading to Boracay, the group added.
The Boracay Foundation, citing its own data, previously said about P56 billion in revenues would be foregone with the closure, with 36,000 jobs from both the formal and informal sectors to be affected.
This figure comes from the island generating about 20 percent of the country’s total tourism receipts from January to September 2017, a joint statement from the Philippine Travel Agencies Association, Tourism Congress Philippines, Philippine Tour Operators Association, and Organization of Hotel Sales and Marketing Professionals added.
Christine Ibarreta, president of the Organization of Hotel Sales and Marketing Professionals, said during a press briefing in March that 11 hotels in Boracay would stand to lose P50 million each in revenues should the island be closed to tourists for one year.
Corporate clients were already asking the hotel group about the closure owing to their scheduled summer conferences “and they are getting mad at us,” Ibarreta said last month.
However, the National Economic and Development Authority said that while the shutdown “will have a minimal impact” on the country’s economic growth, it can have “an adverse short-term impact” on the local economy.
Reynaldo Cancio, Neda director for national policy and planning, said in a briefing on Tuesday that a 6-month closure would “only have a 0.1 percent impact” on the gross domestic product growth.
“Even if the ban extends to up to 6 months, it would not impact the macrofundamentals,” Cancio added.
Meanwhile, Binay said there should be information channels to employees and employers about the impending disruptions in Boracay, along with programs for re-employment service, unemployment insurance, cash-for-work, direct job creation, and other measures to soften the blow to Boracay and its stakeholders.
“The goal should be to mitigate the impact brought job displacements by providing those who are working in the primary, secondary, and tertiary economic sectors a clearer plan for them before the proposed shutdown,” the senator said.
“Is government willing to subsidize 35,000 employed in the island?” she added.
As for Cebu Pacific, it has canceled 31 daily commercial flights and its sister airline Cebgo in Manila, Caticlan, Kalibo, and Cebu.
CEB also suspended daily commercial flight operation in Kalibo to and from Incheon beginning June 1.
“We expect to minimize the impact on our bottom line by redeploying capacity to other routes to between two to five percent. Our priority is to be able to help passengers who would be affected by the closure of Boracay,” said CEB spokesperson Ma. Rosario Lagamon.
Legacy carrier Philippine Airlines also adjusted its flight operations, as its chief information officer Ma. Cielo Villaluna said the airline will scale down its services to Caticlan and Kalibo airports for a six-month period beginning late April.
PAL will expand flights to other Philippine tourist and provincial destinations during the same period “to help ensure the continued growth of domestic tourism.”
Villaluna said PAL will operate nine weekly flights between Manila and Kalibo and seven weekly flights between Manila and Caticlan to maintain continued links to these gateways to Boracay and Aklan province.
All other Caticlan and Kalibo flights from Manila will be suspended from April 20 to Oct. 27, while flights to Caticlan from Cebu and Clark will be suspended from April 26 to Oct. 27, she added.
Beginning April 20, PAL will deploy additional flights on routes between Manila and Cebu, Iloilo, Puerto Princesa and Bacolod while on April 26, PAL will start increasing flights between Cebu and Busuanga (Coron), Cebu and Siargao as well as between Clark and Busuanga.
“As we direct our passenger market flows to these other key PAL destinations, PAL anticipates that the additional flights will help increase demand and spur economic activity for the benefit of the travel and tourism communities in various regions of the country,” PAL president Jaime Bautista said.