On the DOT
By Atty. Helen J. Camarista

The economics of tourism

When you see foreign tourists in your town or city appreciating local sights and points of interest, what immediately comes to your mind? Your answers may be as varied and as interesting as can be. You may think of the cultural, social, educational, religious or environmental aspects of tourism as you please. Or you may think about the economic side of tourism. After all, this aspect is the most visible of all in terms of both its causes and effects. Let's have a look on the economics of tourism.

Tourists spend for a lot of things in the area they visit. They spend on food, transportation, accommodation, tours, entrance fees, souvenirs and many other things. As a matter of fact, foreign and domestic tourists, spend more on a daily basis in the place they visit than they do while in their home country or province. This increased tourist expenditure causes inflationary pressure on local residents who have to stretch their spending capacity to be able to buy things sold to tourists at such “pang-turista” level of prices. Those of us who have visited Boracay, Aklan, a premier tourist destination in the Philippines would know better what this means.

Foreign tourist expenditures in the Philippines become exports of this country. In this kind of export, it is the buyers (tourists) who come to our country. It's different from export of tangible goods where the buyers just stay in their country and wait for the goods to arrive. However, the economic effects derived from both kinds of export are the same. If the exchange rate is favorable to the foreign tourist because the host country like the Philippines has devalued currency, demand for visitor services will be relatively higher this time around compared to pre-devaluation period, barring extraneous factors. This goes without saying that when Filipino tourists/travelers spend money in foreign countries they visit, these expenditures become imports for the Philippines.

Increased tourist spending in Western Visayas, for example, produces more financial transactions in this region thereby creating a transactions multiplier. This should be of particular interest to local and national governments that impose taxes on such transactions.

Tourism offers excellent potentials for the economic development of the Philippines. There's no doubt about it. However, policymakers and industry leaders should not look at tourism as the cure for the economic ills of this country. Fixing our eyes solely on the economics of tourism could lead us to engage in endeavors that would subordinate nobler time-honored Filipino values to money and what it can buy. If we are not careful that might usher the beginning of our end as a people and as a nation.