MANILA, Philippines — The recovery in Philippine tourism activities last year was the slowest compared to peers in the Asia-Pacific region, attended by sluggish domestic travel, Fitch Ratings said on Wednesday.
In a report, the credit rating agency said tourism in the country clocked a recovery rate of 61 percent in 2023.
This was slower compared to tourism growth in Malaysia, Indonesia, Singapore, Thailand, and Vietnam, which registered 70 percent to 80 percent of the prepandemic benchmark.
According to data from the Department of Tourism, the country exceeded its year-end target with 5.45 million international visitors last year, about 650 thousand more than the projected 4.8 million visitors.
READ: DOT surpasses 5 million mark in foreign tourist arrivals for 2023
Robert Dan Roces, chief economist at Security Bank Corp., said in a Viber message the tourism sector is expected to be one of the drivers for economic growth this year.
“In the first quarter alone, one of the top performing sectors was accommodation and food and beverage services, driven by tourism among others. It was up 13.9 percent and outgrowing the first-quarter GDP (gross domestic product growth) at 5.7 percent. Accommodation alone was up 18.4 percent,” Roces said.
Sustained recovery
Fitch Ratings also expects tourism in the region to continue to recover—although at a slower pace mainly due to “less favorable base effects”—fueled by robust demand, economic resilience, additional flight capacity, policy efforts to reignite tourism, and depreciated local currencies.
“We project visitation volume in Asia-Pacific to reach about 335 million, or 92 percent of the prepandemic level despite a mild global economic slowdown,” the report said.
The debt watcher expects an overall recovery of tourism in the region, buoyed by its economic resilience.
“Some of the downside risks are a slow restoration of international air traffic capacity due to remaining operational challenges and lingering issues around staffing shortages; elevated airfares; stubborn inflation to potentially keep interest rates high for longer; and heightened geopolitical tensions,” the report added.