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Tourist arrivals in the Philippines are projected to fully recover in 2025, driven by growth in visitors from key markets despite headwinds like high borrowing rates that may crimp spending on travel, BMI Research said.
In a report sent to journalists on Monday, the unit of the Fitch Group said international arrivals in the Philippines are forecast to reach 8.3 million next year, finally beating the prepandemic level of 8.2 million.
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This year alone, BMI said it expects 6.6 million foreign tourists to visit the Philippines, which would mark an annualized increase of 32.6 percent and account for 81 percent of arrivals registered before the pandemic triggered harsh lockdowns that sapped demand for travel.
By 2028, BMI said the number of foreign visitors would reach 9.4 million.
“We forecast the Philippines’ arrivals to continue to increase over the remainder of our medium-term forecast period fully recovering in 2025,” BMI said.
“We expect arrivals growth to be driven by key source markets in Asia-Pacific, North America and Europe,” it added.
Data from the Department of Tourism (DOT) showed the Philippines had 1.6 million tourist arrivals in the first quarter, growing by 21.3 percent year-on-year. During the period, South Korea, the United States, mainland China, Japan and Australia were the country’s top five source markets.
Dollar source
For Fitch, the figures from the DOT indicated that the market’s postpandemic recovery “remains underway.” When the pandemic hit home in 2020, foreign visitor arrivals in the Philippines crashed by 82.9 percent after countries sealed off their borders to break the virus contagion.
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That said, the expected rebound in arrivals bodes well for the Philippines, where tourism receipts are a major source of dollars for the economy. The Bangko Sentral ng Pilipinas projects annual tourism earnings growth to hit 40 percent this year before easing to 10 percent in 2025.
Moving forward, BMI said there were still some headwinds that may hamper tourism recovery in the Philippines.
“While we have a positive outlook for Philippines’ arrivals, there are short-term risks stemming from high living costs in many markets globally and tighter credit conditions, which will weigh on consumer spending, particularly on non- essential categories such as travel,” the Fitch unit said. INQ