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PHILIPPINESSTATUS OF TRADE IN TOURISM SERVICES
PHILIPPINE DELEGATIONMADELAINE MONTERAMOS – National Economic Dev Authority
(NEDA)JEWEL UDARBE – Center for International Trade Exposition & Mission
(CITEM)BENJAMIN F. SANTIAGO – Department of Tourism, (DOT) Region V
Performance of the Tourism Sector:The Philippines compared to
the rest of the ASEAN
Source: ASEAN Secretariat
Tourist arrivals in ASEAN: Overall trendIn
Tho
usan
ds
81,229
89,225
102,199 105,084 108,904
-
20,000
40,000
60,000
80,000
100,000
120,000
2011 2012 2013 2014 2015
-
5
10
15
20
25
30
35
2011 2012 2013 2014 2015
Brunei Darussalam Myanmar Lao PDR CambodiaThe Philippines Viet Nam Indonesia SingaporeMalaysia Thailand
In M
illio
nsTourist arrivals in ASEAN: Philippine Performance
Source: ASEAN Secretariat
5%
In M
illio
nsTourist arrivals in ASEAN: Member-state trend
Source: ASEAN Secretariat
-
5
10
15
20
25
30
35
2011 2012 2013 2014 2015
Brunei Darussalam Myanmar Lao PDR CambodiaThe Philippines Viet Nam Indonesia SingaporeMalaysia Thailand
GATS & AFAS:Philippine
Schedules of Specific Commitmentsin the Tourism Sector
• General Agreement on Trade in Services (GATS)• ASEAN Framework Agreement on Services (AFAS)
Source: ASEAN Secretariat
Philippine Schedule of CommitmentsTOURISM AND TRAVEL RELATED SERVICES SECTOR
The industry-specific section of the schedules essentially consists of a matrix wherein countries have identified market access and national treatment commitments on each service industry in relation to one or more possible delivery channels or “modes of supply.”
Modes of Supply:
(1) Cross-border supply(2) Consumption abroad(3) Commercial presence(4) Presence of natural persons
GATS:Philippine
Schedules of Specific Commitmentsin the Tourism Sector
Source: GATS Secretariat
Philippine Schedule of CommitmentsUnder the General Agreement on Trade in Services (GATS)
TOURISM SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence
(4) Presence of natural persons
Subsector Limitation on Market Access Limitation on
National Treatment
Tourism accommodation facilities: hotel, resort, pension house, tourist inn, apartel
(1) Unbound(2) None(3) Subject to foreign equity limitation of 40 per
cent for pension house, tourist inn and apartel(4) As a general rule, only citizens of the Philippines
can be employed in tourism-oriented establishments. However, for hotels and resorts, aliens may be employed subject to the pertinent provisions of the Tripartite Agreement among the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration
(1) Unbound(2) None(3) None (4) None
Source: GATS Secretariat
Subsector Limitation on Market Access Limitation on
National Treatment
Specialty Restaurants
(1)Unbound(2)None(3)No foreign equity is allowed if the specialty
restaurant is not part of the facilities of a hotel.
(4)Aliens may be employed in specialty restaurants subject to pertinent provisions of the Tripartite Agreement among the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration
(1) Unbound(2) None(3) None (4) None
Philippine Schedule of CommitmentsUnder the General Agreement on Trade in Services (GATS)
TOURISM SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence
(4) Presence of natural persons
Source: GATS Secretariat
Subsector Limitation on Market Access Limitation on National
Treatment
Professional CongressOrganizers
(1) Unbound(2) None(3) Subject to foreign equity
limitation of 40 per cent (4) None
(1) Unbound(2) None(3) None (4) None
Travel Agencies (1) Unbound(2) None(3) Subject to foreign equity
limitation of 40 per cent (4) Managers and executives
must be resident Filipino citizens
(1) None(2) None(3) None (4) None
Philippine Schedule of CommitmentsUnder the General Agreement on Trade in Services (GATS)
TOURISM SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence
(4) Presence of natural persons
AFAS:Philippine
Schedules of Specific Commitmentsin the Tourism Sector
Philippine Participation in the AFAS
• AFAS is critical to the formation of the ASEAN Economic Community (AEC)
• ASEAN has concluded 9 packages• The Philippines signed the 9th Protocol which is
undergoing the ratification process• The 10th AFAS is under completion
Source: ASEAN Secretariat
Philippine Schedule of CommitmentsFor the 9th Package of Commitments under ASEAN Framework Agreement on Services
TOURISM AND TRAVEL RELATED SERVICES SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence
(4) Presence of natural persons
SubsectorLimitation on Market
Access Limitation on National
Treatment
Hotel, resort, pension houses, tourist inns apartelles lodging services (CPC 64110)
(1) None(2) None(3) None
(1) None(2) None(3) None
Meal Serving Services with Full Restaurant Service (CPC 64210)
(1) None(2) None(3) None
(1) None(2) None(3) None
Source: ASEAN Secretariat
SubsectorLimitation on Market
Access Limitation on National
Treatment
Beverage Serving Services for consumption on the premises (CPC 6431 - 6431(2)
(1) None(2) None(3) None
(1) None(2) None(3) None
Travel agencies and tour operators services (CPC 7471)
(1) None, (2) None(3) Up to 70% foreign equity is allowed
(1) None(2) None(3) None
Others: Hotel management services
(1) None, (2) None(3) Up to 70% foreign equity is allowed
(1) None(2) None(3) None
Convention Services (1) None, (2) None(3) Up to 60% foreign equity is allowed
(1) None(2) None(3) None
Philippine Schedule of CommitmentsFor the 9th Package of Commitments under ASEAN Framework Agreement on Services
TOURISM AND TRAVEL RELATED SERVICES SECTOR Modes of Supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence
(4) Presence of natural persons
Philippine Schedule of Commitments to GATS & AFAS (Tourism Sector): Summary
In the Uruguay Round of Negotiation (1994) for the General Agreement on Trade in Services (GATS), the Philippines’ schedule is moderately restrictive concerning travel and tourism services. The exact extent of coverage under each subsector is difficult to determine because the Philippines did not specify CPC codes to identify its travel-related services.
But in the ASEAN Framework Agreement on Services (AFAS), we see the Philippines’ schedule of commitments being liberalized with some minor limitations. The Philippine’s full commitment creates the most liberal trading environment by guaranteeing full market access or national treatment to foreign service providers.
POLICIES IN THE DEVELOPMENT AND LIBERALIZATION OF TOURISM SECTOR
Republic Act 9593 (Tourism Act of 2009)
• Mandates for the development of a national action plan to be adopted and implemented both by national and local government
• Grant preferential treatment to the employment of Filipino nationals in tourism-related enterprises
• Support the establishment of Tourism Enterprise Zone (TEZs)
5 Classifications of TEZ:
1.Cultural Heritage Tourism Zone2.Health and Wellness Tourism Zone 3.Eco-Tourism Zone 4.General Leisure Tourism Zone 5.Mixed Use Tourism Zone
Entities eligible to apply for the designation of an area as a TEZ
Any entity duly incorporated under the Corporation Code and other relevant laws…may qualify as an applicant for the designation of an area as a TEZ.
TIEZA INCENTIVES FOR TEZ: Fiscal
• Income Tax Holiday• 5% Gross Income Taxation Rate• Tax and Duty Free Importation of Capital
Investment and Equipment• Transportation Equipment and Spare Parts• Tax and Duty Free Importation of Goods
and Services• Special Responsibility Incentive• Net Loss Carry Over
Source: TEIZA
TIEZA INCENTIVES FOR TEZ: Non-Fiscal
• Employment of Foreign Nationals• Special Investors Resident Visa• Foreign Currency Transactions• Exemption from requisition of
investment• Lease and ownership of land
Source: TEIZA
PRIORITY AREAS THAT NEED TO BE ADDRESSED TO SUPPORT THE DEVELOPMENT OF THE TOURISM SECTOR
Improving Access & Connectivity• Route development• Intermodal transport systemTravel Facilitation• To extend Visa-Free Travel to other non-ASEAN
qualified travelers/tourists• Extending validity of visas to all travelers/
touristsAggressive Tourism Investment Promotion
Thank You!
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