Investing amid a crisis seems counterintuitive, but that might be an advisable course of action for the tourism industry, which continues to be ravaged by the coronavirus disease 2019 (Covid-19) pandemic. Investing during a crisis has been a principle for many, perhaps since the 18th century when Baron Rothschild famously said, “Buy when there is blood is in the streets, even if the blood is your own.”
Of course, Baron Rothschild’s advice about investing could apply to the general economy. But tourism in the Philippines merits special attention, because of its contribution to the gross domestic product or GDP. Prior to the health crisis and ensuing economic fallout, tourism accounted for more than 12 percent of the total economy. About 14 out of every 100 Filipinos, or about 13.5 percent, are employed in that industry. Along with remittances from Filipinos abroad and income from the outsourcing sector, tourism was like the third leg of an economic tripod that had supported Philippine growth. Thus, any economic recovery plan for the Philippines should include tourism.
The problem is that tourism continues to be stifled by the pandemic, which seems far from ending. In fact, cases continue to increase here and elsewhere around the world. In the Philippines, the total number of cases should breach 53,000 by today, with more 38,000 Filipinos among the active cases.
The United States, a key tourist market for the Philippines, remains as the epicenter of the pandemic. As such, Europe has imposed travel restrictions on the US, something that policymakers here should consider adopting, at least until the Americans have a better handle on the spread of the novel coronavirus.
While tourism is slow or put on hold, the Philippines should carry out major renovations and development of its tourism infrastructure. By doing that now, work could be done with minimal disruption and less inconvenience to tourists and other travelers. More importantly, doing so will help economic recovery, especially since construction projects have a high multiplier.
First, the airports
If this recommendation can be followed, the first projects on the list should be a major renovation of airports. Of course, international gateways are a priority if the Philippines wishes to improve its capabilities in realizing tourist-arrival targets in the future. Granted there have been milestone achievements in Mactan and Puerto Princesa, but Metro Manila could use a lot of work, even with the renovations that have been carried out by the present and past administrations. Given the slowdown in international travel, for example, Terminal 1 or 2 of the Ninoy Aquino International Airport could be shut down for a major revamp without disrupting travelers much.
More domestic airports could use a lot of work, too. Yes, the government has been working to improve domestic airports, but the point here is to accelerate and expand those projects. What the government has done in Bacolod and Bohol should be recreated and hastened elsewhere in the country.
Investments in seaports, road networks, even transregional railways should be pursued at this time, as well. Maybe there should be special financing programs to help private developers build more hotels, particularly in popular tourist areas outside of Metro Manila.
Obviously, these will not only contribute to tourist travel, but to commerce in general.
Granted, major projects take time to complete. As mentioned earlier, there seems to be no
end in sight for this pandemic. In fact, the northern hemisphere is bracing for the start of influenza season in September that will likely coincide with Covid-19 and exacerbate the health crisis.
There are several initiatives to develop a vaccine, but coming up with one that is both effective and safe takes time. Until a vaccine is widely available, people will naturally feel uneasy about traveling, especially about flying on commercial planes and visiting popular destinations that may be crowded. But that is not permanent.
Eventually, a vaccine will become available. When that happens later this year or in 2021 or beyond, perhaps the public projects suggested here would also be complete or near completion. But if the government tarries or fails to move until better times, then the Philippines will again miss opportunities and once more play catch-up with its neighbors.