$100m hit seen in Boracay closure
THE six-month closure of Boracay Island from tourists starting today will cost the Philippine economy more than US$100 million, which the country’s chief economist said would be compensated for by an increase in arrivals in other domestic tourist spots.
Citing an earlier estimate of the state planning agency National Economic and Development Authority, Socioeconomic Planning Secretary and Neda director general Ernesto Pernia told a press briefing that the temporary closure of the popular tourist destination, which will be rehabilitated from environmental degradation, would shed only 0.1 per cent from the country’s gross domestic product this year.
Noting that the economy was currently worth about 14 trillion pesos and was expected to grow by at least 7 per cent this year, about 980 million pesos a quarter would be lost, especially in the affected local government units. The closure of the island is estimated to cost about 1.96 billion pesos,
“Boracay [island], Malay [town], Aklan [province] and Region 6 will suffer - their growth rates will be trimmed,” Pernia said.
For Western Visayas, its gross regional domestic product growth would be cut by 5.7 percentage points, Pernia added.
The Neda chief nonetheless said that “on the other hand, there will be other areas in the Visayas earning some increase in growth rates; also, Luzon and Mindanao will have some increase” as tourists are instead expected to flock to other destinations in the country.
“We are only assuming that 50 per cent of the volume of tourists going to Boracay will be going to the other [local] destinations,” Pernia said.
“I would assume that closer to 70-75 per cent of those who used to go to Boracay will go to the other tourist destinations, especially domestic tourists.
“It’s going to be a temporary shortfall in terms of tourism income and tourist arrivals.
“Regarding the possible shortfall in tourist arrivals due to the Boracay closure, the Department of Tourism will have to step up its efforts at advertising and marketing our several other tourist destinations, so the same volume of tourists, if not more, will be diverted to these other beautiful locations.”
Private stakeholders in the tourism industry earlier projected that economic losses from the six-month closure of the world-renowned island could exceed 50 billion pesos in tourism |revenues while 35,000 jobs would be lost.
Most affected are the resorts and airlines, which have already cut back on their flights to and from the island.