Tourism investment gate opens
BIZLINKS - Rey Gamboa (The Philippine Star) - January 11, 2018 - 12:00am

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) appears to be in a frenzy approving new tourism economic zones (TEZs) and promising the approval of many more this year.

Despite all the incentives that had been extended under the Tourism Act of 2009 to TEZs, the TIEZA Board has not been able to stimulate private sector interest in putting up tourism economic zones quick enough to help in the country’s tourism efforts.

In fact, it was only in 2012 — or three years since the law was passed — that TIEZA named its first two TEZs, whose commitments included a tourism investment of not less than $5 million and covering at least five hectares of contiguous land area.

The first approved TEZ was awarded to Iglesia ni Cristo for the Ciudad de Victoria in Bocaue, Bulacan for a P25-billion plan over 58 hectares. The plan included the construction of the Philippine Arena, which is now regarded as the largest closed dome in the world capable of seating 55,000 people.

Included in the plan was the construction of a medical center, a sports complex and a new university campus.

Gaming and leisure

The second TEZ approved was for Resorts World Manila in front of Terminal 3 of the Ninoy Aquino International Airport. Investment in RWM was at $1.3 billion by 2017, and is expected to double with the expansion of a new hotel-casino in the area.

The integrated resort project is the first foreign investment under TIEZA, and is owned and operated by Travellers International Hotel Group Inc. (TIHGI), a joint venture between Alliance Global Group and Genting Hong Kong. The plan included four hotels, casino gambling areas, a shopping mall, cinemas, restaurants, clubs and a theater.

Four in 2017

Since then, the number of TEZs have grown to 10, including the recently approved Panglao Bay Premiere, a designated flagship TEZ project of the Department of Tourism (DOT) and TIEZA, located in Panglao Island in Bohol.

Asia Pacific Projects Inc. (APPI) had been designated as the official master planner for the project, which will cover a core area of 50 hectares on the coastal side of the island’s circumferential road.

The project inception and development follows the construction of the new Panglao International Airport, which is expected to be operational within the first half of this year. The airport is funded through the Japan International Cooperation Agency.

The other three TEZs approved this year were Bravo Gold Resorts in Negros Oriental, to be operated by Bravo Hotel Corp.; Kingdom Global City TEZ in Davao City by ACQ Solomonic Builders Development Corp.; and Hijo Resources TEZ in Davao del Norte by Hijo Resources Corp.

As with the previous six TEZs approved by TIEZA, all are planned to become integrated leisure establishments.

The other earlier approved TEZs are Bucas Grande in Surigao del Norte, San Vicente in Palawan, Rizal Park in Manila, and Mount Samat Shrine in Bataan. All four are designated flagship TEZs for their viable tourism potential.

TIEZA earlier announced that they are looking at approving at least three new TEZs every quarter, which would include two more flagship areas.

Committed spending

The palpable optimism at the TIEZA offices follows the Philippine government’s commitment to invest $23 billion in tourism infrastructure over the next six years under the National Tourism Development Plan.

This will include the upgrading and construction of access roads to tourism sites and tourism development areas that have been difficult to access by tourists, the improvement of airports in 11 tourism gateways, and the upgrading of seaports.

Also included in the planned infrastructure boom are improvements in onsite roads, transportation services and accommodations. All these are in step with the Duterte government’s vaunted Build Build Build program that promises to usher in the country’s golden age of infrastructure.

The DOT is optimistic it can double the number of foreign tourist arrivals, increase tourism revenues by 90 percent, and generate 14.4 percent of total Philippine jobs from the tourism sector by 2022. As it now stands, tourism has become one of the fastest growing sectors in the Philippine economy, next to trade and real estate.

Extending tourism perks

TIEZA is asking for an extension of the perks given to TEZ operators given the delayed interest in investments, despite the already lucrative perks originally stipulated by the Tourism Act of 2009.

It seems the implementing rules and regulations covering the law included a sunset provision for tax incentives for a period of 10 years, or until 2019. TIEZA argues that the particular IRR was released only in November 2016, thus explaining delayed interest among possible investors.

Under the law, TEZ developers and tourism enterprises are given a package of fiscal incentives including a six-year income tax holiday, extendable for another six years. TIEZA is asking lawmakers to extend the relevant sunset provisions by another 20 years.

The environment is now ripe for tourism investments, and it would be a pity to derail this momentum. With the reform on taxes ongoing and the world economy truly at a mend, we can’t allow the country’s tourism efforts to be derailed.

Tourism, after all, is an accepted strong contributor and driver to sustainable development and poverty alleviation in the developing countries. Sustainable tourism is a strong job generator that promises to bring inclusive growth and truly positive change for the Philippine economy.

Facebook and Twitter

We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

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