The Philippines must fast-track infrastructure investments to transform its global tourism appeal into sustained economic gains, according to the ASEAN+3 Macroeconomic Research Office, which warned that persistent gaps in transport, utilities, and digital systems continue to constrain the sector’s full potential.
In a recent blog, AMRO highlighted the country’s strong international standing, having secured six major titles at the World Travel Awards Asia and Oceania Gala 2025—including Asia’s Leading Beach, Dive, and Island Destination. Key sites such as Boracay and Clark Freeport Zone also earned individual honors, while the Department of Tourism was named Asia’s Leading Tourist Board.
However, these accolades have yet to translate into stronger international arrivals or broadly shared economic gains across the archipelago.
“While domestic tourism continues to anchor overall demand, the rebound in international visitors has been slower than expected,” the report noted.
Domestic tourism spending reached P3.2 trillion in 2024—slightly above pre-pandemic levels—and accounted for about three-fourths of total tourism expenditure. In contrast, foreign arrivals stood at 5.9 million, still 28% below 2019 levels, weighed down largely by the slow return of Chinese tourists. Among ASEAN peers, the Philippines has posted the weakest recovery in this segment.
Even prior to the pandemic, the country lagged behind regional neighbors such as Indonesia, Malaysia, Thailand, and Singapore in terms of international visitor arrivals.
Tourism activity also remains highly concentrated, with the National Capital Region and Central Visayas accounting for over 60% of foreign overnight stays, underscoring uneven regional development.
To unlock the next phase of growth, AMRO stressed the need to address both hard and soft infrastructure gaps.
On the physical side, improving transport connectivity through expanded investments in airports, seaports, and road networks will be crucial to enhance accessibility and disperse tourist flows. Upgrading essential utilities—such as water, sanitation, electricity, and waste management—is equally important, particularly for island and eco-tourism destinations facing capacity constraints.
Digital and visitor infrastructure must also be strengthened. Investments in broadband connectivity, digital booking and payment systems, as well as facilities like visitor centers and convention halls, can significantly improve service quality, safety, and overall visitor experience.
Equally critical is the development of “soft” infrastructure. Enhancing human capital, raising service standards, and strengthening institutional coordination will help ensure long-term competitiveness. The report emphasized the need for expanded training programs, destination rehabilitation, product diversification, and sustained reforms in zoning, environmental management, and safety standards.
Tourism remains a key pillar of the Philippine economy. In 2024, the sector generated P3.5 trillion in gross value added—7% above pre-pandemic levels—accounting for 13.2% of GDP and supporting 4.9 million jobs, or 13.8% of total employment.
AMRO noted that tourism-linked industries, including hotels and restaurants, deliver higher domestic value-added per unit of input than many other sectors, reinforcing tourism’s role as a vital engine for post-pandemic economic recovery.