With tourism recovery among the government’s top priorities, Camarines Sur Rep. LRay Villafuerte wants to find out from the Department of Tourism (DOT) how much of the over P34-billion bailout package for businesses under the Bayanihan to Recover as One Act (Republic Act 11519 or Bayanihan 2 law) was actually used by small and medium-sized entrepreneurs in the tourism sector, which was one of the sectors hardest hit by COVID-19.
Such relief funds in 2021 for pandemic-hit enterprises and businesspersons included a P10-billion outlay that the House of Representatives had originally allotted for infrastructure projects of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) in its version of the Bayanihan 2 bill, but which, following the subsequent lobbying in the Senate by the DOT and certain industry players, was scrapped in the final congressional bill submitted to Malacañan Palace.
Under Section 10 of the Bayanihan 2 law, a total of P39.472 billion was allocated for capital infusion to GFIs, of which P18.47 billion went to the Land Bank of the Philippines (LandBank) and another P6 billion to the Development Bank of the Philippines (DBP) for their “wholesale banking and equity infusion for low-interest loans to persons and entities engaged in Covid-affected industries.”
“Amid the assertion then by DOT officials and certain industry players that tourism infrastructure was not a priority at the time, the P10-billion intended by the House for TIEZA ended up being allotted to government financial institutions (GFIs) for bailing out Covid-affected businesses, including those in the tourism industry,” according to Villafuerte, who was the lead author in the House of both Bayanihan 2 and the Bayanihan to Heal as One Act (RA 11494 or Bayanihan 1).
Villafuerte, who is now president of the National Unity Party (NUP) and was deputy speaker for finance when the Bayanihan 1 and 2 laws were passed, said that “Given President Marcos’ apt push for tourism infrastructure, it seems appropriate for the DOT to tell us how much of the P34.72-billion bailout fund for Covid-hit businesses under Bayanihan 2 had actually been released to rescue resort operators and other financially distressed entrepreneurs and establishments in the tourism industry.”
At the same time, Villafuerte said: “We also want to know from the DOT how and where the government intends to spend the allocation for tourism infrastructure under the ‘Build Better More’ infrastructure development program of President Marcos, who has rightly put a premium on tourism infrastructure spending in order to attract more tourists to the Philippines.”
Citing reports, Villafuerte said the Department of Budget and Management (DBM), for instance, plans to spend P133 billion for network development to build new roads and widen existing ones, of which P15.7-billion will reportedly be spent on links to tourism destinations.
Such P15.7-billion allotment will supposedly be used by the government to improve over 16 kilometers (km) of roads leading to airports, 27.5 km leading to seaports, and 308 km leading to tourist destinations.
Villafuerte recalled that the House, under then-Speaker Alan Peter Cayetano, endorsed in 2020 an allocation of P10 billion from the Bayanihan 2 stimulus package for Covid-19 response for tourism infrastructure to be built by TIEZA.
He explained that this proposed P10-billion infrastructure budget for TIEZA was included in the House-approved version of Bayanihan 2 on the legislators’ belief that “more and better tourism infrastructure projects needed to be built in 2021 and onwards for the government to rev up this Covid-battered sector anew as a booming industry and major dollar-earner once the pandemic is over.”
However, he said, this infrastructure budget “failed to see the light of day,” as then-DOT Secretary Berna Romulo-Puyat, with the support of certain legislators and big industry players, had lobbied during the bicameral deliberations on Bayanihan 2 for the realignment of the P10-billion infrastructure outlay intended for TIEZA to a bailout fund for tourism-related businesses hurt severely by the government’s stringent lockdowns or mobility restrictions nationwide that barred foreigners and locals alike from going to tourist destinations.
Under Section 10 of the Bayanihan 2 law, a total of P39.472 billion was allocated for capital infusion to GFIs, of which P18.47 billion went to the Land Bank of the Philippines (LandBank) and another P6 billion to the Development Bank of the Philippines (DBP) for their “wholesale banking and equity infusion for low-interest loans to persons and entities engaged in Covid-affected industries.”
Also, P10 billion was set aside in Bayanihan 2 as additional funding for the Covid-19 Assistance to Restart Enterprises (CARES) microfinancing project and other lending programs of the Small Business Corp. (SBCorp)—a GFI attached to the Department of Trade and Industry (DTI)—“as well as interest subsidies to MSMEs (micro, small and medium-sized enterprises), cooperatives, hospitals, tourism industry and OFWs (overseas Filipino workers) affected by the pandemic.”
“That fund diversion under the Bayanihan 2 budget turned out to be one policy boo-boo, given initial reports subsequently reaching my office that not many industry stakeholders had actually availed of the bailout package for the tourism sector,” said Villafuerte, who, during his stint as three-term Camarines Sur governor, had transformed the province into one of the country’s premier tourist destinations.
On Villafuerte’s watch as three-term governor, Camarines Sur was recognized by the DOT as the country’s top tourism must-see destination with his all-out promotion of the province as a global hub for ecotourism (Caramoan Island) and extreme sports (CamSur Watersports Complex or CWC).
Moreover, because the tourism slump was expected to continue until such time that the pandemic threat has subsided, Villafuerte said that legislators felt the need to provide infrastructure funds to TIEZA for its long-term infrastructure program, as the sharp drop in tourism revenues and travel tax collections would mean this state-run firm was looking at scant resources ahead to finance its planned projects.
“The then-proposed TIEZA infrastructure spending would have helped provide many jobs to dislocated industry workers and boost local economies, as infrastructure investments have a high multiplier effect of 3.5—meaning, it will generate P3.50 for the economy for every P1 investment—that would have generated badly needed economic activity in the tourism sites.”
Hence, the aborted P10-billion infrastructure spending would have generated a projected P35-billion worth of economic activities last year in areas with tourist spots, had TIEZA been given that amount to build various projects to improve facilities or make them more accessible to tourists, said Villafuerte.
Contrary to the claim by DOT and some big industry players that infrastructure development was not a priority at that point in the pandemic, Villafuerte said the House leadership was, “back then, looking at the big picture and beyond the pandemic, and felt a long-term goal to sharpen the Philippines’ competitiveness by improving the poor state of our tourism infrastructure.”
“The stakeholders that were probably saying that infrastructure development was not a priority at the height of the pandemic were the big players in such places like Boracay and Panglao islands that enjoy relatively better roads and other infrastructure and even have their own airports,” he said.
Tourism Secretary Christina Garcia-Frasco has assured lawmakers, meanwhile, during the Commission on Appointments (CA) deliberations on her appointment that the DOT was working with the different agencies on crafting a “whole-of-government” approach to addressing nagging concerns such as inadequate infrastructure that have for long hobbled the Philippines from competing with our Southeast Asian neighbors for overseas visitors, even if we have far better beaches and other tourist attractions than them.
“A major reason why the Philippines has been left behind in terms of visitor arrivals by our region’s top tourism destinations such as Thailand and Vietnam is the lack of adequate, let alone world-class, infrastructure that guarantees seamless travel to our must-see places across the country,” he said.
“Had the government, through TIEZA, started building last year the needed tourism infrastructure, our tourist destinations would have been ready for the influx of tourists, which we expect to happen in the months ahead with President Marcos’ decision last week to relax our strict anti-Covid health protocols on masking for everyone and border entry for tourists and other international travelers, he said.
Villafuerte described the lobby in Congress by the DOT in the past administration for soft loans and credit guarantees for tourism businesses under Bayanihan 2—in lieu of badly-needed infrastructure development—as “a leap in the dark,” considering that the end of the pandemic—and the strict lockdowns—was nowhere in sight at that time.
“I don’t think you could have convinced Covid-hit entrepreneurs to make a similar leap in the dark—as what DOT officials did in 2020—by availing of Bayanihan 2 loans last year when nobody was sure when tourist destinations would be reopened to foreign and local visitors and how these cash-strapped entrepreneurs would manage to repay such credit in the absence of thriving businesses,” he said.
Villafuerte last week lauded President Marcos for issuing Executive Order (EO) No. 7 that made optional mask-wearing in both indoor and outdoor settings, save for those in health facilities, medical vehicles, and public transportation.
Keynoting the Philippine Tourism Industry Convergence Reception at the SMX Convention Center in Pasay City last Oct. 17, President Marcos said resort areas must be developed, both those already known to tourists as well as the new ones and the country’s infrastructure must be improved to make tourist destinations more accessible.
Tourism Secretary Christina Garcia-Frasco has assured lawmakers, meanwhile, during the Commission on Appointments (CA) deliberations on her appointment that the DOT was working with the different agencies on crafting a “whole-of-government” approach to addressing nagging concerns such as inadequate infrastructure that have for long hobbled the Philippines from competing with our Southeast Asian neighbors for overseas visitors, even if we have far better beaches and other tourist attractions than them.
Villafuerte, the CA majority floor leader, commended Garcia-Frasco during the CA hearing on her appointment for planning to team up with local government units (LGUs) and the private sector in boosting tourism nationwide but stressed to her that one priority action for this sector is building enough and better infrastructure across the country to ensure seamless travel from Manila to our tourist spots, especially those in remote places.
Villafuerte said infrastructure is really the key to rapid tourism development, as he pointed out that the beaches of Thailand, Malaysia, and Malaysia are more popular destinations even if we have better beaches in the Philippines because they have better infrastructure going to these places.
He said the Philippines has better beaches than Phuket Island in Thailand, for example, but Phuket is a relatively more popular destination for foreign tourists, partly because of its better infrastructure.
Phuket’s airport alone is even bigger than our No. 1 gateway, the Ninoy Aquino International Airport (NAIA), he added.
Garcia-Frasco said that in the absence of an infrastructure development budget in her Department, she has pushed for the establishment of a tourism infrastructure development fund so the DOT can build facilities that cannot be put up by other agencies.
She said, “I recognize that infrastructure is not the primary goal of the DOT; it is the jurisdiction of the DPWH. That is why we have attempted to coordinate closely with the DPWH as well as our regional offices specifically to identify what are the infrastructure challenges that are present in terms of our key destinations and our emerging destinations. After having done these consultations with our 16 regions I presented a proposal to what are the infrastructure needs of the destinations within our country.”
Villafuerte expressed the hope that Garcia-Frasco would be able to bring innovative measures to revitalize the tourism industry, and focus on modernizing tourism-related infrastructure leading to lesser-known must-see destinations across the country.
Citing CamSur as an example, he said the DOT named the province as the country’s No. 1 tourist destination in 2010 after the provincial government—on Villafuerte’s watch as governor—had aggressively pushed the development and promotion of faraway Caramoan Island as an ecotourism haven and the CamSur Watersports Complex (CWC) as a globally known hub for extreme sports events.
“It was a purely local government initiative,” he said of CamSur’s rise as a top must-see place in the country. “So, we are hopeful that Secretary Garcia-Frasco could—and would—deliver on her plan for the DOT to extend full support to the development of lesser known and remote tourist spots.”
He said that no matter how good certain localities are for tourism, it would be difficult for local and foreign visitors to check out these sites without the necessary infrastructure like roads to go there, plus viewing decks, souvenir shops, lounges and rest rooms with free WiFI along the way to these places.
