Pedestrians in Bonifacio Global City in Taguig City, Metro Manila, the Philippines, on Saturday, April 6, 2024. The Philippines trimmed its economic growth forecasts for this year and next amid stubborn inflation and elevated interest rates, while widening its fiscal deficit estimates to support higher spending. Photographer: Veejay Villafranca/Bloomberg
MANILA: The slow return of Chinese tourists has been holding back travel recovery in the Philippines, the Bank of America (BofA) says in a report that highlights the “uneven” recovery in Asia tourism.
As the region’s tourism sector enters the last leg of recovery from the pandemic’s onslaught, BofA said the Philippines, China, Hong Kong and Taiwan were the “laggards” in Asia as tourist arrivals in these destinations have yet to reach pre-pandemic levels.
In the Philippines, BofA noted that foreign visitor arrivals were still 76% of pre-pandemic levels as of February this year, albeit much better than Hong Kong’s 73.7% and Taiwan’s January 2024 figure of 69.6%.
Among the laggards, BofA said China was an “outlier” after it reopened its economy much later than other Asian destinations. Data compiled by the bank showed foreign tourist arrivals in China were 36.3% below pre-pandemic level as of December 2023.
In turn, the later reopening of China’s economy weighed on tourism recovery in countries that heavily depended on Chinese holidaymakers, such as the Philippines and Hong Kong.
Data compiled by BofA showed Chinese arrivals are only tracking at 20% to 30% of pre-pandemic levels in the Philippines, below trends elsewhere in the region. And the recovery is unlikely to speed up anytime soon, with BofA noting the “changing preferences” of Chinese consumers.
“The typical Chinese traveller these days is increasingly interested in exploring domestic cities that offer unique cultural experiences. This has also slowed their return to international destinations,” BofA said.
“The return of Chinese travellers might be a gradual process,” it added.
On the flip side, tourism is now back to pre-pandemic vigor in Japan and Vietnam as they benefitted from the weakness of their currencies.
BofA said Malaysia, Singapore and Thailand were among the “hopefuls” in Asia after seeing a sharp rebound in international arrivals in recent months.
Meanwhile, India, South Korea, Australia, New Zealand and Indonesia were in the “middle of the pack” whose visitor entries are tracking at 80% to 85% of pre-pandemic levels so far.
For this year, the Bangko Sentral ng Pilipinas (BSP) forecasts tourism receipts – a source of US dollars for the economy – to grow by 50%.
That would contribute to the projected US$700mil surplus in 2024 which, if realised, would be smaller than the US$3.7bil windfall recorded in 2023.
Moving forward, BofA said Asian economies with falling currencies would continue to attract more foreign visitors that are looking for cheap holiday destinations.
“Foreign exchange colleagues expect currencies in Asia to strengthen across the board against the US dollar over the next two years but remain weak by historical standards,” BSP said. — The Philippine Daily Inquirer/ANN
