Cash-strapped Tourism Infrastructure and Enterprise Zone Authority (TIEZA) of the Department of Tourism (DoT) is hopeful that the relaxed rules on foreign ownership will accelerate the much-needed funds from foreign investors.
TIEZA chief operating officer, Mark Lapid, said it joined Dubai Expo 2020, which ended in March, to encourage foreign investments in tourism – this follows recent amendments to the Foreign Investment Act (FIA) which allows foreigners, for the first time, to set up and fully own domestic enterprises in the Philippines.
Previously limiting foreigners to 40 per cent business ownership, Lapid said the change in the FIA is a good start. There are certain exceptions to 100 per cent foreign ownership, whereby foreigners can manage hotels and related properties, but cannot own land.
He disclosed that the DoT’s investment and infrastructure arm is badly hit by the tourism lockdown since it depleted its main source of funds – the US$38.78 (1,620 pesos) outbound passenger travel tax – forcing TIEZA to discontinue all of its projects.
While 50 per cent of outbound travel tax collection goes to TIEZA, the rest are divided between two other government agencies.
Despite having no travel tax collection and income from its projects, TIEZA remitted US$227.7 million to the Bureau of Treasury to support purchase of medical facilities and equipment in response to Covid-19, helped fund the Philippines’ hosting of the WTTC 21st Global Summit, and bankrolled the construction of the new Cloud 9 view deck in Siargao, which was ruined by the super typhoon in December.
Its operating entities Gardens of Malasag Eco Tourism Village in Cagayan de Oro, Banaue Hotel and Youth Hostel in Banaue, and San Fabian Beach in Pangasinan were used as temporary quarantine facilities during the pandemic.
TIEZA is also encouraging more private sector investments in tourism projects, and Lapid mentioned there are a few corporations showing interest.
Prior to the pandemic, TIEZA had approved joint venture guidelines for private sector participation in developing, operating, managing and disposing of its properties and facilities.
Barring any more lockdown, Lapid calculated that TIEZA will be able to hit US$19 million in travel tax collection by the end of the year. Its collection had already hit US$2.5 million in April since the Philippines opened its international borders earlier in February.