The country can maximize tourism’s contribution to export revenue given its untapped potential as a driver of export diversification and foreign exchange generation, according to a study released by the Philippine Institute for Development Studies (PIDS).
PIDS Senior Research Fellow John Paolo Rivera, Research Specialist John Joseph Ocbina, and De La Salle College of Saint Benilde Associate Professorial Lecturer Marga Clarence Bolalin said that while tourism’s average share in export revenues from 2000 to 2024 stands at 6.5 percent, its increasing trajectory indicates growing global demand for the Philippines as a tourism destination.
However, even at 10.3 percent in 2024, the tourism sector still represents a modest fraction of total export earnings, underscoring the untapped potential of tourism as a driver of export diversification and foreign exchange generation, they said in a discussion paper.
“This upward trend affirms that inbound tourism is evolving into an important component of the country’s services export strategy, offering resilience amid global trade shifts and a complement to merchandise exports such as electronics or agriculture,” Rivera, Ocbina and Bolalin said.
To unlock further growth in inbound tourism expenditures (IBTE), they underscored the need for strategic investments in destination competitiveness, service quality, infrastructure, and air connectivity, particularly in high potential but underserved areas.
“Strengthening tourism’s contribution to export revenues also positions the sector as a valuable avenue for inclusive and sustainable economic growth,” they added.
IBTE share to total exports showed a gradual uptrend from 6.2 percent in 2000 to 10.3 percent in 2024. Notable spikes occurred in key years such as 2017, when the Philippines hosted the ASEAN (Association of Southeast Asian Nations) Summit, pushing the share to 9.3 percent, and in 2019 and 2023, which recorded highest IBTE-to-export ratios.
“These milestones suggest that international tourism can be a significant export earner, particularly when paired with high-profile events and effective marketing campaigns,” the paper said.
The authors also cited data showing that IBTE demonstrated robust real growth from PHP230.9 billion in 2012 to a peak of PHP585.9 billion in 2019, when its contribution to total exports rose from 6.5 percent to 10.8 percent.
“This indicates that inbound tourism’s export value was expanding faster than the country’s overall export basket, reinforcing its emergence as a core foreign exchange earner,” they added.
Likewise, Rivera, Ocbina and Bolalin said the current share of INTE in exports and household consumption, while growing, still reflects untapped potential.
To optimize tourism’s economic impact, they said there is a need for continued investments in tourism infrastructure, product diversification, intermodal connectivity, and digitalization, particularly in regions with high tourism potential but limited access or capacity.
“Thus, INTE’s trajectory relative to both household and export indicators reinforces the need to treat tourism not just as a consumption good, but as a strategic sector for inclusive growth, services export diversification, and regional development,” the authors added.
