Presented by: DOMINGO RAMON C. ENERIO III Assistant Secretary, Department of Tourism Officer-in-Charge, Tourism Promotions Board

Presented by: DOMINGO RAMON C. ENERIO III Assistant Secretary, Department of Tourism Officer-in-Charge, Tourism Promotions Board

Visitor Arrivals to the Philippines (in millions) Source: DOT TRSD Reports: A/D Cards, Shipping Manifest 10-Year Average Growth of 9.6% And for the past 5 years, an average of 4.8% 2.843 3.092 3.139 3.017 3.520 2.291 2.623 1.797 1.933 1.907 Decrease of visitors are manifested in years of international crises 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 % Difference: -9.8% 7.6% -1.3% 20.1% 14.5% 8.4% 8.7% 1.5% -3.9% 16.7%

Source: DOT TRSD Philippines Reports: A/D Cards, Shipping Major Manifest Markets, 2010 source: DOT-TRSD Report Rank Country 2010 % Share 1 KOREA 740,622 21.04 2 USA 600,165 17.05 3 JAPAN 358,744 10.19 4 CHINA 187,446 5.32 5 AUSTRALIA 147,469 4.19 6 TAIWAN 142,455 4.05 7 HONG KONG 133,746 3.80 8 SINGAPORE 121,083 3.44 9 CANADA 106,345 3.02 10 UNITED KINGDOM 96,925 2.75 11 MALAYSIA 79,694 2.26 12 GERMANY 58,725 1.67 * Overseas Filipinos 228,445 6.49

Philippine Visitor Receipts (in US$ millions) % Inc/Dec 2010 2009 2008 2007 2006 2005 2490.23 2235.92 2428.68 2236.05 2753.12 2957.08 11.37% - 7.94% - 17.87% 7.41% 23.12% 1500 1700 1900 2100 2300 2500 2700 2900 3100

Visitor Profile (2010) Visitor Profile & Travel Characteristics 2010 Source: DOT TRSD Reports: A/D Cards, Shipping Manifest, VSS Average Daily Expenditure = US$ 83.93 Guided Tours 0.67 1% Local Transport 3.04 4% Entertainment and Recreation 13.75 16% Food/Beverage 22.51 27% Miscellaneous 1.53 2% Visits to Attractions 0.05 0% Accommodation 19.31 23% Shopping 23.07 27% Average Daily Expenditure of tourists: US$ 83.93 Activities: Shopping 27% Food/Beverage 27% Accommodation 23% Entertainment and Recreation 16% Average length of stay: 8.01 nights (Source: A/D card, Shipping Manifest & VSS)

TOP 10 ACTIVITIES UNDERTAKEN IN THE PHILS. (2010) Source: VSS Jan Dec 2010 Tourism Promotions Board

EMPLOYMENT IN TOURISM INDUSTRIES, 2000-2009 In thousand persons 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 TOURISM CHARACTERISTIC INDUSTRIES 2,566 2,724 2,799 2,940 3,077 3,136 3,217 3,359 3,415 3,550 Hotels and Similars 70 76 79 86 92 98 101 103 109 115 Restaurants and Similar 541 592 614 665 714 763 785 804 845 894 Passenger Transport 1,085 1,157 1,181 1,262 1,326 1,339 1,356 1,419 1,415 1463 Travel Agents, tour operators and tourism guides 115 124 126 127 137 142 163 172 177 179 Recreation, entertainment and cultural services 240 245 250 265 278 258 267 310 309 309 Retail trade on tourism-charactersitic goods 179 205 219 219 229 240 245 248 252 263 Miscellaneous 336 325 330 318 301 297 300 302 309 327 TOTAL EMPLOYMENT IN THE PHILIPPINES 28,294 29,154 30,062 30,627 31,611 32,312 32,962 33,564 34,089 35,060 Share to Total Employment 9.07% 9.34% 9.31% 9.60% 9.73% 9.71% 9.76% 10.01% 10.02% 10.13% Source of data: Labor Force Survey National Statistics Office (NSO)

Domestic Travellers (in millions) 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 14.59 16.93 15.91 17.29 20.22 24.63 25.11 30.17 24.91 25.1 27.91 An average Filipino travels twice in six months for tourism purposes Main purpose Pleasure and vacation VFR Business Medical MICE 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sources: NSCB Tourism Satellite Account and NSO Average spent per day is Php

Target: 6.3 Million Visitors by 2016 Double visitor arrivals and receipts as well as generate additional 3 million jobs in 5 years Arrivals Receipts Jobs 2016 6.3 Million $4.5 Billion 7.7 Million 2011 3.74 Million $2.67 Billion 4.57 Million 2010 3.5 Million $2.4 Billion 3 Million

Target Tourist Arrivals for 2011 2016 in millions 7 6.36 6 5 4 3 3.02 2011 Adjusted Target Arrivals Target Arrivals (2010 released) ActualArrivals 3.52 3.38 3.74 4.16 4.67 5.19 5.72 2 1 0 2009 2010 2011 2012 2013 2014 2015 2016 The Philippines is the must experience destination in Asia

Economic Impacts of Tourism to the Philippine Economy GDP Contribution Direct Contribution Total Contribution 2011 Increase per annum P 326.5 B (3.4% of Total GDP) P 1,094.7 B (11.4% of Total GDP) 2021 (Projection) 6.4% P 606.2 B (3.9% of Total GDP) 6.0% P 1,955.8 B (12.6% of Total GDP) With the doubling of arrivals, tourism receipts are likewise expected to double within the next 10 years

SUSTAINED GROWTH IN FOREIGN VISITORS AND TOURIST EXPENDITURES 3.52 million foreign tourists in 2010 4.8% average growth rate over 5-year period US$2.49 billion in 2010 in tourist expenditures 11.3% increase over 2009 of USD 2.23 Billion

Comparative Advantage of the Philippines Inherent: Located in the fastest growing region in the world, at the crossroads of Asian and international trade - convenient access from and to major international cities and the 550 Millionstrong ASEAN Market - proximity to other regional hubs such as Hong Kong, Seoul, Singapore Shanghai and Tokyo, which provide numerous travel options

Diverse and World Class Destinations Nature at its best, although one is able to swim with the world s largest mammal: the whale shark, or play with the world s smallest primate: the tarsier; Adventure, although our Bicol region is the site for television s popular Survivor series, Amazing Race, etc.; Culture where West was assimilated into East and emerged as the only Latin country in Asia; Shopping in the region s largest malls or tightest flea markets.

Comparative Advantage of the Philippines Population: - one of the largest English-speaking countries in the world; fluent in English, which is popularly used as medium for communications, commerce and education - renowned worldwide for warmth and hospitality - open to inter-cultural exchange and adaptable to universal and western cultures

Comparative Advantage of the Philippines Population: - Young and highly educated; 94.6 % literacy rate, with 405,000 University/ College graduates per year - 37.89 Million-strong labor force, highly qualified, skilled in global communication and technical talent; well trained manpower with fast learning curve; disciplined, with strong customer service orientation and high level of commitment and loyalty; exported and sought worldwide, but can be harnessed in local service economy - has a dynamic and progressive business outlook, and high-level of commitment and loyalty

Comparative Advantage of the Philippines has new civil aviation policy regime that will lead to greater air access ideally placed to participate in high-demand services such as Business Process Outsourcing (BPO) has a government that identified tourism as a priority undertaking, encouraging tourism investments, and aggressively supporting heavy investment in infrastructure development and marketing activities

Infrastructure and Telecommunications Network Extensive Infrastructure Expansion and Support Established Telecommunications Systems and Networks Completely deregulated industry International connectivity and expanding multi-media infrastructure

TOURISM ACT OF 2009 (RA 9593) Fiscally empowers TPB as the tourism investments promotion arm The Philippine Tourism Promotions Board (TPB), to bring a greater awareness of the Philippines as an attractive tourist investments destination. Creates a tourism investment monitoring agency The Tourism Infrastructure and Enterprise Zone Authority (TIEZA), to generate new investment in the tourism sector by granting fiscal and other incentives.

TIEZA BOI and PEZA have been the 2 agencies responsible for bringing in tourism investments. Because of the Tourism Act of 2009, investors can also look to TIEZA now as a specialized agency dedicated to the tourism sector. TIEZA goes further than BOI & PEZA by recognizing the peculiar needs of the tourism industry offering the same non-fiscal incentives in terms of: - providing special visas - assuring investment repatriation - protecting investments from government expropriation - facilitating investments through a one-stop-shop process to cut down on the bureaucracy and red tape - 6-year income tax holiday, compared to 4 years for BOI and PEZA - tax holiday is extendable by up to 6 more years for substantial expansions or upgrades in facilities and services - after the income tax holiday period, the investor has the option to be taxed on gross income - also available is a special social responsibility incentive, which will be a tax credit of up to 50% of expenses on environmental protection, heritage preservation, or sustainable livelihood programs for host communities. - also to assist locators with local issues concerning their host communities

Tourism Business Investment Opportunities

Tourism Investment Areas PRIME TOURISM ACTIVITIES Medical Tourism (Healthcare and Wellness) Retirement Meetings, Incentive Travel, Convention, Exhibition/Event (MICE) GEOGRAPHICAL DESTINATIONS General Tourism Investments

MEDICAL TOURISM (Healthcare & Wellness) Tourism Promotions Board Value Proposition: World-class medical healthcare services which are some of the best in Asia. Abundance of highly qualified English speaking medical workers sophisticated private hospitals and competitive pricing of medical services. Filipinos have a genuine compassionate nature Our doctors and nurses are among the country s most successful overseas workers our care givers are known for the Filipino brand of tender loving care. The Philippine medical tourism program also includes traditional and alternative healthcare services.

MEDICAL TOURISM We have some of the world s best but affordable spa retreats and wellness resorts. A number of these have entered into joint venture with foreign investors, including a popular resort that offers holistic and alternative treatment in a lush tropical farm setting. These are all complemented with eco-tours, adventure tours, and cultural tours.

RETIREMENT VILLAGES The Philippines is an ideal Southeast Asian Retirement island-country offering an attractive blend of the following: Warm weather / Tropical climate Low cost of living Qualified, English-speaking and caring medical professionals Trained care-givers with the Filipino touch World-class medical / health facilities and services Good accessibility and telecommunications access Less stressful environment and helpful community Religious tolerance a popular destination with rising tourist arrivals Retire twice as rich and five times happier in the Philippines

Retirement Villages / Facilities Luzon Club Amore, Cavite Canyon Woods, Tagaytay Hacienda San Benito, Batangas Chateau Royale Sports & Country Club, Batangas Poco a Poco Condotel, Olongapo Subic Homes, Olongapo Subic Holiday Villas, Olongapo Visayas Kiener Hills Mactan Condominium, Cebu Marco Polo Residences, Cebu Citylights Gardens, Cebu Mindanao Linmarr Towers, Davao Metro Manila Bay Gardens, Roxas Blvd. 8 Newport Boulevard, Pasay One, Two and Three Central, Makati Oriental Garden (Lilac Tower), Makati The Grand Midori, Makati The Koncord, Makati Park Terraces, Makati Riverview Mansion, Binondo 168 Residences, Binondo City Place, Binondo ADB Avenue Tower, Pasig BSA Twin Towers, Pasig Eton Emerald Lofts, Pasig The Capital Towers, Quezon City Pacific Century Tower, Quezon City Source: Philippine Retirement Authority (PRA)

M.I.C.E. FACILITIES Value Proposition: Meetings Incentive, Conventions, Exhibitions/Events (MICE) delegates spend more than the average tourists due to extended multi-destination trips before and/or after the event (pre/post tours): Visitors Average Daily Expenditure Regular Tourists US$ 83.93 M.I.C.E. Delegates US$ 759.00 As such, MICE events create a huge multiplier contribution on expenditures of every convention or exhibition to other downstream industries like hotels, F&B, transport, promotions, equipment rentals, project staffing. Furthermore, tradeshows and conventions also usually have an exhibition component which contribute additional spending to the local economy.

MICE Visitor Profile: M.I.C.E. Industry professionals / service providers and their clients: Airlines, Hotels / Resorts, Health Resorts & Spas, etc. Meeting Planners / Conference Organizers Convention / Visitor Bureaus Destination / Event Management Companies Incentive House / Agencies Trade Associations Venue Owners Marketing Services Companies Consulting Companies Press / Media Tour Operators, Travel Agencies Group Travel Organizers Tourist Attraction & Entertainment Providers Business Travelers Wholesalers

M.I.C.E. Market Opportunity: Asia has become the most sought after location for M.I.C.E. With its Asian neighbours, the Philippines is expressing its desire to join the race and to receive the share in its rewards. The current infrastructure boom in the country can support a new M.I.C.E. industry resurgence... Yet we are still lacking in new, larger and more advanced MICE venues and facilities that can accommodate large-scale conventions and events under one roof.

HOTELS / RESORTS Tourist resorts are expected to be popular among foreign property investors due to the following: relatively low prices guaranteed annual income HIGH-END RESORTS VIP Tourist with special needs High-end lodging options Cutting-edge facilities POPULAR RESORTS General Tourists Affordable lodging facilities Eco-lodges MARINE RESORTS Marine Resort = Breathtaking View of Open Sea + Marine Sports Activities

Golf Resorts Golf represents the largest sports-related travel market. It has been valued at US$20 Billion, with over 50 million golf tourists travelling the world to play on some of the estimated 32,000 courses. Source Markets: USA, Korea, Japan, HK, Canada Competitive Advantage - world class golf courses with de luxe and first class accommodation facilities - spa and wellness facilities nearby golf areas - light activities (e.g. shopping, side trips to other leisure destinations)

Theme Parks Culture and Entertainment Zones The trend now is to integrate theme parks with hotel, housing facilities / condotels, entertainment centers, e.g. Disneyland, Lotte World, Universal Studios, among others. US$ 29.5 B market demand by 2015 Growth propelled by: -Popularity of outdoor activities for family -Demand for mass entertainment Competitive Advantage: - Rich and colourful history - Vibrant traditional culture and heritage - Strong tradition of arts and crafts - Presence of culinary tradition / Local restaurants - Distinct local lifestyle

Training Centers / Institutes Education Tourism (ESL, etc.) Source Markets: Korea, Taiwan, Japan, China Competitive Advantage: - ESL and other degree courses for foreign students - Language learning institutions accredited by BI and DOT - Light adventure and sightseeing activities - Availability of professional and qualified teachers

GEOGRAPHICAL DESTINATIONS: Potential Tourism Business Investment Sites Agriculture: Laguna, Bukidnon, Cordillera, Bacolod, Benguet Arts and Crafts: Cebu, Laguna, Rizal Culinary: Pampanga, Bacolod, Ilocos, Zamboanga, Bicol Festival: Aklan, Cebu, Iloilo, Davao, Quezon, Baguio, Marinduque Health and Wellness: Batangas, Tagaytay, Pampanga Heritage and Culture: Taal/Batangas, Iloilo, Bacolod Language / Educational: Manila, Subic, Cebu, Tagaytay, Bicol, Zambales, Baguio Nature Based: Bohol, Zambales, Baguio, Dongsol/Sorsogon, Sagada/Benguet, Pangasinan, Palawan, Antique Sports and Adventure: Batanes, Davao, Bohol, Camarines Sur, Siargao Sun and Beach Tourism: Guimaras, Camiguin, Pagudpud

Latest Tourism Business Investment / Development Projects SM BAY CITY ARENA Currently under construction, this will be the newest structure at the Mall of Asia (MOA) complex, where large events like concerts, circus, ice shows, and other sports and entertainment events can be held. COMING SOON ~ Seating Capacity: 15,000 ~ Target Date of Completion: 2012

ASEANA BUSINESS PARK Also known as Central Business Park One, ASEANA Business Park is a Flagship National Government Project being implemented by the Philippine Reclamation Authority (PRA) along the Build Operate Transfer (BOT) scheme and pursuant to existing special laws and Executive Orders. COMING SOON PRA has partnered with R-1 Consortium to reclaim and develop approximately 204 hectares of land along Manila Bay. The master plan includes a PAGCOR City, plus Alphaland Bay City which will feature a complete array of real estate products ranging from high-end residential units, office clusters, a marina and yacht club, retail strip, and a retirement community.

COMING SOON GRAND HYATT HOTEL AT THE FORT Federal Land is now constructing the 66-storey skyscraper at the heart of Fort Bonifacio. Its first 25 floors will house the Grand Hyatt Hotel (500 to 600 rooms). THE SHANGRI-LA AT THE FORT Target date of opening: Mid to late 2014 Features: 60 storeys; 544 guest rooms; 146 long-stay residences; 6,800 square meters of meeting and banqueting facilities which includes a grand ballroom, junior ballroom, 11 function rooms, boardroom, business centre and individual teleconferencing room.

F1 CITY CENTER HOTEL, FORT BONIFACIO (by Best Western International) Target Date of Opening: First Quarter of 2011 This 240-room hotel enjoys a prime location within The Fort at Global City. The newly developed area is home to upscale residential buildings, trendy restaurants and bars, retail outlets, and the Market! Market! Shopping Centre. Property developer Ayala Land Inc. (ALI) is set to launch a boutique-type hotel in 2012 at Fort Bonifacio, with an average of 150 rooms,. This new hotel will cater mainly to business travelers. COMING SOON

Tourism Business Investment Prospects Approaching saturation in their invested markets and seeking new destinations, investors now view the Philippines as the next big Southeast Asian destination, notwithstanding our limited accessibility and underdeveloped infrastructure. Tourism related infrastructure capacity is already constrained and tightening, but with the diffused development of resorts, especially along the shores, visitors have gone to practically all over the Philippines for vastly improved eco-tourism facilities.

However, many destinations are still in need of more tourism facilities. Many more places await new opportunities for infusion of tourism investments. The Philippines is like a blank canvass waiting for the image to be painted. Like many works of art, it depends on the combination of colors, themes and brush strokes that will ultimately determine its success or failure. We are those combinations of brush strokes and colors. We make up the scenery of our tourism industry. We need to inspire one another to make a better Philippine tourism industry.

We call upon the Real Estate sector to heed the challenge for the development of more facilities that will support tourismrelated activities, and find new markets and investors. The DOT acknowledges the property sector s initiatives in taking a more active role as facilities provider that support the national tourism development programs of the Aquino Administration. DOT values CREBA s continued partnership, as it strives to trickle-down the benefits of tourism directly to our local communities all over the country, that will ultimately fulfill the administration s national goal: ~ revenue generation ~ job creation ~ and, most importantly, poverty alleviation