By Ralph Jennings
The Philippine government is taking a lesson from the rehabilitation of Boracay that shut down the island paradise for six months last year. Now, the clean and safe state of its famous white-sand beaches is being cited as the inspiration behind government efforts to promote a slate of other master-planned zones for tourism development. And to generate the much-needed capital for those zones, Philippine officials embarked on a roadshow in October to attract more investment from Taiwan, South Korea and Japan.
“In terms of the tourism, we want to make sure that what happened in Boracay does not happen in other areas,” says Pocholo Paragas, chief operating officer of the master-planned area’s lead government agency, the Tourism Infrastructure and Enterprise Zone Authority.
Nationwide lesson from Boracay
Under pressure from Philippine President Rodrigo Duterte, Boracay closed from April to October last year for a cleanup followed by new rules for travelers. The 10.3-square-kilometer islet’s white sand beach spans four kilometers, paralleled by a strip of at least 100 hotels. Boracay generated about $1 billion in tourism receipts in 2017, according to provincial tourism office data as cited by the Philippine Information Agency. That figure marked an increase of about 15% over 2016.
But development had mushroomed without central planning. Boracay has a capacity of roughly half a million visitors per year, but the islet hosted 2 million tourists in 2017, according to the Department of Environment and Natural Resources. Trees were felled, litter piled up and some hotels poured sewage into the surrounding waters, much to the detriment of sea life in the area.
Since its reopening, Boracay has limited arrivals to about 6,400 people per day, meaning travelers can be sure of being allowed onto the island only with verified reservations for one of the 2,063 rooms operated by accredited hotels.
Philippine officials had launched tourism enterprise zones back in 2009, spawning a number of tracts that seek investment today. The projects received a boost in 2017 when the government issued official guidelines for them, Paragas says. The zones need basic infrastructure, transportation, hotels and enough activities that tourists will spread out and avoid crowding, he says. “Not everyone has to be at the beach at the same time,” Paragas says.
A classic master-planned area is the Panglao Bay Premiere zone at a diving region of Bohol Island. It covers 106 hectares and a 750-meter stretch of beach. The zone sits five minutes from a new airport. It’s looking for investors in a mall, a luxury events resort and a hotel for families, to name just some of the projects.
Capitalizing the projects: Testing interest from wealthier parts of Asia
The government is looking ideally for foreign developers who can do “macro” projects of at least $5 million, Paragas says, speaking on the sidelines of an October 3 event in Taipei. Investors would build, operate infrastructure, run transportation systems and build the resorts for the country’s upward spiral in tourism. Tourist arrivals from other countries increased 7.7% last year to 7.1 million, according to Department of Trade and Industry figures.
Foreign investors in the tourism zones qualify for land leases up to 50 years and tax holidays of six years, with more tax breaks for protecting the environment.
The Philippine Tourism Infrastructure and Enterprise Zone Authority gathered 120 Taiwanese conglomerates and business people to hear the government’s pitch.
At least one Taiwanese-invested firm is already making more money than expected from a hotel complex northwest of Manila. That company, MSK Triboa Majestic Bay, started working last year on four condominium buildings and a five-star resort complex on an investment of 20 billion pesos ($387 million) along Subic Bay, which being near Manila draws wealthier Filipino tourists.
Condos are selling and the resort business is strong because Filipinos don’t mind spending money, the developer’s senior consultant Seima Huang says. The firm expects build-out to be completed in 2021.
“To be honest it was a bit of good fortune,” Huang says, recalling that the company’s chairman and siblings had first gone to Manila for development work. “As soon as the Subic investment zone had been set up, there were Taiwanese who wanted to build, and they found us.”