5550b7d908ae93634ec9ec8e PDF
5550b7d908ae93634ec9ec8e PDF
5550b7d908ae93634ec9ec8e PDF
Submitted by:
Dr. Divina M. Edralin
Project Head
and
Ms. Paulynne Castillo
Senior Researcher
Table of Contents
page
List of Tables
List of Appendices
Executive Summary
ii
iii
v
Introduction
1. The industry
1.1 Definition
1.2 Contribution to the Economy
1.3 Structure
1.4 Seasonality of Demand
1.5 External Support Systems
1
3
4
5
5
25
26
2. Forward Linkage/Market
28
3. Backward Linkage/Suppliers
35
4. Laws Hindering/Facilitating
40
47
47
47
49
6. Supply Capability
6.1 Services Offered
6.2 Areas of Specialization
6.3 Expertise/Technical Competence of Manpower
59
59
60
61
63
63
65
65
69
72
78
79
Bibliography
Appendices
294
106
List of Tables
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
Table 11
Table 12
Table 13
Table 14
Table 15
Table 16
Table 17
Table 18
Table 19
Table 20
Table 21
Table 22
Table 23
Table 24
Table 25
Table 26
Table 27
Table 28
Page
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Table 29
Table 30
Table 31
Table 32
Table 33
Table 34
Table 35
Table 36
Table 37
Table 38
Table 39
Table 40
Table 41
Table 42
Table 43
Table 44
Table 45
Table 46
Table 47
Table 48
Table 49
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List of Appendices
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Appendix I
Appendix J
Appendix K
Appendix L
Appendix M
Appendix N
Appendix O
Appendix P
SWOT Analysis
Amending Part IX of The Integrated
Reorganization Plan By Renaming the
Department of Trade and Tourism as The
Department of Tourism, and Creating the
Department of Tourism With a Philippine Tourist
Authority Attached to It In Lieu of Philippine
Tourist Commission
Department of Tourism Programs and Projects
Industry Associations
Trade Unions
Investment Priorities Plan and Implementing
Guidelines
College of St. Benilde
Hotel and Science in Hotel, Restaurant, and
Institution Management Curriculum and The Hotel
and Tourism Institute of the Philippines (HTIP)
The Asian Institute of Tourism
Hotel and Restaurant Administration/Travel and
Tourism OJT Program Profile
Tourism Industry GDP, Visitors Exports and
Employment in Selected Countries, 2000
International Tourism Receipts by Region (US$
billion)
Network Economy and Tourism Industry
Technology utilized as a Competitive Method
Changing Roles and Relationship in the Electronic
Market Space
Cost and Benefit Analysis for Developing Internet
Presence for Small and Medium-sized Tourism
Enterprises
Obstacles to the Introduction of electronic Data
Interchange (EDI)
Page
166
170
179
193
208
210
281
289
292
294
295
296
298
299
300
301
Executive Summary
In the Philippines, tourism is one of the major industries that the WTTC
noted as positioned at the epicenter of global travel and tourism growth and
development. In 1997, tourism contributed 8.7% of the countrys GDP,
generating 2.3 million jobs (or one in every nine nationwide), and accounting for
some 10.5% of Philippine investments.
According to the Department of Tourism, international arrivals in 1999
stood at 2.17 million, a slight increase from the previous years total of 2.15
million visitors. Despite the economic crisis suffered by its Asian markets, the
Philippines foreign exchange receipts from tourism went up by 5.83% from $2.41
billion in 1998 to $2.55 billion in 1999. Moreover, the Philippines enjoyed the
highest repeat visitors in Asia at 54.22 percent, indicating that the tourism sector
can survive external threats and competition in the region.
As tourism serves as the main market for hotel and restaurant services,
increase in visitor traffic over the past ten years resulted in a corresponding
boom in the hotel and restaurant industry. During the last decade, the hotel and
restaurant industry has flourished even as it struggled to cope with difficult
challenges. New hotels mushroomed in the capital while older hotels have done
their best to spruce-up both their interiors and upgrade services. Likewise, the
growth of the restaurant sub-sector, the number of players and the variety of
services offered, has been notable during the period.
Invariably linked, increasing world tourism is expected to offer both
opportunities and trials for the worlds hotel and restaurant industry. It is in this
context that this paper presents information meant to:
1. define the coverage and structure of hotel and restaurant industry
2. identify the industrys forward linkages (market)
3. identify the hotel and restaurant industrys backward linkages
(suppliers)
4. identify the laws affecting the trade in hotel and restaurant services
5. determine the industrys market potential/foreign market demand
6. determine the industrys supply capability
7. identify the sectors training needs
8. identify the industrys strengths, weaknesses, opportunities and threats
9. recommend policies that will enhance the industrys competitiveness
The Industry
The study adopts the definition of the Philippine Standard Industrial
Classification in identifying establishments as belonging to the sector. According
to the PSIC, the industry is disaggregated into two sub-sectors: hotel and
restaurant.
The hotel sub-sector includes the various lodging units of different sizes
and standards located both in urban and rural communities.
The restaurant sub-sector, on the other hand, includes places that serve
food and drinks, be it self-service or full-service. This covers a range of services
including fine dining specialty restaurants, fast food outlets, canteens, and food
courts. In terms of its contribution to the national economy, the hotel and
restaurant industry accounted for 1.35% of Philippines 1998 gross domestic
product (PHP12 billion in GVA compared to the Philippines PHP889 billion GDP
during the period) and 1.28% of its national product (PHP12 billion in GVA
compared to the PHP931 billion GNP). Moreover, the hotel and restaurant
industry employed about 1% (282,142) of the countrys 31,278,000 labor force
during the same period.
Meanwhile, the National Statistics Office (NSO) in 1994, classified 46,930
firms as belonging to the hotel and restaurant industry, employing a total of
221,954 people. At the time, each peso investment in labor contributed PHP4.40
to the industrys total output while each peso investment yielded a PHP1.27
contribution to the same.
Hotel
In general, hotels offer two major types of services: (a) accommodation
and (b) dining services. Based on the quality and extent of services provided,
location, bedroom, front office/reception, food and beverage, general facilities
(service and staff), and special facilities (i.e., business center, limousine services
and airport transfers), hotels are further classified as Deluxe, First Class,
Standard, and Economy. Hotel guests can expect a room with private bath,
telephone, radio, and television, in addition to such customer services such as
laundry, valet, cleaning and pressing. Aside from the services mentioned, hotels
have other facilities: function rooms, ballrooms, health spas, coffee shops, dining
rooms, cocktail lounges or night clubs, gift shops or newsstand-tobacco counters,
and business centers for social occasions, health buffs, and business
conferences.
Customers of the industry include the domestic household, foreign visitors
and institutional buyers. Research shows that the domestic households
selection of hotels and other lodging facilities are affected mainly by three
factors: 1) competitive pricing; 2) availability of services and facilities for
children; and 3) type and extent of free services (i.e., free local calls,
continental breakfast, etc.). Meanwhile, notwithstanding the currency and
economic turmoil in Asia, the Philippine tourism industry posted a 2.17
billion arrivals in 1999. In the past five years, visitor arrivals have been
growing at an annual average of 9%, contributing more than US$2.3 billion
per year to the countrys foreign exchange earnings. Hotels are the most
popular source of accommodation for more than 50% of foreign visitors.
According to the Top 7000 Corporations, the fifty-two (52) top hotels and
other lodging facilities posted a modest increase of 7% in combined gross
revenue from PHP12.4 billion in 1998 to PHP13.2 billion in 1999. Combined net
income in for top hotels and other lodging facilities, likewise, went up 19.2%
during the same period, from PHP709 million in 1998 to PHP845 million the
following year. Profitability also increased, 9.1%, from 0.044 in 1998 to 0.048 in
1999.
The top ten hotels accounted for 61.4% of the sub-sectors gross revenue
in 1999. Among the three hotels and other lodging facilities with the highest
1999 gross revenues are Edsa Shangri-la Hotel and Resort, Inc., PHP1.3 billion
(9.7% revenue share), Manila Peninsula, PHP1.1 billion (8.1% revenue share)
and New World International Development Philippines, PHP983 million (7.4%
revenue share).
Based on occupancy rates, however, the Mandarin Oriental, the Makati
Shangrila and the Manila Diamond Hotel topped the DOT accredited de
luxe hotels category for the period January to April 2000 with occupancy
rates of 81.5%, 77.1% and 77.1%, respectively. Traders Hotel, Holiday Inn
Manila, and Manila Midtown Hotel, on the other hand, led the seven DOT
accredited first class hotels during the same period with occupancy rates
of 67.75%, 66.27%, and 66.25%, respectively. Among the 40 DOT
accredited standard hotels, the Sulo Hotel, the Century Imperial Suites,
and the City States Tower Hotel registered the highest occupancy rates at
74.71%, 69.54%, and 68%, respectively. Finally, among the fifteen DOT
accredited economy hotels occupancy rates ranged from 76-20% from
January to April 2000 with Jade Vine Executive Inn, El Cielito Tourist Inn,
and Swagman Hotel leading at 76.02%, 52.22%, and 51.75%,
respectively.
In general, the hotel sub-sectors strength lies in the following: the ability to
innovate, a pool of competent potential workers/professionals, and technology
development. Pressure on hotel prices, on the other hand, comes from the drive
for value for money. Increased operating efficiency obtained through the
computerization has helped to reduce costly waste in the supply chain. However,
higher labor, raw materials, and utility costs continue to push operating costs up.
Finally, in the macro level, economic and political factors affect the
performance of the tourism industry. In the past two years, for example,
declining disposable income resulting from the Asian currency crisis and political
instability resulted in a 3% contraction in tourist arrivals in 1998 and a 1%
increase in 1999.
Restaurants
Participants in the restaurant sub-sector provide food and drinks, be it selfservice or full-service. The sub-sector caters to both household and institutional
buyers. The Philippine household market is segmented into five income groups
(A, B, C, D and E). Based on the preliminary results of the 1997 Family Income
and Expenditure Survey (FIES), the middle income bracket has expanded from
the 1994 level from 28% of the total number of families in the economy to 30%.
The FIES data indicate that families have experienced improvements in
their income in 1997 from 1994, which indicates an increase in the local
populations buying power. Furthermore, FIES data show that spending on food
consumed outside the home has been increasing from 3.1%in 1985 to 4.7% in
1997. With total family expenditures increasing more than four times during the
period, this translated to more than PHP66.8 billion spent on restaurant services
in 1997. Research bore out that top five quality characteristics that influence the
Filipinos choice of restaurants and fastfood outlets, ranked according to
importance, are flavor and taste, value for money/nutrient content, presentation
and packaging, variety, and systematic ordering and selling.
Meanwhile, institutional buyers employ the services of the restaurant industry
for occasions such as seminars, workshops, meetings, company celebrations,
and marketing and promotional activities. Among the hotel and restaurant
industrys main institutional markets are the wholesale and retail trade (30.4%),
air transport (23%), and the other recreational and cultural services sectors
(5.7%).
To date, there are about 45,220 restaurant establishments in the domestic
economy catering to the dining requirements of a constantly expanding
market. An estimated 80%, or more than 36,000, of these establishments
are classified under the fast food sub-sector.
Low barriers to entry characterize the industry. Capital investments
particularly for franchises can range anywhere from PHP500,000 to
PHP10,000,000. Training, marketing and distribution channels are arranged by
the franchisor. Likewise, as the franchisor provides the new entrant fully
developed management and production systems, prior knowledge and
experience are not required of franchisees. These characteristics of franchising,
particularly of food establishments, make the business very attractive for new
entrepreneurs.
The proliferation of one-stop shopping malls that offer various recreational
facilities and amenities, likewise, eases the entry of potential restaurant and fast
food players. These malls spare the restaurant industry from spending extensive
business development studies for their outlets; mall magnates Henry Sy and
John Gokongwei Jr. have established formidable track records in building malls.
The industry in which the restaurant and fast food firms operate has
increasing consumer demand for every improving product. The growth is proven
by the rapid expansion of food outlets in key areas in Metro Manila and the
provinces. The popularity of fast food establishments came in the 1980s, and
over the last years, the industry has consistently posted double-digit growth
rates.
Competition is fierce in the restaurant industry, particularly the fast food
sub-sector. The market is large but consumers are price conscious and
exhibit brand loyalty. With a wide range of restaurants and fast food
establishments to choose from, pricing schemes and marketing strategies
determine market shares. Market strategies of industry players, therefore,
aim to achieve two primary objectives: 1) hammer in value-for-money
concepts; and 2) create brand consciousness and loyalty.
Market shares in the restaurants are won or lost in pricing. Industry
players offer regularly offer price cuts and discounts to lure in new customers.
Moreover, major players invest heavily in advertising to create brand
consciousness and loyalty. Marketing strategies include raffle draws, free gift
items and specially prized meal combinations, discounted toys and school items
for every certain minimum food purchase. Celebrity endorsements are used in
the hopes that the market will identify with the endorser.
Likewise, intense competition urges players to come up with new products
to capture bigger market shares. Restauranteurs have to be keen at finding the
latest food and wine concoctions here and abroad and adapting them to local
taste. Targeting the Filipinos tastebuds, several fastfood chains that usually
serve only western food have introduced items that appeal to the local markets
palate.
Raising quality standards and improving service have also been focal
points of competition, particularly in the fast food sub-sector. Players give
incentives and compensations to motivate employees to be efficient on
their jobs and thus help maintain the fast food outlets high standards of
quality service and cleanliness. Also, a major importance in a fast food
and restaurant is courteous and friendly personnel. Not surprisingly, a
speedy service is among the more salient attributes people would highly
expect from a fast food/restaurant.
Finally, to keep their share of the market, food chains find it necessary to
extend their service coverage by setting up other branches. Industry
players who have outlets that are visible in Metro Manila and in other key
urban cities are ones who are most likely to take in more profits. Malls,
university areas, and other places where there is heavy pedestrian traffic
are the usual places where fast food and restaurants are highly
patronized.
Restaurant and fast food industry players balance their marketing
concerns with the rising operation costs particularly that of imported food
ingredients. Profit margin erosion is usually remedied by either increasing prices
of final product/service or cut corners in production or the delivery of service.
Either solution may result in a shrinking customer base.
Thus, no one restaurant or fastfood chain completely dominate the subsector. In 1999, the 278 top restaurants in the Philippines posted a total of
PHP33.7 billion in gross revenues, 8.6% higher than the 1998 PHP31 billion. Net
income for the same firms climbed slightly from PHP811.9 million in 1998 to
PHP815 million. Asset and equity investment in likewise increased during the
period by 24.3% and 23%, respectively.
Profitability for the top 278 firms, however, fell 16% from 1998s 0.12 to
1999s 0.10 as the industry required more capital, 0.63 unit in 1999 from 0.55 in
1998, to produce one extra unit of output.
In the fast food segment, Jollibee remains at the top with an estimated
29.4% share of the restaurant sub-sectors gross revenue in 1999 and about
50% market share of the local hamburger-segment patrons.
Meanwhile, the local fine dining and specialty restaurants segment
accounted for less than 20% of the restaurant sub-sectors 1999 gross revenue.
Although top ten restaurant chains account for more than 50% of the local fine
dining segment market, the biggest player Perf Restaurants, Inc. ranked 9th, with
a 1.6% of the total restaurant sub-sectors gross revenue.
In general, the restaurant industrys strength lies primarily in technology
development. Technology transfer, franchising, allows interested parties to
operate a franchise without prior experience or training.
Domestic and
international food chains and franchises facilitate transfer of technology in the
local restaurant sub-sector. They provide training of potential employees and
employ strict quality control systems. Raw materials are likewise provided by the
franchisor.
Finally, there is no real threat of external substitutes to the services
provided by the restaurant industry. Indeed, it is competition between the subsectors of the industry that determines market share.
Laws Hindering/Facilitating
Laws that hinder or facilitate the hotel and restaurant industry include
Executive Order 219, which established the domestic and international civil
75% of all hotel and restaurant professionals deployed during the period were
cooks, waiters, bartenders and other related workers.
Filipino hotel and restaurant workers and professionals are known for their
competence, trainability, and ease in adapting to different environments and are,
therefore, in demand in the international market. Most hotel and restaurant
related workers and professionals during the five-year period were deployed to
United Arab Emirates, Saudi Arabia, Kuwait, Papua New Guinea, Singapore
Malaysia, and the United States.
Industry Training Needs
A primary source of hotel and restaurant professionals training are the
various schools and universities that offer courses in hotel and restaurant
management. A pioneer, in this area is the Asian Institute of Tourism, which
established in 1976. Besides providing high quality education and training to
students who will be the industry's future managers, entrepreneurs and technical
experts, the Institute also conducts research as well as offer professional and
technical programs training for the hospitality industry
AITs lead was followed by other educational institutions. Examples of
schools offering such formal education include De La Salle University
(Dasmarinas and the College of St. Benilde), the University of the Philippines,
and University of Santo Tomas, and the Hotel and Tourism Institute of the
Philippines Foundation, Inc., to name a few. Such courses involve basic aspects
of hotel operations including the front office, food and beverage, house keeping,
and room service, culinary skills, customer care, marketing, accounting, as well
as European language skills.
Aside from the formal training potential hotel and restaurant workers and
professionals receive from the academe, hotel establishments conduct on-the-job
training, apprenticeship, management training, and career development
seminars. A selected few are deployed to training schools managed by the hotels
themselves (i.e., Dusit). Technical Education Skills Development Authority
(TESDA) also offers training and certification for certain hotel and restaurant
industry entry-level positions.
Despite progress made in training hotel and restaurant workers and
professionals, resulting in quality personnel, as a continuously evolving industry,
a more intensive management training that combine theoretical as well as
practical exposure to planning, organizing, staffing, communication, and coping
in organizations. Moreover, training programs that strengthen technical skills
particularly computer operations, especially with the increasing utilization of
information technology in the industry (i.e., reservations, accounting systems,
and point-of-sale-system for restaurants) would complement latest software and
hardware employment.
Recommendations
The following recommendations are presented in the context of the countrys
commitment to enhance the competitiveness of the hotel and restaurant industry.
The intent is to enable the sector to compete more effectively in the local and
domestic markets and to enhance the marketability of the countrys hotel and
restaurant industrys manpower in the international market. The determinants of
a subsectors competitiveness would depend on: 1) the level of
expertise/competence of local professionals/businesses, 2) the degree of
openness of foreign markets and their demand for local expertise, and 3) the
degree of openness of the local regulatory framework (i.e. absence or presence
of reciprocity provisions).
Among the recommendations to enhance the hotel and restaurant
industrys competitiveness include, but are not limited to, the promotion of
sustainable tourism, improvement of the legal/regulatory environment
(particularly those that pertain to the GATS Philippines commitments), offering
systems incentives to promote investment into the hotel and restaurant industry,
human resource development (i.e., training and continuing education), and
strengthening industry linkages.
In the area of sustainable development, it is recommended that programs
should incorporate the following principles:
1. Natural sites should be protected and strict provisions added to
prevent pollution and to control the use of energy and natural
resources;
2. Existing cultural practices in such areas which are helpful to
safeguarding the sites should be upheld;
1.
them access to more precise information on the hotels brand promises to ensure
a correct and satisfactory transaction, as well as providing promotions and
incentives and making timely commission payments.
Meanwhile, in the area of financing, banks should be encourage to create
special financing schemes to help small- and medium- scale hotel and restaurant
firms gain access to more capital needed for investment in advanced technology,
and to help them bridge working capital requirements; to provide funds for
training and development of local manpower, particularly for small- and mediumscale firms; and to simplify requirements for availing of loans to encourage firms,
particularly the smaller players, to take advantage of financing schemes.
In terms of the application of information technology in the hotel and
restaurant industry, players can explore the following options: 1) adopt: onscreen informational and promotional guide listing the hotels outlets and
services, through the in-room television hotel guests may view their folios,
receive messages, book reservations at hotel restaurants, participate in guest
satisfaction surveys, and conduct express checkouts; 2) use in hotel and
restaurant marketing, advertising and promotion via the internet (i.e., websites);
3) access market trends (i.e., tourism, culinary, business services, etc.) on the
web; 4) use in training (i.e., computer-based training); and 5) use in waste
management systems.
Depending on the perspective, monitoring the hotel and restaurant
industrys performance can be done by several institutions.
Designated
government agencies, for example, set policies and guidelines pertaining to
customer physical safety and satisfaction (i.e., in terms of accommodations and
health and sanitary standards). They also guard against fraud and, ideally,
promote truth in advertising and transparency in product information (i.e., the
Department of Trade and Industry approves all types of marketing schemes
pertaining to promotions such as raffles, price discounts, etc.). Moreover, public
institutions also monitor entry and exit of players in the industry and specific
performance indicators (i.e., measured occupancy rates, financial highlights,
deployment of workers and professionals, etc.).
Meanwhile, industry associations, the Hotel and Restaurant Association of
the Philippines in particular, take on the role of undertaking programs and
projects that will upgrade and professionalize the industry, promoting unity and
mutual cooperation among industry members, encouraging and fostering high
ethical standards, and representing the sectors interest matters of government
regulatory policies/laws/rules affecting the industry.
Finally, trade unions safeguard the rights and welfare of industry workers
and professionals. They work closely with government and industry participants
in improving working conditions and employee performance (i.e., recommending
additional training and or certification) and in defending employee rights.
Introduction
The tourism industry is a major contributor to the world economy.
According to the estimates of the World Tourism Organization (WTO),
international tourism alone generated $1.4 trillion in receipts (4.1 per cent of
World GDP) in 2000. Estimates of the World Travel and Tourism Council
(WTTC), on the other hand, put the impact of tourism on the economy at a much
higher level because it includes domestic tourism. As reported by the WTTC,
tourism grossed US$566 billion in world visitor exports and created employment
for 73.1 million persons in the year 2000.
The Caribbean is the most tourism-oriented region in the world. It is
estimated that in 2000, tourism employed 3.1 million people either directly or
indirectly, thus accounting for 13.4 percent of total employment. Direct
employment in the tourism characteristic industries alone amounted to 5 percent
of total employment. Visitor expenditures contributed an estimated US$17
billion, or 18.4 percent, to export revenues. Countries whose international
tourism receipts exceeded 5 percent of GDP or 10 per cent of export revenues
are considered to be tourism countries for the purposes of the World Trade
Organization. Tourism-related portions of GDP estimated by the WTTC for a
number of countries are shown in Annex J. Annex K, on the other hand, shows
international receipts be region.
Indeed, global travel is expected to grow rapidly for at least the next 20
years. Worldwide arrivals were expected to expand from 613 million in 1997 to
an estimated 700 million in 2000, 1 billion by 2010 and 1.6 billion by 2020.
market. As foreign visitors depend primarily on the hotel and restaurant industry
for their accommodation and dining needs, growing world tourism will offer both
opportunities and trials will abound for the worlds hotel and restaurant industry.
It is in this context that this paper presents information meant to:
1. define the coverage and structure of the hotel and restaurant industry
2. identify the industrys forward linkages (market)
3. identify the hotel and restaurant industrys backward linkages
(suppliers)
4. identify the laws affecting the trade in hotel and restaurant services
5. determine the industrys market potential/foreign market demand
6. determine the industrys supply capability
7. identify the sectors training needs
8. identify the industrys strengths, weaknesses, opportunities and threats
9. recommend policies that will enhance the industrys competitiveness
1.0.
The Industry
1.1.
Definition
The hotel and restaurant industry definition used in this study follows the
Philippine Standard Industrial Classification (refer to Table 1). The industry is
disaggregated into two sub-sectors: hotel and restaurant.
The hotel sub-sector includes the various lodging units of different sizes
and standards located both in urban and rural communities.
Table 1. Hotel and Restaurant Industry Definition based on the PSIC
PSIC
Code
Description
98
Restaurants and Hotels
981
Restaurants, Cafes & Other Eating & Drinking Places
9810
Restaurants, Cafes & Other Eating & Drinking Places
98101
Restaurants and Cafes
98102
Refreshments and Ice Cream Stands, Kiosks & Counters
98103
Day and Night Clubs
98104
Cocktail Lounges and Bars Operation
982
Hotels, Motels & Other Lodging Places
9820
Hotels, Motels & Other Lodging Places
98201
Hotels and Motels
98202
Dormitories
98203
Pension Houses
Source: National Statistics Office
The restaurant sub-sector, on the other hand, includes places that serve
food and drinks, be it self-service or full-service. This covers a range of services
including fine dining specialty restaurants, fast food outlets, canteens, and food
courts. Fine dining and specialty restaurants offer a wide variety of international
1.2.
1.3.
Structure
Emerging urban centers outside Luzon, such as Metro Cebu and Metro Davao
are becoming the target locations of outlet expansion by major players as well.
981
9822
CAR
981
982
ARMM
981
982
I
981
982
II
981
982
III
981
982
IV
981
982
V
981
982
VI
981
982
10,455
10,281
174
907
828
79
671
668
3
2,922
2,827
95
1,499
1,432
67
4,058
3,933
125
6,393
6,096
297
1,881
1,793
88
3,123
2,999
124
1
2
72,981
71,562
1,419
3,997
3,574
423
3,317
3,297
20
11,200
10,747
453
5,191
4,850
341
15,144
14,432
712
25,088
23,928
1,160
9,601
9,109
492
13,853
13,368
485
5,037,391
4,808,011
229,380
185,747
156,038
29,709
66,277
65,187
1,090
798,062
775,972
22,090
356,849
333,029
23,820
1,256,874
1,216,051
40,823
1,156,212
1,104,726
51,486
445,757
405,031
40,726
935,162
907,195
27,967
46,930
221,954
14,244,530
Hotels. For the period January to December 1999, a total of sixty-two (62)
classified hotels, with a total capacity of 13,035 rooms were accredited by the
Department of Tourism (DOT) in Metro Manila. These rooms were distributed as
follows: de luxe rooms, 7,046; first class rooms, 2,474; standard rooms, 2,969;
and economy hotel rooms, 546. These numbers, however, do not constitute the
entire universe of hotels in the country as the DOT only accredits hotels that
comply with its minimum standards to ensure tourists' safety, comfort, and
convenience.
Hotels are the most popular source of accommodation among foreign
travelers. In the past five years, more than 50% of foreign tourists used hotels
for lodging purposes.
Because of the growing demand for hotel accommodations, the last five
years witnessed the steady expansion of every segment of the hotel industry.
On the average, the total number of hotel rooms has grown from 11,742 in 1995
1
2
Premier Hotel
Corner T. Mapua & Tetuan Sts.
Santa Cruz
Manila
Lai-Lai Chinatown Hotel
Corner Gandara and Ongpin Sts.
Santa Cruz
True Home
2139 Adriatico Street
Malate
Offers comfortable rooms with TV, aircon and bath at PHP940/1,050. Suites
are PHP1,880. There is also a
restaurant and coffee shop.
Tastefully furnished rooms with fan and
bath are PHP580, and with TV, air-con
and bath from PHP1,000 to PHP1,300.
All rooms have a different dcor, and
there is a swimming pool.
24.Ambassador Hotel
2021 Mabini Street
Malate
According to the Top 7000 Corporations and the Next 5000 Corporations,
the fifty-two (52) top hotels and other lodging facilities posted an increase of
more than 7% in combined gross revenue from PHP12.4 billion in 1998 to
PHP13.2 billion in 1999. Combined net income for top hotels and other lodging
facilities, likewise, went up during the same period, from PHP709 million in 1998
to PHP845 million the following year (refer to Table 9). Profitability also rose by
more than 12%, from 0.057 in 1998 to 0.064 in 1999 (refer to Table 10).
Table 10. Top 52 Hotels & Other Lodging Facilities Profile
1999
1998
Index of Profitability
0.064
0.057
Capital Output Ratio
1.32
1.30
% Change
12.28
1.5
The top ten hotels accounted for 61.8% of the sub-sectors gross revenue
in 1999 (refer to Table 11). Among the three hotels and other lodging facilities
with the highest 1999 gross revenues are Edsa Shangri-la Hotel and Resort, Inc.,
PHP1.9 billion (9.7% revenue share), Manila Peninsula, PHP1.07 billion (8%
revenue share) and New World International Development Philippines PHP983
million (7% revenue share).
Table 11. Top Ten Hotels & Other Lodging Facilities
Gross Revenue
(in million PHP)
1999
1998
1,291
1,233
1,070
1,068
983
1,168
909
816
856
890
813
781
644
719
556
606
522
318
490
573
8,134
8,172
13,254
12,362
Company
Edsa Shangri-la Hotel & Resort, Inc.
Manila Peninsula Hotel, Inc.
New World Intl. Dev.t Phils.
Mactan Shangri-la Hotel & Resort
Manila Mandarin Hotel, Inc.
Philippine Plaza Holdings, Inc.
Enjay Hotels, Inc.
Grand Plaza Hotel Corp.
Philippine Diamond Hotel & Resort
Manila Midtown Hotels & Land Corp.
Total Top Ten
Top 52 Total
Market
Share
(in %)
9.74
8.07
7.42
6.86
6.46
6.13
4.86
4.19
3.94
3.70
61.38
100.0
Rank
1
2
3
4
5
6
7
9
9
10
Jan. Apr.
2000
81.50
77.10
77.10
74.74
74.35
73.63
73.59
72.87
71.60
68.23
Jan. Apr.
1999
80.78
78.20
78.20
66.23
69.64
63.95
81.82
69.55
68.68
61.45
Traders Hotel, Holiday Inn Manila, and Manila Midtown Hotel, on the other
hand, led the seven DOT accredited first class hotels during the same period with
occupancy rates of 67.75%, 66.27%, and 66.25%, respectively (refer to Table
13).
Table 13. Top DOT Accredited First Class Hotels Based on Occupancy
Rates (in %),
First Class Hotels
Traders Hotel Manila
Holiday Inn Manila
Manila Midtown Hotel
Bayview Park Hotel
Philippine Village Hotel
Grand Boulevard Hotel
Great Eastern Hotel
Jan. Apr.
2000
67.75
66.27
66.25
54.52
37.71
28.28
27.54
Jan. Apr.
1999
69.75
63.47
70.00
49.85
34.71
41.06
50.93
Among the 40 DOT accredited standard hotels, the Sulo Hotel, the
Century Imperial Suites, and the City States Tower Hotel registered the highest
occupancy rates at 74.71%, 69.54%, and 68%, respectively (refer to Table 14).
Table 14. Top DOT Accredited Standard Hotels Based on Occupancy Rates
(in %)
Standard Hotels
The Sulo Hotel
Century Imperial Palace Suites
City States Tower Hotel
Primetown Century tower Makati
Hotel Las Palmas
Herald Suites
Orchid Garden Suites
Palm Plaza Hotel
Atrium Suites
Hotel Rembrandt
Jan. Apr.
2000
74.71
69.54
68.00
67.22
67.16
66.74
66.38
65.50
64.46
60.99
Jan. Apr.
1999
80.26
65.44
76.70
66.56
83.28
67.75
58.47
51.63
Cielito Tourist Inn, and Swagman Hotel leading at 76.02%, 52.22%, and 51.75%,
respectively (refer to Table 15).
Table 15. Top DOT Accredited Economy Hotels Based on Occupancy Rates
(in %)
Economy Hotels
Jade Vine Executive Inn
El Cielito Tourist Inn
Swagman Hotel
Manila Tourist Inn
Park Hotel
Anito Hotel Pasay
Hotel Carlston
2000
76.02
52.22
51.75
32.75
28.50
20.50
20.00
1999
84.92
62.16
56.25
39.75
31.13
19.25
38.75
In general, the hotel sub-sectors strength lies in the following: the ability to
innovate, a pool of competent potential workers/professionals, and technology
development. Developing services to better meet the needs of its clients allows
hoteliers to maintain, if not expand, its market. Anticipating the potential
requirements of a traveling businessman, for example, makes a hotel more
attractive. Hotel Intercon capitalized on its ideal location and deliberately put in
place amenities and facilities to suit the changing needs of the business traveler.
Some of these eventually became the standard followed by other hotels here and
abroad.
Pan Pacific Hotel, on the other hand, decided to revive the butler
tradition. Every guest is provided with a butler who can be counted upon to do
and anticipate a guests bidding.
Filipinos are among the best-educated and most easily trainable people in
Asia. They are capable of performing even the most complicated task with
world-class competence.
Filipino hotel employees are reputed to possess the following
characteristics, which give local hotels an advantage over their regional
competitors: they are resourceful, easy to train, and can speak English.
Friendly by nature, Filipinos have a special way of making strangers feel
welcome. Hospitality in the Philippines is both a tradition and an art. Moreover,
among Asians, Filipinos are the most fluent in written and spoken English. Since
English is the worlds universal business language, tourists and business
travelers alike are always pleasantly surprised at the absence of any language
barrier in their dealings with Filipino hotel and restaurant workers.
Moreover, Filipinos native skills and talent are further complemented with
the hotel industrys in-house training programs.
Moreover, employee
performance is monitored and regularly evaluated using set working standards
and performance criteria.
Finally, most local hotels are quick to respond to changes in technology.
To date, most have computerized bookings, reservations, room service, and
accounting systems.
Pressure on hotel prices comes from the drive for value for money.
Increased operating efficiency obtained through the computerization has helped
to reduce costly waste in the supply chain. However, higher labor, raw materials,
and utility costs continue to push operating costs up.
Finally, in the macro level, economic and political factors affect the
performance of the tourism industry. In the past two years, for example,
declining disposable income resulting from the Asian currency crisis and political
instability resulted in a 3% contraction in tourist arrivals in 1998 and a 1%
increase in 1999.
Restaurants There are about 45,220 restaurant establishments in the
domestic economy and about 80% of them belong to the fast food sub-sector.
Food franchising is extremely popular. There are 1,057 franchised quick serve
restaurants, 14 casual dining and theme restaurants, and 507 coffee shops,
bakeries, and confectioneries.
U.S. firms have a very strong presence in the Philippine food franchising
industry. As of 1998, in addition to McDonald's and Shakey's, other U.S.
franchisees present in the market and their corresponding number of outlets are
A&W (14); Burger King (10); Church's Fried Chicken (27); Domino's (17); Kenny
Roger's Roasters (19); KFC (73); Pizza Hut (80); Sbarro (6); Subways (5);
Wendy's (43); Bennigan's (1); California Pizza Kitchen (1); Hard Rock Cafe (1);
Tony Roma's (1); Thai Barbecue (1); Outback (1); TGIF (4); Italianni's (2); Henry
J. Bean (2); Baskin-Robbins (12); Dairy Queen (17); Dunkin' Donuts (424);
Haagen-Daz (2); Mrs. Fields (12); Orange Julius (20); Starbucks (7); and TCBY
(3).
Low barriers to entry characterize the industry. Capital investments
particularly for franchises can range from PHP500,000 to PHP10,000. Training,
marketing and distribution channels are arranged by the franchisor. Likewise, as
the franchisor provides the new entrant fully developed management and
production systems, prior knowledge and experience are not required of
franchisees.
These characteristics of franchising, particularly of food
establishments, make the business very attractive for new entrepreneurs.
The proliferation of one-stop shopping malls that offer various recreational
facilities and amenities, likewise, eases the entry of potential restaurant and fast
food players. These malls spare the restaurant industry from spending extensive
business development studies for their outlets; mall magnates Henry Sy and
John Gokongwei Jr. have established formidable track records in building malls.
The industry in which the restaurant and fast food firms operate has
increasing consumer demand for every improving product. The growth is proven
by the rapid expansion of food outlets in key areas in Metro Manila and the
provinces. The popularity of fast food establishments came in the 1980s, and
over the last years, the industry has consistently posted double-digit growth
rates.
Competition is fierce in the restaurant industry, particularly the fast food
sub-sector. The market is large but consumers are price conscious and exhibit
brand loyalty. With a wide range of restaurants and fast food establishments to
choose from, pricing schemes and marketing strategies determine market
shares. Market strategies of industry players, therefore, aim to achieve two
primary objectives: 1) hammer in value-for-money concepts; and 2) create
brand consciousness and loyalty.
Market shares in the restaurants are won or lost in pricing. Industry
players regularly offer price cuts and discounts to lure in new customers.
Moreover, major players invest heavily in advertising to create brand
consciousness and loyalty. Marketing strategies include raffle draws, free gift
items and specially prized meal combinations, discounted toys and school items
for every certain minimum food purchase. Celebrity endorsements are used in
the hopes that the market will identify with the endorser.
Likewise, intense competition urges players to come up with new products
to capture bigger market shares. Restauranteurs have to be keen at finding the
latest food and wine concoctions here and abroad and adapting them to local
taste. Targeting the Filipinos tastebuds, several fastfood chains that usually
serve only western food have introduced items that appeal to the local markets
palate.
Raising quality standards and improving service have also been focal
points of competition, particularly in the fast food sub-sector. Players give
incentives and compensations to motivate employees to be efficient on their jobs
and thus help maintain the fast food outlets high standards of quality service and
cleanliness. Also, a major importance in a fast food and restaurant is courteous
and friendly personnel. Not surprisingly, speedy service is among the more
salient attributes people would highly expect from a fast food restaurant.
Finally, to keep their share of the market, food chains find it necessary to
extend their service coverage by setting up other branches. Industry players who
have outlets that are visible in Metro Manila and in other key urban cities are
ones who are most likely to take in more profits. Malls, university areas, and
other places where there is heavy pedestrian traffic are the usual places where
fast food and restaurants are highly patronized.
Restaurant and fast food industry players balance their marketing
concerns with the rising operation costs particularly that of imported food
ingredients. Profit margin erosion is usually remedied by either increasing prices
of final product/service or cut corners in production or the delivery of service.
Either solution may result in a shrinking customer base.
% Change
8.62
0.37
24.34
22.99
1998
0.026
0.125
% Change
-7.69
-18.4
Source: CBERD
Profitability for the top 181 firms also went down by 7.7% from 1998s
0.026 to 1999s 0.024 despite the industrys requirement of less capital, 0.102
unit in 1999 from 0.125 in 1998, to produce one extra unit of output (refer to
Table 17).
Gross Revenue
(in million PHP)
1999
1998
9,882
11,639
1,785
1,721
1,141
1,186
901
854
548
636
525
1,070
430
409
424
425
163
150
52
15,951
17,992
33,674
31,000
Market
Share
(in %)
29.35
5.30
3.39
2.68
1.62
1.56
1.28
1.26
0.48
0.46
47.4
100.0
Rank
1
2
3
4
5
6
7
8
10
12
In the fast food segment, Jollibee remains at the top with an estimated
29% share of the restaurant sub-sectors gross revenue in 1999 (refer to Table
18) and about 50% market share of the local hamburger-segment patrons.
Friendly service and a well-tailored, value-priced menu enable Jollibee to secure
the domestic market. Its product line caters to both sweet and spicy cuisine.
Prices are relatively lower as compared to McDonalds, one of its closest rivals,
making Jollibee affordable to those who belong to the lower- and middle-income
brackets.
McDonalds, a distant second, accounts for about 28% of the local
hamburger-segment patrons. McDonalds chains had to overcome the
impression of being too American. Thus, part of its marketing strategy is the
Filipinization of its product line and service. McDonalds now uses the Filipino
language in its stores. Moreover, the chain stores has adapted an expanded
product line to include Filipino favorites such as spaghetti, fried chicken, and
longganisa breakfast.
The local fine dining and specialty restaurants segment accounted for less
than 15% of the restaurant sub-sectors 1999 gross revenue. Although top ten
restaurant chains account for about 70% of the local fine dining segment market,
the biggest player Perf Restaurants Inc. only ranked 9th, with a 1.6% of the total
restaurant sub-sectors gross revenue (refer to Table 19).
Gross Revenue
(in million PHP)
1999
1998
552
231
450
435
378
114
348
272
139
151
136
152
128
86
109
103
106
90
2,066
1,365
33,674
31,000
Market
Share
(in %)
1.58
1.34
1.12
1.03
0.81
0.41
0.40
0.38
0.32
0.32
6.14
100.0
Rank
9
11
14
15
17
27
28
30
34
32
Seasonality of Demand
Restaurant. The restaurant industry is less cyclical than fast food chains.
It lies in the fact that a relatively small percentage, probably less than 15% of the
eating-out market, is accounted for by relatively high-priced meals. This sector is
considered as a luxury segment of the eating out market. In contrast, eating out
at fast food is adjunct either to shopping or employment and not really
recreational.
Table 20. Weekly Seasonality
Day
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Percent Share
35.0%
11.0%
8.0%
8.0%
8.0%
11.0%
19.0%
For most part, majority of the industrys revenues is spread evenly over
the fiscal year. However, the month of December is observed to have a
significantly higher sales which can be attributed to the Christmas shopping and
celebration of Christmas parties and dinner in big restaurants.
In terms of weekly seasonality (refer to Table 20), height of business
activity for a fast food chain would be weekends including the days (Friday and
Monday) close to this time of the week. Data indicate that it is probable that
more people eat out after going to Mass with Sunday representing the peak-day
of the week when customer visit fast food outlets. Each working day (Monday to
Friday) of the week is certain to attract a tenth of fast food customers.
1.5.
Department of Labor and Employment, and the Hotel and Restaurant Tripartite
Consultative Body, Inc., work together to promote the tourism and hotel and
restaurant industries through specifically designed laws, policies and programs
that promote industry growth and industrial peace, safeguard labor rights, provide
training and seminars, and ensure consumer safety.
Programs specifically designed to attract more tourists and therefore
expand the hotel and restaurant industrys market, for example, is the DOTs
Tourism Master Plan.
The Tourism Master Plan (TMP) is the framework and guide of the
Department of Tourism for the sustained development and expansion of the
tourism industry of the Philippines. Completed in 1991, it serves as the blueprint
for tourism development in the country until the year 2010. The Plan was
prepared by the Hoff and Overgaard on behalf of the World Tourism Organization
(WTO), United Nations Development Program (UNDP) and the DOT. Its aim is
to position the Philippines as a leading tourist destination in Asia. Its specific
objectives are:
1. To increase the contribution of tourism economic growth at a national
and regional level;
2. To enhance and contribute to social cohesion and cultural preservation
at the local level;
3. To develop tourism on an environmentally sustainable basis; and
4. To develop a diversity of destinations, attractions and markets.
To achieve these objectives, the TMP identifies the following primary
strategies for tourism development:
1. To establish three main destination clusters in Luzon, Visayas and
Mindanao with Luzon to be positioned as a multi-faceted destination;
Visayas as a resort and cultural heritage destination; and Mindanao as
an exotic wilderness destination. Each cluster will have its own
international airport and diverse satellite destinations.
2. To adopt a combination of niche and mass marketing approaches to
target a wider base of the market; and
3. To develop international and domestic tourism.
For the Luzon development cluster, the TMP has identified the northern
portion of Palawan, including Puerto Princesa, as a priority tourism development
area.
A copy of the law creating the Department of Tourism is found in Annex B
and a description of the DOTs latest projects is described in Annex C.
Industry associations, on the other hand, enable the hotel and restaurant
sector, among other things, to undertake programs and projects that upgrade
and professionalize the sector (i.e., training and seminars for employees and
industry promotion by sponsoring domestic and international exhibits) and to
influence government regulatory policies/laws/rules affecting the industry.
A
description of selected hotel and restaurant industry associations is found in
Annex D.
Finally, trade unions in the hotel and restaurant industry, among other
things, safeguard the rights and welfare of industry workers and professionals.
They work closely with government and industry participants in improving
working conditions and employee performance (i.e., recommending additional
training and or certification) and in defending employee rights. Annex E gives a
brief description of selected hotel and restaurant industry trade unions.
Auguring well for the industry during the period was the consistent monthly
increase in arrivals, the highest of which was recorded in December, primarily
accredited to the heavy influx of balikbayans eager to celebrate the coming of the
new millenium in the Philippines.
Although overseas Filipino arrivals have been on a decline since 1994
from 159,169 to an all time low of 134,541 in 1997, balikbayan homecoming,
however, picked up in 1998 to 174,277, posting a 29.5% increase. Thus, pulling
the average growth rate for the period to 3.4%. Overseas Filipinos contributed
an annual average of US$212.6 million to the countrys foreign exchange
earnings over the past six years. The peak season for balikbayan arrivals is the
November to December period, accounting for 36% of the total.
Table 22. Visitor Arrivals & Amount of Receipts, January to September
1999-2000
Jan. Sept.
Jan. Sept.
Change
2000
1999
(in %)
Visitor Arrivals
1,516,699
1,586,907
-4.42
Visitor Receipts (in million US$)
1,711.41
1,909.52
-10.37
Length of Stay
2.71
2.88
-5.90
Hotel Occupancy Rate (in %)
58.52
58.89
-0.63
Source: Department of Tourism
Owing to the various political issues, visitor arrivals during the first nine
months of the year 2000 fell 4.42%, 1.52 million from January to September as
compared to the 1.57 million during the same period of 1999. Visitor receipts
and length of stay likewise went down, 10.4% and 5.9%, respectively (refer to
Table 22).
Meanwhile, in terms of market segmentation, the first semester 2000
figures show that the US continued to supply the biggest bulk of tourists, an
estimated 23% of the inbound traffic followed by Japan at 20%. Other major
source markets include Korea (8.3%), Hong Kong (7.3%), the United Kingdom
(4%), Taiwan (3.6%), Australia (3.6%), Canada (3%), Germany (2.6%), and
Singapore (2.3%). Overseas Filipinos accounted for about 7.3% of total visitor
traffic (refer to Table 23). The Philippines enjoyed one of the highest repeat
visits in Asia, 52.76% in September 2000.
The primary purpose of foreign visitors to the Philippines in September
2000 is holiday (41.7%), visit friends and family, (24%) and business (22%). An
estimated 99% of all foreign visitors during the same period traveled by air with
the balance coming in by sea. Majority, about 63%, is male and 35% are female,
while the average age of all foreign visitors is 38.9 years old. The data on tourist
arrivals also revealed that only an estimated 20% of foreign visitors availed of
package tours. Majority, about 63%, made their own travel arrangements.
Finally, on the average, foreign visitors spent US$113.67 per day in September
2000. The biggest expenditure being accommodations, 39%, and food and
beverage 22% (refer to Table 24).
Table 23. Visitor Arrivals by Country of Origin, Jan. Sept. 1999-2000
Volume
1998 GNP/capita
%age
Country
(in US$)
2000
1999
Change
USA
29,340
348,639
347,742
0.26
Japan
32,380
304,056
291,168
4.43
Korea
7,970
126,216
90,844
38.94
Hong Kong
23,670
111,025
125,585
-11.59
UK
21,400
61,257
65,720
-6.79
Taiwan
55,358
124,087
-55.39
Australia
20,300
54,500
54,883
-0.70
Canada
20,020
44,967
46,330
-2.94
Germany
25,850
40,047
45,079
-11.16
Singapore
30,060
34,438
37,119
-7.22
Malaysia
3,600
33,435
36,135
-7.47
France
24,940
15,797
18,196
-13.18
India
430
14,938
13,829
8.02
Netherlands
24,760
12,477
12,288
1.54
Indonesia
12,089
11,723
3.12
Overseas Filipino
110,232
113,807
-3.14
Others/Unspecified
137,228
152,372
-9.94
TOTAL
1,516,699 1,586,907
-4.42
Source: Department of Tourism
Table 24. Average Foreign Visitor Daily Expenditure on Major Items (US$)
Daily Expenditure
Items
(in US$)
Share (%)
Accommodation
US$38.91
34.23
Food and Beverage
21.85
19.22
Entertainment & Recreation
21.10
18.56
Shopping
14.08
12.38
Local Transport
2.41
2.12
Guided Tour
0.04
0.03
Miscellaneous
15.29
13.45
Total Daily Expenditure
113.67
100.00
Source: Department of Tourism
As foreign tourists are not very price sensitive, they are usually after the
amenities and service that they need during their hectic travel. Hotels that cater
to the tourist market compete mostly in the area of amenities and services.
Local customers, on the other hand, can be further divided into individual
and institutional patrons. Individual patrons (i.e., professionals, families, etc.) are
price sensitive. Hotels, therefore, compete intensely with each other in terms of
packages. During specific seasons of the year, hotels offer weekend and/or
holiday packages (generally includes discounted accommodations and meals).
These packages are also offered to specific market segments wedding parties,
honeymooners, and balikbayans.
Research shows that the following factors affect the foreign and domestic
household consumers decision in choosing hotels and other lodging facilities: 1)
competitive or discounted pricing; 2) free services (i.e., local calls, childrens
toys & gifts, continental breakfast, etc.); and 3) services tailored to the needs of
children (i.e., nightlight, pediatrician on-call services, swimming pool with
lifeguard, childrens menu in hotel restaurants and child friendly or safe room).
Institutional patrons include company-sponsored employee training
programs, seminars, and workshops. Table 25 shows that among institutional
buyers, the wholesale and retail industry is the hospitality sectors largest market,
accounting for 19.6% of the latters total output. Different sub-sectors of the
wholesale and retail industry are well-known for conducting marketing and
promotional activities in various local hotels (i.e., computer, hardware and
software, promotion, large-scale office equipment manufacturers, for example
Xerox, etc.). Other important markets include the non-ferrous smelting and
refining plants sector (18%), public administration and defense (17.4%), and
finance (11.6%) industries.
Table 25. Hotel and Other Lodging Facilities Sub-sector Forward Linkage
Value
Share
Industry
(PHP'000) (%)
Wholesale & retail trade
Non-ferrous smelting & refining plants
Public administration and defense
Investment, financing & other non-banking services
Banking
Drugs and medicines
Air transport
Public education services
Business management & consultancy & market research
services
Other recreational and cultural services
573.604
526,026
509,470
340,000
280,001
188,299
94,752
58,731
52,263
19.63
18.00
17.44
11.64
9.58
6.44
3.24
2.01
1.79
30,959
1.06
29,086
238,475
1.00
8.16
2,921,666 100.00
Nonetheless, despite the above efforts, local hotels are still not able to
capture a significant share of the domestic tourist market. The patronage of
domestic tourists ensures the survival and profitability of most businesses that
are dependent upon tourism primarily because domestic tourists outnumber
foreign visitors. In the Philippines, 80% of all tourists are domestic travelers; their
total spending, tourists who are at least 18 years old, amounts to about PHP57
billion. Very few hotel operators, however, are able to tap into this market. Price
conscious, most domestic travelers depend on family and friends to arrange trips
and provide lodging.
1997
Expenditure
(current price, million
PHP)
Total Food
Expenditure (in %)
Eating Out (in %)
264,552
342,578
622,616
863,008 1,421,999
51.9
50.7
48.5
47.8
43.9
3.1
3.4
3.8
4.2
4.7
Value
(PHP'000)
Share
(%)
6,757,601
5,108,064
1,265,448
1,187,650
816,094
703,358
667,796
623,010
553,821
421,186
290,754
264,884
262,432
3,298,287
22,220,385
30.41
22.99
5.69
5.34
3.67
3.17
3.01
2.80
2.49
1.90
1.31
1.19
1.18
14.84
100.00
Finally, recent studies show that Filipino consumers value the following
characteristics of restaurant products and services as the most important,
according to priority: 1) flavor and taste; 2) value for money/nutrient content; 3)
presentation and packaging; 4) variety; 5) systematic ordering and selling; 6)
feeling of security in food and environment; 7) prompt delivery and service; 8)
consistency of service; 9) feeling of recognition and importance; and 10) feeling
of security in location and accessibility.
Meanwhile, institutional buyers employ the services of the restaurant industry
for occasions such as seminars, workshops, meetings, company celebrations,
and marketing and promotional activities. Among the hotel and restaurant
industrys main institutional markets are the wholesale and retail trade (30.4%),
air transport (23%), and the other recreational and cultural services sectors
(5.7%).
3.0.
Backward Linkage/Suppliers
Table 29. Hotel and Other Lodging Facilities Sub-sector Backward Linkage
Industry
Ocean, coastal and inland fishing
Electricity
Softdrinks & carbonated water
Perfumes, cosmetics & other toilet preparations
Wholesale & retail trade
Non-life and other insurance activities
Vegetables
Petroleum refineries
Malt and malt liquors
Carpets and rugs
Laundry, dry cleaning and dyeing plants
Other business services, n.e.c.
Coffee roasting and processing
Furniture and fixtures, n.e.c.
Value
(PHP'000)
855,283
798,217
572,216
514,096
397,799
390,626
324,543
289,481
238,541
215,414
181,926
180,850
149,104
127,459
Share
(%)
11.34
10.59
7.59
6.82
5.28
5.18
4.30
3.84
3.16
2.86
2.41
2.40
1.98
1.69
Value
(PHP'000)
122,607
117,193
107,399
105,659
101,949
100,048
83,542
83,036
80,614
80,012
1,321,768
Share
(%)
1.63
1.55
1.42
1.40
1.35
1.33
1.11
1.10
1.07
1.06
17.53
7,539,382
100.00
Supplies and raw materials for restaurants operated by hotels account for
about 19% of the hotel industrys operating cost (refer to Table 29), ocean,
coastal and inland fishing sector (11.3%) and softdrinks and carbonated water
sector (7.6%).
Other major suppliers of the hotel industry include, power (10.6%), the
perfumes, cosmetics and toilet preparations (6.8%), and wholesale and retail
(5.3%) industries.
Meanwhile, imports supply more than 90% of the Philippine hotel and
restaurant equipment market. In 1998, imports were estimated at US$70.39
million, registering an 18.5 percent drop from 1997 imports of US$97.35 million
(refer to Table 30).
Table 30. Hotel and Restaurant Equipment Market Size (in million US$)
Projected
Description
1997
1998
1999
Average Growth
(%) 2000-01
Import Market
97.35
79.39
71.46
10%
Local Production
0.0
0.0
0.0
0.0
Exports
14.15
14.83
15.57
5%
Total Domestic Market
83.30
64.56
55.89
10%
Source: NSO
Danish, Dutch, and Italian. These suppliers shared the market for refrigerating
and freezing display counters, equipment for making hot drinks, and washing,
bleaching/dyeing machines with U.S. suppliers and the other third-country
suppliers. In particular, Italian coffee/espresso machines were the leaders in this
field. European equipment is popular in deluxe and first class hotels because of
the presence of European chefs.
Local production, on the other hand, is limited to basic food service and
kitchen equipment. Major local suppliers of stainless kitchen equipment such as
counters, refrigeration equipment, and ovens include Fab-Asia, Allied Metals,
Inc., and Gomeco Metal Corporation. Lowtemp Corp. manufactures refrigerated
equipment; Pacific Star International Sales, stainless and galvanized iron
furniture; Almedah Food Machineries Corp., rice grinders, hotdog rollers,
convection ovens, fish ball forming/makers; meat grinders; emulsifiers; and
Optima Systems, food showcases.
Liberalization is expected to reduce the bargaining power of suppliers
further. At present, for example, a 10% tariff rate is imposed on imported hotel
and restaurant equipment. The reduction and the eventual removal of tariff rates
on hotel equipment, therefore, will allow more hoteliers to either replace or add to
their current equipment. Making local establishment more attractive to both local
and foreign patrons.
Likewise, deregulating the transport sector, one of the industrys major
suppliers will significantly reduce transportation rates, benefiting hotel operators
around the country.
Moreover, with liberalization, improvements in technology developed in
one country are shared automatically with other countries. They are shared
directly when they are embodied in new capital equipment that would relatively
be cheaper with the reduction/removal of tariff and non-tariff barriers. As with
other industries, the hotel sub-sector would benefit from the availability of
cheaper and more modern technology (i.e., hotel systems such as reservations,
accounting, etc.).
Finally, liberalization will allow the free movement and employment of
international hotel managers, chefs, cooks and other hotel-related professions in
the country.
Value
(PHP'000)
Share (%)
12,148,577
3,263,432
2,620,709
2,578,811
2,484,024
2,103,582
1,719,509
27.47
7.38
5.93
5.83
5.62
4.76
3.89
1,363,241
1,303,575
1,020,333
1,009,762
969,981
871,760
834,499
834,136
747,838
733,261
679,888
522,733
518,513
5,893,277
3.08
2.95
2.31
2.28
2.19
1.97
1.89
1.89
1.69
1.66
1.54
1.18
1.17
13.33
44,221,441
100.00
Among the industrys biggest suppliers are the slaughtering and meat
packing (27.5%), rice and corn milling (7.4%), and ocean, coastal, and inland
fishing (5.9%) sub-sectors (refer to Table 31).
The emergence of free trade will certainly affect most industries today,
including the fast food and restaurant industries. The General Agreement on
Tariffs and Trade/World Trade Organization (GATT/WTO) would be a challenge
to the fast food industry because local suppliers would have to be more
competitive given the different suppliers coming into the local market.
4.0.
Laws Hindering/Facilitating
Min
Express
Total
2,389,886
1,021,176
352,040
3,763,102
213,408 6,776,848
213,408 10,539,959
23%, from 130,000 in 1994 to 160,000 in 1998. The Japanese market accounts
for 34% of total visitor arrivals in Cebu, followed by the US (13%) and the
Taiwanese (11%).
For the hotel and restaurant industry, therefore, E.O. 219 proved to be
extremely beneficial. The reduction in transportation cost and the increase in
airline destinations encouraged both domestic and international travels.
The 2001 Investment Priorities Plan is formulated to serve as a conduit in
the continuation of the economic reform programs crucial in sustaining the
economic gains we have so far achieved. The implementation of these programs
has ushered a continuous industrial development as evidenced by a strong
growth of the industrial output, notable increase in foreign direct investments,
acceleration of export sales, dispersal of growth to the countryside and congruent
improvements in specific sectors.
For the past years, the annual drafting of the IPP has been guided by
preceding economic development plans that include:
! the E.O. 226, otherwise known as the Omnibus Investments Code of
the Philippines that specifies the incentives provided to priority
investments; and
! the Medium-Term Philippine Development Plan of the Philippines
(MTPDP) 1993-1998 that provides the agri-industrial vision for the
country.
For this year, the 2001 IPP is, in part, being made parallel to the newly
mandated Industrial Development Plan of the Philippines (IDPP), the blueprint for
enhancing and sustaining global competitiveness of the Philippine industries in
the short (1-3 years), medium (4-10 years) and long (11-15 years) term. The
2001 IPP will provide incentives to qualified activities in the IDPP. Otherwise,
other types of assistance including those not specified in the IPP will be
rendered.
Furthermore, the 2001 IPP specifically lends support to the pursuance of
the national development vision focusing on agri-industrial development,
sustainable human development, science and technology, and environment and
natural resources management.
To achieve continuation of programs, the general goals of the 2001 IPP
shall encompass those specified under the past IPPs that include:
1) enhancement of global competitiveness;
2) increase in exports;
3) increase in agricultural productivity;
Export-Oriented Activities
Catalytic Industries
Industries Undergoing Industrial Adjustments
Support Industries
Mandatory Inclusions
Thirteen (13) economic activities are listed in this year's plan. The
modernization program with a possible three-year income tax holiday will
continue to be made available in the 2001 IPP. However, as a step closer to our
objective of achieving social equity, support to projects uplifting the welfare of the
consuming public will be reinforced. Projects identified under the Social Reform
Agenda of the government which include socialized/low cost housing projects
and other social services such as the establishment of educational/training
institutions, rehabilitation centers, health service facilities, and new retirement
villages will be given priority. Moreover, the 2001 IPP shall continue its
commitment to encourage the establishment of Research and Development
projects in an effort to fast track the development of technology in the country
and the introduction of innovative products and processes in the market. As one
of the basic economic sectors in the country, the acceleration of agricultural
productivity will be propelled through the provision of continued support to the
key areas identified in the Agriculture and Fishery Modernization Act by
promoting integration of processes and activities to ensure food security and
encourage more value-adding.
A copy of the 2001 IPP and its implementing guidelines are found in
Annex F of this study.
Meanwhile, employment of foreign nationals in the industry is subject to a
tripartite agreement promulgated in 1992 between the Department of Tourism
(DOT) and Department of Labor and Employment (DOLE) and the Bureau of
Immigration (BI). The agreement addresses the following issues regarding the
employment of foreign nationals in the hotel and restaurant industry: positions
open to foreign nationals, procedures in the issuance of visa/permits, and
disciplinary/penal provisions.
According to the agreement, only hotels and resorts duly licensed by the
DOT shall be allowed to engage the services of foreign nationals. Foreign
nationals in hotels and resorts that are already operational may occupy a
maximum of four (4) managerial positions. Hotels or resorts yet to be
constructed may employ as many foreign nationals as may be required during
the stage of construction and up to six (6) months after opening of the hotel to
the public. Moreover, the services of foreign nationals may be availed of during
special occasions/events such as food festivals; provided, however, that the
service contract shall be limited to a period of three (3) months renewable for a
maximum period of another three (3) months.
A pre-requisite for employment of foreign nationals in the hotel and resort
sub-sectors is a pre-arranged employment visa from the appropriate Philippine
Embassy or Consulate or other designated visa-issuing office nearest their port
of origin. If the foreign national has already been admitted into the country as a
temporary visitor or under any other admission category, he may secure a
change of status to pre-arranged employment visa from the Bureau of
Immigration.
In the grant of the appropriate visa, the Department of Foreign Affairs and
the Bureau of Immigration shall generally endeavor to determine non-work
connected qualifications of the applicant.
As a pre-requisite to the issuance of the pre-arranged employment visa or
change of status, the foreign national applicant shall secure an Alien
Employment Permit from DOLE, which shall grant the same on the basis of nonavailability of the services of local expertise for the vacancy, the undertaking of
an understudy training program as appropriate, and in compliance with its other
policy guidelines.
Finally, any person who violates the provisions outlined in the agreement
shall be subject to any of the following penalties:
1. A fine of not less than PHP1,000 but not more than PHP10,000 or
imprisonment of not less than three (3) months, or both as provided for
by Article 289 of the Labor Code;
2. Non-renewal of the Alien Employment Permit and/or visa;
3. Suspension or revocation of the Alien employment Permit;
4. Deportation.
Restaurant. The government has taken an active role in cultivating an
environment that would allow the local fast food industry to be globally
competitive and to operate at levels comparable to international standards.
Specifically, the Department of Health (DOH), together with the Bureau of Food
and Drugs (BFAD) are directed to ensure strict food quality and hygiene
standards. Under the new Intellectual Property (IP) Act, the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) has been abolished. IP has been
created to assume the BPTTTs functions of authorizing the registration of
trademarks, service marks and other marks of ownership, hear and preside over
proceedings affecting rights to trademarks. Meanwhile, the Department of Trade
and Industry (DTI) is the governing agency that approves various promotions and
advertisement campaigns of fast food chains.
All franchise agreements with foreign franchisors are registered with IP as
well as licensing, technical assistance and services, technology transfer and
distribution agreements.
Foreign franchisors in the Philippines, similar to other industries, are
subject to the restrictions on ownership, 40%. The laws on technology transfer,
however, guarantee franchisors in the Philippines royalties of 5% and a
maximum allowable term of technology transfer arrangements of ten years.
Finally, as with the hotel and resort sub-sector, foreign national
employment in the restaurant sub-sector is subject to the tripartite agreement
signed by the Department of Tourism, Department of Labor and Employment and
the Bureau of Immigration.
Specialty restaurants are allowed to employ foreign nationals subject to
the following conditions:
Only specialty restaurants duly accredited with the DOT as well as those
forming part of the integrated operation of licensed hotels/resorts may
be allowed to engage the services of foreign nationals;
A specialty restaurant with a minimum seventy-five (75) seat capacity shall
be allowed to have one (1) foreign Specialty Chef or Sous Chef. In the
initial stage of operation of a specialty restaurant and for a maximum
period of two (2) years, three (3) more foreign specialty chefs or sous
chefs may be allowed;
A specialty restaurant with a seating capacity of 500 or more may be
allowed to employ three (3) additional foreign nationals in any of the
following positions:
(a) as specialty chef(s);
(b) as sous chef(s);
(c) as food service manager (s); or
(d) a combination of the above.
A foreign national may be allowed to replace a Filipino citizen who is
assigned to work abroad on a training program and who is presently
occupying one of the positions that can be filled by foreign nationals
under the agreement; provided, however, that in no case shall the
foreign national be allowed to stay beyond two (2) years or the duration
of the training of the Filipino, whichever, comes first.
The same policies are followed regarding the procedures in the issuance
of visa/permits and disciplinary/penal provisions as the hotel and resort
sub-sector.
5.0.
Local hotel and restaurant players can enter the foreign market through
any of three modes of supply: 1) cross-border supply/consumption abroad; 2)
commercial presence; and 3) movement of natural persons.
Foreigners coming to the Philippines is classified under the first mode,
cross-border supply while Filipino-owned enterprises setting-up branches abroad
through franchising (i.e., Jollibee, Goldilocks, Barrio Fiesta, etc.) is classified
under the second mode. Transfer of technology through franchising, however, is
subject to the unique laws of the market the hotel and restaurant firms intend to
penetrate. These laws, which are as varied as the countries that implement
them, commonly address issues such as royalties, repatriation of profits,
employment of foreign nationals, property ownership, taxes, and the like.
Finally, the international deployment of hotel and restaurant workers and
professionals is classified under the third mode, movement of natural persons. It
is subject to laws pertaining to the practice of their profession. Indeed, most
countries have policies preventing foreign professionals from practicing their
profession in the domestic market.
5.2.
Export of services in the hotel and restaurant industry takes the form of
sending industry workers and professionals to work for establishments belonging
to the sector in a foreign land.
Table 34. Deployment of Filipino Hotel & Restaurant Industry Professionals,
1996-2000
Job Classification
1996 1997 1998 1999 2000 Rank
General Manager
Operations Manager
Budgeting
&
Accounting
Manager
Catering & Lodging Services
Manager
Assistant Catering & Lodging
Manager
Employees Housing Services
Supervisor
Housekeeping & Related
Services Supervisor
Receptionists
&
Travel
Agency Clerks
Bakers, Pastry Cooks &
Confectionery Makers
Cooks & Related Workers
Cooks, Waiters, Bartenders &
Related Workers
Waiters,
Bartenders
&
Related Workers
Maids
&
Related
Housekeeping Services
Housekeeping & Related
Services
Launders,
Dry
Cleaners,
Pressers & Related Workers
TOTAL
82
45
101
1
97
29
74
39
65
20
9
12
13
12
11
13
55
69
43
52
36
11
10
51
22
14
15
327
176
305
222
1523
374
433
532
533
556
247
1,508
224
1,477
338
1,271
405
1,136
278
1,308
5
2
346
248
561
452
236
3,293
3,530
3,115
3,558
3,269
23
326
17
277
17
159
43
136
52
283
10
4
242
6,892
219
6,843
190
6,687
205
6,871
134
6,410
In the last five years, hotel and restaurant related workers and
professional deployment averaged more than 6,740 per year (refer to Table 34).
An estimated 75% of all hotel and restaurant professionals deployed during the
period were cooks, waiters, bartenders and other related workers.
Filipino hotel and restaurant workers and professionals are known for their
competence, trainability, and ease in adapting to different environments and are,
therefore, in demand in the international market. Most hotel and restaurant
related workers and professionals during the five-year period were deployed to
United Arab Emirates, Saudi Arabia, Kuwait, Papua New Guinea, Singapore
Malaysia, and the United States.
Moreover, large Filipino communities abroad are strong basis for the
export of local restaurants and fast food technology. The presence of Goldilocks,
Jollibee, Max, Red Ribbon, and Barrio Fiesta, among others, in the US, for
example, is a result of demand from Filipino migrants longing for a taste for
home.
5.3
Hotels. The Philippines still lags behind in terms of tourist arrivals. The
1997 peak tourist arrival of 2.2 million pales in comparison with country leaders
such as France with 70 million and Spain with 47.7 million (refer to Table 35). In
Southeast Asia, country leaders, such as Hong Kong and Thailand, attract as
much as 11 to 7 million visitors per year. Moreover, data show that frequent
travelers in Asia average 15 airline round trips each year and stay an exceptional
50 or more nights in hotels as compared to the Philippines average of 10 nights.
Table 35. 1998 Tourism Destinations in the World (in 000)
Rank
Country
Arrivals
% change
1
France
70,000
4.7
2
Spain
47,743
10.0
3
United States
47,127
-1.3
4
Italy
34,829
2.2
5
United Kingdom
25,475
-0.2
6
China
24,000
1.0
7
Mexico
19,300
-0.3
8
Poland
18,820
-3.6
9
Canada
18,659
7.9
10
Austria
17,282
3.8
11
Germany
16,504
4.2
12
Czech Republic
16,325
-3.0
13
Russian Federation
15,810
3.0
14
Hungary
14,660
-15.0
15
Portugal
11,880
16.0
16
Greece
11,077
10.0
17
Switzerland
11,025
4.0
% of total
11.2
7.6
7.5
5.6
4.1
3.8
3.1
3.0
3.0
2.8
2.6
2.6
2.5
2.3
1.9
1.8
1.8
18
19
20
21
22
9,600
9,200
7,720
6,856
6,170
-7.7
1.8
6.9
10.4
-7.6
1.5
1.5
1.2
1.1
1.0
Source: WTO
2,100
625,236
-0.3
% of total
1.0
1.0
0.9
0.8
0.8
0.8
0.7
0.7
0.7
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.5
0.5
0.4
100.0
Source: WTO
As for the number of visitor arrivals from within the Asia Pacific, in 1999,
the Philippines only placed ahead of Vietnam at 1.78 million (refer to Table 36).
Competition with Vietnam and the Mekong Basin, however, is expected to
intensify as the latter countries step up the promotion of their cluster as the
holiday and convention destination in Asia in the 21st century.
% of Share
21.3
2.0
10.2
13.4
40.5
11.8
12.8
7.1
1.3
9.1
59.7
6.9
7.8
38.9
25.7
East
Asia
2.09
2.48
2.18
2.11
2.18
2.56
2.21
South Asia
North
America
Oceania
1.89
2.00
2.17
1.96
1.91
2.00
1.84
1.83
1.96
1.78
1.86
1.89
1.97
1.97
1.69
2.00
1.89
1.88
1.81
1.75
2.00
*Total Respondents: East Asia (212), South Asia (82), North America (1189), Oceania (265)
* 1 = excellent, 2 = good, 3 = fair, 4 = poor, and 5 = did not use
Source: Annual Visitor Sample Survey , 1999, Department of Tourism
No. of Rooms
10,000
2,872
2,433
2,222
1,121
28,035
No. of Hotels
46
7
4
6
3
91
No. of Hotels
9
13
7
2
2
49
The Japan and the United States are by far the largest consumer
restaurant markets in the world, each valued at over US$200 billion in 1997. In
Europe, Spain is the only market to exceed US$50 billion, well ahead of Italy, the
UK and Germany. The smallest of the eight key markets is Canada, valued at
just US$20 billion, reflecting a small and geographically widespread population
(refer to Table 45).
In contrast to the rise in outlet numbers in Italy, the US, Germany, Spain
and Canada over the review period, there was a contraction of 3.8%, 2.3% and
1.3% in numbers in France, Japan and the UK respectively.
With an increase of 25.2% in outlet numbers over the period 1993-1997,
Spain has increasingly adopted European-wide trends in the consumer catering
market (refer to Table 48). Initially, a strong cultural identity in terms of culinary
preferences hindered the progress of European and US-style fast food trends.
However, the emergence of fast food outlets offering Spanish-based products
has enlivened the market and boosted outlet numbers.
Table 48. No. of Restaurant Outlets in Major World Markets Growth Rate (%)
Country
1993-1997
1996-1997
France
-3.8
-1.2
Italy
11.8
3.7
UK
-1.3
-0.2
US
7.9
1.3
Germany
4.4
0.6
Spain
25.2
4.5
Japan
-2.3
-0.1
Canada
12.0
2.5
Source: Euromonitor Market Direction
a dining out experience, which extends far beyond a simple meal offer. The
maintenance of high standards of quality and service, allied in some cases to
value-for-money price points, have made such outlets popular eating places for
families and business people.
Meanwhile, sales growth rates in the eight key markets varied
considerably over the period 1993-1997, with nominal value growth registered in
all the markets with the notable exception of Germany (refer to Table 49).
Table 49. Restaurant Sales in Major World Markets
Country
1993
1997
France
154,965
157,807
Italy
74,647
79,528
UK
23,579
27,663
US
210,000
251,900
Germany
71,492
68,814
Spain
6,415
7,981
Japan
24,599
25,285
Canada
22,609
27,919
In the UK, hectic lifestyles and the growth of tourism have boosted the
frequency of eating out. The market has been further buoyed by the popularity of
branded/theme outlets, particularly in the pubs sector.
Japan is the only remaining market to have registered real value growth
over the review period, albeit a very modest 1%. In spite of ongoing economic
difficulties there is a high incidence of eating out, but competition and lower
spending confidence have forced operators to lower prices and accept tighter
margins. The Japanese market has been further impacted by recent food health
scares (most importantly the 0-157 bacillus), which have fundamentally changed
the way consumers perceive consumer catering and the products offered.
Although both Italy and France registered nominal value growth over the
period 1993-1997, this failed to translate into real value growth, resulting in
declines of 7.6% and 7% respectively. The Italian market was particularly harshly
hit by economic recession during the early part of the review period. Price has
therefore become an important factor in the choice of catering outlet and the
market as a whole has been unable to react swiftly to changing consumer
demand. Traditional outlets have suffered especially, and the success of outlets
offering innovative service at economical prices has failed to offset losses in the
traditional restaurants sector.
French market value has been undermined by a series of negative
influences, namely recession in 1993, terrorist attacks in 1995 and BSE scares in
1996. Business activity and tourism suffered as a consequence, although a
recovery in 1997 was evident with a rise in the number of foreign visitors. Current
lifestyles demand rapid service with high quality products and reasonable prices,
factors which have further constrained price development.
The weakest performer of the major markets has been Germany, as the
restaurant market has suffered value decline in both nominal and real terms.
Average meal prices have declined as the influence of fast food and self-service
has grown. The market reached its nadir in 1996 and appeared to have turned a
corner in 1997, as operators proved more adept at dealing with and responding
to the recession. As a result, outlet numbers are rising and consumers are being
presented with a wider range of low/mid-price menus.
6.0.
Supply Capability
6.1.
Services Offered
and airport transfers), hotels are further classified as Deluxe, First Class,
Standard, and Economy. Hotel guests can expect a room with private bath,
telephone, radio, and television, in addition to such customer services such as
laundry, valet, cleaning and pressing. Aside from the services mentioned, hotels
have other facilities: function rooms, ballrooms, health spas, coffee shops, dining
rooms, cocktail lounges or night clubs, gift shops or newsstand-tobacco counters,
and business centers for social occasions, health buffs, and business
conferences.
The restaurant industry, on the other hand, covers fine dining specialty
restaurants, fast food outlets, canteens, and food courts. Fine dining and
specialty restaurants offer a wide variety of international cuisines. The restaurant
originated in France dating back to 1765 when one A. Boulanger, a soup vendor,
opened an establishment advertising restoratives, or restaurants, referring to the
soups and broths available within. The institution took its name from the
advertisement, and restaurant now denotes a public eating place in English,
French, Dutch, Danish, Norwegian, Romanian, and many other languages, with
some variations. In the Philippines, a new trend in the restaurant industry is
rapidly gaining popularity, that is, eat-all-you-can buffets, which are offered at
reasonable prices. A number of restaurants offer "buffets with no leftovers" at
50% off normal buffet prices.
The cafeteria, an American contribution to the restaurants development
originated in San Francisco during the 1849 gold rush. Featuring self-service, it
offers a wide variety of foods displayed on counters. The customer makes his
selections, paying for each item as he chooses it or paying for the entire meal at
the end of the line. Other types of quick-eating places originating in the United
States are the drugstore counter, serving sandwiches or other snacks; the lunch
counter, where the diner is served a limited quick-order menu at the counter; and
the drive-through or drive-up restaurant where patrons are served in their
automobiles. So-called fast food restaurants, usually operated in chains or as
franchises and heavily advertised, offer limited menus - typically comprising of
hamburgers, hot dogs, fried chicken, or pizza and their complements likewise
originated in the United States. Fast foods have the advantage of speed,
convenience, and familiarity to diners who may eat in the restaurant or take their
food home.
More than just as a place to eat, fast food consumers, however, may also
avail themselves of party, such as birthdays and office celebration packages, and
delivery services. Year-round party packages are offered by fast food chains,
which generally include the venue, food, party games and give-a-ways. Delivery
services, on the other hand, peak at lunchtime while night orders peak between
the hours of 10 p.m. to 2 a.m.
6.2
Areas of Specialization
The industry as a whole does not have any particular expertise. Within
the hotel sub-sector, however, players exert effort to develop niches in the
market through product differentiation. The Westin Philippine Plaza, due to its
proximity to the convention center and target marketing, has cornered a large
share of local and international business conferences and cultural events.
Hotels in the Makati area, Hotel Intercon, Shangri-la, and the Ayala Hotels, in
particular, are strong contenders in the business executives market. Located in
the premier commercial district of the capital, these hotels specialize in meeting
the demands of business travelers. Hotel Inter-con, for example, capitalized on
its ideal location and deliberately put in place amenities and facilities to suit the
changing needs of the business traveler. Some of these eventually became the
standard followed by other hotels here and abroad. Among these innovations
are the GuestNet (enables all guests to access the Internet on their television
screen through a wireless keyboard), Business Rooms (mini offices equipped
with, among others, a large desk, a 5-in-1 copier/scanner/phone/fax/printer unit,
and basic office amenities like pen and paper), and the cyberrelations officers
(trained staff dedicated to helping guests with technical difficulties in operating
their laptops or desktop computers).
In the restaurant sub-sector, market niching is likewise a practice. Top ten
players in the restaurant sub-sector accounts for more than 70% of the total
market. Maxs Inc., the undisputed industry leader cornering almost 50% of the
market, specializes in affordable family-type affairs/occasions (i.e., baptisms,
birthday parties, and weddings). Aristocrat chains, that competes in the same
segment, is not too far behind at 20%. Relatively new entrants such as Fridays
and California Pizza Kitchen, taps into the young urban professionals market.
In the fast food sub-sector, Jollibee is the undisputed market leader in the
hamburger segment with a 50%. The chain appeals to the lower- to middleincome brackets with its relatively low prices and a menu that has successfully
captured the Filipino tastebuds. McDonalds, with its relatively higher prices, is in
second place with a 20% market share. The American fast food chain appeals to
the AB crowd. Other hamburger fast food chains include Wendys, which
appeals to the relatively health conscious consumers and the pioneer in fast food
delivery services, Burger Machine, catering mostly to travelers with its mobile
restaurants in numerous gas stations, and Tropical Hut, mostly open 24-hours.
Relatively new players are Burger King and Carls Junior, which resurfaced in the
late nineties after pulling out in the early part of the decade. Meanwhile, the
industry leaders in the pizza segment are Pizza Hut, Shakeys, Dominos Pizza,
and Little Ceasars, the newest entrant to the pizza market. Leaders in the pizza
segment cater to the young adult crowd, particularly Shakeys pizza. In the
chicken segment, Kentucky Fried Chicken is the undisputed market leader.
Finally, only two establishments actively compete in the doughnut segment,
Dunkin Donuts and Mister Donut. The former, Dunkin Donut leads with more
than a 90% share. Doughnuts in the Philippines are usually consumed between
meals rather than during breakfast, which is the case in the United States.
6.3
investment is too high. The major obstacles to the introduction of EDI are
summarized in Annex P.
8.0.
Opportunities
Hotel
Social
Despite the popularity of telephones, faxes, and e-mail, a face-to-face
meeting is still the foundation of business relationships.
Moreover,
businesses generally prefer to hold seminars, workshops, conventions, and
training sessions outside their respective companies. Thus, in the years
ahead, as science and technology tighten their hold on business and society
and the world knits itself ever more tightly into a single market, demand for
hotel services is expected to increase.
Travel agents and meeting planners book nearly one out of two hotel rooms,
and (the internet notwithstanding) these two groups are still the most frequent
intermediaries between the guest and hotel company.
They act as
information brokers, passing information between guests and managers,
process transactions by booking rooms and transferring money, and provide
value-added service by integrating their customers requirements for hotels
with other travel needs (i.e., plane tickets and car rentals), while juggling each
providers offering options, constraints, rules and policies.
Thus, travel agents and meeting planners can and do influence a substantial
number of bookings. Surprisingly, available data shows that many hotel
operators fail to take full advantage of the opportunities presented by
intermediaries. Too many hotel operators treat intermediaries as order
takers, rather than as partners in pursuit of a common objective the
satisfaction of hotel guest.
When hotels make an effort to capture
intermediaries business, the hotels develop for themselves a distinctive
position with the intermediaries, and the intermediaries loyalty appears to go
up substantially.
Building the relationship with intermediaries begin with giving the
intermediaries access to more precise information on the hotels brand
promises to ensure a correct and satisfactory transaction, as well as providing
promotions and incentives and making timely commission payments.
Technology
Large hotels in the country belong to international hotel chains, thus giving
local operators access to technological innovations via their parent company.
Regular participation in local and overseas trade shows, (i.e., the National
Restaurant Show held in McCormick Place, Chicago, the Northern American
Association of Food Equipment Manufacturers, and the annual major hotel
and restaurant shows held in the Asian region) provide hotel operators with
opportunities to update themselves on the latest equipment and IT systems
trend in the industry.
Political
The main strength the hotel industry lies in the promotional boost it gets from
the tourism programs of the government (i.e., the Centennial Celebration).
The Philippine government actively lobbies for the opportunity to host
international events. The Miss Universe Pageant and World Expo, for
instance encourage tourists to tour the Philippine Islands.
Strong support of industry associations and trade unions (i.e., Hotel and
Restaurant Association of the Philippines and the National Union of Workers
in the Hotel Restaurant & Allied Industries) enable the hotel industry, among
other things, to undertake programs and projects that upgrade and
professionalize the sector and to influence government regulatory
policies/laws/rules affecting the industry.
The Philippines is located in the center of Asia, home of the fastest-growing
economies in the world. The archipelago lies southeast of Hong Kong,
northeast of Singapore and almost directly north of Kota Kinabalu in Malaysia
and Bali, Indonesia. Owing to its accessibility and strategic location, the
Philippines is a natural mecca of commerce.
The deregulation of trade in goods and services is expected to enhance the
countrys natural advantage. Liberalization of trade in services addresses the
issue on market access and national treatment. Commitments on the former
aim to progressively eliminate restrictions to the entry of foreign services in a
countrys market while national treatment aim to promote fair treatment
between foreign and domestic service providers. Both hope to reduce
uncertainty in the conduct of trade in services. While free movement of
capital and labor aim to allow foreign capital and professionals to enter the
domestic market. At present, most countries have policies preventing foreign
professionals from practicing their profession in the domestic market.
Restaurant
Social
Moreover, the urban population to which restaurants cater is largely made up
of young people who have higher disposable incomes and who are more
likely to experiment with different cuisine.
Brand loyalty is particularly strong in the fast food sub-sector of the restaurant
industry. Jollibee patrons, for example, generally stay loyal to the franchise
regardless of price increases.
Demand for dining out is associated with both the ever-expanding options
available, and also with the number one reason most consumers use
restaurants: they provide a convenient, reasonably priced experience that
offers better flavors and taste sensations than consumers can get at home.
This has become particularly critical at a time when more and more women
are entering the workforce and consequently have less time to prepare meals
at home.
Moreover, the Philippine population is youth-oriented. Almost half of the
estimated 75 million Filipinos are below 18. And since a large proportion of
fast food consumers is between the ages of 16-24, the annual 2.3%
population growth rate guarantees market growth for the sub-sector.
Technology
International food chains and franchises facilitate transfer of technology in the
local restaurant sub-sector. They provide training of potential employees and
employ strict quality control systems.
In terms of availability of technology, the Philippine market is highly
competitive with numerous products and brands offered at reasonable prices,
and, therefore, allowing restaurant owners the luxury of choosing the type of
technology that best suit their operations.
Equipment purchasing decisions depend on the type of end-user. For
instance, local single-unit restaurants need inexpensive equipment, so price
is the main guiding factor. On the other hand, fine dining restaurants are
willing to pay a premium for high quality, durability, after-sales service, costeffectiveness, reputable supplier and fast delivery.
Restaurant owners regularly participate in local and international equipment
trade fairs, allowing them access to the latest hotel equipment technology.
Economic
Restaurant patrons cross all economic groups. Fast foods and food courts
cater to all income classes. Specialty fine dining restaurants, generally target
the A, B, and C crowd.
The proliferation of one-stop shopping malls that offer various recreational
facilities and amenities is also an important growth factor. The heavy
pedestrian traffic that the malls attract means big business for the restaurant
industry, particularly the fast food sub-sector. Moreover, these malls spare
the restaurant industry from spending extensive business development
studies for their outlets; mall magnates Henry Sy and John Gokongwei Jr.
have established formidable track records in building malls.
Finally, Filipino communities abroad are strong basis for the export of local
restaurants and fast food technology. The presence of Goldilocks, Jollibee,
Max, Red Ribbon, and Barrio Fiesta, among others, in the US, for example, is
a result of demand from Filipino migrants longing for a taste for home.
Political
Strong support of industry associations and trade unions (i.e., Hotel and
Restaurant Association of the Philippines and the NWHUAI) enable the hotel
industry, among other things, to undertake programs and projects that
upgrade and professionalize the sector and to influence government
regulatory policies/laws/rules affecting the industry.
8.2.
Threats
Hotel
Social
The patronage of domestic tourists ensures the survival and profitability of
most businesses that are dependent upon tourism primarily because
domestic tourists outnumber foreign visitors. In the Philippines, 80% of all
tourists are domestic travelers; their total spending, tourists who are at least
18 years old, amounts to about PHP57 billion. Nonetheless, very few hotel
operators are able to tap into this market for most domestic travelers depend
on family and friends to arrange trips and provide lodging.
Technology
Hoteliers indicate several problems that need to be addressed by current
local sources of hotel equipment. One is after-sales-service and availability of
spare parts. Some distributors, in many instances, are unreliable and do not
have an adequate supply of critical spare parts, especially for laundry
equipment. When the equipment breaks down, distributors cannot provide
repair service to the customer. This requires hotels to outsource laundry
services. The phase-out of old models of machinery because of absence of
spare parts support presents another serious problem to hotels.
Likewise, difficult economic situations raise financing costs to prohibitive
levels for many hotel operators. To reduce exposure, banks also restrict
financing to their very best clients, thereby limiting technological
improvements to selected hoteliers.
Economic
Economic and political factors contribute to the lackluster performance of the
tourism industry in the past two years. Declining disposable income resulting
from the Asian currency crisis and political instability resulted in a 3%
contraction in tourist arrivals in 1998 and a 1% increase in 1999.
Pressure on hotel prices comes from the drive for value for money. Increased
operating efficiency obtained through the computerization has helped to
reduce costly waste in the supply chain. However, higher labor, raw materials,
and utility costs continue to push operating costs up.
New hotel projects which, are actively being pursued are the Wingate Inns
and Aston chain, among others, will add to the already overcrowded market.
Wingate's franchisor will build one inn every year until 2003. Investment per
property is estimated at US$4.5 million. While Aston International's thrust will
be in developing resort-type hotels outside Metro Manila.
Finally, liberalization would open the market to more foreign hotel and
restaurant professionals (i.e., managers, chefs, etc.), thus, posing a real
threat to local talent.
Political
Political instability discourages investors and tourists, the lifeblood of the hotel
industry. Uprisings in the provinces, kidnappings, and the current scandal
involving the president have reduced tourism considerably and resulted in a
little bit over 50% hotel occupancy rate.
Delay of the implementation of the open skies policy signed into law by
President Fidel Ramos (EO 219). The open skies policy seeks to liberalize
the airline industry by allowing more foreign airlines access to local routes,
which, in turn, bring more tourists into the country.
Restaurant
Social
Although local entrepreneurs own most fine dining restaurants, an
overwhelming number of fast food outlets are American franchises. These
outlets, therefore, pose serious competition for local franchises. Particularly
since tastes and preferences of consumers tend to favor international,
especially, fast foods and restaurants.
Technology
A primary limitation of the industry is that the restaurant business involves
perishable goods which have to be disposed of at the earliest possible time.
Inventory management is key to balancing raw material demand and supply.
In terms of equipment, restaurant owners indicate several problems that need
to be addressed by current local sources of hotel equipment. One is aftersales-service and availability of spare parts.
Economic
Restaurant patronage/sales are dependent on the levels of economic activity
and real income of local residents and tourists. Periods of high inflation
reduce the household income as well as the budget for eating out.
Continuing high rate of new entries into the crowded marketplace results in
increased competition in all restaurant sub-sectors. Major players have
sought to increase market share by a variety of strategies. In the fast food
sector, many operators have offered substantial discounts, particularly in the
burgers/chicken sub-sector, led by Jollibee. In the full-service restaurant subsector, the introduction of multi-concept restaurants, improved food quality,
quicker service and targeted advertising have been used to make gains in the
market. These strategies allow industry participants to maintain, if not
increase, market share but at the expense of thinning margins.
The rising costs of imported food ingredients, notwithstanding the current
currency crisis, result in increasing production costs. Profit margin erosion
can be remedied by either increasing prices of final product/service or cut
corners in production or the delivery of service. Either solution may result in a
shrinking customer base.
Finally, liberalization will open the door to new international franchises, which
can threaten the viability of local ones. Unrestrained transfer of technology
can impede the development of local entrepreneurial talent.
Political
Political instability, resulting in economic slowdown, reduces real income as
well as the demand for restaurant services.
9.0.
Recommendations
its overall program strategy, taking into consideration the inputs of various
sectors who have a stake in the packaging industry. This Committee is
composed of representatives from the Department of Science and
Technology (DOST), Industrial Technology Development Institute (ITDI),
Packaging Institute of the Philippines (PIP), PhilExport, NEDA, CHED, and
DTI.
5. Develop and strengthen linkage between industry and international
associations. Local industry associations should affiliate with international
associations, and strengthen their relationships with their counterpart
associations in other countries. This will open up opportunities for possible
joint venture partnerships and exchange of technology. This might also
facilitate discussions regarding the possibility of negotiating mutual
recognition agreements.
D. Joint Ventures/Alliances/Mergers
1. Encourage more local firms and foreign firms to form joint venture
partnerships and to explore mutually beneficial arrangements, using the
Philippines as base of operations. While local firms will benefit in terms of
additional capital investments and the transfer of technology into the
country, foreign firms will also derive gains in terms of getting a foothold in
the domestic market, and in terms of utilizing their local counterparts
strong understanding of the local business conditions.
2. Encourage the smaller local players to consider the possibility of merging
with each other to enable them to build up their capital base and to attain
economies of scale needed to compete effectively in a more competitive
environment.
E. Financing
1. Encourage banks to create special financing schemes to help small- and
medium- scale hotel and restaurant firms gain access to more capital
needed for investment in advanced technology, and to help them bridge
working capital requirements.
2. Encourage banks (e.g. Development Bank of the Philippines) and other
financing institutions to provide funds for training and development of local
manpower, particularly for small- and medium-scale firms.
3. Provide direct government assistance to professional associations
4. Encourage local business services players to avail of the benefits of the
Productivity Incentive Act
5. Simplify requirements for availing of loans to encourage firms, particularly
the smaller players, to take advantage of financing schemes.
Bibliography
A.
Websites
Annex B
Annex B
Annex B
c.
Annex B
b.
Annex B
SECTION 10. Purposes and Specific Powers. The purposes and specific
powers of the Authority are as follows:
a. Implement all policies and programs of the Department on
project development;
b. Collect such taxes as may be provided by law;
Annex B
Annex B
SECTION 19.
General Manager: Powers and Duties. The General
Manager shall have the following powers and duties:
a. To direct and manage the affairs of the Authority in accordance with
policies of the Board;
b. To prepare the agenda for the meeting of the Board and submit for its
consideration and approval the policies and measures which he deems
necessary and proper to carry out the provisions of this Decree;
c. To submit within thirty (30) days after the close of each fiscal year an
annual report to the Board and such other reports as may be required;
d. To submit an annual budget and necessary supplemental budgets to the
Board for its approval;
Annex B
SECTION 20.
The Secretary of Tourism may establish a Tourism
Advisory Council, which may be composed of representatives of the
following trade organizations; (1) hotels, (2) restaurants, (3) air carriers, (4)
travel agencies, (5) cottage industry producers and/or distributors, (6) sea
carriers, (7) land transportation operators, and (8) bankers association who
shall be entitled to such per diems and allowances as may be authorized:
Provided, That the Secretary may designate representatives from other
trade organizations as may be necessary. The members of this Council
shall be exempt from conflict-of-interest provisions of the Anti-Graft and
Corrupt Practices Act.
SECTION 21. Applicability of the Civil Service Law. All officials and
employees of the Authority, except technical and professional personnel, shall be
subject to Civil Service Law, rules and regulations and the coverage of the Wage
and Position Classification Office.
SECTION 22. Appointment by the Board. Employees of the Authority shall
be appointed by the Board, upon the recommendation of the General Manager,
to positions in the approved budget using as guide the standards set forth in the
Civil Service Law and rules.
SECTION 23. Transitory Provisions. The properties, monies, assets, rights,
choices in action, obligations, liabilities, records, and contracts of the defunct
Board of Travel and Tourist Industry shall continue to be vested in and assumed
by the Authority, as a government corporation, pursuant to this Decree.
The Board of Directors shall determine what personnel of the Board of Travel
and Tourist Industry shall be absorbed by the Authority.
SECTION 24. Rescission of the Charter of the Philippine Tourist and Travel
Association. The Charter of the Philippine Tourist and Travel Association as
granted under Republic Act No. 710 is hereby rescinded, without prejudice to its
continuing as a duly registered private corporation. Any assets derived from the
government subsidy under the aforementioned charter shall be transferred to the
Authority.
SECTION 25.
The staffing requirements of the Department shall be
provided for in the General Appropriation Act.
SECTION 26. The Civil Aeronautics Board is reconstituted and attached to
the Department. It shall be composed of the Secretary of Tourism as
Chairman, the Civil Aeronautics Administrator, the Commander Officer of
the Philippine Air Force, the Assistant Director for Air Transportation of the
Annex B
Annex B
Appendix B
Amending Part IX of The Integrated Reorganization Plan By Renaming the
Department of Trade and Tourism as The Department of Tourism, and
Creating the Department of Tourism With a Philippine Tourist Authority
Attached to It In Lieu of Philippine Tourist Commission
WHEREAS, there is need to realign government efforts towards trade promotion and
tourism development for greater effectiveness;
WHEREAS, the tourist industry will represent an untapped resource base toward an
accelerated socio-economic development of the Philippines;
WHEREAS, the tourism program is subjected to various administrative and
organizational problems; and
WHEREAS, tourism properly deserves the Government's immediate and priority
attention.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the
Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated
September 21, 1972, as amended, and in order to effect desired changes and reforms in
the social, economic, and political structures of our society do hereby adopt, approve, and
make as part of the law of the land the amendment to the provisions of Part IX of the
Integrated Reorganization Plan by renaming the Department of Trade and Tourism as the
Department of Trade and creating the Department of Tourism with a Philippine Tourist
Authority attached to it in lieu of the Philippine Tourist Commission.
SECTION 1. Declaration of Policy. It is hereby declared to be the policy of the
Government to make the tourist industry a positive instrument towards accelerated
national development; through which more people from other lands may visit and better
appreciate the Philippines and through which the Filipinos themselves may learn more
about the natural beauty, history and culture of their country and thus develop greater
pride in and commitment to the nation.
SECTION 2. Creation of a Department of Tourism. There is hereby created a
Department of Tourism, hereinafter referred to as the Department, which shall be the
primary policy, planning, programming, coordinating and administrative entity of the
executive branch of government in the development of the tourist industry, both domestic
and international.
SECTION 3. Authority and Responsibility. The authority and responsibility for the
exercise of the powers and the discharge of the functions of the Department shall be
vested in the Secretary of Tourism, hereinafter referred to as the Secretary. The Secretary
shall be assisted by one Undersecretary.
Annex B
o. Classify, regulate, supervise and license hotels, resorts, inns, motels, hotels,
restaurants and other related facilities and services which cater to foreign and
domestic tourist and in addition, formulate suitable standards to ensure that the
highest possible standards are met, reasonable fees and charges are made and
that services are given with honesty, courtesy, and efficiency; and
p. Perform such other functions as may be provided by law.
Annex B
program of public relations, promotion and publicity calculated to interest, attract and
encourage overseas travelers to visit the Philippines, including the publication and
dissemination of pamphlets, brochures and other literature and publicity materials and the
production and distribution of audio-visual materials, participation in travel fairs and
other sales and promotion arts.
It shall have the following divisions with corresponding duties and responsibilities,
among others:
a.
6. Participate in fairs and exhibits to promote local goods and products and
provide a medium for the dissemination of information about the
Philippines as a tourist spot.
b.
c.
Annex B
b.
Annex B
g. Adopt, alter and use a corporate seal which shall be judicially noticed;
make contracts, lease, own or otherwise dispose of personal and real
property; sue and be sued; and otherwise do and perform any and all
things that may be necessary or proper to carry out the purposes of the
Authority.
SECTION 11. Capitalization. The capital of the Authority shall consist of (1) existing
assets transferred to it from the Board of Travel and Tourist Industry and the Philippine
Tourist and Travel Association as hereinafter provided and such other properties as may
be contributed to the Authority by the government to form part of its capital and (2) the
taxes under Republic Act No. 1478 and Republic Act No. 6141. All hotel room taxes that
will be collected under the provisions of existing laws are likewise assigned to the
Authority to form part of its capital.
SECTION 12. Power to Issue Bonds or Incur Indebtedness. Whenever the Board
may deem it advisable and necessary for the Authority to contract loans, credits and other
indebtedness, or to issue bonds, notes, debentures, securities, and other instruments of
indebtedness for the development and/or operation of the tourist industry, it shall by
resolution so manifest and declare stating the purpose for which the indebtedness is to be
applied and citing the project study devised for the purpose. In order for such resolution
to be valid, it shall be passed by the affirmative vote of at least four members of the
Board and approved by the President of the Philippines upon the recommendation of the
Secretary of Finance, after consultation with the National Economic and Development
Authority and the Monetary Board of the Central Bank.
SECTION 13. The Authority shall be administered by a General Manager who shall be
appointed by the President from among persons of proven executive competence and
experience in the field of tourist development.
SECTION 14. Board of Directors. The corporate powers of the Authority shall be
vested in and exercised by a Board of Directors composed of the Secretary of Tourism as
Chairman, the General Manager as Vice Chairman and three part-time members who
shall be appointed by the President for their expertise.
Annex B
SECTION 15. Tenure of Office. The tenure of office of the members shall be six
years: Provided, That in the first appointments, the term of office of the three members
appointed by the President shall be fixed as follows: one member for six years, one
member for four years, and the third member for two years: Provided, finally, That no
vacancy shall be filled except for the unexpired portion of the term.
SECTION 16. Meetings and Quorum. The Board shall meet regularly once a month
and as often as the exigencies of the service demand. The presence of at least three
members shall constitute a quorum, and the vote of three members shall be necessary for
the adoption of any rule, resolution or decision or any other act of the Board.
SECTION 17. Compensation of Chairman and Members of the Board. The
members of the Board shall receive such per diems and allowances as may be fixed by
the President.
SECTION 18. Powers and Duties of the Board. The Board shall have the following
powers and duties:
a. To promulgate policies and to prescribe such rules and regulations
as may be necessary to implement the intent and provisions of this
Decree, which rules and regulations shall take effect thirty (30) days
following their publication in two (2) newspapers of general
circulation in the Philippines;
b. To approve the annual budget and such implemental budgets which
may be submitted to it by the Chairman;
Annex B
SECTION 19. General Manager: Powers and Duties. The General Manager shall
have the following powers and duties:
g. To direct and manage the affairs of the Authority in accordance with policies of
the Board;
h. To prepare the agenda for the meeting of the Board and submit for its
consideration and approval the policies and measures which he deems necessary
and proper to carry out the provisions of this Decree;
i. To submit within thirty (30) days after the close of each fiscal year an annual
report to the Board and such other reports as may be required;
j. To submit an annual budget and necessary supplemental budgets to the Board for
its approval;
k. To establish the internal organization of the Authority under such conditions that
the Board may prescribe; Provided, That any major reorganization shall be subject
to the approval of the Board; and
l. To perform such other duties as may be assigned to him by the Board.
SECTION 20. The Secretary of Tourism may establish a Tourism Advisory Council,
which may be composed of representatives of the following trade organizations; (1)
hotels, (2) restaurants, (3) air carriers, (4) travel agencies, (5) cottage industry
producers and/or distributors, (6) sea carriers, (7) land transportation operators, and
(8) bankers association who shall be entitled to such per diems and allowances as may
be authorized: Provided, That the Secretary may designate representatives from other
trade organizations as may be necessary. The members of this Council shall be exempt
from conflict-of-interest provisions of the Anti-Graft and Corrupt Practices Act.
SECTION 21. Applicability of the Civil Service Law. All officials and employees of
the Authority, except technical and professional personnel, shall be subject to Civil
Service Law, rules and regulations and the coverage of the Wage and Position
Classification Office.
SECTION 22. Appointment by the Board. Employees of the Authority shall be
appointed by the Board, upon the recommendation of the General Manager, to positions
in the approved budget using as guide the standards set forth in the Civil Service Law and
rules.
SECTION 23. Transitory Provisions. The properties, monies, assets, rights, choices
in action, obligations, liabilities, records, and contracts of the defunct Board of Travel
Annex B
and Tourist Industry shall continue to be vested in and assumed by the Authority, as a
government corporation, pursuant to this Decree.
The Board of Directors shall determine what personnel of the Board of Travel and
Tourist Industry shall be absorbed by the Authority.
SECTION 24. Rescission of the Charter of the Philippine Tourist and Travel
Association. The Charter of the Philippine Tourist and Travel Association as granted
under Republic Act No. 710 is hereby rescinded, without prejudice to its continuing as a
duly registered private corporation. Any assets derived from the government subsidy
under the aforementioned charter shall be transferred to the Authority.
SECTION 25. The staffing requirements of the Department shall be provided for in the
General Appropriation Act.
SECTION 26. The Civil Aeronautics Board is reconstituted and attached to the
Department. It shall be composed of the Secretary of Tourism as Chairman, the Civil
Aeronautics Administrator, the Commander Officer of the Philippine Air Force, the
Assistant Director for Air Transportation of the Bureau of Transportation and two
other members appointed by the President of the Philippines.
SECTION 27. The Hundred Islands Conservation and Development Authority, the San
Juanico Tourist Development Authority, the Looc Estate and such other entities as
may be organized to promote tourism are hereby attached to the Department.
SECTION 28. The Department of Trade shall perform all the functions, except those
on tourism, of the Department of Trade and Tourism pursuant to the applicable
provisions of the Integrated Reorganization Plan.
SECTION 29. Repeal. Presidential Decree No. 132, dated February 19, 1973 and any
all acts, statutes, decrees, rules, repealed or modified accordingly.
SECTION 30. Effectivity. This Decree shall take effect immediately.
Done in the City of Manila, this 11th day of May, in the year of Our Lord, nineteen
hundred and seventy-three.
Annex B
Appendix C
Department of Tourism Programs and Projects
During the period in review, the DOT launched the Estrada Administrations
REDISCOVERY Program, to encourage and promote international and domestic
tourism. This program seeks to underscore the fact that the challenges faced by the
tourism industry today require a fresh look.
More importantly, the REDISCOVERY program is envisioned to revitalize the
Philippine tourism industry as it is anchored on the unique selling point of the
Philippines. The program is composed of two vital campaigns, namely: the Balkbayani or
the Tourism Frontliners Program and the Rediscover Your Roots Program. The
Balikbayani is aimed at tapping the more than six (6) million Overseas Filipino Workers
(OFWs) as frontliners for tourism marketing and promotions, while the Rediscover Your
Roots is designed for the third- and fourth- generation Filipinos living abroad. The
Rediscovery program was successfully launched in the USA, Japan, and Hongkong last
August 1999. The DOT also spearheaded the Turn of the Century Celebration at the
Rizal Park last 26-31 December 1999. The celebration, dubbed as the Milenyo Filipino
Festival, showcased the Filipino achievements in the area of agriculture and science and
technology during the past century. The festival was highlighted by President Joseph
Ejercito Estrada and First Lady Loi Ejercito who led the countdown to the new
millennium.
A.
Community-based Tourism
The project consists of (4) phases, namely: conduct of actual training on craft
development and specialization, sampling/evaluation of the quality and design, conduct
of business expenses and savings training (BEST), and conduct of advance course on
craft development. The program is primarily focused on livelihood training along the
lines of crafts-making, bonsai growing, dish gardening, and hand-made papermaking.
Preparations are also on going for the implementation of the said project in
Palawan. Relatedly, the DOT is conducting preliminary survey in the area for potential
beneficiaries of the project.
Annex B
B.
The DOT actively participated in major international travel and tourism events
and meetings to showcase the Philippines various destinations. Among these
international events were the ASEAN Tourism Forum and Travel 99 in Singapore,
Internationale Tourismus Bourse in Berlin, 48th Pacific Asia Travel Association Annual
Conference in Japan, International Tourism in Asia in Hongkong, and Kangwon-do
International Travel Expo in South Korea.
The DOT signed an agreement with Chilean tourism authority during the visit of
President Joseph Ejercito Estrada in Santiago, Chile last September. The agreement
seeks to promote bilateral and mutual cooperation in the areas of information/
databanking, investment, human resources development, and marketing and promotion.
The DOT supported the Elf Authentique Adventure endurance games, which
ran from Northern Samar to Biliran, Leyte last April 1999. The adventure games was
estimated to have generated P70 billion pesos worth of free publicity from international
media groups such CNN International, Star Sports, Eurosports, Euronews, LCI France,
Sports Illustrated Magazine, and New York Times. The media coverage carried the
spectacular footages of Samar and Leyte.
In addition, the DOT facilitated the filming of Strix Televisions Expedition
Robinson 1999. A Scandinavians popular adventure TV series, in El Nido, Palawan.
An estimated 4 million Scandinavians viewed the show which resulted from free
publicity worth P3 billion pesos for the Philippines.
The DOT, likewise, signed an agreement with the Singapore Airlines (SIA) for a
comprehensive marketing and promotion drive to attract more tourists to the Philippines.
Under the agreement, the SIA has committed an amount of US$1 million to promote the
Philippines as an international tourism destination focusing on Europe, Australia, and
Singapore markets.
The promotion of eight (8) anchor destinations was launched. These destinations
are Metro Manila, Baguio-Ifugao, Vigan-Laoag, Palawan, Boracay, Bohol, Cebu and
Davao.
The Rediscovery Holiday Package, a short-term promotion designed to promote
Manila, Davao, Cebu, Boracay, and Banaue among leisure travelers in Asia, Europe,
Australia and North America, was implemented with the support of the private sector.
Annex B
C.
The DOT supported the launching of the Lakbay TV and Lakbay Net, which
promoted the countrys tourist destinations through the cable television and the
INTERNET.
THE DOT tied up with Negros Navigation to promote the Balk Probinsya
Program to encourage more Filipinos to travel. Also, the Dream Vacation for Sale Plus
was implemented in cooperation with tour operators and resort owners nationwide.
The Barkadahan Sa Turismo made available to youth and student groups
affordable rates to PTA-owned properties. Among the properties included in this program
are: Lingayen Gulf Resort Hotel and the San Fabian Beach Resort in Pangasinan, the
Pagsanjan Garden Resort in Laguna, McArthur Park Beach Resort in Camiguin, Mt. Data
Hotel in Mt. Province, and Banaue Hotel and Youth Hostel in Ifugao.
Further, the Halina Rediscovery Campaign was conceptualized to boost domestic
travel in the countryside.
D.
Destination Development
Pursuant to Executive Order No. 403, the DOT pursued the implementation of
President Estrada Tourism Highway Program. In consonance with Back-to-Basics
campaign, an agreement was signed by the DOT with the Pilipinas Shell for the provision
of clean restrooms, installation of signages, and setting up of information counters in
major Shell gas stations along the tourism highway.
The DOT also fast-tracked the completion of road network, water supply, and
liquid and solid waste disposal systems in Samal Island, Davao del Norte. Likewise, the
rehabilitation of the berthing facility in Kaputian was implemented to complete the
critical estate infrastructure of the area.
The construction of water treatment and intake facilities, outfall pipelines, and
distribution lines is being accelerated pursuant to the ongoing Overseas Economic
Cooperation Fund (OECF) project in Boracay Island. These projects are being
undertaken by the DOT to protect the pristine coastal environment of the island. In
Panglao Island, asphalt paving of Lourdes-Bacolod Road was undertaken.
To preserve and protect the rice terraces against soil erosion in Asipulo and
Hungduan, Ifugao, the DOT financed the construction of the Bana-o Communal
Irrigation System, Wingiyon Irrigation System, Nungawa Communal Irrigation System,
and Baang Irrigation System.
The DOT submitted to National Economic and Development Authority (NEDA)
the terms of reference for the Northern Palawan Tourism Development Infrastructure
Program for OECF funding. The DOT also signed a Memorandum of Agreement
Annex B
(MOA) with the Provincial Government Palawan and the DENR to verify ownership and
status of properties within the identified tourism development sites.
In coordination with the National Commission for Culture and the Arts (NCCA),
University of the Philippines-College of Architecture (UP-CA), Palawan Natural and
Historical Foundation (PNHF, Inc.), Palawan Tropical Forestry Protection Programme
(PTFPP), and the local government units, the DOT agreed to undertake the establishment
of Palawan Cultural Village, which focuses on identifying the appropriate buffer zones to
protect the lifestyles of the ethnic groups of the area while meeting the demand of tourists
for cultural experience.
Through the technical assistance of the Spanish Government, the DOT agreed to
undertake the establishments of Palawan Cultural Village, which focuses on identifying
the appropriate buffer zones to protect the lifestyles of the ethnic groups of the area while
meeting the demand of tourists for cultural experience.
Through the technical assistance of the Spanish Government, the DOT is
undertaking the physical restoration of selected public areas and buildings in Vigan, as
well as the formulation of a Master Development Plan for the Revitalization of Historic
Center for Vigan. A proposal for the formulation of Sustainable Cultural Tourism in the
Philippines and the development of Model Community-based Ecotourism Projects was
also submitted by the DOT to the Spanish Government for possible financial assistance.
To address the critical concerns and expand tourism, the DOT organized the
Philippine Tourism and Transportation Summit last 22-23 June 1999 at the Manila Hotel.
Two hundred (200) participants from local and international airlines, hotels, resorts, as
well s water and land transport sectors attended the summit, which resulted in a policy
recommendation on progressive liberalizaton.
E.
In cooperation with the United Nations Development Programme (UNDP) and the
Philippine Council for Sustainable development, cultural enrichment, and socioeconomic development.
In pursuance of the Agenda 21, the DOT completed the GREEN GLOBE
Destination Report and Action Plans for Camiguin Island and Ifugao. A destination
management group (DMG) has been set in place in the said areas to provide the link
between the different stakeholders and the National Steering Committee. The DMG is
composed of stakeholders headed by the Provincial Governor with the DOT Regional
Director and the Provincial Environment and Natural Resources Officer (PENRO) as
Vice-Chair.
The DOT also spearheaded the National Ecotourism Congress last 27-29 October
1999 in Tagbiliran City, Bohol. The Congress, which was organized jointly with the
Department of Environment and Natural Resources (DENR), Department of Interior and
Annex B
Local Government (DILG), and the Philippine Womens University (PWU), was
attended by 422 participants from national government units, private sectors, and
international organizations. A proposed policy and strategic guidelines was developed
during the Congress, which will serve as inputs in the formulation of the National
Ecotourism Plan.
F.
G.
Tourism Services
To continually improve the quality and upgrade the standards of service in the
industry, a total of 1,942 accommodation establishments, travel agencies and tour
operators, taxis, and taxi drivers were accredited by the DOT. Likewise, four (4)
accreditation codes affecting calesa, motorized banca, foreign exchange dealers, and renta-car were formulated to further professionalize the quality of these services.
The DOT also conducted 101 training programs along the areas of frontline
office, housekeeping, waitering, bartending, tourist reception, and guiding technique.
These programs benefited 1,441 industry personnel from accommodation establishments,
tour operations and travel agencies, and local communities.
The DOT signed a Memorandum of Agreement with the Maritime Industry
Authority (MARINA) for the granting of exemption from or reduction of the requirement
of allocating fifty percent (50%) of the total passenger capacity for 3rd class
accommodation in the case of the liner passenger capacity for 3rd class accommodation in
the case of the liner passenger vessels providing 1st, 2nd, and 3rd class accommodations.
The DOT is also negotiating with the Tourism industry Board Foundation, Inc. (TIBFI)
for the accreditation of training centers, trainers, and tourism programs. It is envisioned
that these agreements will promote better and efficient tourism services.
Annex B
In addition, the DOT continued to implement the Tripartite Agreement with the
Department of Labor and Employment (DOLE), and the Bureau of Immigration (BI) to
comply with the provisions on the employment of foreign nationals in the hotel, resort,
and restaurant sectors.
H.
Regional Operations
With the support of the local government units and private sectors, the DOT
regional offices have implemented social tourism oriented projects particularly the
beautification and landscaping of municipal plazas, construction of cultural centers, and
installation of streetlights.
Support to the local governments were also provided by the regional offices in the
promotion of various festivals such as Feast of the Black Nazarene in Manila,
Panagbenga in Baguio City, Rimat Ti Aminan in Ilocos, 1999 Sambali Festival in
Cagayan, San Fernando Giant Lantern Festival in Pampanga, Pahiyas Festival in Quezon,
and Peafrancia in Bicol.
Other festivals which were provided with support in the Visayas and Mindanao
islands include the Dinagyang and Ati-Atihan in Iloilo City and Aklan, Sinulog and
Sandugo in Cebu and Bohol, Kasadya-an Festival in Tacloban City, Talak Festival in
Zamboanga, Lanzones Festival in Camiguin, Kadayawan Sa Dabaw in Davao City,
Shariff Kabunsan Festival in Central Mindanao, and Balangay Festival in Butuan City.
I.
Internal Services
The DOT implemented various activities and training programs during the year to
enhance the skills and capacity of its personnel. A total of 279 personnel benefited from
the training program, which include Frontline Services Management, Values Orientation
Workshop, Orientation/Re-orientation Seminar, Effective Written and Oral
Communication, and Basic First Aid and Occupational Health Seminar. Further, ten (10)
qualified DOT family official/ employee were extended foreign scholarships and
opportunities to participate in international workshop/ conferences.
Annex B
Attached Agencies
A.
As the infrastructure arm of the DOT, the Philippine Tourism Authority (PTA)
continued to pursue the implementation of major social and environmental related
projects to develop domestic tourism in the countryside. Among the social projects
undertaken by the PTA were the construction of the multi-purpose hall in Cabarroguis,
peoples plaza in Lambunao, installation of submarine outfall pipeline in Boracay, and
the rerouting of electrical facilities in Vigan Heritage Village. In coordination with the
University of the Philippines-Marine Science Institute (UP-MSI), the PTA spearheaded
the implementation of environmental conservation projects such as coral transplantation,
sea urchin culture, and giant clam garden at (HINP) in Alaminos, Pangasinan. Other
activities also undertaken at the HINP to sustain the program were the construction of
demonstration sites, establishment of mangrove planting stations, and regular clean-up
drive. Furthermore, in collaboration with the local government of General Luna, the PTA
constructed and refurbished the Cabuntog Lodge and Resort to cope up wit the growing
demand for accommodation facilities in Siargao Island, popularity known as the Surfing
Capital of the Philippiens.
In lien with its promotional mandate, the PTA also launched aggressive
marketing campaigns to create public awareness on the best tourism destinations in the
countryside. Among the promotional projects, which were undertaken during the period
under review were Lakbay Milenyo Program, Para sa Pamilyang OFW Program,
Tagaytay Picnic Grove and Dumaguete Concerts, and the Pinoy, Turismo at Iba Pa
Travel.
To amplify the autonomy and empowerment of the local government units, the
PTA devolved the operations and management of its major entities to augment the
financial capabilities of the concerned LGUs. Among the major establishments, which
were turned over to the local governments were the Plaza Independencia in Cebu, Mt.
Samat in Bataan, and the Ardent Hot Springs in Camiguin. In terms of financial
performance, the PTA generated an amount of P1.36 billion from travel tax collection,
and increase of 5.61% compared to the previous years collection amounting to P1.28
billion. This increase can be attributed to the intensified computerization program of the
tax collection system of the PTA.
B.
Annex B
The PCVC provided assistance in bidding for the hosting of major events, to wit:
World Flower Council (2000); Word Youth Student Travel Conference (2201); 31st SKAL
Asian Area Assembly (2002); 16th Biennial Congress of Thoracic and Cardiovascular
Surgeons of Asia (2003); International Congress on Chemotheraphy (2005) Fedracion,
Internationale de Gynecologie et d Obstetrique (2006). The PCVC also provided
technical and promotional assistance to incentive groups and private sectors in bidding
for 59 booked events. In addition, the PCVC assisted the private and government
sectors in terms of photo and video coverage, audio-visual dubbing and presentations,
slide duplications, as well as technical/creative assistance to special projects.
To generate media exposure and mileage, the PCVC assisted and hosted
invitees from the media and travel trade groups and other tourism-related organizations,
which visited and made film/video coverage of the countrys top destinations.
The PCVC also provided promotional/ technical support to five (5) special
projects among which are: International Horticultural Exposition; Philippine Rediscovery
Holidays; Elf Authentique Aventure; Balikbayan Millennium and Reunion for Peace in the
Millennium.
To support the Corporations participation in trade and travel fairs, ad placements
were implemented and monitored in domestic and international publications. Likewise,
intensify the promotion of various tourism events and destinations, the PCVC produced
various promo materials (primers, maps, brochures, banners, kits and folders).
C.
Intramuros Administration
Annex B
D.
The Nayong Pilipino Foundation (NPF) continued to maintain its image as the
repository of our rich cultural heritage in an urban setting. During the period in review,
the NPF implemented the maintenance of its physical structures such as the model
houses, parks, landscaping, and regional comfort rooms. The NPF also undertook the
rehabilitation of the aviary and the redesigning of the aquarium. Likewise, to maintain
the cleanliness of the parks lagoon, ponds, and bird feeding areas, regular maintenance
and rehabilitation were undertaken.
In coordination with various cultural groups, the NPF implemented twelve (12)
cultural programs and other related events namely: Sto. Nio Festival, Alay ng
Nagmamahal; Banduria, Octavina atbp.; Visayan Folklore; Semana Santa featuring
Palm Sunday, Senakulo, and Hanap Kayamanan; Sining Pambata; Tagalog Fiesta;
Santacruzan Sa Nayon; Karera ng Traysikad; Balagtasan Sa Nayon; Kawil at Pain; and
the Pain; and the Peafrancia Festival.
The NPF also mounted exhibits such as the Kasining Painting Exhibit, Hiyas at
Palamuti Exhibit , Hiyas at Palamuti Exhibit, Greenworld of Ornamental Plants Exhibit,
and the Science and Technology Exhibit, and the Science and Technology Exhibit.
Annex B
Department of Tourism
Goals and Policy Thrusts for CY 2001-2003
For the planning period 2001-2003, the Department of Tourism (DOT) shall pursue the
following goals and objectives in accordance with the 20-year Tourism Master Plan:
1.
2.
3.
4.
Cognizant of the above goals, the DOTs umbrella program under the Estrada
Administration is the Rediscovery Tourism Program.
In this regard, the first year of the Rediscovery Program should be monitored during the
planning process. This is to determine whether each division or each attached agency
had planned its projects in the framework of Rediscovery, or whether there is a need to
strengthen methods of integration and communication so that the DOT will finally be able
to implement a unified and focused program.
Likewise, inasmuch as the Philippines is an active member of ASEAN and this region
will present itself as a single destination in Asia, all operating units should include
activities and programs in consonance with out tag line: The Philippines, the Other Face
of Asia. In addition, there is the need to input in each unit/ division/ office plans the
proposals of the private sector and LGUs emanating from the Consultative Meeting held
last 19 January 2000 at the Hotel Intramuros de Manila.
Furthermore, the following shall continue to be pursued by the various operating units in
accordance with the Estrada Administrations Medium-Term Philippine Development
Plan (MTPDP):
1.
Annex B
4.
Annex B
Appendix D
Industry Associations
The Hotel and Restaurant and Tripartite Consultative Body, Inc. (HRTCB)
In September 23, 1992, the core group creating the Hotel and Restaurant
and Tripartite Consultative Bond, Inc. (HRTCB) first met. The sectors involved
are the government composed of the Department of Labor and Employment
(DOLE), the Department of Tourism (DOT) and the Bureau of ImmigrationDepartment of Justice (BI-DOJ); the management, represented by the Hotel and
Restaurant Association of the Philippines (HRAP) and the Philippine Hotel
Owners Association of the Philippines (PHOA) and labor, consisting of the
National Union of Workers in the Hotel, Restaurant and Allied Industries
Alliance of Progressive Union (NUWHRAIN-APL) and the Associated Labor
Union Trade Union Congress of the Philippines (ALU-TUCP). It was agreed
upon that a tripartite body for the Hotel and Restaurant Industry is necessary to
help ensure industrial peace by providing a policy forum where sectoral
perspectives are interchanged in handling labor management issues in the
workplace. Thus they decided to draw up a Memorandum of Agreement which
was signed on December 21, 1992.
The HRTCB which was co-chaired by then Undersecretary Bienvenido E.
Laguesma together with Undersecretary Evelyn Pantig of the Department of
Tourism ventured on organizing regional counterparts of the HRTCB. They were
successful in establishing charters in Cebu City, Davao City and Cagayan De
Oro City. In its first year, apart from its information campaign activities to
promote industrial peace trhough joint consultation mechanisms, HRTCBs major
accomplishment was in facilitating the signing of a Memorandum of Agreement
(MOA) between the Alvarez-Borromeo Development Corporation and the
National Union Workers in the Hotel, Restaurant and Allied Industries, the parties
in the Montebello Case. The MOA ended the almost nine (9) month-old case on
the Montebello CBA Re-opening Negotiations Deadlock.
HRTCB gained its legal personality on October 21, 1996 as it was
registered with the Securities and Exchange Commission. Its first set of officers
were Glenda R. Barreto, President Mr. Josep Estrada; Assistant Secretary
Bernardino B. Julve, Vice-President Mr. Josep Estrada; Atty. Antonio T.
Fontanilla, Secretary; Merceditas Z. Santos, Treasurer; and Daniel L. Edralin,
P.R.O. Co-chairpersons from 1993-1996, on the part of DOLE have been
represented by several Undersecretaries who were assigned to Labor Relations.
These were Undersecretaries Buenaventura C. Magsalin; Undersecretary Jose
Espanol and Undersecretary Dimapilis Baldoz.
On the other hand,
Annex B
Undersecretary Evelyn B. Pantig has been the co-chairperson of the DOT from
1992-1998.
In 1999, the HRTCBs Co-chairpersons are Undersecretary
Ricaforte of the DOT and Undersecretary Rosalinda Dimapilis Baldoz of the
DOLE.
From 1993 to 1999, HRTCB has dutifully aligned its activities by its vision
which is to be the primary dynamic body capable of influencing the government,
its members and other sectors in the promulgation and implementation of policies
and programs promotive of synergistic labor-management-government sector
relationship to enhance industrial peace and improve productivity within the hotel
and restaurant industry.
Inspired by its vision, the HRTCB recognized Hotels and Restaurants with
Outstanding Labor Management Cooperation (LMC) in their workplaces. In
1996, it recognized Cebu Plaza Hotel as the hotel with an Outstanding LMC and
gave special Citations to Manila Hotel, Shangrila Edsa Makati and Via Mare
Rsetaurant. Likewise, in 1997, Cebu Plaza again was awarded as the Hotel with
Outstanding LMC for it was able to help the company restore its good labor
relations after it has to adopt adjustments due to the economic crisis.
Its 1997 highlight include the signing of an Industrial Peace Accord in the
Hotel and Rstaurant Industry to ensure that the APEC Summit Delegates will
have a pleasant stay in the Philippines. While in 1998, HRTCB has been involve
in the conciliation of a labor dispute in the Manila Diamond Hotel and it was able
to secure a PHP1 million DOLE-GATT WTO Adjustment-Funding for its activities
like the conduct of Seminars on Labor-Management-Cooperation Voluntary
Modes of Conflict Resolutions in the Hotel and Restaurant Sector and Livelihood
Trainings for Displaced Workers. For 1999, the HRTCB have drafter a
supplement to the Department Order No. 10 Series of 1997 of the Department of
Labor and Employment for the regular status of regular extra workers and has
been conducting trainings on Cross Cultural Training Programs for Expats to
ensure better working relations within the industry.
The HRTCB through its seven years of existence has managed to
consolidate its database that could come handy for policy development within the
industry. It is able to start with its CBA Comparative Analysis among the De
Luxe Hotels; establish a directory of Hotels and Restaurants in the Philippines as
well as establish a Labor Update Situationer on a monthly basis.
Annex B
the year held on Janaury 11, 1999. On March 12, 1999, Mr. Patricio L. Lim of The
Peninsula Manila and Mr. Oscar Salvacion of The Wetin Philippine Plaza were elected
President Mr. Josep Estrada and Vice-President Mr. Josep Estrada, respectively, for the
term 1999-2000. Senator Loren Legarda, Chairperson of the Senate Committee on
Tourism was kenote speaker for the last meeting for the year held on Dec. 13, 1999.
Preamble
The officers and Members of the Hotel and Restaurant Association of the Philippines,
fully recognizing the role and commitment of the private sector in contributing to the
development, growth and promotion of Philippine tourism, in cooperation with other
organization/associations involved with the industry, do hereby promulgate this
Constitution and By-Laws.
Article I: NAME OF ASSOCIATION
1.
2.
3.
4.
5.
6.
7.
Annex B
consumption of the foregoing purposes and objectives and any and all
acts and things permitted by the laws of the Philippines to be done and
performed by a corporation of a similar nature in particular.
Article III:
1.
2.
3.
4.
5.
6.
7.
8.
9.
MEMBERSHIP
Annex B
10. Expulsion of Members: Any member who shall commit any act or acts
inimical to the interest and welfare of the Association may be expelled
upon the vote of two thirds (2/3) of all the member s of the Board.
Article IV: PRIVELEGES, FUNDS, FEES & DUES
1.
Funds:
The funds of the Association shall consists of fees and dues
from members; voluntary donations; sums as may accrue from the
proceeds of activities undertaken by the Association; and interest grained
or earned on saving accounts, trust funds and income that may be legally
earned by the Association. The funds of the Association shall be kept in
an account with a reputable commercial banking institution chosen by the
Board for the purpose. In addition and whenever permissible, the Board
may invest a portion of such funds as available for the purpose of
generating added financial stability for the Association.
2.
Admission Fees:
Members of the Association except Honorary
members, upon approval of their application for membership shall pay the
admission fee.
3.
4.
5.
Special Assessments: Whenever the need arises, the Board may assess
a special amount provided advise thereto and reasons thereof are given in
advance. Two-third (2/3) vote of the entire body may however revoke said
assessment.
6.
7.
Privileges:
7.1 Regular, Allied and Associate members shall have the right to vote
and be voted upon and shall be entitled to all services and privileges
that the Association prescribe for.
7.2 Honorary and Life members cannot vote and be elected to office.
However, they may be entitled to participate in programs/projects
contributing to the development and growth of the hospitality and
tourist industries.
Annex B
ARTICLE V: MEETINGS
1.
Annual Convention: The Association shall hold an Annual Convention,
the date and venue to be determined by the Board of Directors upon proper
notice.
2.
General Membership and Special Meetings: The Association shall hold
a General Membership meeting every quarter to discuss problems and
development in the industry, inform the membership of the projects of the
association and take up any matter of general interest. Special meetings of the
Association may be called by the President or upon written request by at least
twenty (20) members stating the objectives of the special meeting.
3.
Board Meeting: The Board of Directors shall hold a regular meeting
monthly on the place and date fixed by the president. Special meetings of the
Board may be called by the president or by the secretary of at least five (5)
members of the Board request for it in writing stating the purpose of such special
meeting.
4.
Notice of Meeting: In all meetings, written notices shall be sent by the
secretary at least one week in advance, except in the case of special meetings
of urgent nature.
5.
6.
1.
2.
Annex B
the Vice President for the Restaurant Division likewise shall be elected
from among themselves. In the event of a tie a reballoting shall be held.
The Secretary, the Treasurer and the Public Relations Officer shall be
elected by the members of the Board of Directors from among
themselves.
The Directors representing the Allied members and Associate members
shall be qualified to b elected President of Vice President for the Hotel and
Restaurant Division.
The position of the Executive Director shall be decided by the Board of
Directors upon the latters composition. The Executive Director need not
be a member of the Association. He shall be considered as a managerial
employee of the same.
3.
4.
President: The President shall a) preside over the meeting of the association
and of the Board of Directors; b) appoint with approval of the Board of Directors;
b) appoint with approval of the Board of Directors, committees; c) exercise
general supervision over the organizations activities and make an annual report
thereon to the members during the annual general meeting; d) sign all contracts
approved by the Board of Directors, correspondence and other documents on
behalf of the Association before the public and Allied industries and with trade
bodies abroad; and e) perform such duties as appurtenant to his position or
which the Board of Directors may assign to him.
5.
Vice President for Hotel Division: He shall act as the presiding officer of the
Hotel Division and assist the President by coordinating and devoting his best
effort pertaining to operations, activities and other matter of significance
particularly to hotel members of the Association. He shall be responsible for
holding meetings with hotel members when necessary, for the solution of
problems and relevant issues that concern the hotels and planning for
implementation of projects geared towards advancing the benefits and improving
the business welfare not only of the hotel members of the Association but also of
the Hotel industry in general.
Annex B
6.
7.
Secretary: His duties are a) to preserve the minutes of the meetings of the
Association and its Board of Directors and committees; b) to circularize among
the members all important policies, resolutions and projects adopted by the
Board of Directors as well as all matters of general interest; c) to be the
custodian of all records and correspondence of the organization and d) to keep
an up-to-date membership roster, he must be a resident citizen of the
Philippines.
8.
Treasurer: His duties are a) to take custody of all funds of the organization and
to disburse them in accordance with the directives of the Board of Directors; b) to
supervise the collection of all dues, charges and assessments as well as all other
amounts payable to the organization;
c) to keep the books of accounts,
receipts and vouchers; d) to submit to the members through the Board of
Directors an annual budget of income and expenses for the ensuing year; e) to
submit to the Securities and Exchange Commission for Office verification the
cash book, journal and ledger. He shall post a bond in such amount as may be
fixed by the Board.
9.
Public Relations Officer: He shall devote all his best effort of maintaining a
good image of the Association not only before the general public but also with
the allied industries and among general membership as well. He shall assist in
promoting good relations with the mass media, government and civic circles.
10. Executive Director: He shall be the Chief Operating Officer of the Association
who shall be under the direct control and supervision of the president and shall
have the following duties a) to look after and superintend all operations of the
corporation: b) to initiate and develop corporate objectives and policies and
formulate long range projects, plans and programs for the approval of the Board
of Directors, including those for executive training, development and
compensation; c) to have general supervision and management of the business
affairs and property of the corporation: d) to ensure that administrative and
operational policies of the corporation are carried out under his supervision and
control; e) subject to guidelines prescribed by law to appoint, remove, suspend
or discipline employees of the corporation, prescribe their duties, and determine
their salaries; f) to oversee the preparation of the budgets and statement of
accounts of the corporation ; g) to prepare such statements and reports of the
corporation as may be required of him by law; h) to represent the corporation as
may be required of him by law; h) to represent the corporation at functions and
proceedings upon the instructions of the President or the Board of Directors; I) to
execute in behalf of the Corporation all contracts, agreements, and other
instruments affecting the interests of the corporation which require the approval
Annex B
2.
3.
1.
An election committee of two members from the Hotel Division; two
members from the Restaurant Division and one member from the Allied Division,
and one member from the Associate, shall be appointed by the President with
the approval of the Board of Directors at least four (4) weeks prior to the election
date from among members who will not be candidates to screen nominations and
set-up election procedures.
2.
3.
Annex B
1.
4.
Right to vote: Each chapter shall be entitled to two (2) votes for every
group of fifteen (15) each member hotels and restaurants, to be counted
as one vote for hotel division and one vote for restaurant division. The
votes of each chapter shall be cast by its duly assigned representatives.
ARTICLE X: COMMITTES
Annex B
1.
2.
3.
4.
Standing Committees:
4.1 Membership Committee- The primary function of this committee shall be to
screen all applicants for membership and make recommendations to the
Board for final approval. The committee may set its own rules and related
to membership drives and acceptance of new members; provided however,
that such rules do not contradict the provisions on membership set forth in
these By-Laws. The committee shall assist the Secretary on the quarterly
revision of membership roster and shall sit jointly with the Ethics Committee
on investigation and deliberations pertinent to cancellation of membership.
This committee is charged with the function of conducting the annual
membership drive.
4.2 Finance Committee- The primary function of this committee shall be to
oversee the income, expenditures, properties, investments, trust funds, and
other negotiable assets of the Association to ensure the maximum
protection of financial stability.
4.3 Legislation Committee- The primary function of this committee is to keep
posted, review and analyze all proposed bills, ordinances, decrees and
rules and regulations covered by circulars emanating from pertinent
government agencies and affecting the members of the Association and the
hospitality trade and industry in general. This committee shall inform the
Board of matters deemed disadvantageous to the industry and submit
special studies, position papers and proposals as to the courses of action to
take to preserve the welfare of the industry. It shall work hand in hand with
the Government Liaison Committee.
4.4 Government Liaison Committee- The primary function of this committee
shall be to establish communications and to make representations with the
government agencies concerned on issues recommended by the
Legislation Committee as requiring immediate action through its committee
shall also represent the Association when necessary, in hearings and
Annex B
Annex B
1.
Account and Audit- All books and accounts of the Association shall be
audited at least once a year by a professional auditor so designated for such
purpose by the Board. The books of the Association shall be open for inspection
at all times during regular business hours.
2.
Office- The office of the Association shall be located in Metro Manila,
Philippines, as the Board may designate.
3.
Seal- The corporate seal of the Association shall consists of a circular
design on which shall be inscribed the name of the Association and the words
Incorporated 1951, Philippines.
4.
Limit of Indebtedness- The Board of Directors shall not incur any
indebtedness on the part of the Association in excess of the money in the
Custody of the Treasurer unless such indebtedness is authority by the members
of the Association at the Annual General Membership Meeting or at a Special
General Meeting called for this purpose.
5.
Dissolution- In the event of dissolution of the Association, its remaining
assets, after the payment and liquidation of its liabilities, shall be disposed of and
turned over to any non-profit foundation selected by the Board of Directors or to
the Republic of the Philippines or any of its agencies or instrumentalities or
political subdivision.
6.
Fiscal Year- The fiscal year shall coincide with the calendar year.
Annex B
S.S.
DIRECTORS CERTIFICATE
We, the undersigned, on oath taken, depose and say that:
1.
We represent the majority of the Board of Directors and the Corporate
Secretary of the Hotel and Restaurant Association of the Philippines, Inc.
2.
At the regular meeting held last 09 November 1992, we approved the
Amendment to the Articles of Incorporation and the Amendments to the New Bylaws for the corporation. For reference, a copy thereof is attached herewith and
made an integral part hereof.
3.
At the meeting called for the purpose last 28 November 1992, two-thirds
(2/3) of the members of the corporation likewise approved the Amendment to the
Articles of Incorporation and the Amendments to the New By-laws at the principal
office.
MILAGROS C. ARANETA
Corporate Secretary
LORENZO J. CRUZ
GLENDA R. BARRETO
MICHAEL A. GIBB
Annex B
Appendix E
Trade Unions
National Union of Workers in Hotel, Restaurant and Allied Industries
(NUWHRAIN)
The NUWHRAIN-APL-IUF chapters grew from 38 to 44 in 1989 with the
formation of new local unions at the Manila Galleria Suites in Mandaluyong;
Olympia in Makati; and the Holiday Inn Resort-Clark Field, Mimosa Golf and
Country Club and Fontana Leisure Parks at Clark Air Base; and the affiliation of
the Goldenfield Garden Hotel union in Bacolod. Individual membership,
however, went down to 5,643 from 5,893 in 1998 as employers continued to
reduce the regular workforce in the midst of the continuing slump, particularly in
the tourism industry.
Nevertheless, at the company level, NUWHRAIN was still able to conclude
5 CBAs, of which four were for the last two years of the existing CBAs at the
Intercontinental, Peninsula and Hyatt (RF and Supervisory), and one for the
straight 6th CBA of the Dusit, hotels. A total of 13 LMCs were filed during the
year (5 in NCR, and one each in Regions I and VI), six of which had been settled
amicably leaving only the Goldenfield NOS in Bacolod still pending.
At the regional level, the NUWHRAIN-APL again played a crucial role in
securing for workers including its members in Metro Manila a PHP25.50 raise in
the minimum wage, thru NCR Wage Order No. 2, starting October 1999.
For the industry level, it launched a series of activities towards helping
eliminate child labor and child prostitution, in cooperation with the IUF and ILO;
on 27 September, as part of its annual International Trade Union Action Day on
Tourism celebration more than 200 NUWHRAIN-APL-IUF members in 20
vehicles held a motorcade rally, pickets and dialogue with the DOLE and DOT to
elicit action on a 10-point tourism workers' concerns.
Nationally, the NUWHRAIN continued to take part thru its national center,
the Alliance of Progressive Labor (APL). In campaigns to strengthen human,
democratic and trade union rights, mainly thru amendments to the Labor Code,
and part-list law; and campaigns against poverty, the VFA and charter change.
At the global level, among others, NUWHRAIN again joined the advocacy
against free trade (and for fair trade), pro-people reform of the IMF-WB-ADB, and
Jubilee 2000 Debt Campaign; the Free Burma Campaign; and the solidarity work
for Indonesia and East Timor. It also hosted the holding of the 6th IUF-Asia
Pacific Hotel, Restaurant, Catering and Tourism (HRTC) Conference at the Dusit
in May 1999, and provided resource persons for the HRTC organizing drive in
Indonesia, Sri Lanka and India.
Annex B
Annex B
Appendix F
Investment Priorities Plan and Implementing Guidelines
Part I
2000 PRIORITY INVESTMENT AREAS
I.
NATIONAL LIST
The National List is a list of Activities under the IPP which
activity/activities are deemed National in scope, eligible for incentives
under E.O. 226, and subjects to General and Specific Guidelines.
EXPORT ACTIVITIES
1.
2.
Export trading
Trading of non-traditional export products
3.
Services
Export of services such as knowledge, information,
technology and systems and/or application or installation
thereof in the project sites
Services provided to international airlines/shipping
lines/military aircraft or seacraft even if rendered locally may
qualify for registration provided revenues are paid for in
foreign currency. Mere deployment of people or individual
practice of profession abroad shall not qualify for
registration.
4.
Support to exporters
Annex B
2.
Processing of agricultural
products/wastes
fish
products/by-
IT enables services
Support & knowledge-based services
Business process out sourcing
3.
4.
5.
Social Services
-
and
Annex B
6.
Tourism
-
Tourism estates
Tourist buses
Annex B
7.
Environmental Projects
-
8.
Infrastructure
-
9.
Common Carriers
Annex B
10.
11.
Public utility land, air, and water transport. Air and water
facilities may involve cargo operations only
Engineered Products
-
Projects of Cooperatives
-
12.
13.
Shipbuilding/shiprepair/shipbreaking
14.
Manufacture of
components
motor
vehicles
and
parts
and
Annex B
15.
MANDATORY INCLUSION
PREVAILING LAW
1.
ACTIVITY
Activities under the Agricultural & Fisheries
Modernization Act under R.A. 8435
2.
3.
4.
5.
6.
Exploration,
mining,
quarrying,
and
processing of minerals under R.A. 7942
7.
Publication or printing of
textbooks under R.A. 8047
8.
9.
10.
Refining,
storage,
marketing
and
distribution of petroleum products under
R.A. 8479
books
or
Annex B
Annex B
II.
REGIONAL LIST
The Regional List is a List Activities under the IPP which are Regional in
scope for which projects/ activities should be implemented in the identified region
where it shall be located. The eligibility to incentives under E.O. 226 shall be
determined by the location of the project and subject to General and Specific
Guidelines.
A.
Region
MANUFACTURING/PRODUCTION ACTIVITIES
Activities
CAR
Furniture
Packaging Products
Textiles* and Garments & Articles of Textiles
Gifts, Toys and Housewares
II
Composite Board
Gifts, Toys and Housewares
III
Chemical Products
Composite Board
Jewelry
Leather and Leathergoods
Pyrotechnics
IV
Chemical Products
Chemical Products*
Chemical Products (Organic Chemicals)*
Furniture
Gifts, Toys and Housewares
Industrial Carbon
Jewelry
VI
Composite Board
Annex B
Furniture
Gifts, Toys and Housewares
Industrial carbon*
Jewelry
Leather & Leather goods
Pulp and Paper
Textiles* and Garments & Articles of Textiles
VII
Composite Board
Gifts, Toys and Housewares
Jewelry
Packaging Products (Wooden container)
Pulp & Paper
Textiles*
& Garments & Articus of Textiles (Hand of
Loomwoven Porducts*)
VIII
IX
Composite Board
Gifts, Toys and Housewares
Jewelry and Gemstore
Pulp and Paper
Rubber Footwear
Textiles* and Garments & Articles of Textiles
Chemical Products*
Gifts, Toys and Housewares
Industrial Carbon*
Packaging Products (Glass Packaging)
Textiles* and Garments & Articles of Textiles
XI
Fertilizer,
Lubricants*,
Annex B
XII
Chemical Products
Composite Board
Furniture
Gifts, Toys and Housewares
Jewelry
Pulp and Paper
Rubber Footwear
Textiles* and Garments & Articus of Textiles
CARAGA
SPECIFIC COVERAGE
ACTIVITY
Chemical Products
Composite board
Furniture
Manufacture of furniture
Industrial carbon
COVERAGE/DEFINITION
Manufacture of organic chemicals,
inorganic fertilizer, oleochemicals,
lubricants, essential oils, paints, and
petrochemicals
Annex B
Pyrotechnics
Rubber Footwear
Wood Products
B.
INDUSTRY CLUSTERS
An industry cluster is a group of interlinked or related activities
composed of industries, suppliers, required support services,
infrastructure and institutions.
Coverage:
REGION
CLUSTER/S
NCR
Footwear Center
CAR
Wood Center
Loomweaving Center
Annex B
II
Wood Center
III
IV
Coconut Center
Pili Center
VI
VII
#
#
#
VIII
Coconut Center
Abaca Center
Aquamarine Center
Food Center
IX
Seaweed Center
Fish Center
Rubber Center
Rubber Center
XI
Fish Center
XII
Food Center
CARAGA
Wood Center
Annex B
Part II
AUTONOMOUS REGION OF MUSLIM MINDANAO (ARMM) LIST
A.
1.
B.
EXPORT ACTIVITIES
Processed Food
-
Annex B
2.
Cutflower Production
3.
4.
5.
6.
7.
8.
9.
10.
11.
Feeds Production
aquaculture)
12.
13.
(animal
feeds
and
feeds
for
Cacao beans
Coffee beans (Arabica variety)
14.
15.
Annex B
16.
17.
18.
19.
Sericulture
20.
C.
1.
Pharmaceuticals
-
2.
BASIC INDUSTRIES
Antibiotics
Penicillin
Streptomycin
Tetracyclines
Soft gelatin capsules
Medical Devices
-
Prosthetics
Diagnostics
3. Other pharmaceuticals
4. Textile and Textile Products
-
Annex B
5.
6.
and
development
of
Mineral
D.
CONSUMER MANUFACTURES
2. Leather Products
E.
Annex B
2.
3. Tourism
- Tourism estates
Subject to guidelines developed jointly by the Board of
Investments ARMM and Department of Tourism (DOT)
- Tourist accommodation facilities
Hotels
Resorts
Other tourist accommodation facilities such as
apartels, pension houses, tourist inns, and others.
Tourist transport facilities
Air
Water
Tourist buses and taxi/van
Note: *Endorsed by the DOT
**New and expansion projects may be
registered
Annex B
Biotechnological/biosynthetic chemicals
Essential oils
Fine chemicals
F.
ENGINEERING INDUSTRIES
1. Engineering Products
- Motor vehicle part and components
- Automobile parts and assembly
- Modern offset printing
2. Electronics and Telecommunications Products
G.
Annex B
NUCLEUS
GATEWAY
SATELLITE
DESTINATION
Area I Sulu
Area II Tawi-Tawi
Area III Lanao del
Sur
Area IV Maguindanao
Jolo
Bongao
Marawi City
Sulu Province
Tawi-Tawi Province
Lanao del Sur Province
Part III
GENERAL POLICIES
I.
PROVINCE
Abra
Mountain
Province
Kalinga
REGION
VII
PROVINCE
Siquijor
Negros Oriental
VIII
Eastern Samar
Annex B
II
III
IV
VI
Ifugao
Apayao
Nueva Vizcaya
Quirino
Batanes
Bataan**
Pampanga**
Tarlac**
Zambales**
Aurora
Romblon
Oriental Mindoro
Occidental
Mindoro
Marinduque
Masbate
Camarines Norte
Catanduanes
Antique
Aklan
Guimaras
IX
X
XI
XII
XIII
ARMM
Northern Samar
Western Samar
Biliran
Basilan
Zamboanga del Norte
Misamis Occidental
Davao Oriental
Davao del Norte
Saranggani
Sultan Kudarat
North Cotabato
Agusan del Sur
Surigao del Sur
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
Annex B
Annex B
In line with the MTPDP, the BOI promotes the development of small
and medium-sized enterprises on account of their contribution to
employment generation, countryside development, and the cultivation of the
Filipino entrepreneurial spirit. The sectors given priority under the SMEs are
the activities that will support exports and the priority programs of the
government as well as those with strong or with potential industrial linkage.
In addition to the incentives under E.O. 226, assistance to small and
medium sized projects may be made available through BOI. These
comprise:
1.Assistance in the preparation of project feasibility studies (PFS)
for BOI registration;
2.Business consultancy;
3.Availability of an exchange and assistance facility that identifies
SME support companies of a registered enterprise, thereby
encouraging intra-sector linkages;
4.Technical assistance through the BOIs regular programs which
include the JETRO Supporting Industries Promotion Program;
5.Assistance in sourcing financing support; and,
6.Entrepreneurial assistance to overseas contract workers who
mostly tend to engage in SMEs.
For the year 2000, BOI will continue to target a minimum of eighty
percent (80%) SME registered companies relative to total registrations as
previously specified in the past IPPs.
III. Encouraging Upstream Linkages or Registered Activities
To best assist the registered enterprises, and at the same time
stimulate investments in corresponding SME support industries, the BOI
provides an information exchange and assistance facility that will identify
SME support companies of a registered enterprise and, thus, encourage
intra-sector linkages.
Projects locating in the Autonomous Region in Muslim Mindanao
(ARMM) should register with the respective BOI Office.
IV. Policies on Project Type
Projects may be considered NEW, EXPANSION or EXISTING based on
the following conditions:
A. New Projects
Annex B
Annex B
Multi-Phased Projects
Projects where capacity build-up shall be implemented in several
stages over a period of time, shall be registered on a per phase basis. The
first phase will be registered as a new project and the succeeding phases
may be registered, if qualified, as expansions.
This policy shall, however, not apply to infrastructure projects where
commitment for total development is required.
Annex B
Annex B
Part IV
SPECIFIC GUIDELINES TO THE NATIONAL AND REGIONAL LISTS
I.
EXPORT ACTIVITIES*
1. Manufacture /production of non traditional products
This refers to manufacturing/production of non traditional export
products with capability to export at least 50% of its output, if Filipino
owned or at least 70%, if foreign owned.
2. Export trading
This refers to selling of non traditional export products abroad.
For an export trader to be eligible for a pioneer status, an enterprise
must commit to export at least US$ 10 million annually and at least fifty
per cent (50%) of its exports should be sourced from small and
medium enterprises (SMEs).
It must be able to assist the SMEs by providing any of the following:
financing, raw materials, components, equipment, or technology.
Export traders may be entitled to the ITH incentive only on their income
derived from the following:
a.) Export of new products, i.e., those which have not been
exported in excess of US$100,000 in any of the two (2) years
preceding the filing of the application for registration, or
b.) Export to new markets, i.e., to a country where there has been
no recorded import of a specific export product in any of the two
(2) years preceding the filing of the application for registration.
3. Services
This refers to the services rendered to clients abroad such as
knowledge, information, technology and systems and/or application or
installation thereof in the project sites.
To be eligible for pioneer status, an enterprise must comply with any of
the following:
a.) It must engage in an activity that is new in the country; or
Annex B
Annex B
II.
of
existing
Annex B
Annex B
Annex B
c.)Support & knowledge based services refer to other types of ITrelated professional services, including but not limited to, provision
of application or systems as in application service provider or ASP,
consulting services, software maintenance services, information
systems planning, computer and systems audits and other similar
services.
d.) Business Process Outsourcing (BPO) services form a significant
part of the major business process or operating function in a
business enterprise where the services are performed by another
enterprise which is located remotely from it and the services are
rendered regularly and continuously, mainly at the service
providers site and are delivered electronically to the client and/or to
other recipients of the services on the clients behalf.
Individuals,
Information
expansion
registration
thereof.
Annex B
Since the activity is listed in the IPP, for Filipino entities (at least 60%
Filipino owned), export commitment is not required.
For foreign entities (more than 40% foreign owned), at least 70% of
total services rendered must be exported. If pioneering, 100% of
services may be rendered to the domestic market. Provided,
however, that the firm complies with the requirement under the
Foreign Investments Act that the paid up capital is at least US
$200,000 which will be lowered to US $100,000 if (1) the project
involves advanced technology as determined by the Department of
Science and Technology or (2) hires at least fifty (50) direct
employees.
To be eligible for pioneer status, a project must comply with any of
the following:
1.
2.
3.
4.
3.
**
Annex B
Annex B
Social Services*
This covers the following:
a.) Educational training institutions specializing in developing skills for
the manufacturing, agriculture, fishery, mining, tourism,
infrastructure and service (including the training of maintenance
personnel, seafarers complying with international standards and
the development of environmental/sustainable disciplines i.e.,
pollution control officers/managers, environmental management
auditors) sectors.
-
Annex B
c.) Social welfare services which include day care centers, senior
citizens centers, centers for disabled and handicapped,
trauma/crisis centers, rehabilitation centers for youth offenders in
selected areas, out-of-school youths centers, and other social
welfare services as determined by the BOI in consultation with the
Department of Social Welfare and Development and other
government agencies concerned.
-
Annex B
6.
Tourism*
Applications for registration of all tourism activities must include an
endorsement from the Department of Tourism.
a.) Tourist Accommodation Facilities
New and expanding tourist accommodation facilities may be
granted pioneer status if they meet the following:
Type of Activity
Hotels
Resorts
Annex B
7.
Environmental Projects*
a.) Development or conversion of industrial ecosystems (IES)
-
Annex B
Annex B
Annex B
Infrastructure*
Construction, rehabilitation, improvement, betterment, expansion,
modernization, operation, and maintenance of the following types of
project.
Annex B
a.) The minimum area shall be twenty five (25) hectares of contiguous
land and shall provide area and facilities for at least five (5)
locators. In meritorious cases, the Board may consider registration
of an industrial estate with an area less than twenty five (25)
hectares provided the estate caters to SMEs of specific sectors of
industries and that fifty per cent (50%) of the saleable area shall be
provided with standard factory buildings.
Locator refers to an enterprise situating itself in the industrial
estate who either leases or buys the module.
b.) The establishment of industrial estates must conform to the land
use regulation in specific areas where it will be located as
determined/required by the local government unit (LGU), Housing
and Land Use Regulatory Board (HLURB) and Department of
Agrarian Reform (DAR). Therefore, applications for registration
shall include endorsements from the LGU concerned, HLURB and
DAR.
c.) As a minimum requirement, the proposed industrial estate must
proved core facilities such as paved roads, power system, water
Annex B
devices,
and
Annex B
e.) At least twenty five per cent (25%) of the gross area of the
industrial community should be allocated for socialized/low-cost
housing.
f.) A project may qualify for expansion if it will have an increase of
more than twenty five per cent (25%) in hectarage and will involve
the construction of additional residential units and core facilities but
may exclude the ancillary facilities. Mere addition of facilities to an
existing project without the construction of additional residential
components, even if involving an increase in area, can not be
considered as an expansion IC project.
g.) Expansion projects of ICs may be allowed to utilize the existing
ancillary facilities provided the incremental hectarage does not
exceed one hundred per cent (100%) of the hectarage of the
existing project.
h.) In Cavite and Laguna, only projects locating in the following areas
and municipalities shall be eligible for registration:
Cavite Mendez-Nuez, Magallanes, Amadeo, Indang, and
Noveleta
Laguna
- Siniloan, Victoria, Alaminos, Liliw, Pagsanjan, Sta. Maria,
Majayjay, and Pangil
Service Cities refer to well-planned, managed, developed,
environmentally sustainable and globally competitive metropolis provided
with a full range of products, services and amenities which include, among
others, educational facilities, medical facilities such as tertiary (specialty)
hospitals, a grand central station to serve as multi-modal transportation
hub which will include an integrated mix of local and regional public transit
system and a comprehensively designed pedestrian circulation system, a
well-lighted and integrated parking system and structure, integrated
design and adaptable utility system composed of underground power
lines, water supply system with water treatment system and dual piping
system, provision for centralized gas facility and provision for district
cooling, and latest telecommunications system that should integrate
existing system with traffic, parking, cable, theaters, concert halls and
galleries and convention centers employing/adapting new or the latest
concepts within the structures.
a.) Components within the service city shall conform to the zoning
regulations of the LGU and land use regulation of the HLURB and
DAR. Therefore, applications for registration shall include
endorsements from the LGU concerned, HLURB and DAR.
b.) Service cities must have an area of not less than five hundred (500)
hectares and should be located outside Metro Manila, Laguna and
Cavite. Those projects below five hundred (500) hectares, except
Annex B
For multi media operation, it must cover areas in line with the
countrys program for regional development.
Annex B
Annex B
b.) The treatment facility shall cover the minimum basic process
flow of a treatment plant such as screening, mixing, flocculation,
sedimentation, filtration and chlorination. Its capacity must be
sufficient to handle the volume of raw water for its target
subscriber area.
c.) Distribution activity must involve the installation of a piping
network that includes water main service pipelines and flow
metering systems.
d.) Upgrading of existing water supply/distribution/treatment
facilities, may be registered as a NEW project provided that the
cost of upgrading already approximates the cost of constructing
a new facility, i.e., ninety per cent (90%) and above, as certified
by the National Water Regulatory Board.
e.) Projects costing more than P1.0 billion shall be granted pioneer
status. Projects that will cover at least two (2) of the major areas
of water operation will also be entitled to a pioneer status.
f.) Projects involving any of the foregoing areas of water operations
dedicated solely to either IEs, ICs, SCs, or subdivision
development areas are not qualified for registration under this
listing.
Major water catchment basins/waterways and related infrastructure, manmade or natural including sewerage systems
a.) Reclamation projects undertaken under this listing qualify for
registration.
b.) Upgrading of existing waterways and sewerage system facility
may be registered as a NEW project, provided, that the cost of
upgrading already approximates the cost of constructing a new
facility, i.e., ninety per cent (90%) and above, as certified by the
Philippine Estate Authority (PEA) and the Department of Public
Works and Highways (DPWH) or any of its appropriate
agencies.
c.) If the cost of upgrading the facility is less than ninety per cent
(90%) of the cost of constructing a new facility, the new project
may be registered as a modernization activity.
d.) Upgrading may be characterized by or may result in any but not
limited to the following as certified by the appropriate agencies:
- Development of water supply /resource including irrigation
and power
- Development of transportation, commerce and tourism
e.) Projects costing more than P1.0 billion may be granted a
pioneer status.
Tollroads/highways
a.) Upgrading of existing tollroads/highways may be registered as a
NEW project provided that the cost of upgrading already
Annex B
b.)
c.)
d.)
e.)
Annex B
b.) All projects undertaking the listed activities are eligible for pioneer
status.
c.) Mini-hydroelectric plants with a capacity equivalent or less than
10,000 kilowatts should register with the Department of Energy
(DOE) under R.A. 7165 (Mini-hydroelectric Power Incentives Act).
Power Transmission:
Pioneer status may be granted if the project cost exceeds P1.0 billion.
Power Distribution:
a.) Power distribution may be registered subject to the forty per cent
(40%) maximum foreign ownership.
b.) Pioneer status may be granted if the project cost is more than P1.0
billion.
9.
Common Carriers*
Annex B
Annex B
10.
For vessels, age limit must not be more than ten (10) years old.
For high speed passenger crafts, age limit is five (5) years.
All applications for registration must be endorsed by the
Maritime Industry Authority (MARINA). Vessels for tourism
purposes must also be endorsed by the Department of Tourism
(DOT).
Engineered Products*
This listing shall include preparation of designs of engineered
products and/or their parts and components, as well as metal
finishing processes, such as plating and galvanizing.
Special purpose industrial machinery may include but will not be
limited to environmental equipment.
11.
Projects of Cooperatives*
This covers activities undertaken by producer and service cooperatives
excluding business activities whose source of income are derived from
deposits, lending, trading, buying or selling or otherwise deal, trade or
invest in stock markets, debentures, bonds or other marketable
instruments generally recognized as securities, or other similar
activities.
Producer cooperative is one which undertakes joint production whether
agricultural, fishery or industrial.
Service cooperative refers only to those engaged in electric light,
power distribution, housing development and other services in
consonance with those listed under the current IPP.
Pioneer shall mean a registered enterprise:
(a) Engaged in the manufacture, processing or production and not
merely in the assembly or packaging of goods, products,
commodities or raw materials that have not been or are not being
produced in the Philippines on a commercial sale; or
(b) Which uses a design, formula, scheme, method, process or system
of production or transformation of any element, substance or raw
materials into another raw material or finished goods which is new
and untried in the Philippines; or
(c) Engaged in the pursuit of agricultural, forestry and mining activities
and/or services including the industrial aspects of food processing
whether appropriate, pre-determined by the Board, in consultation
Annex B
13.
Shipbuilding/shiprepair/shipbreaking*
This covers the construction, repair or breaking of cargo/passenger
vessels designed to support the needs of the shipping and iron and
steel sectors.
a.) Shipbuilding and shiprepair projects may be given pioneer status if
the minimum berthing capacity is 10,000 deadweight tons.
b.) A shipbreaking facility must have the capability to dismantle vessels
of at least 100,000 deadweight tons to be granted pioneer status.
c.) Steel re-rolling and/or steel scrap supply agreement with local
millers must be submitted to support the applications for
shipbreaking.
14.
Annex B
III.
MANDATORY INCLUSION
1.
Annex B
3.
Annex B
a.) Small scale commercial fishing fishing with passive or active gear
utilizing fishing vessels of 3.1 gross tons (GT) up to twenty (20) GT;
b.) Medium scale commercial fishing fishing utilizing active gears and
vessels of 20.1 GT up to one hundred fifty (150) GT; and
c.) Large scale commercial fishing fishing utilizing active gears and
vessels of more than one hundred fifty (150) GT.
New, expansion or rehabilitation/modernization of existing fishing
fleet, may qualify for registration.
The proponent must be at least sixty percent (60%) Filipino.
4.
5.
Annex B
Annex B
Annex B
Annex B
Food Center
Coverage:
a. Processing of agricultural produce into intermediate or final products that are
either for food or non-food use. Specifically these agri-processing activities
are: flour milling, oil-seed crushing or oil seed milling and/or refinery, starch
production, feed milling, meat processing, sugar milling/refinery, and others.
The raw material of these activities could be locally sourced, or imported if not
locally available in desired quantity and quality, provided that importation of
said agricultural products shall be in accordance with usual procedure, rules
and regulations.
b. Production of the major raw materials for the activities in item a, provided that
at least seventy percent (70%) of production shall be supplied to the firms
within the cluster / center.
c. Manufacturing activities that are using the products and/or by-product of the
above activities as the major raw material or as one of the major raw
materials, in the manufacture of the final products, provided that at least
seventy percent (70%) of raw material requirement shall be sourced from the
firms within the cluster / center.
d. Manufacturing of packaging products that are important to the above
activities, such as but not limited to tin cans, carton boxes, paper as labeling.
Provided at least seventy percent (70%) of the production will be supplied to
the firms within the cluster / center and to other centers identified in the 2000
IPP.
e. Other ancillary activities that support the above activities specifically service
activities such as bulk-handling, transport, & storage/warehousing, cold
storage, abattoir and dressing plants, pollution control, research and
development, manpower training, etc., provided that at least seventy percent
(70%) of production or service capacity shall be supplied or rendered to the
firms within the cluster / center.
Geographic Coverage: Region III
Region IV
Automotive Parts and Components
Subject to the Implementing Rules and Regulations developed by the BOI
in consultation with the concerned DTI -Regional Office and RDC.
Electronics
Annex B
Annex B
Region VI
Marine Products Center
Coverage:
a.
Processing of marine produce into intermediate or final product that are
either for food or non-food use. Processing activities are not limited to
canning, feed milling, and fishmeal production.
b.
Commercial production of marine products, provided at least 70% of
production will be supplied as raw materials for the activities in item a.
c.
Post-harvest activities such as but not limited to cold storage and ice
plant, provided at least 70% of service capacity will be intended for the firms
under items a & b.
d.
Manufacturing of packaging products that are important to the above
activities, such as but not limited to tin cans, carton boxes, paper as labeling.
Provided at least 70% of the production will be supplied to the firms within
the Center and the other centers identified in the IPP 2000.
Geographic Coverage: Region VI
Sugar Center
Coverage:
a. Production of sugar cane or other sugar producing crops, including the
production of planting materials.
b. Sugar milling and/or refining
c. Manufacturing activities that use sugar as the major raw material/input, such
as the manufacturing of sugar confectionery, flavored sugar, and
manufacturing activities using the by-products & wastes of sugar
milling/refining as the major raw material, provided that at least seventy
percent (70%) or raw material (i.e., sugar and sugar by-products / waste)
requirement shall be sourced from the firms within the cluster / center.
d. Service activities specifically the following: farm machinery and equipment,
irrigation and drainage, specialized transport equipment, pests and diseases
control, research and development., provided that at least seventy percent
(70%) of production or service capacity shall be supplied or rendered to the
firms within the cluster center.
Geographic Coverage: Region VI and in the province of Negros Oriental
Region VII
Costume Jewelry Center/Fashion Accessories Center
Coverage:
a. Main Activity Manufacture of costume jewelry/fashion accessories
b. Industrial Supplies (dyes, pigments, paints, enamel)
Annex B
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
Cards of paper
Plastic Beads
Glass Beads, imitation pearls
Identifiable parts
Plastic cards
Beads of base metal
Garter strings
Leather strings
Nylon strings
Vulcanized rubber strings
Hairpins
Annex B
Abaca Center
Coverage:
a. Production of planting materials.
b. Commercial production of abaca and raw fiber processing such as but not
limited to pulp and paper specialty paper, twine, rope, handicraft, etc.
Geographic Coverage: Region VIII
Aquamarine Center
a.
b.
c.
d.
e.
Coverage:
Processing of aquamarine produce into intermediate or final product
that are either for food or non-food use. Processing activities are not
limited to canning, feed milling, and fishmeal production.
Commercial production of aquamarine products, provided at least
70% of production will be supplied as raw materials for the activities in
Item a.
Aquamarine hatchery operation such as but not limited to lapu-lapu,
tilapia, ell, hito, bangus, prawn/shrimp culture.
Postharvest activities such as but not limited to cold storage and
ice plant, provided at least 70% of service capacity will be intended for
the firms under items a & b.
Manufacturing of packaging products that are important to the above
activities, such as but not limited to tin cans, carton boxes, paper as labeling.
Provided at least 70% of the production will be supplied to the firms within the
Center and to other centers identified in the IPP 2000
Annex B
Coverage:
a. Processing of fishery produce into intermediate or final products that are
either for food or non-food use. Processing activities are not limited to
canning, feed milling and fishmeal production.
b. Commercial fishing/production, provided at least 70% of production will be
supplied as raw materials for the activities in Item a.
c. Post-harvest facilities such as but not limited to cold storage and/or ice
plant, provided at least 70% of service capacity will be intended for the firms
under items a & b.
d. Manufacturing of packaging products that are important to the above
activities, such as but not limited to tin cans, carton boxes, paper as
labeling. Provided at least 70% of the production will be supplied to the
firms within the Center and to other centers identified in the IPP 2000.
Geographic Coverage: Region IX
Rubber Center
Coverage:
a. Rubber plantation or production of natural rubber latex or cup lumps,
including the propagation of planting materials, provided that at least seventy
Annex B
percent (70%) of production shall be supplied to the firms within the cluster /
center.
b. Rubber processing or the processing of natural rubber latex or cup lumps
into crumb rubber, and other intermediate natural rubber products.
c. Rubber products manufacturing activities that will utilize the above
intermediate natural rubber products as the major raw material, provided that
at least seventy percent (70%) of raw material requirement shall be sourced
from the firms within the cluster / center.
d. Other ancillary activities that support the above activities including pollution
control, research & development, manpower training, etc, provided that at
least seventy percent (70%) of production or service capacity shall be
supplied or rendered to the firms within the cluster / center.
Geographic Coverage: Region IX
Region X
Rubber Center
Coverage:
a. Rubber plantation or production of natural rubber latex or cup lumps,
including the propagation of planting materials, provided that at least seventy
percent (70%) of production shall be supplied to the firms within the cluster /
center.
b. Rubber processing or the processing of natural rubber latex or cup lumps
into crumb rubber, and other intermediate natural rubber products.
c. Rubber products manufacturing activities that will utilize the above
intermediate natural rubber products as the major raw material, provided that
at least seventy percent (70%) of raw material requirement shall be sourced
from the firms within the cluster / center.
d. Other ancillary activities that support the above activities including pollution
control, research & development, manpower training, etc, provided that at
least seventy percent (70%) of production or service capacity shall be
supplied or rendered to the firms within the cluster / center.
Geographic Coverage: Region X and the province of North Cotabato
Region XI
Fish Center
Coverage:
a. Processing of fishery produce into intermediate or final products
that are either for food or non-food use. Processing activities are
not limited to canning, feed milling and fishmeal production.
b. Commercial fishing/production, provided at least 70% of production
will be supplied as raw materials for the activities in Item a.
Annex B
Food Center
Coverage:
a. Processing of agricultural and fisheries produce into value added products
for food or animal feed purposes.
b. Production of agricultural crops, livestock and poultry, fisheries / aquatic
species as raw material for above processing activities, provided that at least
seventy percent (70%) of production will be supplied to the firms within the
cluster / center.
c. Manufacturing of packaging products that are important to the above
activities, such as but not limited to tin cans, carton boxes, paper as labeling.
Provided that at least seventy percent (70%) of the production will be
supplied to the firms within the center and to other centers identified in the
2000 IPP.
d. Other ancillary activities that support the above activities specifically service
activities such as cold storage, bulk storage/warehousing, bulk-handling
and transport, abattoir and dressing plants, pollution control, research and
development, manpower training, etc, provided that at least seventy percent
(70%) of production or service capacity shall be supplied or rendered to the
firms within the cluster / center.
Geographic Coverage: Region XII
CARAGA
Wood Center
Coverage:
a. Main activity manufacture of finished wood products such as wooden
frames, packing cases, builders joinery & carpentry of wood, tableware &
kitchenware, wooden furniture, wooden seats & other articles of wood
b. Direct support & service activities:
- manufacture of primary or intermediate wood products such as lumber,
veneer, plywood, composite board, wood strips parquet, mouldings, etc.,
Annex B
which serve as major raw materials in the manufacture of the above finished
products.
- rendering of ancillary or support services like kiln drying, subcontracting,
painting and finishing
Geographic Coverage: CARAGA
Annex B
Part V
INCENTIVES TO REGISTERED FIRMS
Incentive privileges may be enjoyed only upon registration. In general, registered
enterprises are entitled to the following incentives:
A. Tax Exemptions
1)
2)
3)
4)
5)
Annex B
3)
In no case shall the registered pioneer firm avail of this incentive for a
period exceeding eight (8) years.
2. Exemption from taxes and duties on imported spare parts
A registered enterprise with a bonded manufacturing warehouse shall be
exempt from customs duties and national internal revenue taxes on its
importation of required supplies/spare parts for consigned equipment or
those imported with incentives.
3. Exemption from wharfage dues and export tax, duty, impost and fees
All enterprises registered under the 2000 IPP will be given a ten (10) year period from date of registration to avail of the exemption from
wharfage dues and any export tax, impost and fees on its non-traditional
export products.
4. Tax exemption on breeding stocks and genetic materials
Agricultural producers will be exempted from the payment of all taxes and
duties on their importation of breeding stocks and genetic materials within
ten (10) years from the date of registration or commercial operation.
B. Tax Credits
1. Tax credit on tax and duty portion of domestic breeding stocks and genetic
materials
A tax credit equivalent to one hundred percent (100%) of the value of
national internal revenue taxes and customs duties on local breeding
stocks within ten (10) years from date of registration or commercial
operation for agricultural producers.
2. Tax credit on raw materials and supplies
A tax credit equivalent to the national internal revenue taxes and duties
paid on raw materials, supplies and semi-manufacture of export products
and forming part thereof shall be granted to a registered enterprise.
C. Additional Deductions from Taxable Income
1.
Annex B
D. Non-fiscal Incentives
1.
2.
3.
4.
Annex B
PART VI
CLARIFICATORY NOTES TO MODERNIZATION PROGRAMS
I.
GENERAL GUIDELINES
1. In general, modernization projects will be eligible to pioneer or nonpioneer status as specifically provided in the 2000 IPP coverage listing.
To be eligible for pioneer status, the modernization project must comply
with Article 17 of E.O. 226 unless other conditions are provided in the
specific guidelines covering the activity.
2. In general, modernization programs must be completed within two (2)
years from date of registration except for those engaged in agricultural
projects, mining/ mineral processing and power projects with a capacity of
at least 100 MW the modernization of which may be completed within
three (3) years from date of registration.
3. To be eligible for registration, the location and specific activity of
modernization project must be listed in the 2000 IPP.
4. The modernization project can be undertaken in the firms existing plant
site and shall be exempted from the locational restriction policy. The
relocation of the plant site may be allowed provided that the modernized
project is outside NCR and that existing facilities are rendered totally
inoperable or if still operable, it will function only as an adjunct to the
modernized site without capability to independently produce a complete
finished product.
5. In general, modernization projects shall result to a yield rate of at least
95%.
6. The modernization program should identify the phases/stages of
production sought to be modernized.
7. All projects registered under the modernization program shall be eligible to
income tax holiday and all other incentives under E.O. 226 applicable to
the modernization program.
Specifically, only the increment income resulting from modernization
shall be entitled to ITH for three (3) years from the start of
commercial operation regardless of location. Modernization projects
that do not result to an increase in current installed capacity shall
not qualify for availment of this incentive. For purposes of
computation of this incentive, a base figure shall be established to
be equivalent to the current installed capacity of the firm at the time
of filing of application for registration of modernization project.
Incentive covering the exemption from wharfage dues, export tax, duty,
impost and fees shall also be applied only on the incremental capacity
resulting from the modernization.
Annex B
II.
C. Social Services
Modernization of social service facilities is allowed.
Social Welfare Services
Annex B
Tourism
1. Modernization shall mean the modification/ upgrading/ restoration to
the original condition of the facilities/ structures/ amenities/ of tourist
accommodation facilities (hotels, resorts, inns, etc.) to conform/ meet
the classification requirements of the DOT.
2. Modernization of tourist accommodation facilities is allowed. However,
projects within Metro Manila are not entitled to any incentive.
3. Modernization projects, to qualify for pioneer status, must entail a cost
of at least P300,000 per room.
E.
F. Infrastructure
Port
a)
1. Upgrading of existing ports with project cost less than ninety percent
(90%) of the cost of constructing a new port is considered
modernization.
2. Pioneer status may be granted if the project cost exceeds P 1 billion.
b)
c)
d)
ollroads/Highways
Annex B
e)
2.
Power Transmission
Pioneer status may be granted if the project cost exceeds P 1
billion.
3.
Power Distribution
Pioneer status may be granted if the project cost exceeds P 1
billion.
G. Common Carriers
a. Land Transport
1.
2.
3. Pipeline Operations
a) Upgrading of existing pipeline operations with project cost less
than ninety percent (90%) of the cost of constructing a new
facility is considered modernization.
b) Pioneer status may be granted if the project cost exceeds P 1
billion.
Annex B
b. Inter-Island Shipping
1. Modernization shall mean an undertaking of any of the following:
vessel replacements, repowering or replacement of engines, vessel
conversion, acquisition of brand new communication and navigation
equipment, acquisition of support and cargo handling facilities and
modification of vessels to meet classification requirements.
2. Replacement of vessels may be allowed to vessels covering same
franchise.
3. Replaced vessels should not be used by the firm for public
conveyance in any form.
4. Before start of operation, seaworthiness of modernized vessel must
be issued by MARINA.
H. Engineered Products and/or their Parts and Components
1. For radio and television, registration may be allowed provided fifty
percent (50%) of the incremental volume shall be exported.
2. Upgrading of a companys existing major equipment shall be on a oneto-one basis and the equipment to be acquired, in general, will be
brand-new and will meet the environmental standards required for
environmental safety.
3. Machine shops engaged in engine reconditioning and/or rebuilding
services, as well as general purpose welding and press shops shall not
qualify under this program.
I. Motor Vehicle Parts and Components and Motor Vehicle Specifically
Passenger Cars, Commercial Vehicles & Motorcycles
1. Modernization refers to the upgrading of production facilities and/or
ancillary/support facilities through the adoption of modern
technology/equipment. The objectives of the modernization program
are any or a combination of the following: to enhance productivity,
achieve operational flexibility to meet market requirements and/or
changes in technology trends, improve product quality and compliance
with standards and to meet environmental standards.
2. Pioneer status may be granted to a project covering the modernization
of motor vehicle parts and components if it involves the upgrading of
the primary production facilities and will comply with the provisions of
Article 17 of E.O. 226.
3. The modernization of a motor vehicle assembly plant should be
integrated with the modernization of its parts suppliers. Pioneer/nonpioneer status shall be determined by the Board based on investments,
employment, technology and the program to upgrade local small and
medium parts suppliers.
J. Agriculture and Fishery and High Value Crops
Subject to the general guidelines, when applicable.
Annex B
2.
Intermediate steel products such as plates, hot-rolled or coldrolled flat products (for GI sheets, deep drawing applications,
automotive and appliance) or their equivalents (tin mill black plates
for tinplates); or bars/rods which are plain surface long products in
round or non-round shapes and in straight lengths or coiled, the
types of which are not currently produced in the Philippines, for use
in drawing, extrusion or forging.
Annex B
M. BOT Projects
Modernization of projects under BOT Law (R.A. 6957, as amended by
R.A. 7718).
Upgrading of existing tollroads/highways with project cost less than
ninety percent (90%) of the cost of constructing a new facility is
considered modernization.
N. Chemical Products
1. After two (2) years from start of completion of modernization
project, the firm shall export fifty percent (50%), directly or
indirectly, of increase in production output due to modernization.
2. If one hundred percent (100%) of the incremental production would
be exported indirectly, this should be geared for export oriented
firms that in turn will directly export at least seventy percent (70%)
of their output.
Annex B
Appendix G
College of St. Benilde
Hotel and Science in Hotel, Restaurant, and
Institution Management Curriculum
CSB Vision-Mission
The College of Saint Benilde, a member of the De la Salle University System, is
a dynamic, Filipino, Catholic tertiary educational institution for innovation and teaching
excellence in eth Lasallian traditon of religio, mores, et cultura.
Vision-Mission
The School of Hotel, Restaurant, and Institution Management (SHRIM) is
committed to providing the hotel and restaurant industry with professionals who possess
the requisite knowledge, skills, attitude, and Benildean values to become successful
entrepreneurs, hoteliers, and restaurateurs. It aspires to take the lead in offering relevant
and innovative courses that meet the demand for industry-ready professionals for hotels
and restaurants in the Philippines and abroad.
Annex B
Industry Linkages
The relevance of course offerings is ensured through active linkages with the
hospitality and tourism industry. The program provides intensive practicum in local,
regional, national, and international establishments to foster career challenges.
The School of Hotel, Restaurants, and Institution Management has linkages with
the Hotel and Restaurant Association of the Philippines (HRAP) and the Educational
Foundation of the National Restaurant Association (NRA) of the United States.
Faculty
Faculty members are professors and instructors trained in the Philippines and
abroad, as well as industry-based experts and practitioners. Linkages with industry,
government agencies, research, and cultural organizations provide the students exposure
to other practitioners in the field.
Career Opportunities
Students are prepared for their careers through 36 general units of general
education, and 83 units of core/ professional/ major courses. The latter focuses on the
aspects of the operations of a lodging/ food service establishments as part of the
hospitality and tourism industry.
The practicum, offered during the last term provides graduating students with 600
hours of on-the-job training: 150 in the International Center, 150 hours in food-service
establishments and 300 hours in a lodging establishment.
Summary of Courses*
Course Code
COSK1-E
AESTHET
GEPSYCH
BIBSTUD
FIRST YEAR
First Trimester
Course Description
Communication Skills 1
Aesthetics
General Psychology
Bible Study
Units
3 (3)
3
3
3
Annex B
PEONEPF
SEPERDE
ROTC-01
TOTAL
Course Code
ALGEB-E
HISTORY
PHI-GOV
PTOUR-1
DYNAREL
PETWODA
ROTC-03
TOTAL
Course Code
COSK2-E
BMAT2-E
PTOUR-2
FILIP11
RECONSE
PETRIID
ROTC-03
TOTAL
Physical Fitness
Seminar on Personality
Development
Military Training 1
Second Trimester
Course Description
Elementary Algebra
Philippine History
Philippine Government
and Constitution
Principles of Tourism 1
Church and Sacraments
Dances
Military Training 2
Third Trimester
Course Description
Communication Skills 2
Business Mathematics
Principles of Tourism 2
Sining ng Komunikasyon
Religion and the
Contemporary Search for
Self
Individual and Dual Sports
Military Training 3
2
3
(3)
(1.5)
14 (7.5)
Units
3 (1.5)
3
3
3
3
3
2
(1.5)
17 (3)
Units
3 (3)
3 (1.5)
3
3
3
2
3
17 (6)
Annex B
Course Code
COMORAL
WORPROC
PAECEDU
CHEMLEC/LAB
FILIP12
CATHWOR
SECOND YEAR
First Trimester
Course Description
Oral Communication
Wordprocessing
Peace Education
General and Food Chemistry
Filipino sa Tanging Gamit
Catholicism in the Modern
World: Problems and
Challenges
Units
3
3
3
3 (2)
3
3
ROTC-04
Military Training 4
(1.5)
TOTAL
Course Code
PHILIEN
BACNTH1
PRIMLEC/LAB
FILIP13
NUTRLEC/LAB
PEFORTS
TOTAL
Course Code
WORLITE
RDIMLEC/ LAB
FOODSYS
MARKMGT
MANAPUR
HAZONFO
TOTAL
Course Code
18 (3.5)
Second Trimester
Course Description
Philippine Literature
Basic Accounting for the
Hospitality Industry
Principles of Food
Production and Menu
Planning
Retorika
Nutrition and Wellness
Team Sports
Third Trimester
Course Description
World Literature
Rooms Division
Management
Foodservice System
Marketing Management for
the Hospitality Industry
Purchasing Management for
the Hospitality Industry
Hazard Analysis in Food
THIRD YEAR
First Trimester
Course Description
Units
3
3
4 (4)
3
3 (2)
2
18 (6)
Units
3
3 (2)
3
3
3
3
18 (2)
Units
Annex B
PHILOMA
INSOCIO
CASLEC/LAB 1
OPERCON
BARMLEC/LAB
Philosophy of Man
Introduction to Sociology
Catering System 1
Controlling and Analyzing
Costs in Food Service
Operations
Bar Management
TOTAL
Course Code
FORLAN1
FINAMAN
HURMGMT
DEBELEC/LAB
CASLEC/LAB
LEGASHI
3
3
5 (6)
3
3 (2)
17 (8)
Second Trimester
Course Description
Foreign Language
Financial Management for
the Hospitality Industry
Human Resource
Management for the
Hospitality Management
Facilities Design and
Building Engineering
System
Catering System 2
Legal Aspect of the
Hospitality Industry
TOTAL
Units
3 (1.5)
3
3
3 (2)
5 (6)
2
19 (8)
Third Trimester
Course Code
FORPLAN2
NATSC13
CASEIS1
INFOSYS
ENFRAMA
INTECON
JOSERIZ
Course Description
Foreign Language 2
Ecology
Issues and Cases
Information Systems for the
Hospitality Industry
Entrepreneurship,
Franchising and Small
Business Management
Introduction to Economics
with Agrarian Reform
Life and Works of Jose
Rizal
TOTAL
Course Code
PRACTUM
TOTAL
Units
3
3
1
3
3
3
3
19 (8)
FOURTH YEAR
First Trimester
Course Description
Practicum-800 hours
Units
12
12
Annex B
The DLSU-CSB
Angelo King
International Center
The School of HRIM will be housed at the De La Salle University-College of Saint
Benilde-Angelo King International Center built on a 2,100 square meter lot on Estrada
corner Arellano Street, Malate, Manila- a few blocks away from CSB Campus.
The Center will offer the following amenities 49 guestroom, a conference hall,
fine dining restaurant, cafeteria, business center, travel agency and transport service
offices, gifts shop, three floors of parking, self-laundry/ironing facilities, a meeting room
for in-house guests, two passenger elevators, and 24-hour security.
The School in HRIM will occupy three floors of the Center and will provide the
following facilities to students: air-conditioned lecture rooms, a demonstration kitchen,
institutional hot, cold and baking/pastry kitchens with adequate cold/dry storage areas, a
demonstration, bar, two basic food laboratories, two computer laboratories a nutrition
laboratory, multi-media room, conference room, reading room, study room, two planning
rooms, clinic, prayer room, two passenger elevators, a service elevator, and ample
locker, shower, and comfort rooms.
The 12-storey building which will be competed by June 1999, will also house the
DLSU System Office, the Center for English Language Learning, and the Career
Development Program of the School of Business and Management.
Annex B
Annex B
Appendix H
The Asian Institute of Tourism
History
The Institute performs the three basic functions of teaching, research and
extension, fulfilling the following objectives:
Facilities
The Institute boasts of the biggest collection of tourism books and journals
in the country as well as a computer laboratory. When fully rehabilitated, the AIT
House will have first-class facilities, which will provide services to the University
community as well as other clients. It will also be used as a training hotel for
students.
BS Tourism Program
Annex B
60 units are general education subjects taken in service units of the University,
such as the College of Arts and Letters, College of Social Science and
Philosophy and the College of Science. The remaining 87 units which are taken
at the AIT consist of 19 required tourism subjects, five tourism electives, a
language elective and a practicum of 360 hours.
The subjects cover general management, accounting and finance,
marketing and promotions, tourism laws and regulations and management of the
different tourism sectors which include tour and travel operations, air, land and
sea transportation and hotel and resort operations.
A special feature of the program is the internship program. The students
are required to undergo 360 hours (equivalent to five course credits) of practicum
in the summer prior to their senior year. By getting practical exposure to a sector
of the tourism industry of their choice, students can make informed decision on
their career options, which may be in the airline, hotel, resort, convention, travel
agency management, tour operations, and allied fields.
Training and Extension
tourism awareness
development planning
marketing and regional destination promotions
tour operations and travel agency management
hotel operations
resort operations
Annex B
Research
domestic tourism
economic impacts of tourism
socio-cultural impacts
evaluation research
policy researches
Publications
Annex B
Appendix I
OJT Profile
With OJT
Metro Manila
Contact Person in Establishment
HRD/Personnel Manager
Owner
General Manager/Director
Supervisor/Department Head
Frequency*/
Percentage
100%
100%
28%
23%
13%
36%
100%
39%
13%
4%
13%
4%
27%
100%
28%
11%
23%
38%
Minimum
Maximum
Average
1 year
24 years
4 years
100%
Fourth Year
1st to 4th year
3rd to 4th year
2nd to 4th year
47%
4%
15%
34%
Minimum
Maximum
Average
2 hours
1,400 hours
504 hours
Annex B
**
24.5%
96.2%
52.8%
None of the 53 schools screen the students who undergo OJT. Requirement imposed is a
passing grade on pre-requisite projects.
Annex B
Appendix K
International Tourism Receipts by Region (US$ billion)
1985
1990
1995
1997
1998
1999
Growth
rate (%)
1998/1997
World
118.1
263.6
405.8
439.7
441.0
454.6
3.1
Africa
2.5
5.3
8.1
9.4
9.8
4.8
Northern Africa
2.9
2.7
2.9
3.3
14.9
6.4
Western Africa
0.6
0.7
0.8
0.9
12.4
10.5
Middle Africa
0.1
0.1
0.1
0.1
3.5
-1.1
Eastern Africa
1.1
1.1
2.3
23.3
-1.8
5.9
Southern Africa
1.2
2.6
3.3
3.3
-1.3
7.2
69.2
100.5
116.9
118.0
0.9
Northern America
54.8
77.5
89.7
88.5
-1.3
4.6
Caribbean
8.7
12.2
14.0
15.0
7.1
7.1
Central America
0.7
1.5
1.8
2.1
18.6
12.6
Southern America
4.9
9.3
11.4
12.3
8.3
9.7
39.2
74.6
75.7
67.8
-10.4
North-eastern Asia
17.6
33.6
37.1
South-eastern Asia
14.5
27.9
24.3
Oceania
7.1
13.0
Americas
33.3
Average Annual
growth (%)
198519951997
98
10.7
2.8
11.0
10.2
6.8
5.5
Asia
East Asia and Pacific
13.2
13.4
-3.1
-4.8
1.7
20.4
-16.0
-9.9
14.3
12.1
-15.5
-2.6
South Asia
1.4
2.0
3.5
4.0
4.3
.5.3
9.1
6.8
Europe
63.5
143.5
211.7
224.5
232.5
3.6
10.5
3.2
Northern Europe
24.7
32.6
34.2
35.7
4.4
3.1
Western Europe
63.5
81.0
75.3
77.9
3.5
-1.3
4.8
22.7
31.9
3.1
-2.5
11.1
Southern Europe
44.6
65.8
70.6
75.7
7.3
4.8
East Mediterranean
5.9
9.7
12.6
10.1
-3.4
7.7
4.4
7.5
9.2
8.6
-6.7
Europe
Europe
Middle East
4.2
5.7
4.5
Annex B
Appendix L
Short-term Impact
Price and cost competition among
airline groups, direct sales (trials),
price differentiation
Medium-term Impact
Electornic linkages and service
packages for (business) customers,
professional distribution partners will
regain or expand power because
they can offer the best rates and
comparative shopping
Internationally
operating chains
SME tourism
suppliersassociations
DMOs (Destination
Management
Organization
Tour operators
GDS/CRS
Travel agents
New
intermediaries
Annex B
Annex B
Appendix M
Management-oriented technology
Computer networking system
Global information technology
Decision-making system
Business intelligence system
Property management system
Global distribution system
Information database system
Database processing system
Franchise service delivery system
Material handling system
Yield management system
Revenue management system
Direct marketing application
Database marketing
Financial application
Cash flow analysis system
Multimedia training system
Source: IH&RA, 2nd White Paper on the Hotel Industry, op.cit., p.5.
Annex B
Appendix N
Changing Role
More active role in specifying and
configuring services
More emphasis on consulting and
complex business
Internet travel
sites (cybermediaries)
Regional and/or
national tourist
organizations
Tour operator
CRS/GDS
Suppliers
Annex B
Appendix O
Costs
Benefits
Direct bookings, often intermediaries and commission free
Global distribution of multimedia information and promotional material
Low cost of providing and distributing timely updates of information
Global presence on the Internet, 24 hours a day, 365 days a year
Durability of promotion (in comparison to limited life of printed advertising in
press)
Reduction of promotional cost and reduction of brochure waste
Great degree of attention by visitors to website
Reduction of time required for transactions and ability to offer last minute
promotions
Low marginal cost of providing information to additional users
Support of marketing intelligence and product design functions
Development of targeted mailing lists through people who actively request
information
Great interactivity with prospective customers
Niche marketing to prospective consumers who request to receive information
Interactivity with local partners and provision of added value products at
destinations
Ability to generate a community feel for current users and prospective
customers
Annex B
Source: D. Buhalis and W. Schertler (eds.): Information and communication technologies in tourism 1999,
Proceedings of the International Conference in Innsbruck, Austria 1999, 1999, Springer Computer Science,
Springer-Verlag Vienna, 1999, p. 224.
Annex B
Appendix P
Layer
Interorganizational
relations and the role of
intermediaries
Obstacles
The implementation of EDI is facilitated by a cooperative relationship
among the business partners. As a matter of fact competitive relationships
are dominant and the industry is fragmented
Technical and
organizational integration
Interchange agreements
and response patterns
(pragmatics)
EDIFACT messages
(Syntax)
Telecommunication and
security