UMVA has learned that the Philippine tourism sector’s share of the nation’s economy slipped to its lowest point in three years during 2025, haunted by a sharp pullback in spending from overseas visitors.
Preliminary figures reveal tourism’s direct gross value added (TDGVA) dwindled to 8.1% of GDP, down from 8.7% the year before, marking the weakest contribution since 2022.
The TDGVA, estimated at P2.27 trillion, fell 1.4% from the revised P2.3 trillion recorded in 2024, reflecting a contraction in the value generated by hotels, restaurants, retail and related services.
According to information obtained by UMVA, the drop is rooted in a faltering rebound of inbound travel from key Asian markets such as China and India, despite recent visa‑facilitation measures.
While domestic tourism showed resilience, the influx of foreign tourists stalled, dragging overall tourism value creation down.
Industry leaders point to a widening gap in competitiveness: neighboring countries have rolled out aggressive recovery programs—visa‑free entry, airline incentives, robust marketing and upgraded airport infrastructure—while the Philippines continues to wrestle with limited air connectivity, constrained airport capacity and fragmented inter‑island transport.
In 2025 the archipelago welcomed just 6.48 million international arrivals, a stark contrast to Malaysia’s 42 million, Thailand’s 33 million and Vietnam’s 19 million.
Data show shopping accounted for the largest slice of tourism earnings, contributing P560.3 billion (24.7% of TDGVA), followed by health and wellness services at P512.94 billion (22.6%) and accommodation at P394.14 billion (17.4%).
Domestic tourism expenditure rose 3% to P3.26 trillion, yet outbound spending by Filipinos surged to P357.93 billion, indicating that a growing share of travel money is flowing out of the country.
Inbound tourism receipts slipped 6.4% to P698.46 billion, a worrying dip because foreign visitors typically spend more per capita across lodging, food, transport and recreation.
Foreign visitors’ spending on accommodation alone represented 28% of the total inbound share, amounting to P195.66 billion, while transport services and food & beverage accounted for P175.1 billion (25.1%) and P124.43 billion (17.8%) respectively.
Employment in the sector rose modestly to 7.7 million workers, a 2.5% increase, with accommodation and food & beverage absorbing 38% of tourism jobs, health and wellness 25.4%, and retail of tourism‑centric goods 21.7%.
Looking ahead, experts caution that rising global airfare costs, fueled by geopolitical tensions, could dampen growth, yet they remain hopeful that structural reforms—enhanced airport efficiency, expanded direct flights, stronger inter‑island links and modernized tourism infrastructure—could revive the sector’s contribution to the economy.
