Pacific Money | Economy | Southeast Asia

Philippine Tourism: Risk, Resilience, and Returns for Private Capital

For investors, there is real potential – but also real risk.

The Philippines tourism industry has been the subject of significant scrutiny in recent months. Both the Straits Times and Channel News Asia published feature stories in December 2025 highlighting a challenging outlook, noting that the industry has struggled to return to pre-pandemic levels as international travelers increasingly favor regional competitors such as Vietnam and Malaysia. Sustaining growth in tourism is critical: The sector now contributes close to one-fifth of the Philippine economy and supports millions of jobs.

For investors, however, the Philippines presents a confusing and often contradictory picture. Media reporting has suggested that foreign tourist arrivals declined in 2025, but much of this analysis preceded the release of full-year data. December figures ultimately showed a modest 0.76 percent year-on-year increase in international arrivals, underscoring how headline narratives can obscure a more nuanced reality.

Returns on public-sector investment in the tourism sector vary widely depending on how performance is measured. A June 2025 analysis by Eric Jurado in The Intelligent Investor argued that the Philippines delivers the lowest tourism return on investment in Southeast Asia. Using a framework called Return on Tourism Investment (RoTI), Jurado estimated that every $1 of public tourism spending generates just $0.57 in international tourism revenue – well below Vietnam and Thailand. Jurado’s arguments were widely circulated in Philippine media outlets. By contrast, Tourism Secretary Christina Garcia Frasco stated in January 2026 that tourism investments yield returns of........

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