The proposed removal of the P1,620 travel tax is raising alarms in the Philippine tourism sector as the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) says critical infrastructure projects could face serious funding gaps.
TIEZA Chief Operating Officer Mark Lapid explained in a television interview that travel tax revenues are split among three agencies. Half goes to TIEZA, 40 percent to the Commission on Higher Education (CHED), and 10 percent to the National Commission for Culture and the Arts (NCCA).
Lapid said total travel tax collections reached P8.7 billion in 2025 with P4.35 billion allocated to TIEZA, P3 billion to CHED, and about P1 billion to NCCA.
Most of TIEZA’s share is used for operations and infrastructure projects. Ongoing efforts include rehabilitation of sewerage and water treatment systems in Baguio, infrastructure support in Coron and El Nido, lighting improvements at the San Juanico Bridge, development of picnic groves in Tagaytay, airport terminal upgrades, and restoration of heritage churches and ecotourism sites.
About P1.5 billion of TIEZA’s allocation goes to operations supporting more than 300 employees with over a thousand across attached units. Lapid warned that shifting travel tax funds to the General Appropriations Act could disrupt these programs and potentially affect jobs.
Lawmakers have suggested replacing the travel tax with direct national budget funding. TIEZA says such a move could limit its flexibility as a government-owned and controlled corporation, preventing rapid responses to requests from local governments.
Travel tax revenue also supports sports tourism and international events including basketball and volleyball championships and infrastructure improvements such as tennis courts at the Rizal Memorial Sports Complex. Lapid cited the success of Filipino tennis player Alex Eala as a sign of growing sports tourism potential.
Lapid noted that the travel tax applies to outbound passengers and does not directly affect inbound tourist arrivals. However, infrastructure and connectivity remain major challenges. High airfares, hotel costs, limited runway capacity, and congested hubs like Manila constrain growth. Expanding international gateways and improving transportation links are crucial to attracting more visitors nationwide.
TIEZA’s warning emphasizes the tension between fiscal changes and sustaining tourism infrastructure projects that support jobs, development, and international competitiveness.
