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Save Philippine Tourism: Ax the Common Carrier Tax!

Photo taken from www.polyp.org.uk
The Philippines is in a tourism identity crisis: miles upon miles of unspoilt, out-of-the-way beaches, along with cheap goods and services, and lots of happy, hospitable people. Yet, our infrastructure, especially our airports, are below par that even though the Ninoy Aquino International Airport (NAIA) is located close to Manila’s financial and shopping districts. Tourists would love to spend their dollars on Philippine-made creations and products, yet the same tourists are forced to pay P750 before departure from NAIA for an “Airport Improvement Fee”. I mean, hello, the last time I was in NAIA around five years ago, nothing much has improved except for jacking up the terminal: maybe now, it has gone even worse (see Raissa Robles’ article below). The aging infrastructure of NAIA, combined with lack of proper accessibility options between NAIA and Clark Airport, makes a connecting trip combobulating, if not outright unacceptable. Tourists and frequent fliers pay, for each time they depart from the country, an Airport Improvement Fee that certainly goes to, you guessed it:

– Either the pockets of an immigration officer collecting money from the comfort of his shell in the middle of the departures area, or 
– To funding structural improvements that have so far seen little improvement in quality, if at all.

The Common Carrier Tax, imposed since the late 1990s, has provided little, if no benefit, to foreign carriers operating in the Philippines. It is, in my opinion, another avenue to collect kickbacks from foreign airlines to continuously fund corrupt schemes at our nation’s airports. Along with the “Airport Improvement Fee” collection (P750 for each passenger), the two have caused havoc and disruption on an otherwise booming tourism industry for the Philippines, making the country’s tax system inefficient and airlines crying in desperation. Look at other countries where there are no collection lines after immigration at the departures area: it shows the efficiency of their tax system and provides greater comforts for passengers traveling out from airports like Changi in Singapore, San Francisco in the United States, and Zurich in Switzerland. Why can’t the Philippines follow suit and resort to collecting fees for every departing passenger before hitting the gate, especially when one is about to run late for a flight?

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Moving on, the real losers in this Common Carrier Tax (also read here) fiasco are the Philippines and the Filipino people. Why? First of all, although a 3.5% tax is imposed on all foreign air and sea carriers operating to an from the country seems to be a meager value, the overall costs of bringing in goods, services, and passengers jacks up the entire operations bill of an airline, say Air France-KLM, who has recently made a statement that it will end its lone direct European service to Manila from Amsterdam because of the outrageously high tax burden handed over to the airline and instead focus its resources to nearby Hong Kong. And by the way, this Common Carrier Tax problem does not apply to local carriers (i.e. Cebu Pacific and Philippines). A Lonely Planet forum member even calls the Philippines as a “pariah” state because of the tax burden that has shooed other airlines away from the country, from Air France to Alitalia to even Vietnam Airlines. 

Numerous agencies, articles, media outlets have already discussed this matter for years now, including:

– ABS-CBN News (1, 2, Editorial)
– Articles from:
     – Business World (12)
     – Malaya     
     – Manila Bulletin
     – Manila Standard Today
     – The Philippine Daily Inquirer (12)
     – The Philippine Star
– Blog analysis and entries from:
     – Airlineberg
     – Portcalls
     – Raissa Robles
– The European Chamber of Commerce
– GMA News

The main question, therefore, that I want to ask is why has our government been keeping their eyes closed, hands tight, ears deaf, and bodies steady when all these criticisms from other parts of the world have been thrown to the Philippines? Doesn’t the country deserve anything better than “NAIA hailed as one of the most hated airports in the world”, let alone “KLM ‘Absolutely Not Happy’ in Philippines”? Even though a plan to ax the controversial tax has been passed by the house was approved in February (article), the Bureau of Internal Revenue, for whatever reason, decided to keep the tax implementation going (article), costing billions of needed pesos to aid the tourism industry the Aquino government and we, the Filipino people, want to expand and thrive. We already have the Puerto Princesa Underground River as one of the New Seven Wonders of the World, and we are among the happiest and mo
st hospitable people on the planet, so why not celebrate those by cutting down the bureaucracy found in our country’s airports and modernizing them to be up to international standards?

A P1.1-billion improvement project is now underway to finally update and improve the overall structure of NAIA Terminal 1. It is, for a fact, that Terminal 1 is what most tourists get to see first–and last–about the Philippines. Reading Ms. Robles’ article above, you would have noticed image upon image of the very dismal state of NAIA T1, from a hole-in-the-wall play area to “seats of boredom” where nothing fun and useful departing tourists can do, to even “please use another restroom because the CR ahead is closed”. Is that basically who we are as a Filipino people: friendly on the outside, corrupt on the inside?


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Filipinos love to travel around for a bargain. But this does not mean that we sacrifice our airports’ facilities from providing adequate accommodation and lodging areas, top-notch facilities, kid-friendly spaces, and world-class duty free shopping that will wow tourists and investors to the Philippines. And this does not definitely mean that the Philippine government–and its assortment of agencies–will remain muted to the call of Filipinos and foreigners everywhere to improve our facilities and provide a more competitive environment for local and overseas airlines alike. The Philippines has forged pocket open skies deals with several countries in the past two years, allowing other carriers to fly into the country. Yet, when they operate out of any airport, especially in Manila, they will be greeted with ridiculously high taxes and fees, compounded with below-par toilets, shops and facilities; corrupt customs and immigration officers; and airport madness at both departure and arrival areas with endless security checks and collection lines.

I believe that repealing the Common Carriers Tax would be an ideal first step to improving the Philippine tourism environment. However, it is a double-edged sword: along with removing the tax, the Philippine government should continue to invest in improving its aging (and sometimes flawed) airport structures to make it in line with the best airports in the world. Along with those, I would like to offer other important recommendations:

– Instead of collecting the “Airport Improvement Fee” before heading to the departure gates, integrate them with the price of the airline ticket so that travelers will not worry about handing out cash to customs collectors, reducing corruption and bureaucracy at the airport.

– Renovating NAIA T1 to move unneeded ‘attractions’ (i.e. shops, banks, non-accessible facilities) away from the terminal’s main “circulation” areas (departures and arrivals) and instead locate them either:
    > outside the main terminal
    > on the upper floor of the terminal
    > through reusing existing spaces near terminal gates

I would also reconsider plans made by the following architects to modernize NAIA Terminal 1 and upgrade its facilities:
    
    > Royal Pineda, Budji Layug, and Kenneth Cobonpue (1, 2)
    > Jun Palafox
 
instead of just re-hiring Leandro V. Locsin and Associates to redesign the outdated and overcrowded terminal, not only because it will improve the airport’s aesthetics, but it will also extend the shelf-life of Manila’s premier airport by several more years before considering to transfer to the Diosdado Macapagal International Airport at the former Clark Air Force Base in Angeles City, Pampanga, some 80km northwest of Manila. (video) While Cobonpue expressed that it will take about a year to complete the terminal’s renovations at a cost of P1 billion, Locsin’s team can work along with Cobonpue’s team fixing the overall structure running through the facility, from wiring to water pipes, elevator improvements to expanding walkways, allowing the project to finish quicker in time for the summer tourist season next year.

TODAY is the best time to show to the world that through our bayanihan spirit, along with showcasing our stunning seascapes, magnificent towns,  and unique landscapes, and improving our airport conditions to make them world class, we can improve the face of the Philippines as a whole. Step-by-step, from reducing corruption at our airports to improving our airport facilities to providing better transportation access from our airports to famous attractions, we can show proudly what our country has to offer. We will never again tolerate corruption in our airports by collecting senseless taxes and fees that only benefit a few government officials while sacrificing airport comfort and safety. Reform the Philippine tourism industry now!

Editorial cartoons taken from FeWings and Cartoon Stock.


0 thoughts on “Save Philippine Tourism: Ax the Common Carrier Tax!

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