Wake Up, Philippines!

Tourism comes to save the day

Posted in Tourism, Travel by Erineus on March 19, 2009

By Vincent Cabreza
Philippine Daily Inquirer
First Posted 05:21:00 03/13/2009

BAGUIO CITY, Philippines — In good times and in bad, tourism can be relied on to save the day for this city’s economy.

According to a study on the city’s business sector by the University of the Philippines (UP) in Baguio, tourism was the most stable industry in this northern city over the past 20 years, and it could generate jobs despite a global economic slowdown.

Gladys Cruz, an Economics professor at UP Baguio, said business here between 1987 and 2008 was dominated by the service and retail enterprises.

Texas Instruments Philippines Inc. and other export-oriented manufacturers at the Baguio City Economic Zone (BCEZ) have boosted both national and city revenues, but manufacturing represents less than 1 percent of the enterprises of Baguio, Cruz said at a session of the recent Baguio Centennial Conference.

The session explored the business behavior study by Cruz, Professor Lorelei Mendoza and UP student Maria Alelie German.

Cruz also said that schools have likewise become major job-creating enterprises owing to a 4.0-percent growth in teaching staff as a consequence of the 3.5 percent annual increase in the enrollment in Baguio universities.

Baguio has become the primary university hub in Northern Luzon, Cruz said.

“There is a greater role to be played by the services sector with more schools, hotels and restaurants being established to meet the growing demands of tourists and students … there is also an increasing number of households operating boarding houses and transient places,” the study said.

“The services sector displays a good potential for job generation … Manufacturing plays a negligible role in the Baguio economy, mostly small-scale, except for [the BCEZ, which has] a high export value but which is currently facing unfavorable global conditions [that has led to] retrenchments and production slowdowns,” the study added.

But tourism has been hiring the most number of workers annually.

“Yearly, an average of 2,189 workers is employed in this sector. [About] 10.4 percent of them hold managerial positions, 89.5 percent are rank-and-file staffers, 0.10 percent account for foreign workers,” the study said.

The UP study was spun off from Cruz’s 1986 profile of Baguio businesses.

Cruz said businesses that operated in 1986 were mostly family-oriented, small-scale operations that had “very limited employment generating capacities.”

These operations required only two hired employees and often survived because of unpaid family workers, Cruz said.

These enterprises also had no formal capital sourcing.

Sales and commercial establishments represented 60.5 percent of businesses that year, trailed by community and social service firms which represented 19.3 percent.

The trend changed in 1989, Cruz said.

Corporations grew and hired an average workforce of 48 skilled employees.

But single proprietorships still dominated the business community — and almost all of their investments were in retailing.

The dominance of retail firms, however, would wane.

Citing a business inventory conducted by the National Statistics Office between 1978 and 2002, Cruz, said the number of Baguio retailers went down to 60 percent in 2002 from about 75 percent in the 1970s.

The city also documented an increase in business entities from to 11,794 in 2006 from 7,945 in 1986.

But the city still earns more from its tourists because more than 80 percent of the visitors touring the Cordillera region end up staying in Baguio, said German.

http://business.inquirer.net/money/features/view/20090313-193870/Tourism-comes-to-save-the-day

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