DoubleDragon hotel unit says ‘hola’ to Madrid

An artist’s rendering of Hotel101 Madrid, located at Avenida Fuerzas Almadas, Valdebebas

PHILIPPINE hotelier Hotel101 will be planting its first footprint in Europe by setting up tourism accommodations in Spain.

In a news statement, property developer DoubleDragon Corp. said its subsidiary Hotel101 Global Pte Ltd. signed a Binding Agreement for the purchase of 6,593 square meters of prime commercial land in Madrid. Hotel101 Global is registered in Singapore and serves as DoubleDragon’s vehicle to expand its hotels worldwide. The statement failed to identify the seller of the property.

Hotel101 Madrid will have about 736 rooms, and is the third hotel development of DoubleDragon overseas, along with a 518-room hotel in Niseko, Hokkaido in Japan, and California in the United States. The company failed to reveal the timetable for the opening of Madrid and the US properties, but Hotel101-Niseko will be completed by the fourth quarter of 2025.

“These first three overseas sites will serve as bridge projects to jumpstart the transition of Hotel101 to become a global brand with a truly unique business concept that can be planted in over 100 countries,” said DoubleDragon chair and Hotel101 Global chair Edgar “Injap” J. Sia II.

The locally listed DoubleDragon closed at P7.85 per share on Thursday, up 10.56 percent from Wednesday’s close, on news of the Madrid property purchase.

Nasdaq listing 

DoubleDragon has been issuing corporate bonds overseas to fund the overseas expansion of its hotels, the latest of which was a US$160-million offering listed in Singapore. The self-made entrepreneur Sia, who founded popular restaurant Mang Inasal said, “Hotel101 Global is envisioned to eventually become one of the Top 5 hotel brands globally with a total room portfolio exceeding 500,000 uniform rooms operating in over 101 countries by 2040.”

The young tycoon is partnered with Jollibee founder and taipan Tony Tan Caktiong in DoubleDragon. Sia said the property developer is targetting to list Hotel101 Global Pte Ltd at the Nasdaq, given that eventually hotel film “is expected to derive over 95 percent of its revenues outside the Philippines.”

 

Aside from expanding in the Philippines and opening hotels in Japan, Spain, and the US, Hotel101 Global will also enter the following markets by 2026: the United Kingdom, United Arab Emirates, India, Thailand, Malaysia, Vietnam, Indonesia, Saudi Arabia, Singapore, Cambodia, Bangladesh, Mexico, South Korea, Australia, Canada, Switzerland, Turkey, Italy, Germany, France, and China.

The company’s first development in Europe and the very first homegrown Filipino hotel chain in Spain will be similarly designed with Hotel101 facilities such as an all-day dining restaurant to be operated by a concessionaire, a business center, swimming pool, a fitness gym, and a commercial space for a 24-hour convenience store. 

Target condotel revenues 

“It is set to become one of the top 5 largest hotels in Madrid,” asserted Sia, as the company targeted “condotel sales revenue of about €143.3 million  (₱8.8 billion)  from Hotel101-Madrid project, given the high real estate investment demand in the city driven by the Spanish Golden Visa,” a residence visa issued to non-Europeans making significant investments in Spain. Under Hotel101’s business model, investors own the hotel units, which the company operates as full-service accommodations for guest bookings.

Hotel101-Madrid will be located in Avenida Fuerzas Armadas, Valdebebas, and   surrounded by major landmark buildings. It is an easy three-minute walk to the Valdebebas Train Station, four-minute walk to the IFEMA convention complex, five-minute walk to the Real Madrid Sports Complex, and around seven-minute walk to the new Madrid Barajas International Airport.

 

Sia underscored  DoubleDragon’s vision for Hotel101 is “to become world-class in all standards and create job opportunities to Filipinos, who reside in the Philippines or abroad, and bring a pinch of pride and honor to each and every Filipino from anywhere around the world where Hotel101 will eventually locate and operate.”

 

BSP chief joins concerned groups on Maharlika Fund

CONCERNED Filipinos are adding their voices to economists and Philippine officials, who have expressed their opposition to the proposed legislation, which seeks to create a P250-billion sovereign wealth fund, now being rushed for approval in the House of Representatives. 

A petition on Change.org titled, “Hands off our SSS and GSIS contributions, NO TO House Bill 6398!” already picked up 20,000 signatures as of Dec 5, exceeding its initial target of 15,000. The petition is picking up steam as it tries to reach a new goal of 25,000 signatories.

This developed as Bangko Sentral ng Pilipinas (BSP) Gov. Felipe Medalla was cool to the idea of creating the Maharlika Wealth Fund (MWF), as proposed in House Bill 6398, warning of the dangers of another 1MDB scandal in the making. The fund’s creation has been supported by Finance Secretary Benjamin Diokno, a former central bank governor, who curiously, even backed the use of gross international reserves (GIR) and overseas Filipino worker remittances as seed money for said fund.

On Friday, 2nd district  Albay Rep. Joey Salceda, chair of the technical working group refining HB6398, released revised provisions in the proposed legislation meant to allay concerns of the public, economists, and fellow lawmakers. Primarily pushed by House Speaker Rep. Martin Romualdez and Deputy Majority Leader Sandro Marcos, HB 6398 proposes to use pension funds under the Social Security System (SSS) and Government Service Insurance System (GSIS), as well as funds of state-owned Land Bank of the Philippines and Development Bank of the Philippines, as seed capital for the MWF. 

Other co-authors of the controversial bill include Reps. Jose “Mannix” Dalipe, Stella Luz A. Quimbo, Yedda Marie K. Romualdez, and Jude A. Acidre.

No to GIR use

In an interview with Bloomberg TV, Medalla said, “To me, the experience of 1MDB of Malaysia is the biggest risk. Even if the current guys are okay, will the guys five years from now still be okay? It’s a governance issue.” Under a revised  provision of HB6398, the President of the Philippines, now Ferdinand Marcos Jr., “shall sit as chairperson” of the Maharlika Wealth Fund Corp., the fund’s administrator. Salceda said  in a interview with GMA’s 24 Oras, it was President Marcos who “ordered” the creation of the sovereign wealth fund.

The 1Malaysia Development Bernard (1MDB) scandal refers to the embezzlement of Malaysia’s sovereign wealth fund, of which some $700 million ended up in the personal accounts of then Prime Minister Najib Razak. 

Medalla also took exception to the use of the GIR for the fund, which “could affect the independence of the central bank. For instance, if they say they will take the central bank’s dollars, then what will we use if the reserves are reduced because they have been taken by the sovereign wealth fund? We’ll have less ammunition the next time there is international volatility that is related to the people and the dollar.” The GIR is the sum of all foreign exchange inflows into the country, and are held by the Bangko Sentral to cushion the economy in case of market shocks,  like a steep weakening of the local currency. 

Meanwhile, economists such as Calixto Chikiamco and former Finance Undersecretary Romeo Bernardo have expressed concern as well over HB6398, underscoring the timeliness of the fund’s creation and the inherent risks in investing it.

Gov’t has no excess funds

In an interview over Teleradyo, Chikiamco described it in Filipino as a “good idea, at the right time. But today is not the right time. Why? Because the right time is when the government is flush with a lot of money but right now, the government’s budget deficit is 6 percent of GDP (gross domestic product). When government has a lot of money, we can set aside excess funds for the sovereign wealth fund.”

Bernardo, an analyst of the New York-based Global Source Partners, said the proposed bill “will add to Philippine financial risks. The proposal is poorly-timed, with external balances under stress and government debt and borrowings elevated, and it raises the specter of Malaysia’s 1MDB scandal traced ultimately to poor governance.”

Meanwhile, the Change.org petition opposing the use of government pension funds as seed money for the MWF said, “The bill allows investments on ‘Financial derivatives’. THESE ARE HIGH-RISK INVESTMENTS! Have they forgotten 2008?” The global economic crisis that year was precipitated by financial derivatives invested in subprime mortgage assets. 

The petition, created by De La Salle University associate professor David Michael San Juan, who is also the third nominee of the ACT Partylist, added, “The bill has no mechanism to directly give profits to citizens (especially SSS and GSIS). Profits would instead be channeled to the government financial institutions. And the profits are not even guaranteed ha.”

Less aid for MSMEs  

It added the use of LandBank and DBP funds to capitalize MWF “would drastically limit the funds which the said government banks could lend to MSMEs (the backbone of our economy, in terms of jobs creation) and ordinary citizens.” MSMEs refer to micro, small, and medium enterprises which account for over 90 of the companies in the Philippines. 

The petition warned, “As the bill allows the fund to draw from the annual General Appropriations Act or supplemental appropriations, this can possibly reduce available funds for vital social services such as healthcare, education, housing etc.”

Among the revised provisions HB6398 released by Rep. Salceda on Friday, included the removal of the GIR as seed capital for the MWF, but the BSP will still be  required to contribute “50 percent of its annual dividends,” while the National Government’s annual contribution to the said fund is “subject to the recommendation of the Secretary of Finance.”

The equity contributed by state pension funds and GFIs will be “in the form of common or preferred shares, convertible securities, and other forms, as may be determined by the Board of Directors; provided, that preferred shares and convertible debt instruments issued by the MWFC to the government financial institutions shall be guaranteed by the National Government.”

Not covered by GCG law and OGCC review

The revised bill also provides, “The head of the GFI with the most capital contribution shall sit as vice chair and the chair of the executive committee in charge of the management of the MWFC;  11 regular members representing the Fund’s shareholders, in proportion of their corresponding shares or equity investments; and two independent directors from the private sector who may come from the Philippine Stock Exchange, Bankers Association of the Philippines, and the academe.”

Section 27 of HB6398 exempts MWFC from the GOCC Governance Act of 2011, which means its officers can hold longer terms than the one-year apointment for Chief Operating Officers of other state agencies. 

The bill also exempts “transactions and assets of the MWFC and MWF” from direct and indirect local and national taxes.

Likewise, the bill exempts the contracts entered into by the MWFC from review by the Office of the Government Corporate Counsel. 

PHL to lift borders for vaxxed foreign tourists from 'green' countries

Passengers arriving at Naia-3 (Image courtesy Roy Kabanlit /Creative Commons)

VACCINATED tourists from many of the Philippines’ top 12 markets will be the first to take in the sunsets on Manila Bay and frolic in the country’s beaches, as government takes the initial steps in lifting its borders to foreign nationals. These include China, Japan, and India, as borders are being eyed for reopening by December 2021.

Tourism Secretary Bernadette Romulo Puyat announced on Friday that the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF) has approved in principle the entry of fully vaccinated tourists from Green List countries/territories/jurisdictions.” Guidelines on their arrival are still being finalized by the Special Technical Working Group (TWG) on Travel. She told the BusinessMirror, “I hope these will be approved by next week.”

Aside from these countries, others on the Green List include: Hong Kong, Saudi Arabia, the United Arab Emirates, American Samoa, Bhutan, Chad, Comoros, Ivory Coast, Falkland Islands, Federated States of Micronesia, Guinea, Guinea Bissau, China, Japan, Indonesia, Kosovo, Kuwait, Kyrgyzstan, Malawi, Mali, Marshall, Islands, Montserrat, Morocco, Namibia, Niger, Northern Mariana Islands, Oman, Pakistan, Palau, Paraguay, Rwanda, Saint Barthélemy, Saint Pierre and Miquelon, Senegal, Sierra Leone, Sint Eustatius in the Lesser Antilles, South Africa, Sudan, Taiwan, Togo, Uganda, Zambia and Zimbabwe. 

In a news statement, the Department of Tourism (DOT) said, allowed to enter are individuals inoculated with “vaccines recognized by the country’s Food and Drug Administration under an Emergency Use Authorization (EUA) or those authorized by the World Health Organization.”

Romulo Puyat said, “Allowing tourists from green countries or territories that have the majority of its population vaccinated and with low infection rate, will greatly help in our recovery efforts--increasing tourist arrivals and receipts among others. This move will likewise aid in bolstering consumer confidence, which is a large contributor to our gross domestic product or GDP (gross domestic product) growth.” 

She noted other countries have already reopened their borders to international leisure travelers. “Our Asean neighbors like Thailand, Vietnam, and Cambodia also did the same. We believe that it is also time for us to reopen our borders for inbound tourism as a way towards full recovery.” 

For his part, Tourism Congress of the Philippines president Jose C. Clemente III said, "After almost two years, we are very pleased to know that foreign visitors from the Green List countries will soon be allowed to enter the Philippines without need for a quarantine period. We hope that this is the start of the revivial of the tourism industry moving forward.”

He added: "We also continue to remind our stakeholders to not let their guard down despite of the eased conditions. The pandemic is still around and we reiterate our call to continue observing health and safety protocols to ensure that we can remain open." 

The DOT is also currently working with the Small TWG on Travel on a separate proposal for vaccinated travel lanes or travel bubbles for vaccinated tourists coming from yellow list countries. There are still ongoing talks on travel bubbles with the governments of Japan, South Korea, and Vietnam, with possible partner destinations such as Metro Manila, Bohol, or Cebu, which host international airports.

Prior to the pandemic, the Philippines welcomed 8.26 million tourist arrivals in 2019, up 15 percent from the previous year. Of the total arrivals in 2019, tourists from China accounted for 21.1 percent, Japan (8.3 percent), and India (1.63 percent). 

Confused by announcements of June 1 flights? Here's what really went down

Image from My Boracay Guide

THE CIVIL Aeronautics Board (CAB) on Saturday stopped Philippine carriers from selling tickets for flights, which were supposed to commence on Monday, June 1, as the National Capital Region shifts to general community quarantine (GCQ) status. 

This developed as reports reached the Inter-Agency Task Force (IATF) about complaints from local government units (LGUs) saying they were not ready for commercial flights. Pioneering flag carrier Philippine Airlines had announced late Friday it would commence domestic and international flights on June 1.

An advisory signed on May 30, 2020 by CAB Executive Director Carmelo L. Arcilla, a copy of which was obtained by BusinessMirror, said, “Please be informed that the IATF has yet to approve the routes for domestic operations in the first week of June 2020. Consequently, airlines are hereby advised to cancel their flights on June 1, 2020 and to stop selling tickets for the said date.” 

The advisory was released at around 7 p.m., and sent to the CEOs and other executives of the Air Carriers Association of the Philippines, Air Juan Aviation Inc., Air Philippines Corp., Airswift Transport Inc., Cebu Pacific, Cebgo, Isla Aviation Inc., PAL, Philippines Air Asia, and SkyJet Airlines. 

Following the CAB advisory, PAL revised its plans, and announced on Saturday evening that its domestic flights would resume on June 8. Aviation sources intimated CAB had actually approved the flights for June 1, but failed to inform the IATF. CAB officials did not respond to text messages from this paper.

Meanwhile, Undersecretary for Tourism Regulation, Coordination, and Resource Generation Arturo P. Boncato Jr. said several provinces in the south requested for a postponement of commercial flights to prepare their airports and resorts for hosting of tourists. Among these are Siargao and Boracay. 

“The provincial government of Surigao del Norte would like to prepare for the reopening of Siargao especially dealing with incoming flights and reopening of resorts, etc. They are working on their protocols,” he said. The province has requested the IATF for a “suspension of regular airport operations up to August 31,” and discourages the entry of tourists, as per the LGU’s Executive Order 20-018 issued on May 30.

Boncato added, “The province of Aklan and LGU of Malay are also doing simulations and dry runs for reopening and have yOn et to announce a reopening date.” Malay hosts Boracay Island, dubbed one of the best beaches in the world. The island is building a Covid-19 laboratory, in anticipation of the tourist influx, said the DOT official. 

Other provinces which have also declined to reopen for tourism were Bohol and Baguio. These provinces have been placed under MECQ and as per IATF regulations, are allowed to resume tourism activities.

On Saturday, the CAB also reminded airlines that they are not allowed to accept passengers going for leisure activities in areas under GCQ.

In an advisory signed on May 29, 2020 by Arcilla, the agency said, “Under the Omnibus Guidelines on Community Quarantine, movement in areas under GCQ for leisure purposes shall not be allowed.”

It also prohibited the travel of “persons below 21 years old,” as well as senior citizens, along with which have “immunodeficiency, comorbidities, or other health risks, and pregnant [women].… For purposes of compliance, airlines shall vet or screen departing passengers to confirm that the travel is for non-leisure purposes.”

The advisory, released Saturday morning, also reminded carriers on health and safety protocols to be followed in airports and onboard their aircraft, to protect crew and passengers from the novel coronavirus.

On Friday, the DOT clarified on Friday that under GCQ, tourism and leisure-related activities were still prohibited. (See, “No hotel operations, leisure travel allowed under GCQ,” in the BusinessMirror, May 30, 2020.) 

*This was my original story submitted to the desk, before it got wrapped with another reporter's copy. 

On being Lucio Tan Jr.

LUCIO "BONG" TAN JR.

BACK in 2008, I had the distinct privilege of interviewing Lucio “Bong” Tan Jr. for a magazine for which I used to work. I must admit, I approached him with some trepidation; after all, his temper on the basketball hard court and on the golf green was almost legendary.

But it was a very subdued and polite Bong who sat down for the interview, surprising me with his amiability. He even displayed the same flashes of wit his father has been known for at certain times and among certain company. He poked fun at himself — jesting that he probably looked like his achi Vivienne, as a makeup artist went on to put some light lipstick on his face for a fashion shoot — and at his powerful taipan of a father (“I don’t wear white socks.”).

Bong was nurtured by his mother Carmen, his amah, and grew up with six sisters – Vivienne, Karlu, Rowena, Sheila and Jesslyn – Bong being the fifth among the siblings. (He was father to Lucio Tan III called Hun-Hun, now 27, and Kyle, 23, his sons with the former Julie Chen, a Taiwanese-American.)

The family home

Bong grew up in the family home along Biak-na-Bato St. in Quezon City. From the outside, the property looks unremarkable except that it occupies an entire block spanning from Maria Clara St. and Dapitan St., in Sta. Mesa Heights, and has a helipad. I joked that we were practically neighbors as I grew up in the same area as well.

But it was a good place in the 1960s and 1970s to bring up one’s children especially if one were just starting a family. This was where many Manila-based Chinese-Filipino families flocked to after the Ruby Tower collapsed in 1968.

Bong said his father “trained” him and his siblings “not to splurge.” He remembered receiving a meager allowance when he went to college at the University of California in Davis, so he had to work two jobs, like his American classmates — as a gym manager and a basketball coach — just so he had enough money to spend for his needs.

Until his move to California, he also led a very “spartan life” from 1984 and 1986, as he studied at the Beijing University in China to deepen his appreciation of the native language and culture. “There was no McDonald’s yet then,” Bong recalls, but he said it was the best time to be in China. “It was actually the last chance to learn the culture before it opened up. I went back, now it’s so different. I’m still lucky that I went also during that time, under the old China, to study history and the language.”

His sense of fashion

At this interview, Bong is just wearing a powder blue shirt jack over dark pants, the kind popularized by a certain, ahem, strongman in the '70s. “I started wearing it 10 years ago, and now a lot of corporates are wearing it.” 

Asked if he liked men’s wear from Prada or Hugo Boss, he says: “Believe it or not, I also go for sales, and sometimes I give it (my shirt) away, when people like it. If it’s Hugo Boss how can you give it away?” he laughs. (Ironically, for the fashion shoot, he is dressed up in a navy blue Hugo Boss suit, which fits him rather well, although he did display some self-consciousness as the photographer flashed away. Bong does wear business suits when the occasion calls for it, but for casual wear, he uses athletic shorts, a T-shirt and sneakers when going to the mall.)

Although not really fond of luxury brands, Bong told me, “I like fresh-looking clothes,” and readily admitted to reading male fashion magazines like GQ.  “I like wearing clothes that nobody has seen yet. But I’m not brand-conscious.”

But yes, Bong says it’s not been easy carrying the name of his  namesake father, who by a recent account in Forbes, is worth $3.3 billion. As the only male in his father’s first family, he had been bruited to be the one to take over from his father, someday. (Just last October 28, he was appointed president of PAL Holdings Inc., the listed firm that owns and operates the flag carrier Philippine Airlines, aside from being vice chair already of the PAL board. He also sat on the board of the LT Group Inc. and held positions in other Tan-owned companies like Asia Brewery Inc., Eton Properties Philippines Inc., Tanduay Distillers Inc.)

“I feel pressured of course, and also it’s challenging. It is a challenge to put in practice all that you learned right?” Bong remarked. He was supposed to work in a bank after graduating in 1991 from UC Davis with a civil engineering degree, “But my Dad told me to come back [to Manila] already.”

A taste of tobacco

His first job at Fortune Tobacco Corp., was as a tobacco leaf inspector, which he described as “hell! It was so hot in the warehouse, I had to inspect all the tobacco deliveries to check if they were the right grades. I had to change my shirts at least four times a day. And that was free ha! I had no salary, parang OJT (on-the-job training).” When the tobacco season was over, he was moved around different divisions to learn up close the operations of the cigarette company.

As a manager, Bong described himself as “approachable, everyone can call me up, text me on my cell, they know I will answer unless I have a game or in a meeting.” (Indeed he was quite accessible even to media. Bong was one of the very few PAL officials who would go on record for interviews, and respond to my text messages.)

He said anyone could go to him if there were problems in the company. “I’m a guy who has to listen to both sides [of an argument]. I will always ask, ‘Okay who’s the other party?’ but I will not tell him that I will call the other side. I will say I will think about it then I call the other side. If I can settle it,  okay, if not, I consult an expert on the issue. If it’s just a small matter, I just tell the one who complained to me, ‘ibigay mo na [let it go]’.”

The succession plan

But Bong stressed even then, the succession issue in the family is not actively talked about, even as some media reports point to him as the heir apparent. Unlike other Chinoy business families, like Henry Sy Sr., John Gokongwei, George Ty, Andrew Gotianun and those of other taipans, his father has not publicly anointed anyone as his successor.

I asked Bong then about his main “rival” as heir-apparent, his half-brother Michael, who is older than him by just three months, and also holds major positions in their father’s businesses. (Few people know that Bong and Mike were actually good friends, despite being pitted against each other since birth. I am told that the Mike  had visited Bong at the ICU, and has been at the latter’s wake every night. “He is deeply affected” by his brother’s passing, said a source.)

But Bong is obviously uncomfortable discussing the issue. He leaned into me as his voice drops a tad lower, as if not wanting to let anybody hear his answers. He knows he can’t evade my questions, yet respectfully answered them without giving too many clues.“We never talk about it,” Bong stressed, adding that no one is really sure who’s going to take over from his father, if and when, the latter retires. Now at 85, Kapitan continues to attend board meetings and manages his businesses through a few trusted lieutenants.

“We have a different plan,” Bong underscored during our chat then. “We have a different system in choosing an heir apparent, whoever is more deserving.” Pressed to explain what that meant, he merely said, “It will be someone whom people will be comfortable with.”

(Our heartfelt condolences to the Tan family, friends of Bong, and his staff.)

*Originally published in the Asian Dragon, edited for brevity, and updated to include current events.

Duty Free PHL seeks higher profits by trimming staff

THE DUTY-FREE Philippines Corp. is seeking to streamline its organization in an effort to trim costs, and increase its profits.

This was disclosed by DFPC Chief Operating Officer Vicente Pelagio A. Angala to select media on Thursday, while expounding on the aim of the government corporation to be a leaner organization.

At present, he said, DFPC has some 800 employees, which includes sales staff at its malls, airport kiosks, and branches nationwide. Asked how many employees may be trimmed by the reorganization, Angala declined to say, but added, “let’s put it this way, we can work with half the number,” or about 400 employees.

He intimated that the salaries of the employees impact on the bottomline of the company, and it may be possible for its malls and outlets to operate with just a sales manager or a cashier, but the concessionaires themselves will hire their own sales force and support staff.

He said the reorganization “will be done in phases” so as not to disrupt the operations of the corporation, an attached agency of the Department of Tourism (DOT).

The new Luxe Duty Free outlet of DFPC at the Mall of Asia complex is targetting the mainland Chinese market. (Image courtesy DOT)

For the year ending December 31, 2016, personal services reached some P470.4 million, accounting for 24 percent of total operating expenses that year. No audited financial statements have been made available for the years 2017 and 2018.

Earlier, Angala said the DFPC is targetting to hit some $220 million (P11.66 billion) in sales this year,  just 1.4 percent higher than the $217 million (P11.5 billion) generated in 2018. While no figures were available yet for 2018, the corporation netted a profit of P179 million in 2017, up 9 percent from the P164 million earned in 2016.

He is hoping the opening of the new Luxe Duty Free outlet at the Mall of Asia complex, which targets the mainland Chinese tourists in the country, along with new stores in provincial airports such as in Puerto Princesa and Panglao Island, will help boost the sales of the corporation.

Meanwhile, in its thrust to help increase the income of small and medium-sized enterprises as well as local farmers, DFPC recently added homegrown brands to its online shopping web site.

Three months after the online shopping web site was launched, customers can choose from over 150 products, from perfumes and cosmetics, liquor, toys, confectionaries and now export-quality Filipino brands.

“For three decades, Duty Free Philippines has been known to be the haven of luxury and imported goods. That is still true but we want to also emphasize the importance of enabling our local entrepreneur,” said Angala.

Some of the local products available at www.dutyfreephilippines.ph are Just Fruit manufactured in Metro Manila; Kick-start Coffee of Silang, Cavite; Malagos Chocalates of Davao; Risa Chocolates of Las Piñas City; Tanay Hills Coffee of Rizal; and VuQo Premium vodka of Caloocan City.

Angala added that all 54 local brands available at all Duty free stores will be available online before the end of the year.

To shop online, customers need to provide their flight details. Items will be prepared and customers could pick them up at the airport.

Each passenger is allowed to buy up to $1,000 worth of items, 48 hours upon arrival.

At the Luxe outlet, the Filipiniana section currently featuring items from the SM Mall’s Kultura section will be slowly replaced by the premium export-quality consumer products, liquor, and furniture crafted by Filipino artisans.

Overseas Filipino workers and balikbayans (returning Filipinos) can shop up to 15 days from date of arrival. The shopping privilege is further extended to 30 days during the Christmas season (for those arriving from November 15 to January 15 the following year).

Senior citizens and persons with disabilities have an extended privilege of shopping up to 365 days from the date of their arrival in the country.

Under the Tourism Act of 2009, 50 percent of the revenue of DFPC is remitted to the DOT for tourism-development projects

*Originally published in the BusinessMirror, April 4, 2019.

Gov't to remove people, not hotels in Boracay (UPDATED)

THE Department of Environment and Natural Resources (DENR) will be adopting a "low-density" plan for Boracay Island, as part of its efforts to rehabilitate the area and reduce the  latter's environment stress.

A high-ranking DENR official said, however, a low-density plan did not mean the number of hotels and resorts would be reduced, even as the agency finalizes the study on the island's carrying capacity.

In an interview with this writer, DENR Undersecretary for Attached Agencies Sherwin S. Rigor said the agency will be releasing the carrying capacity study “within this month, because we are finetuning [it]. We’re including the weight of the facility also, not just of human beings. The first question there was the carrying capacity of people. But we discovered also the degradation of the environmental areas there, including the use of land. So we included that as well.”

The inter-agency Task Force Boracay estimates that the carrying capacity of the island, hailed by travel publications as one of the best islands in the world for its long, powdery, white-sand beach, was breached in 2009, when visitor arrivals then reached some 650,000. Last year, visitor arrivals on the island reached 2 million, more than half of who were foreign tourists. 

(UPDATE Aug. 26: The Task Force already discussed the carrying capacity study commissioned by the DENR, and drawn up by scientists from UP Los Baños in their meeting last August 22, Wednesday. Members of the task force, however, have declined to release said study.)

The Environmental Literacy Council defines "carrying capacity" as an ecosystem's ability to support people and other living things without having any negative effects. "It also includes a limit of resources and pollution levels that can be maintained without experiencing high levels of change. If carrying capacity is exceeded, living organisms must adapt to new levels of consumption or find alternative resources. Carrying capacity can be affected by the size of the human population, consumption of resources, and the level of pollution and environmental degradation that results. Carrying capacity, however, need not be fixed and can be expanded through good management and the development of new resource-saving technologies."

Rigor said the DENR is “moving forward [toward making Boracay a] low density development” because right now, it is now “high density. It’s a matter of [the island’s] land use.” But he clarified that in moving towards a low-density development plan for Boracay, this would not mean a significant reduction of the number of hotels and resorts on the island. “Definitely there is decongestion. So you must decongest what part you want to decongest. Right now, [there are] the hotels, the tourists, the workers coming from the other islands who are not residents of Boracay. So we're willing to make a balance; the workers are the ones who will be transferred, just to make the [island focused] on tourism development.”

Task Force Boracay wants to use the masterplan designed by Architect Jun Palafox, which featureslow-rise accommodations, expansive green spaces, a rail system or environmentally-friendly transport vehicles, among others. But it was not clear if the Task Force would pay for the masterplan or the local government of Malay, which commissioned it.

Rigor also disabused the public’s perception that Boracay Island is overbuilt. “It's not overbuilt. It's overused and overpopulated. We will be making a full plan of it…. At present, we're planning to remove the workers living on Boracay. There are about 20,000-30,000 who occupy forestlands, wetlands, [and] lands owned by the government. So when we transfer them to the mainland, that will substantially decrease the population.” He said the 20,000 workers are in just one shift. In contrast, there were about 18,000 tourists who visited Boracay daily. 

He stressed that the DENR will likely not move to reduce the number of hotels and resorts on the island, “because there is still area you can build upon.” During the last hearing of the Senate Committee on Tourism, Senator Nancy S. Binay pointed out the need to determine the carrying capacity of the island before it is reopened, and found out that hotels and resorts were already selling their rooms in anticipation of said reopening. (See, “To open or not to open Boracay Island, that is the question for Binay,” in the BusinessMirror, July 17, 2018.)

But Rigor stressed that accommodation establishments on Boracay “cannot sell yet their rooms until they are compliant. Without the compliance, we will not open them. But we will open Boracay.”

The DOT has estimated that there are 430 hotels on Boracay, with rooms at some 15,000 as of March 2018. It also said it was targetting only 30 percent of the rooms to be available for tourist bookings by October 26, the announced date or Boracay's reopening. (See, "Only 30% of Boracay hotels seen opening by October 26," in the BusinessMirror, August 13, 2018.)

He expressed confidence that the rehabilitation of the island was still on track to reopen on October 26. “We still have 90 days. We're confident [we will reopen on schedule],” adding that the widening of the main road need not be 100-percent completed. “You just need to start where are the congestion of hotels,” he averred.

President Duterte ordered the closure of Boracay Island, once dubbed the “best beach in the world” by travel magazines, for six months beginning April 26. It was to make way for the government rehabilitation program, which entails the restoration of environmentally-stressed areas, completion of the sewerage system, removal of easement obstructions, widening of the main road, construction of a diversion road, and decongestion of the island of transport vehicles. 

In 2017, the island generated some P56 billion in tourism receipts.

Stakeholders to DOT: Let’s keep ‘It’s More Fun…’ tourism slogan

By Ma. Stella F. Arnaldo / Special to the BusinessMirror

THE Department of Tourism’s (DOT) plan to change the Philippines’s tourism brand and campaign slogan was met with a barrage of negative reactions from tourism industry stakeholders, with netizens even giving their own “fun” spins and possible new slogans.

Cesar Cruz, president of the Philippine Tour Operators Association (Philtoa), told the BusinessMirror that the “It’s More Fun in the Philippines” brand and campaign slogan launched in 2012 “should not be changed yet. It has not really reached its maximum potential.”

Being a tourism industry veteran, he said, “I think the country slogan shouldn’t be changed every administration; it takes time for the brand or the campaign slogan to achieve its maximum potential. It’s only now that ‘It’s More Fun in the Philippines’ has gained acceptability here and abroad. Maganda ang dating nya satourists.”

Cruz’s view was echoed by Aileen Clemente, executive vice president of the Tourism Congress of the Philippines, saying, “Large brands in the private sector do not change slogans in short periods of time because, more than an expense, it is an investment. I would rather see that we continue the momentum and enhance what needs to make it better.”

For his part, Arthur M. Lopez, president of the Philippine Hotel Owners Association, also opined that the DOT should keep the “Fun” brand and campaign for the Philippines. “On a commercial point of view, for advertising recall and for continuity, it pays to stay with the current slogan.”

He believes that “it takes time for a new slogan to take effect.”



The “It’s More Fun in the Philippines” marketing campaign was conceived by advertising agency BBDO Guerrero, and launched in January 2012 under then-Tourism  Secretary Ramon R. Jimenez Jr., who is an advertising veteran, as well.

Initial conception for the slogan itself amounted to P5.6 million, but the subsequent media placements and advertising campaign have run into billions of pesos since its launch in 2012. These include advertising placements on buses and taxicabs in London, ad placements in major newspapers in key markets and window ads in New York.

DOT insiders say the agency and its marketing arm, the Tourism Promotions Board, spent approximately $61 million (about P3 billion) spread over four-and-a-half years for developing the campaign and media placements.

Current Tourism Secretary  Wanda Corazon T. Teo announced in Cebu recently that the DOT is now soliciting new proposals from advertising agencies for a new brand and campaign slogan for the country.

She said it was “normal” for every administration to change tourism marketing slogans, and that the new one, to be launched in mid-2017, would reflect the change and reforms being instituted by the Duterte administration.

Taking inspiration from the DOT’s direction, netizens actively took to their keyboards to create memes of possible new slogans for the DOT from "Come to the Philippines and have a killing good time," to reflect the over 2000 extrajudicial killings that have happened since Duterte took office, to “(expletive), ang ganda ng Pilipinas!” to reflect the President's colorful language.

Meanwhile, Philtoa’s Cruz pointed out that even the “Wow! Philippines,” marketing campaign conceived under the administration of former Tourism Secretary Richard  J. Gordon in 2002, “became very effective not even during the time of Gordon, but because we continued the campaign. So the impact of the slogan was sustained when other Cabinet secretaries, like Durano, etc., came in.”

Cruz also stressed that in other countries, they have kept their slogans and country branding for a long time. “For Thailand, for example, they made some tweaks but their slogan continues to be ‘Amazing Thailand.’ For India, it’s still ‘Incredible India’, and so on. If we change our slogan again, how long will it take until it reaches its acceptability?”

Cruz added: “Let’s be honest, it’s only now that the ‘Fun’ campaign is really reaching its potential, and after the country branding, now the campaign has been tweaked to promote the provincial destinations. It takes time to develop, but we have yet to explore [other dimensions] of the campaign.”

Aside from the length of time that a brand attains a certain level of acceptability, Cruz said there are other priorities that have to be attended that could boost visitor arrivals, such as infrastructure, air-traffic congestion, etc. “It’s expensive [to develop and launch a tourism campaign]. With the very limited budget that we have for our investment, we will have to spend so much, which is money we can use for other things that need to be prioritized, like marketing, promotion, infrastructure, etc.”

Clemente, who is also president of Rajah Travel Corp., said, “When you change a slogan, it is effectively changing the branding. The consequences of doing so have a larger impact than one may originally think of. Since branding not only distinguishes us from that of another, it is critical that the adoption of the brand by all stakeholders is considered.”

She added that there needs to be an independent assessment using quantitative and qualitative metrics to show whether a brand or campaign slogan has been effective, which will determine the need to change the brand or slogan, or to keep it.

(This piece was originally published in the BusinessMirror, Sept. 15, 2016.)