Tourism and Economy in the Philippines

Questions and Answers

What does the Tourism Act of 2009 in the Philippines classify tourism as?

A government-driven sector primarily for domestic travel

An industry of national interest and importance (correct)

A supplementary component of the agricultural sector

A leisure activity with minimal economic impact

Which of the following best defines the tourism multiplier effect?

The government spending on infrastructure to promote local tourism

The revenue generated by inbound tourism that flows into an economy (correct)

The impact of domestic tourism on entertainment industries

The increase in foreign tourists visiting a country leading to higher exports

What is an example of a direct effect of tourism expenditures?

Investment in training for tourism service staff

Government funding for tourist attractions

Purchasing agricultural products for restaurants

Tourists booking flights and hotel accommodations (correct)

Which pathway of the tourism multiplier effect involves tourism investments and government spending?

Indirect effect Signup and view all the answers

What is meant by the term 'induced effect' in the context of tourism?

Broader contribution of tourism through spending by employees. Signup and view all the answers

What is the primary focus of the dynamic effect in tourism?

Long-term improvements in social services and infrastructure Signup and view all the answers

Which of the following is NOT a positive economic impact of tourism?

Leakage of income to external suppliers. Signup and view all the answers

Which of the following is NOT a pathway of the tourism multiplier effect?

Cumulative effect Signup and view all the answers

Which type of positions is included in the job market created by tourism?

Positions ranging from entry-level to executive roles. Signup and view all the answers

What role does tourism play in the socio-economic growth of the Philippines?

It acts as an engine for growth and cultural affirmation Signup and view all the answers

Which of the following is an example of an indirect effect of tourism?

Restaurants purchasing local produce from farmers Signup and view all the answers

How does tourism affect the livelihood of small-scale businesses?

It creates opportunities by involving them in various tourism sectors. Signup and view all the answers

What is the significance of taxes and fees related to tourism?

They provide revenue for the government from various tourism-related activities. Signup and view all the answers

Leakage in tourism primarily refers to which of the following?

Supplies being sourced from outside the tourist destination. Signup and view all the answers

What role do transportation providers play in the context of tourism's economic impact?

They contribute by offering services such as local transport. Signup and view all the answers

Which statement best describes the 'share of tourism income' concept?

It involves income generated throughout the tourism journey, including stopover routes. Signup and view all the answers

Study Notes

Definition of Economy and Tourism

Economy refers to the production and consumption of goods and services alongside the supply of money in a country or region.
In many nations, tourism is a foundational industry essential for economic growth and development.

Philippines Tourism Act of 2009

Declares tourism as a vital part of the national economy.
Recognizes tourism as an industry of national interest, promoting socio-economic growth, cultural affirmation, and job creation.

Tourism Multiplier Effect

The tourism multiplier effect is the revenue generated by inbound tourism that benefits the economy through new resource injections.
Four pathways of the multiplier effect include direct, indirect, dynamic, and induced effects.

Pathways of Tourism Multiplier Effect

Direct Effect:
- Resulting from tourist spending on accommodation, food, transportation, and attractions.
- Driven mainly by domestic travel and international tourist expenditures.
Indirect Effect:
- Arises from tourism investments and government spending on tourism infrastructure.
- Involves economic activities from suppliers like farms, while supporting services and utility companies.
Dynamic Effect:
- Long-term benefits of tourism encompass improved job skills, enhanced social services (health, education), and infrastructure development (airports, roads).
- Example: Increased employment opportunities, better public facilities due to rising tourist numbers.
Induced Effect:
- Accounts for spending by employees in the tourism sector on local goods and services.
- Example: Hotel staff purchasing lunches from nearby eateries.

Positive Economic Impacts of Tourism

Job Creation:
- Diverse employment opportunities range from entry-level positions (e.g., hotel staff, airline ground staff) to middle-management roles and specialized jobs (e.g., executive chefs).
- Job creation extends to industries supporting tourism (e.g., construction for infrastructure).
Livelihood Opportunities:
- Small businesses thrive, providing goods and services like handicrafts, agritourism experiences, and local delicacies.
- Local transport services benefit from tourism demand.
Share of Tourism Income:
- Economic benefits also extend to areas related to tourism, such as businesses along transit routes.
- Revenue generated from food purchases, resupply points, and other travel necessities.
Taxes and Fees:
- Government revenue increases through tourism-related taxes and fees (e.g., passport, visa, parking, and airport fees).
- Businesses involved in tourism contribute through taxation.

Negative Economic Impacts of Tourism

Leakage:
- Occurs when tourist spending goes to suppliers outside the local economy, reducing direct economic benefits to the destination.
- Affects locations that rely on imported goods or services instead of utilizing local resources.

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Description

This quiz explores the critical role of tourism in the Philippine economy as outlined in the Tourism Act of 2009. It discusses how tourism impacts production, consumption, and overall economic health in the country. Test your understanding of the relationship between tourism and economic development.