Key Points
- The Senate aims to pass its version of the Travel Tax Abolition Act by year-end, after House approval on March 16; both chambers must then agree a final text for the president to sign.
- TIEZA’s Mark Lapid told lawmakers about 95% of the agency’s operations are at risk, with no replacement funding in the proposed national budget for projects spanning El Nido, Coron, Baguio and 10 domestic airports.
- Leechiu Property Consultants said the tax debate has not significantly affected hotel investment decisions — roads and airports have. Baguio’s pipeline grew 78% in two years to 1,454 rooms after highway upgrades.
Summary
The Philippine Senate is on track to abolish the country’s nearly 50-year-old travel tax by the end of the year, and the agency that depends on it has no replacement funding in the latest national budget. The Travel Tax Abolition Act of 2026 would scrap the 1,620-peso ($25) levy Filipinos pay per outbound trip, rising to 2,700 pesos ($42) in first class. The House approved the repeal on March 16, and President Ferdinand Marcos Jr. has listed it among his priority measures. The tax raised 8.7 billion pesos ($136 million) in 2025, half of it going to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and the rest to higher education and arts and culture programs. TIEZA chief operating officer Mark Lapid told lawmakers at a September budget hearing that about 95% of the agency’s operations are at risk without replacement funding, with projects including water and sewage work in El Nido, Coron and Baguio, the restoration of Baguio’s Burnham Park, and upgrades to 10 domestic airports. Tourism Secretary Christina Frasco warned that repeal without replacement funding could jeopardize infrastructure, education and heritage programs. The Philippine Hotel Owners Association opposes repeal in its current form, arguing it would push spending abroad while leaving domestic tourism projects short of funds. Leechiu Property Consultants said the debate has not yet moved hotel investment decisions — access does. Boracay has 3,678 rooms across 14 projects in its pipeline, and Baguio’s pipeline has grown 78% in two years to 1,454 rooms after highway improvements.
