Even as the government keeps pitching tourism as a growth priority and jobs engine, the agency tasked with building much of its infrastructure is heading into 2027 with billions’ worth of ongoing projects and a proposed budget of exactly zero.

On top of this, if Congress succeeds in abolishing the travel tax, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) could also lose the revenue stream that normally pays for almost everything it does.

A source familiar with TIEZA’s budget planning told Rappler that the agency initially sought around P5.2 billion in national government funding for 2027. That request covered infrastructure projects alone and did not yet include personnel services or maintenance and other operating expenses.

Budget Secretary Kim Robert de Leon informed TIEZA that the request could not be favorably considered because of the government’s limited fiscal space, the source said. Consequently, the proposed 2027 budget carries zero subsidy for the agency, compared with P248 million for general administration and support in 2026.

The Department of Budget and Management (DBM) echoed this stance during the budget hearing of the Department of Tourism (DOT).

“TIEZA’s proposal for National Government Subsidy in FY2027 is in view of several legislative measures proposing the abolition of the travel tax. However, as these bills remain under deliberation in the Senate and have yet to be enacted into law, the TIEZA’s requested subsidy was not considered in the FY [2027] NEP,” DBM Assistant Director Lulu Vispo said.

A zero budget may come with consequences on the tourism infrastructure pipeline. TIEZA chief operating officer Mark Lapid told lawmakers during the tourism department’s budget hearing that almost all of its projects are multi-year, with around P5.2 billion needed in 2027 alone to keep them moving.

The DBM, however, pointed to P2.355 billion in supposedly available TIEZA funds: P810.25 million in unobligated allotments as of March 31 and another P1.545 billion in unreleased 2025 appropriations. 

“TIEZA may continue to utilize its travel tax collections to fund tourism-related infrastructures or projects,” Vispo added on Monday, September 7.

Meanwhile, TIEZA says that money is not sitting idly. Lapid told lawmakers that the roughly P2 billion cited during the hearing could not simply be used to pay for its infrastructure commitments as it was being used to fund the agency’s payroll.

“The P2 billion is for our personnel services in our office operations. So technically, we wouldn’t have any funds for infrastructure from the amount mentioned,” Lapid told lawmakers in Filipino.

The travel tax problem

The problem is that the pesky P1,620 travel tax that travelers love to hate is also what keeps much of TIEZA running.

Congress is now moving to abolish it. The House has already approved House Bill 8464, while Senate President Sherwin Gatchalian said in August that the Senate is targeting abolition within the year.

Under the current setup, 50% of tax collections go to TIEZA, 40% to the Commission on Higher Education, and 10% to the National Commission for Culture and the Arts. TIEZA’s share from those travel taxes makes up roughly 95% of its funding, an agency source told Rappler.

The House bill does anticipate the problem by requiring the national government to replace those funds through the annual budget. The tricky part is timing. TIEZA is being told to prepare for a future in which the travel tax disappears, but it has yet to receive approval for replacement funding.

The tax cut could also have a very human cost inside the agency that needs consideration. A TIEZA presentation showed that around 300 travel tax personnel may be displaced out of its 1,045-strong workforce. Of those, 115 may have difficulty finding new work because of their age, while some 270 families could be affected.

Lapid told lawmakers that TIEZA cannot simply absorb the workers elsewhere because they are spread across international gateways nationwide and the agency does not have enough plantilla positions at its main office. Some could be terminated, while others may receive separation incentives.

Five projects may get a lifeline

During Monday’s budget hearing, the DOT made its case for Congress to restore an allocation for at least P1.3 billion for five TIEZA projects.

The list obtained by Rappler from a source includes:

• P328.9 million for improvements of the Banaue Hotel and Youth Hostel complex in Ifugao. The TIEZA-owned property sits on a 5.3-hectare site overlooking the Banaue Rice Terraces and has 81 hotel rooms plus a 15-room youth hostel. TIEZA has been rehabilitating the aging property for years, which has remained temporarily closed.
• P301.07 million for the CBDC River Water System in San Vicente, Palawan. This is meant to provide a long-term potable water supply to tourism establishments and communities around Long Beach, one of the main clusters of TIEZA’s San Vicente Flagship Tourism Enterprise Zone.
• P400 million for iLIPAD, TIEZA’s airport development program with DOTr. Launched in 2020, the program helps fund upgrades to provincial airports, particularly facilities needed for night operations and greater flight capacity.
• P212.2 million for the construction of a waste water treatment facility in Coron. The project is aimed at addressing the environmental strain that tourism and development place on one of Palawan’s busiest destinations.
• P63.7 million for the construction of Sky Garden in Barangay Lucap, Alaminos City. The project, which Marcos himself broke ground for in May 2025, is envisioned as another attraction and gateway near Hundred Islands, with elevated gardens, viewing decks, walkways, parking, a commercial center, and a multipurpose hall.

The proposed allocations for the DOT and its attached agencies are not yet final, however, as Congress can still revise the 2027 budget before it is enacted. But so far, lawmakers have appeared receptive to calls for more tourism funding, repeatedly pointing to the country’s infrastructure gaps and the need for greater investment.

After all, one need only look at NAIA to see what years of underinvestment can do to a country’s main international gateway — and how quickly things can begin to turn once fresh capital finally starts pouring in. – Rappler.com