| Abstract: |
This study was conducted to investigate the determinants of international
tourism demand for the Philippines.This study employed a double-log augmented
form of gravity model estimated using the robust random effects model.Results
revealed that tourist arrival in the Philippines are generally increasing from
2001 to 2012. Empirical estimation was conducted to determine factors
affecting Philippine tourism demand. These factors include income, market
size, and distance. Relative prices was also identified which includes cost of
living and price of goods and services in the Philippines and other related
tourism destination like Malaysia, Indonesia and Thailand. Supporting
variables like direct flights, conflict, commonality in language and common
colonizer between the Philippines and source of origin of the tourist was also
examined. Furthermore, it also includes impact of calamity in the tourist home
country and common membership to ASEAN. Empirical results show that tourist
inflow is positively and significantly affected by income of the origin
country and is reduced by population and distance. Relative low prices of
tourism in term of cost of living and prices of goods and services in the
Philippines have no effect in attracting inbound tourist. Furthermore,
international demand for Philippine tourism is not affected by relative prices
of tourism in Malaysia, Indonesia and Thailand as the competing tourist
destinations. Conflict and common colonizer between Philippines and country of
origin are not significant determinants of international tourism demand. Among
the variables, direct flights turned out to be the most significant factor
that can contribute to the increase in tourism demand of the Philippines. |