Philippines hotel owners send SOS

MANILA, Philippines — The Philippine Hotel Owners Association (PHOA) has renewed its call to the government for support for the accommodation sector in the form of tax relief measures, labor force assistance and travel stimulus, in a bid to help the sector survive and recover from the coronavirus disease 2019 (COVID-19) pandemic.

In a letter addressed to Tourism Undersecretary Benito Bengzon Jr., PHOA president Arthur Lopez reiterated the groups’ recommendations for the Tourism Response and Recovery Program of the Department of Tourism (DOT), noting its previous letter dated March 27.

“The hotel owners are the biggest investors in the tourism industry, in terms of capital, employment and dollar generation. Our sector is very much affected by the COVID-19 disruption of business, and we are looking for possible solutions and options for our recovery, as it impacts on our employees and our business continuity,” Lopez said.

“We are, however, disappointed that we have not heard from the Department of Tourism since then. Meanwhile, various proposed stimulus packages have come up from Congress and the Department of Finance,” he added.

Among its recommendations to support the financial lifeline of the accommodations sector are the provision by government-owned and controlled banks of zero interest short term working capital loans of up to two years for those who have reopened their businesses; a renovation fund that will compensate hotels that may be used for healthcare or government support during this crisis; the provision of a 100 percent tax relief for corporate income taxes for the taxable years 2019 and 2020 and 50 percent for 2021 and 2022 by the Bureau of Internal Revenue for accommodation establishments; the removal of VAT and local government unit fees for 12 months and the deferment of existing payment for 12 months; and the enhancement of tax holidays and incentives for accommodation sector developers without restriction to location.

PHOA also called for the creation of a Hotel Credit Guarantee Fund (HCGF) in which interest earned by banks will be Gross Receipts Tax and Income Tax free and eligible hotel’s credit guaranteed by the government for a period of five years by payment of HCGF premium.
In addition, the group also recommended that the Insurance Commission include accommodation establishments’ businesses losses as a result of diseases which are either endemic, epidemic or pandemic as part of the Business Interruption policy.

Meanwhile, proposals of the group for labor force assistance include the provision of 100 percent tax holiday for income earned by hotel employees for the entire 2020 by the BIR as well as the encouragement of government to banks to provide flexibility either through moratoriums, refinancing, extensions and the like on payments owed to them from accommodation employees.

PHOA also recommended the subsidization of all SSS, Pag-IBIG and PhilHealth contributions of the employer and employees until the end of 2020 by the national government; provision of additional SSS employee relief fund by government banks directly paid to their bank to help them manage their personal debt.
In a statement Wednesday, the DOT said it has already made appropriate representation with the SSS, Pag-IBIG Fund and PhilHealth for the deferment of tourism workers’ contributions.

“Upon these representations Philhealth has agreed to extend the deadline to remit the members’ savings/contributions until two weeks after the lifting of the (quarantine) without any penalty,” the DOT said.

It added that Pag-IBIG has also agreed to extend its deadline of payment of premium contributions for the first quarter of 2020 to April 30, while the SSS agreed to extend the deadline for the remittance of contributions until June 1.

PHOA also called for the implementation of travel stimulus measures such as the removal of VAT and LGU fees for the next two years to reduce hotel rates; the active encouragement of increased air connectivity to major source markets through charter flights and more competitive fees charged to airlines by the DOT; provision of additional funds for the promotion of the Philippine tourism sector in the next five years; provision of more visa free entries to more countries to stimulate demand; and the boosting of the DOT’s presence in the major global travel and trade exhibition worldwide.

“We hope to coordinate with DOT and the concerned agencies on how the accommodation sector can be provided with the necessary attention and opportunities in the overall recovery plan,” Lopez said.

“This should ensure our continuous operations and service to reopen our tourism markets and bring in the needed impetus and revenues for the country’s economy,” he added.

Lopez earlier emphasized that without government assistance, there will be hundreds of accommodations establishments at risk of closure, affecting in turn tens of thousands of hospitality jobs.

Other tourism industry groups have previously submitted recommendations for tourism recovery to the DOT, such as the Tourism Congress of the Philippines, the Hotel Sales and Marketing Association Philippine and the Philippine Travel Agencies Association.

In a statement Wednesday, the DOT outlined the measures it has taken to aid the private sector in response to the COVID-19 pandemic.

“To cushion the impact, the DOT and its attached agencies, even before the lockdown, laid out the response and recovery plan during the initial stages of the COVID-19 outbreak in the country with the tourism sector taking a direct hit early on,” Tourism Secretary Bernadette Romulo-Puyat said, noting that the DOT will be extending a wide range of assistance not only to tour operators, but to the entire travel and hospitality sector.

The DOT’s immediate response actions include the implementation of a moratorium on the collection of accreditation fees from new and renewing applicants from Tourism Enterprises and Tourism-Related Enterprises for the year 2020.

In addition, the DOT and the Tourism Promotions Board have also waived the participation fees in international fairs and exhibitions between now and the end of 2021.

“In response to the appeal of the travel industry, the DOT has also been communicating with the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) to provide rehabilitation financing support such as, but not limited to, extending low interest loans for tourism enterprises that have been severely affected by the COVID-19,” the DOT said.

“Relative to this, the DBP has identified the tourism industry under COVID-19 as qualifying under its program called Rehabilitation Support Program on Severe Events (RESPONSE), which aims to provide rehabilitation financing support through low interest loans to business, which have been adversely affected by calamities,” the DOT added.
The DOT said the LBP will also assist tourism stakeholders under its program called Rehabilitation Support to Cushion Unfavorably Affected Enterprises by Covid-19 (I-RESCUE) Lending Program.