Makati city: Philippine tourism remains resilient despite the ongoing energy crisis and a decline in the South Korean market in the first half of the year, with 2026 recording the highest five-month arrivals in the past five years.
According to Philippines News Agency, in its 1H 2026 Philippine Property Market Report released Tuesday, Leechiu Property Consultants (LPC) said the growth was the highest post-pandemic and is primarily driven by the United States, Japan, Canada, and a notable increase in Chinese arrivals. Citing data from the Department of Tourism (DOT), LPC reported that the Philippines recorded 2.74 million foreign visitors from January to May 2026. This figure marks an increase from the arrivals recorded in the same period from 2022 to 2024, which ranged from 559,000 to 2.56 million.
In a forum in Makati City, Alfred Lay, LPC Director for Hotels, Tourism, and Leisure, expressed optimism about further growth in Chinese arrivals as the country introduces more travel and tourism packages after easing its visa policy for the market. Lay also noted potential growth in Japanese visitors, with 226,000 recorded from January to May 2026, up from 211,000 in the same period last year.
Lay pointed out that the depreciation of the peso is likely to provide an inbound tailwind for tourism by making the country a more affordable destination for foreign visitors. "At this stage, that may or may not be offset with also increased cost of flights, and the cost of transportation at a local level. So, we'll see how that plays out. But if the peso does weaken, of course, there are some positives and negatives on that," he added.
On the other hand, Lay warned of potential challenges ahead, particularly concerning the effects of the Iran war, which could impact arrival momentum by the second half of 2026. He highlighted that traveler uncertainty and the ripple effects of flight cancellations during the height of the crisis will weigh on arrivals in the months ahead. "Fuel prices affect so much of how tourism operates and depending on whether this war ends or doesn't end, whether the Strait (of Hormuz) is open or it doesn't open, whether we're buying more or less fuel from Russia, I think we will see the varying degrees of effect that may have on the tourism industry," he said.
In the hotel sector, Lay reported that Metro Manila's corporate and Meetings, Incentives, Conferences, and Exhibitions (MICE)-driven demand continues to "hold up" and is "shielded" from both inflationary pressures and Iran war-induced travel disruptions. The property report showed that occupancy averaged 66 percent in the first five months of 2026, with an average daily rate (ADR) of 6,000, up from 65 percent and 5,800 in ADR in the same period last year. Lay commented, "As inflation continues to push up, the cost of doing business is higher, and hence the margins for this industry are being really squeezed."
