Philippine Travel Tax Repeal Threatens Infrastructure

Plans to abolish the Philippines' outbound travel tax are raising concerns about how the country will fund tourism infrastructure, even as lawmakers argue that removing the charge would make international journeys more affordable.

The proposed Travel Tax Abolition Act would eliminate a levy of 1,620 pesos for most Filipino passengers leaving the country, rising to 2,700 pesos for first-class travellers. The House of Representatives approved its version in March, and Senate leaders are seeking passage before the end of 2026. The measure would still need a final agreed text and presidential approval before becoming law.

The tax raised 8.7 billion pesos in 2025, with half allocated to the Tourism Infrastructure and Enterprise Zone Authority and the remainder supporting higher education and cultural programmes. TIEZA chief Mark Lapid has warned that approximately 95% of the agency's operations could be affected without replacement funding. Projects include sewage and water improvements in El Nido and Coron, work in Baguio and upgrades to domestic airports. No replacement allocation has been identified in the proposed 2027 budget.

Tourism businesses face competing considerations. A lower departure cost could stimulate outbound travel, but neglected roads, airports and visitor facilities could weaken the Philippines' appeal to international tourists. Hotel industry representatives oppose repeal without a financing solution. The debate therefore extends beyond the price of a ticket: legislators must decide how to reduce travel costs while preserving the investment needed to sustain destinations. The eventual legislation will determine whether those programmes receive secure alternative funding from the government.