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05
Sep

Finance dep’t looking for sweet spot between tourism, higher take from airport terminal and landing fees

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By Melissa Luz T. Lopez | BusinessWorld Online

THE Finance department is studying proposals to restructure airport fees in order to raise revenue collection while also helping encourage tourism.

Finance Secretary Carlos G. Dominguez III said his agency is studying charges imposed on aircraft using Philippine airports, with plans to reduce the fees in top tourist sites in order to attract more visitors.

“We are looking at several ways to improve the revenue of the CAAP (Civil Aviation Authority of the Philippines)... as well as to encourage traff ic and tourism outside the Metro Manila area,” Mr. Dominguez told reporters last week.

Last week, AirAsia Group Chief Executive Officer Tony Fernandes asked Mr. Dominguez to reduce or scrap the departure tax imposed in small airports, which the budget carrier said would help support its expansion plans in the Philippines.

Airline passengers leaving the Philippines are levied a full travel tax of P1,620 for those in economy class, while P2,700 is collected from first-class flyers, according to the Tourism Infrastructure and Enterprise Zone Authority.

Pressed for details, Mr. Dominguez said he was open to introducing differential pricing for airports, which include higher landing fees during peak hours: “You want to land in the primetime, you pay more; you want to land in the middle of the night, you pay less.”

Under the CAAP’s rules, landing fees are based on the point of departure. Fees are more expensive if flights are leaving international airports compared to domestic gateways, and are computed based on an aircraft’s maximum gross weight.

Based on CAAP Department Order 98- 1178, night flights meant an additional landing charge worth 10-15% if landing and take-off occurs between six p.m. to six a.m.

Another plan would be to implement different charges for boarding gates, Mr. Dominguez said.

Such plans, however, must be ironed out with the Department of Transportation.

“At the same time, if those revenues are going to be high enough, we probably can reduce the charges for airports and destinations that we want people to go to. Like we want to encourage people to go to Bohol, or Laguindingan in Cagayan de Oro, so we can have differential taxation rates there,” the Cabinet official added.

Tourism receipts contribute to inflows to the Philippines alongside remittances from overseas Filipino workers and business process outsourcing revenue, which help balance outflows due to heavy importations.

The government is targeting visitor arrivals of seven million for 2017. As of end-June, some 3.36 million foreign tourists visited the Philippines and spent some P146.334 billion, against the 2.98 million visitors who spent P127.374 billion during the same period last year.

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