30-8-2024 (MANILA) The Philippines is poised to make a bold bid for the title of Asia’s shopping capital, according to the country’s top economic advisor. However, the ambitious goal hinges on the implementation of two crucial measures: an e-visa system and tax refunds for tourists.
Frederick Go, Special Assistant to the President for Investment and Economic Affairs, unveiled this vision during the National Retail Conference and Expo. “I think we always have that potential to be the shopping capital in Asia,” Go asserted, emphasising that it’s not too late for the Philippines to claim this coveted position.
Go outlined two fundamental prerequisites for transforming the Philippines into a retail paradise. Firstly, the introduction of an e-visa system would streamline the entry process for international visitors. “To become a shopping capital, that means you’re attracting visitors from all over the world to come here and enjoy and shop. So we need the e-visas. We need to make it easier for travellers to come to the Philippines,” he explained.
The second critical component is the implementation of value-added tax (VAT) refunds for tourists. Go pointed out that this practice is commonplace across Asia, stating, “Practically every country in Asia has VAT refund for tourists. We don’t. So if we indeed want to become a shopping capital of Asia or of the world, we need to have those two as basic.”
Implementing a VAT refund system would require new legislation and a robust process, Go noted. He suggested that the Philippines could look to other countries for guidance on best practices in this area.
The economic benefits of these measures could be substantial, according to Go. He views tourism as “low-hanging fruit” and one of the easiest sectors to boost. The VAT refund system, in particular, could make the Philippines more attractive to luxury brands, further enhancing its appeal as a shopping destination.
Despite the head start of other Asian countries in establishing themselves as shopping hotspots, Go remains optimistic about the Philippines’ chances. “People travel every day, every week, every month. You never miss the boat. People travel all the time,” he said, dismissing concerns that the opportunity might have passed.
The Philippine Retailers Association (PRA) has thrown its support behind the initiative. PRA President Roberto Claudio highlighted the significance of shopping to tourism, noting, “Take note that the second biggest expense of the tourists is shopping after their hotel and their fare.”
Claudio urged retailers to prepare for the potential implementation of a VAT refund scheme, predicting that the “overall benefit to the economy is going to be enormous and retailers will be the first one to be in the front line.”
