WITH THE HOUSE voting to abolish the travel tax just days ago, support for its abolition has gone bolder but the agencies who have been receiving allocations from the collected taxes since 1977 are screaming loudly to stop its banishment because of communities that would be deprived of program funding.
Yet with the full support given by President Marcos for its abolition– making it among his priority legislations to report during his 4th SONA in July– the abolition of this antique 1977 measure gets real each passing day.
Finance Secretary Frederick Go has expressed concern about some P8 billion yearly losses with the travel tax abolition, which Filipinos traveling abroad find unnecessary, antique and another source of legalized robbery (in addition to forcing them to queue for long periods) just so they can enter the airports and wait for their departing flights.
The government collects a travel tax of P1,620 ($28.35) from economy air passengers and P2,700 ($47.24) from first class air passengers, if they are departing to a foreign country.
While the Philippines specifically labels its P1,620 (economy) and P2,700 (first class) charges as a “travel tax,” neighboring nations use a variety of terms for similar collections. Australia charges A$60 as Passenger Movement Charge on all departing passengers, Japan has the International Tourist Tax of JPY 1,000 (rising to JPY 3,000 in July), Cambodia has a departure fee of US$25 already included in ticket, Bali (Indonesia) has the Mandatory Tourist Levy of IDR 150,000, and Thailand has the Foreign Entry Fee of 300 Baht (effective February 2026).
Exempt from travel tax are overseas Filipino workers, Filipino permanent residents overseas who stayed less than a year in the Philippines, and children aged two years and below.
In most other countries– developed and those within our Asian neighors– the travel tax is tucked in the cost of the tickets, which can be booked and paid online without the hassle of queueing again before departure.
The beneficiaries of the Marcos Sr. travel tax scheme were the Tourism Infrastructure and Enterprise Zone Authority (with 50 percent); the Commission on Higher Education for scholarships of poor students desiring to finish tourism and hospitality courses (with 40 percent) and the National Commission on Culture and the Arts (with 10 percent).
In money terms this means allocations of P3.9 billion for infrastructure (TIEZ), P3.1 billion for scholarship (CHED) and P1.1 billion for NCCA.
Authorities collected about P8.7 billion in travel tax revenue in 2025, according to a position paper from TIEZA that was submitted to the congressional committee and obtained by BusinessWorld. Collections reached P7.8 billion in 2024, P6.3 billion in 2023, P332 million in 2021, P713 million in 2020, and P7.1 billion in 2019.
Collections from travel tax reached P7.2 billion before the pandemic; dropping to P123 million in 2020 then rising to P359 million in 2021, recovering at P2.38 billion in 2022 and then to P7.75 billion in 2024.
Critics of the antiquated travel tax– which Marcos imposed to keep the people from spending dollars abroad (during the deep economic crisis during Martial law) and to encourage more domestic tourism– claim that such funds can be “inserted” into the budgets of these agencies instead of continuing to impose this cumbersome practice.
Those in favor of continuing travel tax claim that this is tantamount to encouraging more Filipinos to travel abroad (principally to Asian neighbors) instead of luring them more in the country’s over 7,000 islands that provide the same, if not more, breathtaking views and wholesome experiences to the travellers.
As Esquire magazine reported yesterday the funds for scholars, arts, and tourism infrastructure face an uncertain future with the repeal of the travel tax, according to CHED, NCCA, and TIEZA representatives.
“Each person who pays the travel tax invests in underprivileged scholars in college, artists’ grants, and the development of tourism destinations in the country,” the report noted.
In 2025, the government collected some P8.7 billion in travel taxes.
Despite its clear benefits, however, the Committee on Tourism at the House of Representatives approved six bills abolishing the travel tax, citing the need to ease the burden of Filipinos traveling abroad. President Marcos Jr. had earlier directed its abolition upon recommendation of the Legislative-Executive Development Advisory Council.
During Monday’s hearing of Committee on Tourism, Nueva Ecjia First District Rep. Mikaela Angela B. Suansing, assured the three government agencies, “Given the criticality of the funds, we will work together (heads of the committees on tourism, ways and means, appropriations, and respective authors of the bills) to ensure that those funds will remain available…and to structure the [ensuing] bill in such a way that [the funds] would still be responsive to the needs of the different government agencies,” without being subjected to the annual appropriations requests.
Suansing chairs the Committee on Appropriations, Romblon Rep. Eleandro Jesus F. Madrona chairs the Committee on Tourism, and Marikina Second District Rep. Miro S. Quimbo chairs the Committee on Ways and Means.
Compromising Scholars
CHED Chair Dr. Shirley C. Agrupis said 85.63 percent of the Higher Education Development Fund (HEDF), which was established under Republic Act No. 7722, “relies predominantly on travel taxes. From 1995 to 2025, these funds totaled some P38 billion.
Among the projects funded by the HEDF are the upgrade of facilities like laboratories, research grants, and scholarships for faculty development and student financial assistance, to name a few. In particular, she said the HEDF has assisted 246,034 undergraduate and graduate student scholars from 2018 to 2025.
NCCA Deputy Director Marichu Tellano said the agency receives P600 million to P700 million a year from travel taxes needed for its “permanent possessions. Without the travel tax, all the grants for the artists and different organizations will be gone.” The travel taxes have also funded the restoration and operation of the Manila Metropolitan Theater, the maintenance and operation of the different UNESCO World Heritage sites.
TIEZA Chief Operating Officer Dr. Mark T. Lapid said the travel tax “fuels tourism development” through direly needed tourism-infrastructure projects, developing tourism economic zones by attracting investors, funding tourism master plans, and extending emergency assistance, such as in their recent support to enable the Philippines host its first Women’s Tennis Association match.
148 Tourism Infra Doomed?
From 2019 to 2025, Tieza has been able to complete some P5 billion worth of tourism infrastructure projects, and some 148 projects valued at P7.13 billion are currently being developed.
For his part, Aklan Second District Rep. Florencio T. Miraflores, vice chair of the Committee on Tourism, said Boracay Island, which is under his jurisdiction, is one of the major beneficiaries of the travel tax, primarily for the provision of the “water, sewerage treatment plant, and the corresponding drainage project, which has made Boracay a worldwide destination today.” He underscored that “Tieza needs the flexibility of funding of tourism-related projects,” to immediately respond to the concerns of tourism destinations, like in Boracay’s case, a recent flooding problem.
Capiz First District Rep. Howard A. Guintu, speaking in Filipino, also said that “TIEZA was a big help in rehabilitating our centuries-old church,” and warned that in the case of his colleagues who also need help in restoring their historical landmarks, “if the travel tax is abolished, they may have further encountered difficulties in requesting funds to restore these landmarks.”
The levy was first imposed by Republic Act No. 1478 in 1956 and was later amended through Presidential Decree No. 1183 in 1977.
President Ferdinand R. Marcos, Jr. has declared the bill abolishing the travel tax a priority and had urged Congress to pass it before the adjournment in June.
The three agencies supported the move to scrap travel tax granted their funding would be secured via the annual budget bill.
“To be honest, what goes to TIEZA is only around 35%,” said Lapid adding that “we are in charge of the administrative fee or about P500 million to collect the travel tax,” Business World quoted him.
In its position paper, TIEZA said 90% of its budget relies on the travel tax, and “any disruption without a viable alternative is critical.”
“The travel tax provides the fiscal agility required for immediate tourism response,” it said, noting that its funding source allows the agency to “urgently address” tourism needs.
Impact on Higher Education
Agrupis told legislators that removing the travel tax without a replacement revenue source would deprive 5.4 million students who rely on it. “If the travel tax is repealed without a replacement revenue source, we will lose 85.6% of its funding.”
Scrapping the Philippines’ travel tax would lower the cost of flying, stimulate outbound and inbound travel and make the Philippines more competitive as a regional hub, said Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co.
“But it’s not a silver bullet. The real gains come only if the lost revenue is replaced by smarter funding for tourism — better airports, smoother visas, and stronger destination marketing,” he added.
Sandro’s House Bill 7443
House Bill No. 7443, filed by House Majority Leader Sandro Marcos, proposes the abolition of the Philippine Travel Tax on the premise that it imposes an undue burden on travelers and hinders economic mobility and tourism growth. While the bill identifies legitimate concerns regarding travel affordability and regional competitiveness, the outright repeal of the travel tax is both economically and fiscally misguided, according to a research paper.
The paper said abolishing the travel tax would undermine dedicated funding for tourism infrastructure and related programs, shift the burden of financing to general taxation, and disrupt Philippine fiscal stability. Instead of abolition, recalibrating the tax structure and reforming its administration would better address equity and mobility concerns while preserving essential revenue streams.
It added that abolishing it outright would undermine long-term public finance stability, remove a visible funding mechanism for critical national programs, and ultimately shift burden to the general body of taxpayers. Rather than repeal, what is needed is meaningful reform—rate rationalization, equity-based exemptions, administrative modernization, and stronger transparency and accountability frameworks.
Advocates of abolishing the Travel Tax typically ground their arguments in three key points: affordability, equity, and administrative efficiency. The affordability argument suggests that each mandatory fee imposed on travelers ultimately raises the total cost of travel and could serve as a barrier to mobility for middle and low-income families, students, overseas workers, and micro-entrepreneurs (Smith, 2021). From this perspective, a Travel Tax—however modest—is an additional cost that combined with airfare, fuel surcharges, airport fees, and other travel-related taxes, compounds the financial burden and potentially dampens travel demand.
Knocking Out Tourism
Bilyonaryo reported that the Philippine Hotel Owners Association (PHOA) is pushing back against a government proposal to abolish the national travel tax, warning that the move could subsidize “bon voyage” trips at the expense of the local hospitality sector.
The trade group, representing the country’s largest hotel and resort owners, argues that eliminating the levy would encourage the outflow of consumer spending to neighboring Southeast Asian markets, siphoning capital from a domestic industry still navigating its post-pandemic recovery.
While the government views the tax repeal as a way to lower costs for Filipino travelers, PHOA leadership contends the timing is economically counterproductive.
By making international departures cheaper, the association fears the state is inadvertently incentivizing the “export” of Philippine pesos to regional rivals like Thailand and Vietnam.
“We should not be bodily subsidizing a ‘bon voyage’ at the expense of our own backyard,” the association said in a statement. “Before we cut the cord, we need a dialogue that prioritizes Philippine jobs over foreign spending.”
PHOA president Arthur M. Lopez emphasized that the national priority should remain the growth of inbound traffic, bringing foreign currency into the country rather than facilitating its exit.
PHOA warned that abolishing the tax without a “comprehensive replacement plan” would be premature, potentially depriving the industry of the infrastructure support required to sustain long-term growth.