Philippine lawmaker Romero “Miro” Quimbo is pushing to scrap the country’s long-standing travel tax on outbound passengers, arguing that lower airfare and higher tourism volumes could generate as much as 22 billion pesos in new annual revenue for the government. The proposal comes amid a broader policy shift that treats cheaper travel not as a fiscal loss, but as a catalyst for jobs, income tax collection and a more competitive tourism sector.
Quimbo’s Case: Lose P7.5B Today, Gain P22B Tomorrow
Quimbo, who chairs the powerful House Committee on Ways and Means, laid out his numbers in a recent radio interview, saying that the abolition of the travel tax would initially leave an estimated 7.5 billion peso hole in annual collections. That shortfall, he contends, would be more than offset within roughly 18 months as more Filipinos fly, more money circulates through the travel economy and the government captures higher income tax receipts from airlines, travel agencies and related businesses.
According to Quimbo, committee simulations suggest that incremental economic activity from cheaper travel could eventually yield around 22 billion pesos per year in additional tax revenues. In effect, government would be trading a direct levy on outbound passengers for a larger, more dynamic tax base driven by higher volumes of tourism and greater disposable income among Filipino households.
The numbers are politically potent. A projected threefold return in favor of the state strengthens the argument that travel tax reform is not merely a populist giveaway, but a structural adjustment designed to align fiscal policy with the realities of a post-pandemic tourism recovery.
Airfare Relief at the Check-in Counter
At the heart of the debate is the travel tax currently imposed on most Filipino adults flying overseas. Economy-class passengers pay 1,620 pesos, while first-class travelers are charged 2,700 pesos on top of airfare and various airport and terminal fees. For budget-conscious travelers and families booking multiple tickets, the surcharge can quickly add up, sometimes rivaling the base fare for short-haul flights within Southeast Asia.
Quimbo notes that round-trip tickets to regional hubs like Singapore and Bangkok can fall in the 8,000 to 9,000 peso range during promotional periods. Removing the travel tax component, he argues, could translate into an effective 20 percent reduction in total ticket cost, a meaningful difference for households trying to stretch their travel budgets. That kind of discount, applied at scale, is what underpins projections of surging outbound tourism and stronger demand for flights.
Travel agencies and airlines stand to gain directly from the anticipated uptick in bookings, while ancillary sectors including hotels, restaurants, retail and transport could benefit from higher passenger throughput. For many in the private sector, the calculus is clear: lower upfront costs encourage more people to fly, and a larger pie ultimately supports more jobs and higher business revenues.
House Bill 7443 and the Push to Scrap Travel Tax
The legislative vehicle for Quimbo’s projections is House Bill 7443, a measure filed by House Majority Leader Sandro Marcos that seeks to abolish the travel tax established under Presidential Decree 1183 and woven into the Tourism Act of 2009. The bill proposes halting the collection of the existing fixed charges, effectively removing the levy on outbound Filipino travelers for leisure and other purposes.
The measure has been tagged as a priority item in the common legislative agenda of the Legislative-Executive Development Advisory Council, a signal that the executive and congressional leadership view it as central to their economic program. Quimbo has publicly expressed confidence that the House can approve the bill before its June recess, sending it to the Senate with enough time for deliberation within the year.
Under the Constitution, all tax measures must originate from the House of Representatives, giving Quimbo’s committee a central role in shaping the final contours of any travel tax reform. Hearings are expected to scrutinize not only revenue forecasts, but also the impact on agencies currently funded through travel tax shares and the adequacy of replacement support in the national budget.
Tourism on the Rebound and a Regional Reality Check
The move to scrap the travel tax comes as Philippine tourism continues to rebound from the pandemic and as the country seeks to avoid losing ground to its Southeast Asian neighbors. While domestic travel has recovered strongly and international arrivals are improving, policymakers and industry stakeholders have warned that elevated travel costs could blunt the momentum just as global tourism normalizes.
Regional competitors have already embraced tax and fee reforms as part of broader efforts to lure visitors and stimulate outbound mobility. Lawmakers pushing House Bill 7443 often point to the fact that most members of the Association of Southeast Asian Nations have shed similar travel levies, viewing them as outdated barriers to tourism growth and regional integration.
In this context, the Philippines risks being seen as an outlier that taxes citizens simply for crossing its borders. Proponents argue that abolishing the travel tax would not only make flights cheaper, but also signal that the country is serious about aligning with regional best practices and fully embracing the spirit of the ASEAN Tourism Agreement, which encourages the reduction of travel-related charges on member-nation nationals.
Tourism Infrastructure and the TIEZA Question
One of the most sensitive aspects of the debate concerns the Tourism Infrastructure and Enterprise Zone Authority, which receives half of all travel tax collections. TIEZA has long cast the levy as a cornerstone of its mandate, highlighting how every ticket bought by outbound passengers helps finance tourism infrastructure projects across the archipelago.
Over the past several years, TIEZA has used travel tax revenues to support hundreds of projects, from tourist rest areas and access roads to landmark lighting schemes and the rehabilitation of heritage hotels. The agency has also positioned itself as a key investment promotion body, greenlighting billions of pesos in tourism-related investments and touting the job creation that follows.
Abolishing the travel tax would, at least on paper, cut off this dedicated revenue stream. Yet both the executive branch and travel tax reform advocates insist that projects historically funded through TIEZA’s share, as well as allocations for the Commission on Higher Education and the National Commission for Culture and the Arts, can be maintained through the General Appropriations Act. In other words, infrastructure, scholarships and cultural programs would compete within the broader national budget rather than rely on a specific levy.
Critics are likely to question whether such assurances will hold firm over time, particularly when fiscal pressures mount. Proponents counter that shifting to appropriated funding will force tourism and cultural initiatives to be evaluated alongside other national priorities, potentially encouraging greater transparency and performance-based spending.
Government Signals: Malacañang Backs Lower Travel Costs
The push to remove the travel tax has gained added momentum from Malacañang. President Ferdinand Marcos Jr. has signaled support for the abolition proposal, with his communications team emphasizing the burden the levy places on Filipinos traveling not only for leisure but also for work, education and emergencies. The measure is among 21 priority bills flagged for passage in the first half of the year, a list that includes other high-profile governance and digital regulation reforms.
For the administration, the case for scrapping the travel tax dovetails with a broader strategy of making the Philippines more attractive to tourists and investors. Previous initiatives, such as the planned rollout of a value-added tax refund program for foreign visitors and the extension of e-visa schemes to key markets, underscore the government’s willingness to use tax policy as a lever for tourism promotion.
By endorsing travel tax abolition, the Palace is effectively arguing that lower charges at departure gates will complement these efforts, encouraging more Filipinos to travel, more overseas Filipinos to visit home more often, and more global travelers to consider Philippine airports as convenient gateways in and out of the region.
Industry Response and What Cheaper Tickets Could Mean on the Ground
Within the travel and aviation sectors, the prospect of eliminating the travel tax is largely welcomed as a long-overdue step that could help unlock pent-up demand. Airlines operating in the Philippine market have been contending with higher fuel costs, currency volatility and competitive fare wars, all while navigating a patchwork of fees and user charges that influence pricing strategies.
Removing a fixed levy like the travel tax has a particularly pronounced effect on low-cost carriers and short-haul routes, where ancillary charges represent a larger share of the all-in fare. A 20 percent reduction in ticket prices for popular regional destinations, as some lawmakers suggest, could draw in new travelers who previously saw international trips as out of reach, especially younger Filipinos and provincial residents planning their first overseas journeys.
Travel agencies and online booking platforms could also see gains as price-sensitive consumers widen their search for affordable itineraries. Increased outbound traffic tends to be mirrored by inbound interest as well, with returning residents bringing home visitors, overseas workers timing vacations to coincide with local festivals and business travelers extending their stays to sample leisure offerings.
On the ground, higher volumes of passengers can translate into more demand for airport services, logistics, hospitality staff and tour operations. The challenge for policymakers and industry leaders will be to ensure that capacity keeps pace, from immigration counters and baggage systems to hotel rooms and trained tour guides.
Balancing Revenue Risks, Equity Concerns and Long-Term Growth
Despite the upbeat projections, the proposed abolition of the travel tax is not without critics. Skeptics question whether the 22 billion peso revenue estimate is too optimistic, noting that it hinges on robust tourism growth, efficient tax collection and the assumption that income tax gains will materialize quickly enough to compensate for foregone travel tax receipts.
Equity considerations also loom large. While outbound travel has become more accessible, it remains concentrated among middle- and upper-income Filipinos. Some argue that a levy on international departures, if properly structured and targeted, can serve as a progressive tool that taps those with greater means to help fund tourism infrastructure, education and cultural preservation that benefit the broader public.
In response, reform advocates point out that the current travel tax does not distinguish between a worker flying out for a low-wage overseas contract and a frequent flyer on premium leisure trips. They argue that the levy has become a blunt instrument that penalizes mobility, hinders family reunification and constrains opportunities at a time when global travel is increasingly intertwined with economic and personal advancement.
The debate is now shifting to whether a complete abolition, as envisioned by House Bill 7443, is preferable to more incremental reforms that would exempt economy passengers or specific categories of travelers while retaining some level of contribution from higher-end segments. Recent proposals in the Senate have explored such targeted approaches, suggesting that a compromise model could yet emerge from the legislative process.
What Travelers Should Watch as the Debate Unfolds
For Filipino travelers, the outcome of the travel tax debate could directly alter the cost of their next international trip. If lawmakers move quickly and the measure secures Senate approval, outbound passengers may see the 1,620 to 2,700 peso charge disappear from their receipts within the next budget cycle, depending on how swiftly the implementing rules are finalized and systems updated.
In the meantime, industry groups and consumer advocates are expected to press for clarity on transition timelines, ensuring that airlines, travel agencies and government collection points can adjust their booking and payment platforms without confusion. Transparency on how freed-up household spending and business revenues translate into broader economic gains will be equally important in sustaining public support.
For now, Quimbo’s message is straightforward: with airfare down and tourism poised to climb, removing an aging tax on travel could help the Philippines ride a wave of regional mobility while delivering a substantial fiscal dividend. Whether Congress, and ultimately the traveling public, shares that view will shape not only ticket prices, but also the country’s trajectory as a tourism-driven economy in the years ahead.