Providing incentives such as value-added tax (VAT) refunds to foreign travelers would make the Philippines “competitive” as a destination among its peers in Southeast Asia, the Department of Tourism (DOT) said Thursday.

In a statement, Tourism Secretary Christina Frasco backed the creation of a VAT refund mechanism for non-resident tourists, which was recently adopted by the House of Representatives.

“This legislation is a crucial milestone in enhancing the country’s appeal as a premier tourism destination, positioning the Philippines competitively among its regional neighbors,” she said.

“We commend the Senate and House for recognizing the potential of this VAT refund system in encouraging greater tourist spending.”

Frasco said allowing tourists to claim VAT refunds on locally purchased goods worth at least PHP3,000 would not only boost tourist spending by 29.8 percent, but also small businesses and employment.

“We echo the sentiment that this VAT refund program is not merely about immediate gains, but a long-term investment in our tourism industry,” she said.

“As we continue to transform the Philippines into a tourism powerhouse, we believe that this measure will significantly contribute to our shared goal of a sustainable and globally competitive tourism sector.”

Frasco said the DOT is aligned with the Congress’ intention to promote Filipino signature products such as Marikina shoes, barongs and traditional weaves, among others.

This initiative, she said, would “elevate the overall travel experience for visitors and encourage longer stay and return visits”.

Once enacted, Frasco said the law allowing VAT refunds would serve as a “testament to the government’s commitment to creating a welcoming and enriching environment for tourists while driving economic benefits for the Filipino people”. (PNA)