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BACKLASH FEARED AFTER HOSTAGE FIASCO

0 Comments 24 August 2010

BACKLASH FEARED AFTER HOSTAGE FIASCO

The Philippines could be in for a backlash following Aug. 23’s botched hostage rescue that resulted in the deaths of eight Hong Kong tourists.

The government’s damage control response was seen as crucial to mitigating the impact on the country’s image and the economy. On Aug. 24 peso shed a hefty 47 centavos to the US dollar while the stock market dropped by 2.29%.

The fiasco has prompted Hong Kong to issue a “black” travel alert — its highest — while China warned its citizens to exercise caution while in the Philippines, prompting alarm among local travel industry officials and concerns that foreign investments would also be affected.

President Benigno C. Aquino III met with Chinese Ambassador Liu Jian Chao yesterday to convey the Philippines’ sympathy and assure that the incident would be investigated. He also talked with Hong Kong Chief Executive Donald Tsang — who had complained that calls to Mr. Aquino during the crisis were not answered — by phone and declared August 25 a National Day of Mourning.

Communications Development and Strategic Planning Secretary Ricky A. Carandang said members of the diplomatic community would be provided a detailed explanation, including particulars of the botched rescue’s operational aspect.

“We have a plan to send a delegation to Hong Kong in the next few days … The idea is to go there and meet with concerned officials to explain what happened,” Mr. Carandang said.

The delegation will also address concerns that Filipinos living in Hong Kong could come under threat given public anger over the incident.

Presidential spokesman Edwin Lacierda said the Foreign Affairs department would brief members of the diplomatic corps to assure them and the foreign community that the Philippines is safe.

“We believe that if we explain what happened … they’ll have more of an understanding, perhaps be kinder when they issue travel advisories,” Mr. Carandang said.

The immediate impact, said Mr. Aquino, would likely be in tourism.

“One of our avenues for job generation is tourism. We intend to double the tourism figures from three million to six million. This obviously does not help,” he told a briefing early yesterday.

Tourism Secretary Alberto A. Lim told BusinessWorld he expects this year’s 3.3-million visitor target to be missed.

“We still have to consult it with our tourism planners and the industry to know how hard they expect to be hit, but I think it (visitor volume) would [go down by] about 5% to 10%,” he said.

Mr. Lim said his department would be coming up with a new “branding package” for the country in a couple of months’ time to counter the negative impact of the incident.

This was echoed by Philippine Travel Agencies Association President Maria Paz R. Alberto, who said: “With the help of the government, we have to improve security for tourists and improve the image of the Philippine National Police, which was heavily tainted in the incident.”

In Cebu, travel agency operators said they were anticipating booking cancellations, and not just from China and Hong Kong.

Jenny Franco, chairperson of the Cebu chapter of the National Association of Independent Travel Agencies, said: “Hong Kong is a country that everybody listens to, especially Asians, because they have a government that everybody looks up to.”

Japanese travel agent Hiroshi Nakamura said Japanese nationals had been advised to exert extra caution when traveling to the Philippines. He was optimistic, however, that Cebu would continue to attract Japanese visitors.

“Cebu has long been loved by the Japanese. It has a good image because it is peaceful,” Mr. Nakamura told BusinessWorld.

Local carriers said they expect to lose business but noted that cancellations were not immediate.

“Philippine Airlines (PAL) carries at least 40% of all inbound tourists from Hong Kong. The Manila-Hong Kong-Manila route is a very busy one with a total of 10 flights daily,” spokesman Ma. Cielo C. Villaluna said.

Given Hong Kong’s call for its citizens to return immediately, she said PAL would be waiving penalties for re-bookings of all Hong Kong-issued tickets.

The flag carrier is also offering two round-trip tickets for free to relatives of Hong Kong nationals who were killed or hospitalized during tragedy.

“The flag carrier will shoulder the airfare for two each for the victims’ relatives in flying to and from Manila. As our way of condoling with the victims’ families, PAL is also offering to bring back the remains of their loved ones to Hong Kong free of charge,” said Harry Tan, chairman of PAL’s executive committee.

Budget carrier Cebu Pacific said it was also waiving re-booking penalties.

“So far, we have received re-booking requests for less than 5% of our total daily passengers carried for our Hong Kong flights,” said Candice Iyog, Cebu Pacific vice-president for marketing and distribution.

Latest Tourism department data showed visitor arrivals up nearly 10% to 980,765 as of April this year. Of the figure, 47,715 came from Hong Kong, 7.89% more compared to the same period last year.

Hong Kong was the fifth-biggest tourism market for the Philippines during the period, behind only South Korea, the United States, Japan and China.

Hong Kong’s “black” alert, said Department of Foreign Affairs spokesman Eduardo C. Malaya, is the only confirmed advisory against the Philippines.

“We recognize the exercise of the prerogative of the Hong Kong Special Administrative Region to issue a travel alert in light of the tragic end to [Monday’s] incident. The incident, however, is an isolated case and is no way reflective of the peace and order situation in the Philippines,” Mr. Malaya said in a text message.

Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr., meanwhile, said the incident would not have a substantial impact on economic growth projections.

“I don’t think this will have a significant effect on our year-round GDP (gross domestic product) and economic growth for the third and fourth quarters. It’s an isolated case. It is not part of the country’s economic condition, and I hope it would be taken that way,” Mr. Paderanga said in a telephone interview.

“What is important now is the government’s response and handling of the incident and how we cope with it,” Mr. Paderanga said.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. told reporters: “That was a very unfortunate incident but an isolated event and the markets will see through that and it should not have a significant effect on the market in general.” (BusinessWorld)

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