Tourism zone development in the Philippines

State-led tourism development in the Philippines can be traced back to the autocratic government of President Ferdinand Marcos (1965-1986) who created the cabinet-level Department of Tourism shortly after the declaration of martial law in 1972 (Richter, 1999). His militarised tourism strategy used the discourse of ‘making the Philippines safe for tourists’ and followed his earlier dedication of a Pacific War Memorial on Corregidor island in 1968 - a former battle site that played a role in the invasion and liberation of the Philippines from Japanese military forces in World War II — which subsequently became a site of remembrance for domestic visitors as well as American and Japanese tourists and war veterans (Gonzalez, 2013). The establishment of large five-star hotel complexes in strategic places across the country — most of them owned by Marcos and his cronies — were reportedly financed using the country’s national pension system as a guarantee (Richter, 1999). Apart from enriching himself and his associates, Marcos used tourism for political leverage at a time when the US had important military bases in the country (Richter, 1999; Gonzalez, 2013).

Until the onset of the COVID-19 pandemic in early 2020, tourism was one of the largest foreign exchange earners in the Philippines, and consecutive administrations have pursued extremely proactive policy measures to attract investors into the tourism industry. The Tourism Act of 2009 established a new agency, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), under the Department of Tourism. TIEZA is in charge of promoting the establishment of Tourism Enterprise Zones (TEZs), which may fall under any of the following zone classifications: (i) cultural heritage; (ii) health and wellness; (iii) ecotourism; (iv) general leisure; and (v) mixed use tourism. TEZs need to have a size of at least 5ha and can be either brownfield (with existing infrastructure) or greenfield (with no or minimal infrastructure) developments. The minimum amount of investment is US$5 million, not including land acquisition costs.

The operators of TEZs benefit from a range of fiscal and non-fiscal incentives, including multi-year income tax holidays, exemptions from taxes and custom duties on imports of capital investments and equipment, and tax deductions on costs incurred by environmental protection efforts, cultural heritage preservation activities, and sustainable livelihood programmes for local communities. As of January 2019, TIEZA administered 11 flagship Tourism Enterprise Zones and several other TEZs, such as Hacienda Looc (discussed in the next section). These are complemented by Tourism Economic Zones which are administered by the Philippine Economic Zone Authority (PEZA). As of 30 November 2017, there were 19 Tourism Economic Zones across the archipelago with a total approved investment of about USS 900 million. Nearly all of them were under Filipino corporate management. One of these Tourism Economic Zones is located on Boracay Island (see below).

Tourism enterprise zone development for the elite in Hacienda Looc, Batangas Province

The Hamilo Coast project in Hacienda Looc is located in the Nasugbu municipality of Batangas province and can be conveniently reached from the Philippine capital Manila. It is being implemented by SM Prime, a subsidiary of SM Investments Corporation (hereafter called SM), which is one of the largest business conglomerates in the country. Hamilo Coast’s master plan is being developed by IMA Design, Inc., which prides itself in having designed such international megaprojects as Disneyland Paris and Universal Studios. With the planned development of a golf course, two marinas, a shopping mall, a ferry terminal, ten resorts and more than 3,000 dwelling units, its vision is to become the premier sustainable beach resort town of the Philippines (Atkins, 2016).

Hacienda Looc extends over an area of 8,650ha and comprises four village clusters (harangays) with a combined population of about 10,000 (Atkins, 2016). The area has a chequered legal history; it was once in the hands of a rich Filipino family which had to hand over the ownership of the large estate to a state-owned development bank in 1973 when it was unable to repay a loan. In the 1980s, the estate was turned over to the Assets Privatization Trust, and subsequently a major share of the area was placed under the

Comprehensive Agrarian Reform Program (CARP) (see Box 3.2), with several hundred farmers being the intended beneficiaries of land ownership certificates (APC and KMP, 2012). Yet, the suitability of Hacienda Looc for agricultural use was questioned by a government-commissioned feasibility study which recommended converting the area into a tourism zone (Atkins, 2016). In the mid-1990s, a subsidiary of SM won the public bidding for those areas not covered by CARP and filed petitions to the Department of Agrarian Reform to cancel the land ownership certificates for the remainder of the estate (APC and KMP, 2012; Atkins, 2016). In 2007, the area was declared a Tourism Enterprise Zone by executive order of then President Macapagal-Arroyo.

Box 3.2 Pro-poor and indigenous land policy programmes in the Philippines

The Comprehensive Agrarian Reform Program (CARP) was introduced by then President Corazon Aquino in 1988 after intense lobbying by peasant movements and land reform advocates. Intended beneficiaries were landless, including tenants and regular or seasonal farmworkers, and landpoor farmers owning no more than three hectares of agricultural land. Tools for redistribution included voluntary sales with a compensation premium, compulsory acquisition and distribution of stocks held in land-based enterprises. The program was met with fierce resistance by landlords, who challenged its legitimacy and tried to exploit various loopholes to prevent land redistribution and, in some cases, even to re-appropriate distributed land, e.g. by lease-back or ‘joint-venture’ arrangements. The slow pace of CARP has also allowed many landlords to forcibly remove tenants from their land in order to avoid having their land subjected to agrarian reform.

The Indigenous Peoples Rights Act (IPRA) of 1997 recognises the rights of Indigenous peoples to their cultural integrity and self-governance and certifies customary property rights to ancestral domains and lands. The Act requires a council of elders to formally represent the community in all dealings with government entities. The Certificate of Ancestral Domain Title (CADT) recognises indigenous communal land rights on formerly public domain land. The process of obtaining a CADT is expensive and timeconsuming, due to the large amount of evidence that needs to be provided by the claimants. Besides, ancestral domain claims often overlap with land in the ‘public domain’, such as protected areas and government reservations, as well as concessions given for mining, tourism, logging, plantations, and energy projects, which are governed by other existing and often conflicting laws.

Sources: Hall, Hirsch and Li, 2011; Neef, 2016

From the mid-1990s until the early 2010s, local communities together with a range of human rights advocacy groups staged public protests, organised media campaigns and launched court appeals. The case also featured in a 40-minute documentary The Golf War by filmmakers Jen Schradie and Matt DeVries. In response to fierce local resistance, Hacienda Looc experienced increased militarisation through national armed forces alongside private security guards employed by SM (Atkins, 2016). An NGO network led by the Asian Peasant Coalition (APC) and KMP reported a range of human rights violations against the protesters, including fatal shootings, death threats, burning of houses, destruction of crops, and farmers being prevented from accessing their fields (APC and KMP, 2012). Local people also complained about increased soil erosion, pesticide contamination, flooding and landslides as a result of the construction of a golf course in the area (APC and KMP, 2012).

In an attempt to make the land grab appear more legitimate and to co-opt local people into supporting its mega-project, SM has deployed a range of strategies. Through its corporate foundation, it launched a skills development programme and a livelihood project in the barangays of Hacienda Looc and built such amenities as basketball courts and day-care centres (Atkins, 2016). The Hamilo Coast project has also engaged in a strategic partnership with WWF Philippines that includes the creation and management of three Marine Protected Areas (MPAs) along the coast and the rehabilitation of mangroves and hillside forests (WWF Philippines, 2017; The Manila Times, 2018). Yet these measures of‘corporate greenwashing’ have imposed serious restrictions on local people’s livelihoods. Much of the waters oft' Hamilo Coast are now inaccessible to fisherfolks depending on nearshore fisheries, and charcoal making in the adjacent hillside forests — formerly an important source of income for landless people - has been banned since 2009 (Atkins, 2016).

Since the mid-2010s, local resistance against the Hamilo Coast project has become weaker, and several villagers have sold their land to SM and assumed low-wage employment on the company’s premises (Atkins, 2016). Yet some NGOs recently renewed their calls on the government to revoke the ownership rights of large, colonial-era estates, including Hacienda Looc, and to redistribute the land to farming communities (Barahan, 2017).

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