This policy brief examines whether the Philippine travel tax remains fit for purpose in a more globally integrated and mobility-driven economy. Originally introduced as a foreign exchange control measure, the tax now serves mainly as a funding source for tourism infrastructure, higher education, and cultural programs through TIEZA, CHED, and the NCCA. However, its structure has remained largely
unchanged since 1987 and relies heavily on economy-class Filipino travelers, raising concerns about equity, efficiency, and fiscal sustainability.
The brief argues that while the tax continues to support important programs, its regressive structure, revenue volatility, and weak alignment with regional mobility objectives limit its long-term effectiveness. It recommends a phased transition toward General Appropriations Act financing, supported by stronger transparency and accountability measures, while reviewing more equitable alternatives such as ad valorem aviation levies or frequent-traveler surcharges.