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AIM RSN PCC 2017-003: Assessment of the Meetings, Incentives, Conventions and Exhibitions (MICE) Industry in the Philippines

The assessment of the Philippine Meetings, Incentive, Conventions and Exhibitions (MICE) industry is the first attempt at assembling and analyzing all data and information relevant to its activities, translating them into concrete policy, regulatory and governance gaps that can easily be understood and hopefully, addressed, by decision-makers. This paper presented the scope and definition of MICE in local and international context, and identifies the main MICE players (i.e. event organizers, destination management companies) as well as other actors involved in the industry's forward, backward and indirect linkages. Stakeholders in direct backward linkage include venue owners, booth/stand contractors, marketing consultants and logistics providers. Those involved in direct forward linkage consist of food providers/restaurant owners, hotels, retail stores, recreation centers, and travel as well entertainment providers. Players involved in indirect linkage include providers of transport, security, communications and utilities as well as those involved in printing/publication, banking and finance, and electronics. In estimating the economic contribution of MICE, the team estimated the independent share of MICE as well as related industries to the gross domestic product (GDP), computed for the multiplier effect of MICE to forward and backward industries, and estimated the total MICE participant expenditures. The economic contribution of MICE cannot be readily determined as the Philippine statistical system does not have an indicator that directly measures its gross value added (GVA). Nonetheless, the team estimated a 0.004 percent to 0.87 percent MICE contribution to the country's gross domestic product (GDP) using the proxy method. Using the closest available indicator 'Organization of conventions and trade shows' as a proxy for MICE, the industry's GVA is estimated at only PhP415.3 million or a measly 0.004 percent of the country's GDP. It is, however, very likely that the figure is underestimated given that small and unregistered/informal MICE players are not captured in the Annual Survey of Philippine Business and Industry (ASPBI) where the economic contribution of the proxy indicator appears. MICE GVA dramatically increased if all MICE-related industries are taken into account (i.e. GVA from related industries such as accommodation, real estate/venues, travel agency and tour operator activities, event catering and food service, and combined facilities support activities) in the estimation. This suggests that support must be given to these industries as well for the government to maximize the economic contribution of MICE. The team estimated the multiplier effects of MICE using the expenditure distribution on typical MICE events. An exhibition contract of PhP1 million, for instance, can yield as much as PhP360,000 in revenues for exhibition venues while an incentive travel contract of the same amount can generate as much as P600,000 revenue for hotels and accommodation facilities. In addition to the expenditures of event organizers, MICE attendees likewise spend on domestic goods and services. A MICE attendee spends six times as much (PhP29,694) as a regular tourist does (PhP4,949). A plausible explanation is that since their companies provide them with daily subsistence allowance and assume their major travel expenses such as accommodation, food and transport, MICE participants tend to spend more on shopping and experiential activities, taking advantage of the destination offering. Demand for MICE in the Philippines is relatively lower than that of its neighboring Asian countries (ranking 49th worldwide and 13th in Asia Pacific in terms of the number of meetings held annually) and yet, its large-scale venues in the country such as the World Trade Center Metro Manila and SMX Convention Center are often fully booked - unable to accommodate new events and provide additional space for the expansion of regularly held conventions and exhibitions. If the country already struggles to meet the current demand for venues - which is still low by international standards - then aggressively promoting the Philippines for MICE would necessitate more large-scale infrastructure and supporting facilities. The government initiated the establishment of most large-scale MICE venues in the Philippines such as the Philippine International Convention Center (PICC), WTCMM, Cebu International Convention Center and Tagaytay International Convention Center but compared to the size of MICE venues in other countries, the country remains at the tail end of competition. The strengths and weaknesses of the country in being a MICE destination were also identified in this assessment, alongside analysis of opportunities and threats affecting the country's prospects. Strengths: 1. Competitive MICE event planners and suppliers, 2. Wide range of accommodation options to meet the influx of MICE clients, 3. Unique tourist attractions and world-class entertainment, 4. Active participation of private MICE-related associations. Weaknesses: 1. Inadequate number of large-scale MICE venues, 2. Prolonged clearance and release of imported articles for exhibition, 3. Poor inter-island and internet connectivity, 4. Cost of doing business in the Philippines, 5. Weak public-private sector collaboration, 6. Passive government support for MICE, 7. Absence of a separate budget line item for MICE, 8. Non-conformity of academic MICE curricula to international standards, 9. Gaps in research and development. Opportunities: 1. Rising global income, 2. Large potential market for products marketed in MICE events, 3. Strategic location in Asia, 4. Growing appetite for knowledge sharing, 5. Wide-reaching marketing platform, 6. Growing popularity of "green" MICE venues, 5. Emergence of casino-entertainment resorts. Threats: 1. Rising competitiveness of Asian cities, 2. Rising popularity of digitally-enabled MICE events, 3. Safety and security concerns, 4. Rising competitiveness of other service industries. Based on the analysis of MICE trends, gaps, threats and prospects, the team recommends the following strategies for moving forward: 1. Establish a government bureau dedicated to MICE, with specified competencies and its own budget, 2. Professionalize MICE organizers, 3. Establish or expand integrated or mixed-use tourism complexes with large-scale, world-class convention and exhibition venues in key provinces and cities, 4. Philippine accession to ATA Carnet, 5. Distinct branding for Philippine MICE, 6. Increase Philippine visibility as a MICE destination, 7. Strengthen MICE data analytics.

AIM Rizalino S. Navarro Policy Center for Competitiveness
Authors Keywords
Francisco, Jamil Paolo S.; Olfindo, Rosechin; Tiongson, Rhodora; Philippines; MICE;
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