SOUTHEAST Asia's tourism sector continues to recover from the impact of the Covid-19 pandemic, but the Philippines is "lagging considerably behind," Bank of America (BofA) Global Research said in a new report.

Tourists from China are aiding the recovery, BoFA said on July 29, with Malaysia expected to see the largest gain.

Vietnam, following the relaxation of visa policies since August 2023 and the country's increasing popularity among Korean tourists, was said to be the "clear leader" within the Association of Southeast Asian Nations.

Tourist arrivals are currently at 105-110 percent of 2019 levels since March for Vietnam, BoFA noted, while the Philippines remains below 70 percent.

The country's "underperformance" was attributed to the "muted pace of returning Chinese tourists (still below 20 percent of 2019 levels), partly reflecting the decline of POGOs (Philippine offshore gaming operators) beginning 2020," it added.

POGOs, which mostly cater to Chinese gamblers and were manned by workers from the mainland, flourished during the term of President Rodrigo Duterte. Oversight over POGO operations later tightened due to alleged links to crimes, and Duterte's successor, Ferdinand Marcos Jr., last week ordered a total ban.

Thailand, meanwhile, trailed Vietnam at 90 percent, followed by Indonesia, Myanmar and Singapore, which are in the "middle of the pack" at 80 to 90 percent.

Singapore arrivals, BofA noted, have pulled back from a boost due to Taylor Swift's concerts in March.

As for the lift from Chinese tourists, Malaysia is expected to see outbound seats rise by almost 40 percentage points (ppt) to 129 percent of the pre-pandemic level.

Indonesia (15 ppt to 69 percent) and Singapore (10 ppt to 111 percent) follow, while Vietnam and Thailand could see a 6.0 ppt lift each to 75 and 81 percent of 2019 levels, respectively.

The Philippines, however, was said to be an "outlier," with outbound seats falling by 9.0 ppt to 46 percent.

In ordering a winding-down of POGO operations by the end of 2024, Marcos said that the online casinos had ventured into areas furthest from "gaming, such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder."

Officials have said that the economic cost of a ban would be minimal.

Benefits from POGO operations amount to P166.49 billion per year, they said, significantly lower than the economic cost of P265.74 billion.

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