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Economy

Boracay closure offers chance to clean up and rethink tourism

Sudden shutdown hits top Philippine beach resort, but future looks encouraging

This sewer pipe from a resort facility on Boracay runs directly into the sea.   © AP

MANILA -- Philippines President Rodrigo Duterte in April ordered the closure of Boracay, the country's most famous resort island, for up to six months, due to environmental concerns. Two and a half months later, the island known for its white sand and clear water remains quiet, awaiting its reopening in October.

The island attracted nearly 2 million tourists in 2017.

The sudden decision by the government raised criticism, and has already hit the island's tourism. At least 700,000 trips to the island are believed to have been canceled. But a move is also emerging among the country's conglomerates and other businesses toward efforts to improve environment on the island. 

Fridays Boracay Beach Resort, a hotel and leisure complex, is one of the local businesses suffering serious consequences from the shutdown. Sales of Boulevard Holdings, the operator, fell 81% on the year to 1.7 million pesos ($31,800) in May. Sales for the first five months of this year grew only 5% from the year earlier.

Airlines such as Philippine Airlines and budget carrier Cebu Air will likely suffer similar consequences.

Manila Water, a major water utility operated under conglomerate Ayala Corp., earns 142 million pesos a year from the joint water business on the island with a government-sponsored partner, according to local media reports. But the revenue from the island is expected to be down 50 to 60% this year from usual. Tourists account for 70% of water usage there. 

Meanwhile, Ramon Ang, president of San Miguel, the conglomerate that operates nearby Caticlan Airport, said the government measure may be painful over the short term, but fair and beneficial over the long term. Caticlan is one of the closest air gateways to the island, located on the edge of the neighboring island of Panay.

The negative impact of the island closure is estimated to reach 1.9 billion pesos. Even before the government decision, rumors about a possible island shutdown attracted criticism. But a poll conducted in late March by local research company Social Weather Stations indicated that more than 60% of respondents supported the shutdown, which is intended to protect the island's natural environment.

For the island shutdown, the government cited unlicensed hotels popping up on the island and draining wastewater to the sea. The government is eager to eliminate illegal buildings and develop sewage management facilities on the island, and the move is helping raise mood toward improving the resort location's environment.

Boracay Island Water, a unit of Manila Water, has raised its annual forecast of capital spending for this year to 700 million pesos, from the initial 677 million pesos. It intends to allocate a portion of the money for putting forward a plan to construct wastewater treatment facilities that are capable of processing 5 million liters of sewage a day.

Meanwhile, San Miguel's solution is to build a bridge between the island and Caticlan Airport on Panay Island, which will include water and sewage piping between the two islands. The business is preparing to propose the public-private collaboration project to the government, which will spend a total of 3 billion pesos over the two years.

Duterte earlier called the island's surroundings a "cesspool." But the environment has now returned to a "clean" state, Environment Secretary Roy Cimatu told reporters in June. He also hinted at possible earlier lifting of the closures before the six-month ban is to officially end in October. 

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