Philippine Senate panel tackles bid to abolish travel tax

The Senate Ways and Means Committee discussed bills seeking to abolish the travel tax, a measure prioritized by the administration and backed by the Department of Finance (DOF).

Senator Pia Cayetano chaired the hearing yesterday, where authors of the proposed legislation argued that the travel tax is now an outdated levy that restricts Filipinos from exercising their constitutional right to travel.

Cayetano emphasized the need to balance the travelers’ interest in eliminating this expense with the government’s need to generate revenue for its projects.

“Today, critics argue that it has become an added cost that disproportionately impacts ordinary Filipinos who travel for work, family reason, education, or leisure. They contend this barrier is misaligned with modern economic realities and ASEAN commitments aimed at facilitating seamless regional mobility,” Cayetano said.

“At the same time, we also acknowledge that revenue from the travel tax currently supports vital programs.

This includes tourism infrastructure, higher education, and cultural funds, which many institutions fear may face funding gaps if this source is eliminated without an alternative mechanism in place,” she added.

DOF Undersecretary Karlo Adriano noted that abolishing the travel tax—whether completely or partially, affecting only Filipino travelers or also ASEAN nationals—would impact revenue between ₱1.018 billion and ₱9.3 billion. Collections from 2017 to the first half of 2025 averaged ₱4.56 billion.

Currently, travel tax revenues fund projects by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), the Commission on Higher Education (CHED), and the National Commission for Culture and the Arts (NCCA). Representatives from these agencies updated senators on how the funds are used for programs in tourism, education, and the arts.

With the proposed abolition, the projects previously funded by travel tax would instead be included in the agencies’ appropriations, Adriano said.

When Senator Sherwin Gatchalian asked about the tax's history, Adriano explained it was imposed during the previous Marcos Sr. administration to “conserve foreign exchange” by “discouraging international travel.”

Gatchalian noted that, at the time, international travel was not widely affordable and remittances from overseas workers were not yet a major economic driver.

“Times have changed after 70 years. Imposing travel tax is now an added friction cost,” he said.

Cayetano added that budget travel has become more accessible, making the tax a financial burden on ordinary Filipino households. She also criticized the DOF’s earlier statements that Congress should decide how to fund programs if the travel tax is removed.

“Ayaw ko lang ng ‘bahala na kayo.’ Hindi tama yun. It’s not the right attitude,” Cayetano said, stressing that it is the executive department’s responsibility to draft the national budget and identify funding sources in the National Expenditure Program.

-Paraluman News