Return of International Air Carriers to Philippines Expected

Several European and American airlines are expected to return to the Philippines after the government’s removal of “discriminatory” taxes on foreign carriers, the country’s leading tourism industry group said.

The Philippine Travel Agencies Association (PTAA) said the removal of the common carriers tax (CCT) and gross Philippine billings (GPB) imposed on foreign airlines would boost efforts to turn the country into a major aviation hub for Southeast Asia.

In Davao City, President Aquino on Thursday signed Republic Act No. 10374 exempting foreign carriers operating in the country from the payment of certain taxes.

The President signed RA 10374 at the newly opened SMX convention center in Lanang, where some 600 local and foreign delegates gathered for the Philippine MICE Conference. MICE stands for meetings, incentive travel, conventions and exhibitions/events.

Ninoy Aquino International Airport in Manila

Ninoy Aquino International Airport in Manila

With the signing of the law, the President expects the government to meet its target of 10 million foreign visitors a year by 2016, up from 4.3 million in 2012, as he sees “millions of our peoples [having] greater freedom in planning their trips.”

Officials expressed hope that the new law would usher in an era of lower fares for aircraft and transport vessels because foreign carriers would be exempt from paying the 3-percent common carriers tax imposed on passengers. Carriers would also be spared from the payment of the value-added tax for the transport of passengers.

“The travel industry has long waited for the scrapping of the CCT and GPB,” PTAA president John Pail Cablaza said in a statement.

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