DOT SPEECH JULY 1998
On the Philippine Withdrawal to Host the World Expo 2002
Gemma Cruz Araneta
Secretary of Tourism
Commission on Appointments, Philippine Senate
July 1998
The Philippines’ bid to host the World Expo 2002 was conceived and initiated in 1994. The primary consideration then was that the World Expo 2002 is cost efficient and is not going to be an expensive burden for the government
Contrary to the above-mentioned intention, it turned out that the exposition would have been a colossal obligation on the part of the Philippine government. At worst, we would be incurring this obligation at a time when the Philippine economy is at its lowest level of growth,due to the current worldwide economic crisis.
The thrust of theEstrada Administration is to uplift the living standards of the common Filipino, particularly those of the marginalized sectors of society. This vision will be fulfilled only if we are able to utilize government resources for the improvement of farm-to-market roads, education, mass housing and other basic social necessities.
We cannot take the risk of spending our financial resources for hosting this kind of high-profile events that will benefit only a few and prejudice the less-privileged Filipino masses. A similar view was expressed by the Senate President when he enjoined his colleagues to respect PresidentEsrada’s decision to officially withdraw from hosting the World Expo 2002.
The proponent of the event declared that from an initial cost of US$ 159 million the amount was reduced to US$116 million (PhP 6 billion. Which ever amount is the accurate one, both are still a huge amount which the Estrada administration is not inclined to disgorge. s
The proponent also said that there is a cost-sharing scheme for the expenses, a 40/60 sharing (government/private sector) which was subsequently reduced to 32/68. However, to this date, the Estrada administration has yet to see a firm financial commitment with a MOA from the private sector. No detailed study has been submitted by the proponent explaining the various components of said commitment, ranging from development cost to return of investments.
As early as 14 July 1993, no less than then Secretary of Foreign Affairs, Roberto R. Romulo, brought to the attention of then President Fidel V. Ramos the financial implications of the Philippines’ hosting the World Expo 2002.He cited the case of the Spanish state corporation which sustained heavy financial losses estimated at US$50 million for hosting the 1992 World Exposition in Sevilla, Spain.
On 6 November 1995, Secretary of Foreign Affairs, Domingo L. Siazon, informed then Secretary of Trade and Industry, Mr. Rizalino Navarro, about the points raised by no less than the president of the Bureau International des Exposition (BIE) , Ambassador Ole Philipson, during his meeting with Pres. Ramos in September 1995. There was another meeting of BIE Secretary General Vicente Loscertales and Dr. Sedfrey Ordonez in Paris , on 27 January 1995. The points discussed were:
- The cost of hosting an international exposition could reach US$6 billion for big fairs and US$1 billion for small fairs like Expo 2002. Cited was Hungary which withdrew as host of the 1996 Expo because of budgetary constraints.
- Two exhibitions within a period of 4 (four) years will be extremely expensive for the Philippines, alluding to the Centennial celebration in 1998 as the other exhibition.
- In lieu of the World Expo 2002, which would entail an enormous financial outlay, BIE suggested that the Philippines host a garden or flower festival. That was why the DOT hosted the “Florikultura ‘98, Gardens of the World Festival” in Pampanga. Then Tourism Secretary , Mina Gabor, spent Php 400 million for the 10-day “Florikultura.”
Other facts to consider:
- The World Expo 2002 is a mini expo which is supposed to last for 90 days. The proponent estimates that the Expo will attract a total of 6 million visitors, which means 40,000 people will flock to the Expo grounds every day for 90 days.
- BIE rules do not allow commercial activities in an Expo. This will discourage local businesses to invest in Expo 2002.
- The area designated for the Expo is the Quezon Memorial Circle and parts of the campus of the University of the Philippines to make up a total of 25 hectares. The Quezon family asked President Estrada to please not to allow any entity to desecrate the monument of their father.
- The proponent assures that 60 to 75 countries will join Expo 2002, though architectural studies show that only 30 to 35 countries can be accommodated in a 25- hectare area.
- Under BIE rules, the host country provides the pavilions for foreign countries, for free.
- The Expo organizer ( the DOT) will have to provide a “Nayong Expo” which will be built in the UP campus.
- To herd the estimated 3.6 million visitors to the Expo site, new infrastructure will have to be constructed, like an MRT 4 from EDSA corner Quezon Avenue to the UP campus, connected to an elevated mono-rail passing through and around the Quezon Memorial Circle. The estimated cost of the new infrastructure is US$70 million, of course a mobilization fund has to be advanced to start construction .
In the recently -concluded World Expo in Lisbon, the event incurred a deficit of US$400 million which will have to be paid by the taxpayers. The organizers had predicted at least 15 million visitors but the event drew only 9.6 million visitors , 80 per cent of whom were domestic tourists and the remainder from neighboring Spain. Is the Philippine government prepared for such an eventuality? In fact, based on the records of the Department of Tourism, Php 85 million have already been spent on a host of activities related to the bidding for the World Expo 2002.
The Department of Tourism fully supports the decision of President Estrada to withdraw from hosting the World Expo2002. The tourism program of a country should not be prey to the personal agenda and vanities of government officials.
Honorable Senators, Let us go back to basics, to sustainable tourism. Thank you for hearing my side.