As the Philippine currency sinks in value to 54.1 pesos against the greenback â€“ the weakest in nearly 13 years and eight per cent lower than at the start of the year â€“ the business events sector is rethinking its strategies, and reining in outbound travel in favour of domestic and shorthaul destinations.
Angel Ramos Bognot, owner of Afro Asian World Events, said the pesoâ€™s reduced value has already spelt â€śdisasterâ€ť for outbound business.
â€śTravellers are spending more and their money is of less value, which will result in delays or suspensions of their international trips, and they may opt to hold MICE domestically.â€ť
For those going ahead with MICE abroad, â€śa shorthaul trip is advised as itâ€™s more affordable”, Bognot pointed out.
Since this year, Canon Marketing Philippines has been limiting overseas trips in favour of rewarding its champions with local trips or a combination of domestic meetings, cash incentives, and non-cash products like raffling off luxury cars and Rolex watches.
With the pesoâ€™s depreciation, a trip abroad would exceed the companyâ€™s â€śfixed budgetâ€ť, so Canon would opt for a domestic trip or host a business meeting locally combined with other perks, said Grace Obeya, sales and marketing manager, consumable group, consumer systems products division.
Such flexibility will enable the company to â€śstill attain business objectivesâ€ť although foreign trips combining business and relaxation are still booked in cases of special events, such as the launch of a new product or prototype, Obeya said.
While Tradewings Tours and Travel Corp has yet to experience any direct impacts of a weaker peso, general manager Feliz Axalan expects â€śto minimise our marginsâ€ť for MICE business in 2019 when bids are awarded around October to November this year.
The effects of the pesoâ€™s depreciation will likely be more acutely felt next year, he added.
Furthermore, Axalan expressed worries about outbound demand next year not only due to exchange rate fluctuation â€“ with some experts predicting a further drop to 55 pesos to the US dollar by year-end â€“ but also the impending hike in fuel surcharge for airlines and the general election next May.
On the other hand, industry players expect the pesoâ€™s depreciation will make the Philippines a more attractive destination for inbound business.
â€śHowever, there is a negative impression overseas on the economic perspective of the country, linking the weak peso with high prices and instability in commodity pricing,â€ť Bognot said.