Manila, September 15, 2005—A consulting team appointed by the International Finance Corporation has found that expansion of tourism in Boracay provides significant opportunities for private investors, but that investment should be carried out in the context of a new development plan. The team, consisting of German and Philippine consultants, in its preliminary report concluded, among other recommendations, that Boracay should shift critical services and infrastructure supporting Boracay to the nearby mainland location of Caticlan to ensure sustainable development.

The study will lead to an investment forum in the next few months where the final report will be presented. The forum will include a wide range of Boracay stakeholders, private investors, and affected local and national government agencies.

Critical development issues now facing Boracay are numerous, including migration, zoning, capacity, lack of health facilities, visual and noise pollution, solid waste management, waste water management, energy supply, and intra-island and inter-island transport. The team suggested that to deal with these issues authorities must place their highest priority on preparing an updated master development plan that includes Boracay along with neighboring tourism areas of Nabas, Buruanga and Malay. The preliminary report also puts a heavy emphasis on tourism marketing and promotion that can help guide the development of Boracay and identify support services that promote the effort to make Boracay a world class island resort.

“There are enormous investment opportunities through promoting sustainable tourism in Boracay,” said IFC Country Manager Vipul Bhagat. “For Boracay to remain a bright spot in Philippine tourist development, a new plan must be established and implemented to ensure new private investment is channeled toward meeting significant development challenges.”

The team’s findings suggest that Boracay requires expanded water and wastewater facilities and power supply to meet future demands which will come from several large hotels under construction. The team also recommended that future development of Boracay infrastructure for critical services be shifted to Caticlan. The projects suggested by the team include: the transfer of the solid waste management facility from Boracay island to Caticlan; the construction of low-cost mainland housing to ease migration and over-congestion on Boracay; an improved transport facility between Caticlan and Boracay; Caticlan airport terminal facilities; a new marina in Caticlan; a Caticlan-based full-service hospital to respond to emergencies and an agro-industrial center in Caticlan with ice and cold storage facilities and a public market. The area also needs new education facilities in Caticlan that can offer courses in tourism-related services, environmental management and ecotourism. Tourist facilities would benefit from the e-portal system for bookings and reservations. The preliminary report details other investment opportunities and an action plan including projects that can be implemented in a short time frame by private investors and national and local governments.

The team was funded by the International Finance Corporation, the private sector arm of the World Bank Group, through trust funds from the State of Bavaria, Germany. The German team was headed by Mr. Winfried Werner of Obermeyer, an urban and regional planning expert. The Philippine team was headed by former Tourism Secretary Ms. Mina Gabor, now president of PHILSMED. The local and international consultants included specialists in a wide range of areas, from sustainable tourism to wastewater management. The study benefited from input from the Department of Tourism, the Department of Environment and Natural Resources, the Philippine Tourism Authority, Malay Local Government Unit, Kalibo Provincial Government, Congressional Office of the Lone District of Aklan, Boracay Foundation Incorporated, Boracay Chamber of Commerce, Regional and Provincial Tourism Office, Barangay Officers of Boracay, the Coast Guard, the Navy, the Boracay Land Transport Multi-Purpose Cooperative. The team also consulted with tourists, academics, students, medical practitioners, boatmen, a tribal community, vendors associations, and local residents.

In 2004, Boracay Island hosted about 430,000 tourists, about a third of which were foreign, resulting in spending of 8 billion pesos (US$143M). Arrivals have been growing by 13% annually, higher than the national average. The island has an estimated current population of more than 15,000 growing at an annual rate of 6%, more than double the national average.

IFC in the Philippines

IFC committed investments of $102 million in the Philippines during the 2005 fiscal year in the housing finance, infrastructure and insurance sectors along with advisory mandates in the infrastructure sector. IFC recently began lending directly in pesos to local companies to mitigate their foreign exchange risks, and about 85 percent of FY05 investments were local currency financing. IFC also manages PEP Philippines, an SME program targeting key sectors including tourism in the Philippines.

About IFC

The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.

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