Longitudinal dynamics of MSME growth in Iloilo, Philippines: Assessing the economic and social ripple effects of domestic tourism

Abstract

This longitudinal study delves into the impact of domestic tourism on Micro, Small, and Medium Enterprises (MSMEs) in Iloilo, Philippines, highlighting the economic advantages and the concurrent challenges. Interviews with MSME representatives revealed a significant boost in revenue during peak tourist seasons, leading to business growth and enhanced local employment. This economic benefit is further underscored by improvements in community infrastructure, funded largely by tourism-generated revenue. However, the study also uncovers several challenges. Chief among these is the inconsistency of seasonal income, compelling MSMEs to continually adapt to changing tourist preferences. This dynamic presents a complex balancing act for businesses striving to capitalize on tourism benefits while managing the unpredictability of the market. Focus Group Discussions (FGDs) reinforce the positive economic impact on MSMEs, but also bring to light critical concerns about environmental degradation and potential cultural erosion. These discussions suggest a delicate interplay between economic growth and the preservation of environmental and cultural integrity. Collaborative efforts among MSMEs are highlighted as a vital strategy to maximize tourism opportunities. The study recommends policy support, capacity building, and strengthened inter-business collaboration to address the identified challenges and enhance the benefits of tourism. Such collaboration is deemed essential for promoting sustainable tourism practices. Observations during the study indicate that businesses in tourist-heavy areas generally thrive, benefiting from their strategic locations and physical attributes. Nonetheless, there are evident signs of environmental stress in these areas, underscoring the need for urgent implementation of sustainable tourism practices. The study concludes that while domestic tourism is a catalyst for economic growth in Iloilo, it also presents sustainability challenges. These dual aspects of tourism's impact necessitate further research into sustainable tourism practices that can strike a balance between economic development and environmental and cultural preservation. The findings advocate for a nuanced approach to tourism development, ensuring it contributes sustainably to the economic and social development of the community, while safeguarding its environmental and cultural heritage.