SHANGHAI - Chinese tourist numbers to the Philippines are dropping as the ongoing territorial dispute continues over Huangyan Island in the South China Sea.

Many Chinese travel agencies have halted tours to the Philippines, which China accuses of "making trouble" in the waters around the disputed island for over a month.

A department manager surnamed Zhang with China International Travel Service (CITS) said the company started to see a decrease in tour applications to the Philippines at the end of April and the number dropped dramatically at the beginning of May.

Before the Huangyan dispute, the company used to organize eight to 10 tourist groups to the Philippines per month and each group was composed of about 20 Chinese, according to Zhang.

The Chinese travel agency Ctrip.com has also stopped organizing tours to the Philippines and is persuading those who have booked independent and semi-independent traveling to the archipelago to cancel their plans.

The company has promised to totally refund the tickets of those who cancel their trips.

He Yong, a department manager of Ctrip, said about 300 tourists have been affected.

Yang Yanfeng, researcher with China Tourism Academy, said safety is the precondition for tourism, and Chinese agencies' suspension of tours in the face of threats is a timely and rational response that reflects their strong sense of social responsibility.

Airlines are also facing economic losses.

Airport authorities in Shanghai told Xinhua that from May 1 to 15, some 2,600 tourists flew from Shanghai to the Philippines, while the number was more than 4,100 during the same period last month.

China Eastern Airlines said it had canceled its non-scheduled service to the Philippines and arranged no flights to the country during the past half month.

China's Southern Airlines has also announced that it will reduce its flights to the Philippines in May and June.

Tourism Impacted

China alleges that in early April the Philippines sent a warship to harass 12 Chinese fishing vessels that had sailed into the island's waters to seek shelter from a bad weather.

The month-long tensions over Huangyan Island prompted China's National Tourism Administration to issue a travel warning last Thursday calling on Chinese tourism operators to postpone tours to the Philippines.

Almost all Chinese participating in group tours are expected to return to China by May 16, as that is the final contract day for the remaining groups of Chinese tourists currently traveling in the Philippines, an unidentified official with the administration said Sunday.

The drop in Chinese tourists to the Southeast Asian nation is likely to have a big impact on the Philippines' tourist industry.

Manager Zhang with the CITS said many local agencies in the Philippines are extremely worried about the current situation and have asked the CITS to make more efforts to promote tours to the Philippines.

Yu Weihua, manager of the overseas travel department of the Shanghai China Travel International Ltd., said the suspension of tours will have a far-reaching effect on the Philippines.

"It is unlike suspensions caused by natural disasters, which can be resumed when the disaster is over," he said. "Many Chinese tourists who had given up their tours to the Philippines are driven by a sense of patriotism, and may wait a long time to again choose the country as a tourist destination."

Chinese tourist numbers to the Philippines are substantial -- ranking the fourth highest compared with other countries, after those from the Republic of Korea, the United States and Japan.

Tourist arrivals from the Chinese mainland rose 78 percent in the first quarter of this year, to 96,455 or 8.4 percent of the total, according to the data from the Philippine government.

Traveling to the nations' picturesque islands had become increasingly popular for Chinese, and Boracay had been an especially hot tourist destination for Shanghai tourists, Yu said.

Long-term economic effects

Some fear that the impact of heightened tensions over Huangyan Island will affect other areas of bilateral relations between China and the Philippines.

China-Philippines trade amounted to $27.7 billion in 2010, making China the third largest trade partner of the country, and the two sides had pledged to double their trade volume to $60 billion in five years.

Qu Xing, head of China Institute of International Studies, said the deterioration of the two countries' relations will certainly have negative economic effects, and the anti-Chinese sentiment in the Philippines will hurt the development of trade between the two countries.

China is a great potential market for Western countries as well as the emerging economies, and losing the Chinese market will severely hurt the Philippines' economy, Qu said.

As for China's impounding Philippine bananas alleged to carry pests, Qu said the move was not related to the Huangyan dispute, as China had adopted new inspection standards before the dispute arose.

The newspaper Manila Standard Today said Tuesday that the Philippine Stock Exchange benchmark index dropped 1.4 percent on Monday, its sharpest decline in two months.

Shi Yinhong, professor with Renmin University of China, said the economic loss that the Philippines will suffer by losing the Chinese market could be as much as that of a real war.

The attitude of the Philippines decides the situation of the crisis, and hopefully, the Philippines can be rational enough to take a stand to end the dispute, Shi said.