Visitors arrivals to the Philippines grew just 1.5 percent to 285,243 in July, the slowest increase this year, as tourists from the United States , Korea and Japan —the Philippines' main markets—cut their trips here amid higher plane fares and surcharges, the Tourism Department said yesterday.

It said it has launched a shopping festival this month to counter the fall and to encourage more tourists to visit in the second half of the year.

"Increased tourist expenditures for shopping could substantially jack up the country's tourism revenues and generate demand-driven growth in various sectors of the economy, including the industrial and agricultural sectors," Tourism Secretary Ace Durano said.

Arrivals from Korea went down by 7.6 percent, the United States by 0.1 percent, and Japan by 10.2 percent for the first time in three years, but that was offset by the higher traffic from China and Northern Europe , Durano said.

He said the top malls in Metro Manila were participating in the department’s September ShopFest 2008, a month-long shopping festival designed to promote Filipino brands and boost visitor spending in the Philippines .

The festival is also expected to boost the retail sector as foreign visitors spend 26 percent of their daily average expenditures here—$21.59 out of every $82.96—on shopping.

Indeed, shopping alone accounted for $66.7 million of the daily expenditures of the 3.09 million tourists who visited the country in 2007, tourism figures showed.

Tourism revenues helped the Philippine economy offset its huge trade deficit this year as they contributed substantial foreign inflows in the first half.

The department said 1.919 million tourists visited the Philippines in the year to July 2008 for a 6.1-percent increase from last year, and that they spent $2.17 billion as shown by partial tourism receipts for the period.

The top markets were Korea with 380,619 visitors, the United States with 366,662, and Japan with 216,114.

Visitors from China rose 18.3 percent to 102,653, the department said, adding the direct flights between Shanghai and Cebu resulted in a 267-percent jump in the number of Chinese visitors arriving in the Mactan-Cebu International Airport .

Taiwan , a turn-around market, contributed 13 percent more visitors or 72,946. Arrivals from Malaysia grew 8 percent to 39,515, and those from Singapore 6 percent to 57,332, the department said.

Visitor traffic from Vietnam rose 39 percent, while arrivals from Europe continued to post strong growth.

Arrivals from Russia grew by 35 percent, while those from France , Spain and the United Kingdom increased by 26 percent, 22 percent and 18 percent, respectively, the department said.