PAL pays nearly P6B to DOTr to settle accounts

PAID. PAL pays for its unpaid navigation charges on November 3, 2017 at the CAAP office in Pasay City. DOTr photo

PAID. PAL pays for its unpaid navigation charges on November 3, 2017 at the CAAP office in Pasay City.

DOTr photo

MANILA, Philippines — Lucio Tan-led flag carrier Philippine Airlines (PAL) settled its multi-billion-peso debt with government on Friday, November 3.

“PAL settled today, 3 November 2017, its P6 billion unpaid air navigational charges to the national government, which were incurred since 1970s up to 30 July 2017,” the Department of Transportation (DOTr) said in a statement.

The Civil Aviation Authority of the Philippines (CAAP) received a check in the amount of P5,677,887,615, while the Manila International Airport Authority (MIAA) received a check worth P258,594,230.33 net of taxes.

The checks were to cover unpaid navigational fees and other charges accumulated through the years. They were turned over in the presence of DOTr Undersecretary for Aviation and Airports Manuel Antonio L. Tamayo, Undersecretary for Legal Affairs and Procurement Reinier Paul Yebra, and Assistant Secretary for Communications Leah Quiambao. 

PAL’s payment was made before the December 2017 deadline.

Matters came to a head in late September when the DOTr publicly called on PAL to pay P7 billion. President Rodrigo Duterte himself weighed in, warning PAL that he would close its dedicated NAIA terminal 2 if it failed to do so.

All parties eventually agreed on an amount close to P6 billion, with the government noting that PAL's payment was made ahead of deadline.

PAL president Jaime Bautista said that the airline’s operating firm PAL Holdings Incorporated  will “likely, most probably” expect to record a loss this year. This was confirmed by the firm in a disclosure to the stock exchange last week.

This, he explained, was because the unforeseen payment would impact the firm's cash flow and require it to borrow money. – Rappler.com