outbrain
Close  

Dominguez: Aid for struggling airlines under study

By: - Reporter / @bendeveraINQ
/ 02:41 PM July 29, 2020

MANILA, Philippines — President Rodrigo Duterte’s chief economic manager on Wednesday assured assistance to struggling airlines amid the COVID-19 crisis even as the government had yet to firm up how.

Finance Secretary Carlos G. Dominguez III said he had met with local airline companies while the government was “studying various alternatives” to aid them.

ADVERTISEMENT

Homegrown airlines already shed thousands of jobs as the economy was brought to a standstill by the COVID-19 pandemic and the resulting lockdown—the longest and most stringent in the region—which restricted movement of people in and out of the country. The domestic industry fears thousands more could be out of work if they cannot get some relief from the government.

Air Carriers Association of the Philippines (ACAP) vice-chair and executive director Roberto Lim told the Senate in May that the three major carriers—Philippine Airlines, Cebu Pacific, and AirAsia Philippines—would need about P8.6 billion a month to sustain their operations.

FEATURED STORIES

The bulk, or P6.8 billion, was needed mainly to pay aircraft lease; P1.3 billion for their workers’ monthly salaries; and P500 million to settle airport and navigational fees, Lim had said.

Dominguez said the Department of Finance (DOF), in particular, was “studying the industry and the condition of the companies, as well as various alternative approaches.”

Asked if ailing airlines could qualify for possible capital infusion under the proposed national emergency investment vehicle joint-venture of state-run lenders Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank), Dominguez said the DOF’s study was underway so they will be ready once the bill was passed in Congress and while its implementing guidelines were prepared.

Pending in Congress was a measure that will plunk at least P50 billion into a holding company to be formed by the two government financial institutions (GFIs), which will allow the government to pour equity investments into firms, which Dominguez had said must be “critical to national interest,” troubled with solvency problems.

“Companies that intend to tap this window will have to abide by certain conditions. The conditionalities will spell out the standards of governance for companies that will receive assistance under this window. Among the conditions are limits to dividends; non-dilution of equity; limits on bonuses and allowances, retention and incentives of senior executives; clawbacks on bonuses; and no golden parachutes. Luxury expenditures related to entertainment or events, office and facility renovations, private aviation and transportation services as well as other expenses not related to the normal course of business will have to be curtailed,” Dominguez said last month.

ADVERTISEMENT

For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link .

Read Next
EDITORS' PICK
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Acap, aid, Air Carriers Association of the Philippines, Airline, aviation, Business, Carlos Dominguez III, COVID-19, DoF, pandemic
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.