THE Department of Transportation (DOTr) on Friday said it accepted Philippines Airlines’ (PAL) P6 billion offer to settle its dispute with the government over unpaid fees.

In a joint statement, the DoTR and the flag carrier said they reached an agreement over the unpaid air navigation fees and other charges that PAL owes the Manila International Airport Authority (MIAA) and Civil Aviation Authority of the Philippines (CAAP).

“The DOTr has accepted the offer of PAL to pay in full the P6 billion claims of the CAAP/MIAA, and PAL commits to keep all their transactions updated and current with the CAAP/MIAA,” the statement read.

PAL was also quoted as saying it agreed to settle in order “to manifest their trust and confidence to (sic) President Rodrigo R. Duterte’s administration.”

“The matter of PAL’s unpaid charges has been decisively settled. It is a clear reminder that when government prioritizes national interest, citizens will cooperate,” Presidential Spokesperson Ernesto C. Abella said, noting the funds will be used for infrastructure projects.

The agreement comes after Mr. Duterte on Sept. 26 gave PAL ten days to pay up or else he will cut off the flag carrier’s access to the Ninoy Aquino International Airport (NAIA) Terminal 2.

“Sabi ko, you are using government buildings, airport… (May) utang diyan sa runway ‘di mo binabayaran. Sabi ko, ‘You solve the problem yourself. I will give you 10 days. Bayaran mo. Pag hindi mo bayaran, eh ‘di sarahan ko.’ Wala nang airport,” Mr. Duterte said, referring to the NAIA 2 which is being used exclusively by PAL since 1999.

The DoTR then issued a final demand for PAL to fully pay its obligations, threatening legal action “to protect the interest of the government.”

According to the DoTR, PAL’s unpaid navigational fees and other charges reached P7.3 billion as of Sept. 26, 2017. This includes P6.96 billion payable to CAAP as of July 30, and P322.11 million to MIAA as of Sept. 26.

The issue over PAL’s unpaid charges had remained unresolved under the previous administrations.

When PAL was still owned by the government, it had enjoyed privileges such waiver of landing, take-off, and other fees at the NAIA.

However, the government insisted that PAL is no longer entitled to such privileges, since it was privatized in 1992. The flag carrier is now owned by tycoon Lucio Tan.

Shares in the airline’s parent company PAL Holdings lost 2 centavos or 0.39% to close at P5.10 apiece on Friday. – Anna Gabriela A. Mogato

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