The Philippines’ gov’t ready to help airlines but not alone

The government of the Philippines is ready to step in and assist the troubled airlines in the country but would neither nationalise any of them nor help alone with no contribution from the private sector, Finance Secretary Carlos G. Dominguez III said during the virtual Philippine Business Conference and Expo. “We are prepared to participate in the assistance to the airline industry… But let me point out that whatever assistance we have, or we are going to provide, will be a part only of the entire process,” Dominguez III said. He added that the government would expect the private sector to provide the majority of any forthcoming rescue financing, although he did not go into details as to how high a share the authorities would be ready to dole out. “We will rely on the participation of private banks, and we will support their efforts to help revive the industry. But I have to point out that the government does not want to end up owning their airlines,” he added. Dominguez III underlined that the government has been in talks with the airlines in the country for around six months. However, due to the ever-changing nature of the pandemic and its unpredictable course of action, the airlines have to frequently revise their financial forecast. They have presented four to five plans each since the outbreak of the pandemic and as such, no final financial plan has been drawn up yet. The government is currently evaluating whether airlines would qualify as strategically important entities available to seek loans from the planned PHP50 billion peso (USD1.05 billion) emergency fund, which is to be managed by the Development Bank of the Philippines and Land Bank of the Philippines. Dominguez III said that even if the airlines would be eligible for this funding, a credit risk assessment should be done by the participating private banks. “The government is not in a good position to evaluate credit risks. So we will rely on the participation of private banks and we will support their efforts to help revive the industry,” the minister said. Dominguez III used to serve as the president of Philippine Airlines (PR, Manila Ninoy Aquino Int’l), the country’s largest airline. The flag carrier is privately owned by businessman Lucio Tan.