Settle your debts, Duterte tells PAL's Lucio Tan

Dharel Placido, ABS-CBN News

Posted at Sep 28 2017 01:36 AM | Updated as of Sep 29 2017 09:09 PM

PAL eyes compromise deal

MANILA – President Rodrigo Duterte has threatened to shut down the Ninoy Aquino International Airport (NAIA) Terminal 2, which has been used by the Philippine Airlines (PAL), if the country’s flag carrier will not pay its liabilities to the government.

The President gave PAL chairman and chief executive officer Lucio Tan 10 days to settle his companies liabilities with the government.

“Sabi ko, you are using government buildings, airport, you have a back… back -- utang diyan sa runway ‘di mo binabayaran,” Duterte said in a speech during the celebration of the 56th anniversary of the Philippine Constitution Association at the Manila Hotel on Tuesday.

“Sabi ko, ‘You solve the problem yourself. I will give you 10 days. Bayaran mo. ‘Pag hindi mo bayaran, eh ‘di sarhan ko.’ Wala nang airport. So what?”

The President said he does not mind if “we sink” because of the closure of NAIA Terminal 2, which has been used exclusively by PAL for its domestic and international flights since 1999.

"We have to enforce the law. So guys, you guys, if you are put into a great discomfort, sorry. Wala akong magawa. The law is the law. It is the law. And that is what makes me unpopular itong mga... Eh alam mo na. Nandito sila,” Duterte said.

Duterte claimed that Lucio Tan offered money for his presidential campaign but he declined.

The Department of Transportation (DOTr) said PAL's unpaid navigational fees and other charges due to government as of September 26 amount to about P7.28 billion, payable to the Civil Aviation Authority of the Philippines (CAAP) and the Manila International Airport Authority (MIAA).

“Upon instruction of Department of Transportation (DOTr) Secretary Arthur P. Tugade, letters have been sent to PAL as early as August 2016 demanding full payment of all unpaid charges. As a result, discussions were undertaken with PAL to reconcile invoices and documents, which led to PAL's payment to CAAP of PHP 370 million,” the DOTr said in a statement.

“PAL also requested to discuss the possibility of paying its arrears in 7 years. All such requests have been denied. Thus, final demand for full payment of all unpaid charges has been sent to PAL, preparatory to the filing of appropriate legal action in order to protect the interest of government.”

'Amicable settlement'

PAL, in a statement Wednesday, said it has been trying to resolve the issue for years on its allegedly unpaid navigational charges.

PAL said the CAAP, in August last year, sent letters demanding payment of unpaid navigational charges in the amount of P6.63 billion. 

"The same legal issues were the subject of a court case between PAL and the MIAA years back where the court ruled in favor of PAL. Despite the favorable ruling, PAL then opted to settle amicably with the MIAA as a manifestation of its full support of the government," the airline said.

"PAL has earlier manifested its willingness to amicably settle with the CAAP as a manifestation of its continued support for the Authority. Communications have been open between the parties as regards this matter. For the past months, both CAAP and PAL have been working together to validate these claims in their mutual and collaborative effort to settle this obligation. PAL has fully cooperated and will continue to cooperate with any and all agencies to resolve this concern," it said.

"In fact, PAL stressed that CAAP created an inter-agency panel of negotiators for the proposed settlement via CAAP Authority Order 149-17," the airline said. "PAL formally submitted its offer to CAAP which offer is more than the amount covered by the CAAP supporting invoices received by PAL. To date however, PAL has not received any official response from CAAP on its offer."

"We look forward to meeting the negotiating panel and we are ready to submit a compromise agreement to settle this issue once and for all," PAL said.