PH Carriers Received ₱20 Billion For Repatriation Flights

8 October 2020

The Philippine government is ready to assist the airline sector as long as it won’t end up owning troubled carriers, Finance Secretary Carlos Dominguez said.

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The Philippine government said Wednesday that it had been assisting Philippine-based airlines by paying them about US$400 million dollars (₱20 Billion pesos) for repatriation flights of Overseas Filipino Workers (OFWs) to the Philippines, and transporting locally stranded individuals (LSIs) to the Provinces, Department of Finance (DOF) said.

"We've been helping them." says  Finance Secretary Carlos Dominguez.

The government will not however take over the operations of domestic airlines according to Dominguez during the 46th Philippine Business Conference.

DOF is studying the possible qualification of airlines in the national emergency investment vehicle joint-venture of state-run lenders Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank), which will invest at least ₱50 billion into a holding company to save corporations deemed “critical to national interest.”

A separate ₱10 billion economic stimulus package under the ₱1.3-trillion Accelerated Recovery and Investments Stimulus for the Economy Act (ARISE) is allocated for airlines and is now pending in Congress for approval. ARISE sought to create a sovereign wealth fund for investment in the airline industry.

“But let me point out that whatever assistance we have or or we are going to provide will be part only of the entire process. The private sector banks have to cough up the majority of the assistance.” the Finance Chief has said.

“We will rely on the participation of private banks and we will support their efforts to help revive the industry,” Dominguez added.

Dominguez disclosed that the Philippine government has been helping local airlines since day 1 in the form of contract grants to transport Filipinos home affected by Covid19 Pandemic. He said the government and airlines had been in “deep” talks since March on how best to help them.

“We could have chartered foreign carriers because its cheaper but it won't help our airline industry, ” said Dominguez.

He said that another US$16 million dollar (₱820 million) was recently approved under Bayanihan 2 to transport Filipinos home this year, while airlines awaits the support package under the ARISE bill and the 2021 GAA budget pending in Congress.

Another support package in Bayanihan 2 was ₱700 million loan assistance to domestic airlines guaranteed by the Government of the Philippines.

"That kept our airlines afloat in this difficult time, but we won’t end up owning troubled carriers, Finance Secretary Carlos Dominguez said.

The Philippine government has already chartered more than 50 flights, and 600 commercial flights to repatriate Filipinos home, majority of whom were carried by Philippine-based carriers as of September 30. Philippine Airlines alone mounted more than 300 repatriation flights for overseas Filipinos and locally stranded individuals. The biggest foreign airlines that was also contracted to bring Filipinos home were Qatar Airways, Emirates Airlines and Saudia Airlines. Since March, Qatar Airways has repatriated over 50,000 people in and out of the Philippines.

The Department of Foreign Affairs (DFA) has brought home more than 200,000 overseas Filipinos since the country’s biggest repatriation campaign started in March. At least 9,574 were brought the past week.

DFA said another 150,000, mostly from the Middle East, are scheduled to be repatriated soon, also to flown mostly by local airlines, PAL and CEB, as far as they can managed, considering quarantine restrictions of their flight and cabin crews.

This week, two DFA-chartered flights from Saudi Arabia brought home 711 overseas Filipino transported by Philippine Airlines.

According to DFA,  the charter of Philippine Airlines Airbus A350-900 aircraft to Italy costs the taxpayer some US$450,000 (₱23 million) in charter cost and the PAL Boeing 777-300 flight to Tunisia and Lebanon cost around ₱24 million, while an Airbus A330-300 plane that flies the Middle East cost the government between ₱13 million up to ₱14 million per trip.

DFA Undersecretary Sarah Lou Arriola admitted during the House deliberation of the 2021 budget last week that there are still 88,000 distressed OFWs stuck in Saudi Arabia alone. She said the DFA is having trouble bringing them all home given the sheer volume of Filipinos there.

The DFA is planning to repatriate another 17,660 OFWs this month, also to be flown mostly by Philippine-based carriers.