DOTr accepts PAL's P6-billion settlement of unpaid dues

The Department of Transportation (DOTr) on Friday accepted from Philippine Airlines (PAL) P6 billion to settle unpaid obligations to the government.

"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 transactions updated and current with the CAAP/MIAA," the DOTr and PAL said in a joint statement on Friday.

The settlement comes one day short of the 10-day ultimatum given by President Rodrigo Duterte for PAL to pay its navigational and other charges payable to CAAP and MIAA.

Late last month, the DOTr noted that as of September 26 the airline supposedly has unpaid navigational and other charges amounting to P322,112,385 and payable to the Manila International Airport Authority (MIAA).

The DOTr also claimed that the Civil Aviation Authority of the Philippines (CAAP) has total collectibles from PAL amounting to P6,965,146,149.63 as of July 30 2017.

"In August 2016, the Civil Aviation Authority of the Philippines, sent letters to PAL demanding payment of unpaid navigational charges in the amount of P6.63B," the airline said

The DOTr warned the flag carrier to pay in full its obligations or face possible lawsuits.

"After several months of validation and reconciliation of accounts, the DOTr and PAL are pleased to announce that they have reached a resolution on the CAAP and MIAA fees issue," the joint statement read.

PAL has said it was willing to enter into a compromise deal with the government to settle its unpaid obligations.

"One of the overriding reasons why PAL agreed to settle is to manifest its  trust and confidence in President Duterte's administration," the statement added.

PAL also assured the government and the traveling public that it will continuously provide its vital airline operations "in the service of the Filipino people."

"Hopefully, it will bring stability to the company as it takes one uncertain issue out of the way," AB Capital Securities Inc. head of research Jose Vistan said. — VDS, GMA News