People's Journal
Tuesday, September 22, 1998
President Estrada yesterday said he would ask controversial tycoon and Philippine Airlines chairman Lucio Tan to extend the notice of closure of the beleaguered flag carrier to await the result of a referendum among its employees.
The President was referring to a referendum initiated by the labor department among members of the PAL Employees’ Association to determine their stand on the board's decision to reject the offer of PAL management. It started yesterday and expected to be finished after two days.
"Perhaps, I could appeal to him (Tan) to reset the closure until the referendum is finished," Mr. Estrada said.
PAL would shut down its operations by tomorrow if all efforts go to naught.
The referendum, though non-binding. would have a persuasive effect, especially if the vote of union members is overwhelming, he said.
The President said he was convinced that the referendum would be the best gauge of the sentiment of the PAL employees.
“If the employees approve it, then management will have to continue PAL's operations,” he said.
He assured, however, that the government is studying several options to stave off the closure of PAL, among which is the granting of an additional seat to the PALEA board.
The government is entitled to four seats in the PAL board for the17-percent share it holds in the carrier.
"I am willing to have one seat occupied by one member of the union to settle this problem," Mr. Estrada said.
PAL management earlier offered PALEA three seats in the board — in exchange for a 10-year suspension of collective bargaining — representing 20 percent of PAL's shares.
Labor leaders initially accepted the offer but rejected it, prompting the PAL board to issue a closure notice.
But while the government is exhausting all efforts, the President said bailout of the ailing airline is totally out of the question and appealed to the management and labor leaders to also do their share to keep it flying.
He reminded both sides that PAL's closure would not only affect the industries that rely oil its services, but reminded both sides that PAL's closure would not only affect the industries that rely on its services, but the entire country as well.
"I am practically begging both sides to come out to their senses and reach an agreement;" he said.
He added: “They should think not only of themselves but also of the country because PAL's closure will affect a lot of people."
Government takeover of PAL is not an option, he said, for lack of funds.
The budgetary process would bearduous even if there would be funds for it, he added.
Presidential spokesman Jerry Barican, meanwhile, said the administration is also actively seeking the entry of new investments into domestic airline routes. These may come from existing players or from new ones, he said.
The President is also prepared to fast-track the approval process to speedily get enough planes to fly domestic routes, he said.
Meanwhile, pressures for government to take over PAL operations mounted yesterday at the Senate in a last-ditch effort to save the ailing airline.
Sen. Francisco Tatad asked Mr. Estrada to use his constitutional powers and order a temporary takeover of PAL, to prevent a crippling transportation and economic standstill when PAL stops operations by midnight of September 21
Tatad proposed that the National Development Co take over PAL inasmuch as the airline's operations require hiring of pilots and workers on a casual basis at productive conditions.
Defense Secretary Orlando Mercado yesterday also recommended to the President the immediate takeover— by the Philippine Air Force — of vital PAL operations, Including currency and mail runs and servicing of the flag missionary routes to far-flung areas and other non-profitable destinations.
In his recommendation, Mercado stressed that the emergency measures should not be misconstrued as the initial step toward the nationalization of the flag carrier or a government takeover.
Justifying his recommendations to the Commander-in-Chief, he said the nation "is faced with a potential emergency situation" with the impending closure of PAL.
“This is a major concern which will require the concerted effort of all government agencies to cushion its impact of the economy and security of the country," the DND chief said.
Tatad also batted for an increase in PAL fares by as much as 110 percent, stressing there must be a more realistic pricing.
As a parallel trove, he said, bilateral air transport agreements must also be reviewed since the prevailing agreements are "too one-sided and extremely detrimental to PAL and the country's economy."
This is exactly what Transportation and Communications Secretary Vicente Rivera proposed to congressmen yesterday — that the national government pump P10 billion into PAL to rehabilitate it and keep it flying.
Rivera candidly said, however, that for as long as the labor unions stay in the company, PAL would not be able to recover.
Appearing before the House appropriations subcommittee A-1, he assured that the President has an alternative plan to prevent PAL's permanent closure.
Pending negotiations with both the PAL management and labor unions, Rivera refused to elaborate on the fallback option.
In an interview later, he said he was "very optimistic" that Mr. Estrada would be able to resolve the PAL row.
"The President is exerting and doing his level best, so I think he can settle this," Rivera said.
Ople, on the other hand, urged the Securities and Exchange Commission to name a management committee to take over PAL's operation.
He said the SEC is empowered by law to create a management committee higher than the receivership committee of five already appointed by the Commission.
He explained while the receivers exercise oversight functions, a management committee effectively supplants the existing management and direct the operations of PAL.
In a letter to the President dated September 20, Tatad stressed that PAL's abrupt decision to stop operations without any period of transition would create a national emergency.
Tatad said under Article 12 of the Constitution, the Chief Executive, in times of national emergency, or when the public interest so requires, can order a temporary takeover or direct the operation of any privately owned public utility or business serving the public interest.
PAL’s abrupt closure, he said, would not only have incalculable effect on the economy but also leave the Philippines as the only counts of its size and stature without any national flag carrier.
“Since nobody knows how long it would take another commercial airline to step into PAL’s role, the resultant economic emergency could last a long time. This is why the State should immediately step in," he said.
Tatad explained the takeover would not necessary mean government infusion of fresh capital to PAL.
"Government does not have to worry about money. This is an exercise of state power. It is not a buyout,' he added.
Sen. Blas Ople on Friday also asked Malacañang to take over the operations of PAL to keep 9,000 employees on the payroll.
Sen John Osmeña, on the other hand, called on members of the PAL union to carefully rethink the decision of their leaders, stressing that their CBA is useless when they no longer have their jobs.
He said they should not allow themselves to be used by radicals in their dispute with management.
"Ano pa ang gagawin nila sa kanilang CBA kung wala na silang trabaho. lpakain na lang nila sa abogado nila ang CBA nila," Osmeña added.
Tatad shared his sentiments, appealing to PAL employees to make financial sacrifices for the common good.
"I must also caution the rank and file workers to be wary of labor leaders who exploit the workers' legitimate rights and interests to advance their own private agenda." he said. DULCE RAYMUNDO/ TCVALDERMA/ ABERGONIA
Tuesday, September 22, 1998
President Estrada yesterday said he would ask controversial tycoon and Philippine Airlines chairman Lucio Tan to extend the notice of closure of the beleaguered flag carrier to await the result of a referendum among its employees.
The President was referring to a referendum initiated by the labor department among members of the PAL Employees’ Association to determine their stand on the board's decision to reject the offer of PAL management. It started yesterday and expected to be finished after two days.
"Perhaps, I could appeal to him (Tan) to reset the closure until the referendum is finished," Mr. Estrada said.
PAL would shut down its operations by tomorrow if all efforts go to naught.
The referendum, though non-binding. would have a persuasive effect, especially if the vote of union members is overwhelming, he said.
The President said he was convinced that the referendum would be the best gauge of the sentiment of the PAL employees.
“If the employees approve it, then management will have to continue PAL's operations,” he said.
He assured, however, that the government is studying several options to stave off the closure of PAL, among which is the granting of an additional seat to the PALEA board.
The government is entitled to four seats in the PAL board for the17-percent share it holds in the carrier.
"I am willing to have one seat occupied by one member of the union to settle this problem," Mr. Estrada said.
PAL management earlier offered PALEA three seats in the board — in exchange for a 10-year suspension of collective bargaining — representing 20 percent of PAL's shares.
Labor leaders initially accepted the offer but rejected it, prompting the PAL board to issue a closure notice.
But while the government is exhausting all efforts, the President said bailout of the ailing airline is totally out of the question and appealed to the management and labor leaders to also do their share to keep it flying.
He reminded both sides that PAL's closure would not only affect the industries that rely oil its services, but reminded both sides that PAL's closure would not only affect the industries that rely on its services, but the entire country as well.
"I am practically begging both sides to come out to their senses and reach an agreement;" he said.
He added: “They should think not only of themselves but also of the country because PAL's closure will affect a lot of people."
Government takeover of PAL is not an option, he said, for lack of funds.
The budgetary process would bearduous even if there would be funds for it, he added.
Presidential spokesman Jerry Barican, meanwhile, said the administration is also actively seeking the entry of new investments into domestic airline routes. These may come from existing players or from new ones, he said.
The President is also prepared to fast-track the approval process to speedily get enough planes to fly domestic routes, he said.
Meanwhile, pressures for government to take over PAL operations mounted yesterday at the Senate in a last-ditch effort to save the ailing airline.
Sen. Francisco Tatad asked Mr. Estrada to use his constitutional powers and order a temporary takeover of PAL, to prevent a crippling transportation and economic standstill when PAL stops operations by midnight of September 21
Tatad proposed that the National Development Co take over PAL inasmuch as the airline's operations require hiring of pilots and workers on a casual basis at productive conditions.
Defense Secretary Orlando Mercado yesterday also recommended to the President the immediate takeover— by the Philippine Air Force — of vital PAL operations, Including currency and mail runs and servicing of the flag missionary routes to far-flung areas and other non-profitable destinations.
In his recommendation, Mercado stressed that the emergency measures should not be misconstrued as the initial step toward the nationalization of the flag carrier or a government takeover.
Justifying his recommendations to the Commander-in-Chief, he said the nation "is faced with a potential emergency situation" with the impending closure of PAL.
“This is a major concern which will require the concerted effort of all government agencies to cushion its impact of the economy and security of the country," the DND chief said.
Tatad also batted for an increase in PAL fares by as much as 110 percent, stressing there must be a more realistic pricing.
As a parallel trove, he said, bilateral air transport agreements must also be reviewed since the prevailing agreements are "too one-sided and extremely detrimental to PAL and the country's economy."
This is exactly what Transportation and Communications Secretary Vicente Rivera proposed to congressmen yesterday — that the national government pump P10 billion into PAL to rehabilitate it and keep it flying.
Rivera candidly said, however, that for as long as the labor unions stay in the company, PAL would not be able to recover.
Appearing before the House appropriations subcommittee A-1, he assured that the President has an alternative plan to prevent PAL's permanent closure.
Pending negotiations with both the PAL management and labor unions, Rivera refused to elaborate on the fallback option.
In an interview later, he said he was "very optimistic" that Mr. Estrada would be able to resolve the PAL row.
"The President is exerting and doing his level best, so I think he can settle this," Rivera said.
Ople, on the other hand, urged the Securities and Exchange Commission to name a management committee to take over PAL's operation.
He said the SEC is empowered by law to create a management committee higher than the receivership committee of five already appointed by the Commission.
He explained while the receivers exercise oversight functions, a management committee effectively supplants the existing management and direct the operations of PAL.
In a letter to the President dated September 20, Tatad stressed that PAL's abrupt decision to stop operations without any period of transition would create a national emergency.
Tatad said under Article 12 of the Constitution, the Chief Executive, in times of national emergency, or when the public interest so requires, can order a temporary takeover or direct the operation of any privately owned public utility or business serving the public interest.
PAL’s abrupt closure, he said, would not only have incalculable effect on the economy but also leave the Philippines as the only counts of its size and stature without any national flag carrier.
“Since nobody knows how long it would take another commercial airline to step into PAL’s role, the resultant economic emergency could last a long time. This is why the State should immediately step in," he said.
Tatad explained the takeover would not necessary mean government infusion of fresh capital to PAL.
"Government does not have to worry about money. This is an exercise of state power. It is not a buyout,' he added.
Sen. Blas Ople on Friday also asked Malacañang to take over the operations of PAL to keep 9,000 employees on the payroll.
Sen John Osmeña, on the other hand, called on members of the PAL union to carefully rethink the decision of their leaders, stressing that their CBA is useless when they no longer have their jobs.
He said they should not allow themselves to be used by radicals in their dispute with management.
"Ano pa ang gagawin nila sa kanilang CBA kung wala na silang trabaho. lpakain na lang nila sa abogado nila ang CBA nila," Osmeña added.
Tatad shared his sentiments, appealing to PAL employees to make financial sacrifices for the common good.
"I must also caution the rank and file workers to be wary of labor leaders who exploit the workers' legitimate rights and interests to advance their own private agenda." he said. DULCE RAYMUNDO/ TCVALDERMA/ ABERGONIA
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