Philippine Daily Inquirer
Tuesday, September 22, 1998
BUSINESS
By Christine A. Gaylican
THE CLOSURE of the country's flag carrier. Philippine Airlines, will have a negligible effect on the economy, Economic Planning Secretary Felipe M. Medalla said yesterday.
However, he did not deny the fact that industries would be the ones directly affected by PAL's impending closure.
"On a direct effect basis, I don't think the PAL issue will be reflected on our gross national product (GNP) growth. After all, the airline is just less than 0.1 percent of the total GNP," Medalla said.
"It will be PAL's clients which would shoulder this (problem). Their operations would surely be adversely affected," Medalla said. "Anyway, it’s not yet over for PAL. Let's wait for Wednesday before we calculate its effects."
The private sector, specially the export industries is worried over PAL’s impending closure as it would affect the delivery of their goods.
But others disagree with Medalla.
"The whole economy, in my view would be in jeopardy. The movement of goods would be hampered. It's anybody's guess really what would happen next," said Sergio Ortiz-Luis. President of the Philippine Exporters Confederation.
Dharmala Securities Inc. economist Jose Vistan was worried about the increase in the country's unemployment when PAL eventually ceases operations.
"Our unemployment figures would jack up by at least 9, 000," he said. "The level of non-performing loans (of the banking sector) would also increase."
Vistan said that PAL’s closure would affect not only the banking sector but also the investment prospects in the country.
"The NPL is one of the crucial statistics in which the International Monetary Fund and other lending institutions base their credit ratings;" Vistas said. "The country's plan to borrow abroad would encounter extreme difficulties."
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