SEC Proceeds with PAL Rehab Hearing

Philippine Journal
Saturday, September 19, 1998

CLOSURE of the flag carrier Philippine Airlines will cripple the country's trade leading to massive unemployment and a further slowdown in the economy, the Department of Trade and Industry yesterday said.

DTI Undersecretary Ernesto M. Ordoñez said, "Trade impacts employment to a much larger degree because job creation depends on trade and that is the real impact."

PAL employs 9,000 with P1.2 billion in wages but the figure is understated because of the other jobs and opportunities created by PAL's trade related activities.

When PAL pilots struck in June this year, shipments of goods abroad were not affected because exporters took on other airlines.

Domestic trade was not also affected at that time despite the strike because PAL was able to fly to some of its domestic routes in addition to other local airlines.

But when PAL shuts down operations after midnight of Sept. 23 both foreign and domestic trade would be affected according to Ordoñez.

Although other domestic airlines may fill in the void to be left by PAL, there would still be gaps in the routes.

Other foreign airlines may also take the slots to be left by PAL but it will take sometime and that will slowdown the growth of the economy.

"We don't want that temporary disruption,” Ordoñez said.

Infrastructure is very critical to economic growth because infrastructure moves goods and PAL played a greater role in that, Ordoñez said.

"Should this (closure) happen we will be faced with a situation that is detrimental to economic growth and therefore all efforts must be taken to avoid this," Ordoñez said.

Ordoñez called for the adoption of a contingency plan to cushion the debilitating impact of a PAL closure. Such a plan should ensure adequate flights for the domestic market.

Ordoñez, however, expressed confidence that President Estrada could persuade both the management and labor parties to come to a compromise agreement.