Gov’t doing its best to push PAL-Cathay deal

People’s Journal
Thursday, December 10, 1998

President Estrada assured the public yesterday his administration is giving its best efforts to convince Hong Kong-based Cathay Pacific Airways to buy into Philippine Airlines.

Interviewed at Villamor Air Base before leaving for Bukidnon, the President told Palace reporters he remains hopeful that both sides could strike an agreement soon.

“Well, we’re trying our best to settle an agreement,” he said, even as he downplayed reports that the PAL-Cathay talks might be derailed by the move of former first lady Imelda Marcos to contest the ownership  of the national flag carrier.

Mr. Estrada is an active participant in negotiations between PAL and Cathay, which has expressed interest in acquiring a controlling stake in the airline.

In an earlier radio interview, Finance Secretary Edgardo Espiritu said Cathay feels concerned about the constitutional restrictions of foreign investors.

Espiritu explained that while Cathay wants to manage PAL’s day-to-day operations, it is wary of the constitutional provision limiting foreign investors to own a maximum of 40 percent of any local company.

He added that Cathay appears amenable to honoring PAL management’s proposal to preserve the jobs of PAL employees, which the employees approved overwhelmingly in a referendum last September.

Asked whether a settlement can be hammered out soon, the President said, “hopefully, hopefully” but made clear that there is no time frame.