PAL Says It Can Finance Itself

Today

Saturday, December 5,1998

By RECTO MERCENE

FORGET foreign investors, Philippine Airlines can go it alone–or so it now believes.

Executive Secretary Ronaldo Zamora, emerging Thursday evening from a meeting with PAL officials, said the beleaguered airline is so confident of its “stand-alone” option that they are “not even asking for an exemption on the original December 7 deadline for which they must submit a rehabilitation plan.”

According to Zamora, PAL is confident that it has money to turn the airline around.

Zamora noted that pal has so far managed to mount local and international flights without hitch.

“Over the past month, PAL has been flying without any foreign investors,” Zamora said. Because of this, he concluded, “the credibility of a stand-alone investment plan may in fact be worth considering.”

Whether or not PAL can actually fly on its own resources for long, however, is still in serious doubt.

Zamora acknowledge, after all, that “in fact, [PAL is still] losing several billions, several tens of billions of pesos. But in the end, discussions with foreign investors require a certain amount of give and take and PAL management feels that there is not enough ‘give’ in the part of the foreign investors.”

Asked about the identity of a strategic partner allegedly willing to infuse $90 to $150 million for PAL, Zamora replied: “Remember at one point the president was considering the possibility of government financial institutions offering credit lines to PAL?”

Without giving any more details, Zamora said the only condition being asked is for PAL to have sufficient collateral.

“I don’t see why we cannot do that right now,” he added.

   

“President Estrada wants to do everything possible to make PAL fly, which is the same sentiment being harbored by the flag carrier’s management,” Zamora said.

“There is no question in my mind that nobody wants PAL to fold up,” he added.

In this regard, if PAL is not going to get any foreign investors, it is looking at ways that internal investments can be generated.

The government may go along with the plan to protect its 20-percent share in the company, Zamora said.

The claim of Estrada that Cathay wrote him a letter was a reference to the many instances where Cathay expressed its interest in rehabilitating PAL, Zamora pointed out.