The Clark International Airport Corp. (CIAC) ended 2011 with a dismal P118.21 million net loss that worsened its total deficit to P938.77 million, reflecting its “continuous poor operating condition and low capitalization,” the Commission on Audit (COA) reported.

In the auditors’ review of the operations and transactions of the government-controlled company, the Commission noted “the continuous deterioration of the financial condition [of CIAC].”

CIAC operates the Clark International Airport, also known as the Diosdado Macapagal International Airport, which was named after the father of Rep. Gloria Macapagal Arroyo of Pampanga province.

According to COA, the CIAC has been “continuously suffering losses” in its operations which resulted in the build-up of its capital deficit to P938.77 by 2011 yearend.

Moreover, the CIAC resorted to borrowings to operate the international airport.

“As such, CIAC’s poor operating condition and its heavy dependence on debts were inevitable in the absence of fresh and substantial equity infusion from its then mother agency, the Bases Conversion and Development Authority [BCDA] and now from the national government,” the report read.

CIAC was able to obtain P50 million from the BCDA to dampen its cash shortfall but BCDA released the amount “as advances instead of as an investment.”

“Analysis of the submitted financial reports disclosed that despite the huge losses, the CIAC’s expenses for personal services have been averaging 58 percent of its gross income for the last seven years, indubitably a big factor to its mounting deficit,” the COA added.

The state company said that even if CIAC suffered losses in the previous years, income for 2011 improved to P51.79 million from P23.72 million in 2010 “although still not enough to cover increasing depreciation and financial expenses.”

As for recommendation, COA asked the CIAC to adopt cost-cutting measures and work out strategies to expand its revenue sources.