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The Philippine Airlines (PAL) has just graduated from
the status of receivership. For a firm that lost its previous
position as the nation’s flag-carrier—probably because of
globalization—its emancipation from some kind of government
control is indeed welcome.
This new status of PAL capped a
nine-year period of a regulatory regime. Although shackled by
control, the management transformed the firm into a robust and
profitable company. In that simple but significant ceremony last
week, Securities and Exchange Commission Chairman Fe Barin handed
PAL President Jaime J. Bautista documents removing PAL from
receivership.
The document formally released
PAL from the restrictions of the rehabilitation plan. That was also
the same document that had served as the airline’s road map of
recovery since June 1999—the same year the SEC placed PAL under
receivership.
The move was welcomed by PAL’s
creditors, who have come to terms with the flag carrier on the
rescheduling of its remaining obligations. As of August 31, 2007,
PAL had $869 million in outstanding principal debt, down from $2.2
billion when it entered receivership.
The PAL president said that with
PAL ending receivership, a number of benefits will come, among which
are lower financing costs, improved financing terms and better
access to capital markets.
It will also open up more doors
and opportunities for the airline. It does not have to bear the
stigma of being under rehabilitation. This is also expected to lead
to more commercial and marketing opportunities.
The lifting of receivership,
according to Bautista, provides greater flexibility for PAL, as it
seeks to grow its fleet, expand services and venture to new
destinations. He recalled a landmark development in the history of
PAL when CEO Lucio C. Tan infused in June 1999 $200 million in fresh
equity. This audacious move triggered the approval of the
rehabilitation plan and from there—a smooth cruising to recovery.
Bautista has all praises for the
PAL majority owner. “Dr. Tan’s bold and selfless move, taken
when no one else wanted to touch PAL, was an act of faith in our
ability to turn around the company. The new PAL, now among best
performing airlines in the world, is a testament to Dr. Tan’s
commitment.”
How committed is Mr. Lucio Tan to
the future of PAL? It was said that he put on the line his other
firms for the success or failure of the rehabilitation plan. What a
gamble indeed!
Good start from Secretary Atienza
I am sure that the people of
Sibuyan island, Romblon, welcome this new move of Environment
Secretary Lito Atienza. A few days ago, he issued an order stopping
three mining firms from cutting trees in the lush forest of the
island. This must be Atienza’s immediate response to the protest
going on in the island against mining.
Atienza in effect suspends the
permits issued by his predecessor to the small-scale miners in late
July to cut down at least 100,000 trees in San Fernando, Sibuyan.
(By the way, the term small-scale mining may not be apt because the
miners use backhoe to dig the land.
Very significant is the order of
Atienza to stop lower officials of the Department of Environment and
Natural Resources from issuing permits to cut trees. Sometimes,
abusive local DENR officials issue permits for cutting trees without
the knowledge of the secretary.
Atienza was quoted in one report
as having said that permits granted to the Sibuyan Nickel Properties
Development Corp. (SNPDC), All Acacia Resources Inc. and the Sun
Pacific Resources Philippine Inc. were “anomalous.” If this
statement is correct, then we are about to see a review of the whole
mining permit granted to the miners.
Sen. Aquilino Pimentel Jr. said
that granting a permit to a mining firm remains a power of the
environment department and not of the provincial government. The
father of the Local Government Code said that the power to grant
permits was not devolved at all.
In calling for a review of the
mining claims, Atienza was reacting to the protests going on in the
island. “We want to do justice for Councilor Armin Marin who
offered his life to protect the environment,” he said in a recent
briefing. Marin, 42, was shot and killed by a guard of a mining firm
while leading a picket against mining in San Fernando on October 3.
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