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Dominguez says Duterte has no plans of taking over airlines of Tan, Gokongwei: Bailout will come from private banks, not taxpayers’ money

Finance Secretary Sonny Dominguez has given a heads up to bilyonaryos Lucio Tan and Lance Gokongwei that President Rodrigo Duterte has zero interest in owning their financially hemorrhaging airlines.

Dominguez told members of the Philippine Chamber of Commerce ad Industry that the bailout for Philippine Airlines and Cebu Pacific would come from private banks that have a better eye on assessing their creditworthiness.

RELATED STORY: PAL bleeding nearly P4B a month, erases P17.7B pumped in by Lucio Tan:D/E ratio balloons to 390%

“We are deep in discussion with them and we are prepared to participate in assistance to the airline industry. But let me point out that whatever assistance we have or we are going to provide will be part only of the entire process. The private sector banks have to cough up the majority of the assistance,” said Dominguez in forum Wednesday, 7 October 2020.

“I don’t want to be in a position, because govt is not in a good position to evaluate credit risk. We will rely on participation of private banks and support their efforts to revive the industry. Government does not want to end up owning the airlines,” he added.

RELATED STORY: Obligasyon daw ng taxpayers! PAL boss says airlines deserve P8.6B monthly bailout: Injustice for Lucio Tan to bear brunt of pandemic risks

Through the Air Carriers Association of the Philippines (ACAP), Tan and Gokongwei have knocked on Duterte’s doors asking for massive financial relief just a few days after the government declared a Luzon-wide lockdown to contain the pandemic which shuttered all airports in the country.

Specifically, ACAP is begging for P8.6 billion monthly subsidies – P1.3 billion in wage subsidies, P6.8 billion in working capital and P500 million in navigational and airport charges.

RELATED STORY: PAL, Cebu Pacific, AirAsia see P150B revenue losses in Q2

After getting criticized for demanding taxpayers’ money to bail out bilyonaryo owners, ACPA changed its tune and asked for government guarantees for much needed loans to keep them liquid.

“They have prepared at least 4 or 5 plans for their finances. The reason they say is the situation is changing so quickly that they have to keep on changing their plans,” observed Dominguez.

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