As companies reel from the impact brought about by the Covid-19 pandemic, a government official said the state might infuse capital into important businesses.
This was Finance Asst. Secretary Antonio Joselito Lambino Jr.’s response to a question in a press briefing at Malacañan Palace last week on the plight of airline companies, whose operations have been severely affected by the lockdown and travel restrictions.
“One (option) is to give capability to our government financial institutions to form a holding company that would engage in equity investments with nationally important companies experiencing solvency issues. This is because solvency issues cannot be addressed by merely lending to them,” he said.
He said there could be instances when equity investments would be needed “but this is time-bound and subject to specific conditions.”
The conditions include a prohibition against using the government investments to pay for bonuses or salary increases, Lambino said.
“It’s about looking across industries, finding the ones nationally important and seeing what kind of support is required or needed,” he said.
Lambino said that in some instances, loan programs would be possible, but added that banks would be able to lend more.
State-led PhilGuarantee has approved additional guarantee schemes, and there would be programs for small and medium enterprises as well as for big companies, he said.
Other details will be discussed during deliberations in Congress next month, Lambino said.
In a separate interview at the Wednesday Roundtable @ Lido, Air Carriers Association of the Philippines’ (ACAP) executive director Roberto Co Lim said while airlines were not seeking subsidies from the government, it would be best for the government to issue guarantees to private banks to ensure liquidity.
Lim said domestic airlines were operating at just 5-7 percent of regular daily flights.
“We are also seeking the government’s assistance by waiving the parking, take-off and landing fees which amount to some P500 million a month,” Lim said.
Should the airline industry fail to get assistance, Lim said companies might have to return their aircraft and operate on a limited scale. Melo M. Acuña