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House bill calls for P40-billion airline bailout

A House legislator filed a measure Thursday that will allocate P40 billion to assist the air transport industry affected by the pandemic.

AAMBIS-OWA Party-list Rep. Sharon S. Garin filed House Bill 9324 or the proposed “Air Carriers Relief Act” which will provide a relief package to the air transport sector following the damage done to travel by the coronavirus disease 2019 (COVID-19) crisis.

The bill calls for “extend(ed) loan payments, interest-free loans, loan guarantees, and regulatory relief” for the industry.

The P40-billion package will consist of P10 billion in interest-free loans to be provided by the Development Bank of the Philippines (DBP); P10 billion in guarantees from the special fund of the Philippine Guarantee Corporation; P10 billion in relief from regulatory fees; and a P10 billion provision for rapid COVID-19 testing.

The bill sets out a DBP loan ceiling of P2 billion per domestic air carrier, payable between five and 10 years.

The proposed law will also expand the government guarantee program by increasing the maximum loan guarantee coverage per borrower.

Banks and other non-bank financial institutions regulated by the government will also be required to extend their commercial loan agreements and terms to domestic air carriers “for a period of three (3) years, and may be further extended for another two (2) years with an interest rate as may be set by the BSP (Bangko Sentral ng Pilipinas).”

The bill will also allow air carriers the option to seek relief from customer refunds, allowing them to issue vouchers for future travel. — Gillian M. Cortez

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