Archive for the ‘Open Skies’ Category

Published on the July 13, 2007 issue of the Manila Bulletin

The multisectoral Fair Trade Alliance (FTA) yesterday called for a strategic development plan for the aviation industry, tourism and other ancillary industries rather than a unilateral opening of Clark to foreign carriers even as it warned that a wholesale opening of Clark contradicts the Constitutional mandate.

Speaking at a recent forum on Open Skies sponsored by the Philippine Chamber of Commerce and Industry, FTA lead convenor Wigberto Tañada stressed that their alliance is not against economic liberalization per se but stressed, “We are for an economic liberalization that is calibrated, measured, progressive and synchronized with our own development priorities and the capacities of our industrial and agricultural producers.”

Tañada pointed out that under Article 2, Section 19 of the Constitution, it is expressly provided that the “State should provide a self-reliant and independent national economy effectively controlled by Filipinos.”

He said that FTA is pushing for calibrated protection because that is what our neighbors like China, Japan, Vietnam and South Korea are doing rather than opening up the economy in an accelerated, one-sided and even lazy and reckless manner.

“Thus, in the Clark’s open skies issue, we are shocked to hear outright proposals for the Philippines to unilaterally open up our skies and abandon the globally-accepted norm of aviation trade negotiation, which is bargaining bilaterallly for equal or reciprocal flying rights,” Tañada said.

He branded some foreign carriers arrogant for wanting to have more rights than Filipino air carriers such as the privilege of operating even without any permit from the Civil Aviation Board (CAB) and the privilege of using Clark as a hub to fly to other destinations.

This unfairness was most evident when Macau denied the application of Asian Spirit to fly from Clark to Macau and back, whereas Tiger Air of Singapore has been allowed to fly freely from Clark to Macau and Singapore, he pointed out.

“A unilateral aviation liberalization policy clearly contradicts the Constitutional mandate that the ‘State shall protect Filipino enterprises against unfair foreign competition and trade practices,” he said.

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By Maricel E. Estavillo
Published on the July 6, 2007 issue of BusinessWorld

In the light of the controversies resulting from recent policy changes for Clark and Subic airports, the country is once again divided over what form of “open sky” or air liberalization policy it should adopt.

While most local airlines oppose draft Executive Order 500-B, citing the lack of reciprocity providing equal entitlement of air rights, some groups are still pressing for its immediate implementation.

“We are all for it. If EO 500-B is passed, we foresee development in Central Luzon and this will also address the congestion of the Manila airport. [And] obviously with open sky, more tourists will come to the Philippines and more Filipinos can travel abroad as fares become more affordable,” Philippine Travel Agencies Association President Jose C. Clemente III said in an interview yesterday.

E0 500-B would allow foreign airlines to exercise fifth freedom rights at Clark and Subic airports, or the right to carry passengers from a carrier’s own country to a second country, and from that country to a third country.

“The average tourist spends an average $1,200 while he is in the Philippines. We estimated that we could have easily made 3.5 million tourists last year, but we only reached 2.9 million tourists because of some air policy restrictions,” Mr. Clemente said.

His industry group is one of the industry stakeholders attending yesterday’s Philippine Chamber of Commerce and Industry-sponsored forum on open sky.

For former senator and Fair Trade Alliance lead convenor Wigberto Tañada, the recent controversies hounding aviation policy for Subic and Clark airports signals the need for the government to revisit its position. “Let’s discuss it, argue over it, study it. Then let’s see what really should be done. But it will all go back in the end to what is really the overall policy of the country,” Mr. Tañada said. “There should be a meeting of all stakeholders — from all government agencies concerned to private stakeholders — so that we will have coordination, coherence.”

Touchy subject

In his presentation yesterday, Civil Aeronautics Board (CAB) Executive Director Carmelo Arcilla described the progressive air liberalization policy adopted by the government as “proceeding at a healthy pace.”

He admitted, though, that there have been cases where the foreign partners of Philippine air carriers got the upper hand during the implementation of air service deals.

The latest is the case of Asian Spirit, which until now is waiting for the approval of the South Korean government for its application to fly regular scheduled flights from Kalibo in Aklan to Incheon in South Korea.

“We filed it last December, we should have been flying already,” Asian Spirit Chairman Antonio Turalba said in a phone interview.

Recently, the Macau government rejected Asian Spirit’s application to fly to Macau, while Hong Kong has just rejected the application of Cebu Pacific to field charter flights despite the presence of Hong Kong Airlines at Clark airport.

“Reciprocity has become a touchy subject,” Mr. Arcilla said, adding the open sky policies of some countries are selective and restrictive.

“We should assess the value of granting the air rights on a case-to-case basis, because countries are dissimilar. There seems to be no size fits all formula in air liberalization, owing to dissimilar, political, economic and geographic differences,” he said.

Generally, Mr. Arcilla said, smaller countries with strong economies like Bahrain, Singapore and Dubai are aggressive in pursuing air liberalization deals with foreign country partners. “They have no market to open, and they will benefit more from increased access,” he said.

The ‘open skies’ issue in Clark: A question in fairness

Wigberto E. Tañada, Lead Convenor

We, at the Fair Trade Alliance (FairTrade), welcome this initiative of the Philippine Chamber of Commerce and Industry (PCCI) to hold this forum on “Save our Skies or Open Skies: A View from Both Sides.” Yes, we do need more public discussion on an issue that has apparently generated acrimony and confusion, not unity and clarity of what is best for the national interest.

A few weeks ago, a columnist chided the Fair Trade Alliance for siding with the local aviation industry on the proposed wholesale opening of Clark to foreign carriers. By opposing an open skies policy in Clark, we have been taken to task for taking a stand that is allegedly anti-tourism and anti-OFW. We have been reproached and admonished for continuing to adhere to the ‘Filipino First’ policy, which they said had failed and was even anti-Filipino. These certainly are big sweeping accusations by those seeking an all-liberalization of our skies against those demanding a calibrated, measured and progressive opening.

Let me clarify why the Fair Trade Alliance has sided with the local aviation industry by citing here some of our fundamental beliefs as an Alliance:

First, we are not against economic liberalization per se. However, we are for an economic liberalization that is calibrated, measured, progressive and synchronized with our own development priorities and the capacities of our industrial and agricultural producers, many of whom are members of the Philippine Chamber of Commerce and Industry. We are accordingly for calibrated protection, for this is what our neighbors – Japan, South Korea and now China and Vietnam – have done and are continuing to do. The problem is that our economic technocrats, from the time of Marcos to the present, have a very limited concept of attaining economic growth – that is, opening up of the economy in an accelerated, one-sided and even lazy and reckless manner.

Thus, in the l980s and 1990s, we opened up our manufacturing in a wholesale manner in accordance with a World Bank timetable, making us one of the ten most open economies by l997, this according to the Bank of International Settlements of Switzerland. The result? Many of our industries producing textiles, tires, tiles, plastics, chemicals, auto parts and so on have been decimated by the unilateral trade liberalization, aggravated by a culture of smuggling in the country and the anti-Filipino attitudes of our own technocrats. We did the same in agriculture, from the mid-1990s to the present. The result? From a net agricultural exporter, the Philippines is now a net agricultural importer of almost everything — from rice and corn to onion and garlic, from fruits and vegetables to meat and milk. Thus, if a food crisis will break out in Australia, Thailand and Vietnam simultaneously, this country will go hungry, as many of our displaced Filipino farmers have already been experiencing.

And now, from unilateral industrial liberalization and unilateral agricultural liberalization, we want to open up unilaterally our skies, our aviation market, without any equal reciprocity. My God, what is happening to this country?

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By Benjamin V. Buco, Jr.
Published Page 2/S4 on the Industry Report of BusinessWorld, May 17, 2007

It has been two years since Singapore’s low-cost carrier (LCC) Tiger Airways inaugurated its regular flight to the Diosdado Macapagal International Airport (DMIA) in Clark Field, Pampanga. Tiger Airways’ decision to fly to the Clark airport starting April 5, 2005 was part of the government’s liberalized charter programs, which allowed foreign budget airlines to ferry passengers to and from DMIA and the Subic Bay International Airport (SBIA).

The Civil Aeronautics Board (CAB) implanted the liberalized charter program in 2003 in an effort to improve the country’s tourism industry. The program allowed charter airlines to issue individual tickets to passengers and to make scheduled trips, especially to areas not served by domestic carriers.

For sure, news about the entry of low fare airlines such as Tiger Airways in Clark has been a delight for Filipino travelers who have been dreaming of spending their weekend in Singapore to either shop or relax. Back then, Tiger Airways sold absurdly cheap ticket, at $16 or P900/pax one-way.

However, after about two years of traversing the Singapore Clark route, Tiger Airways is now threatening to cut and even cancel flights to DMIA after what the airline described as “regulatory uncertainty” at the DMIA. Tiger Airways as well as other foreign carriers operating in Clark are facing possible restrictions due to the issuance of Executive Order (EO) 500-A in August 2006 which practically rescinded the “open skies” policy to set out under the original EO 500 issued early last year.

Stakeholders such as the Joint Foreign Chambers of Commerce of the Philippines (JFC) said they are afraid that if Tiger Airways was to reduce or cancel its flights to the country, other foreign carriers would be cautious about entering Clark. This, according to them, could put the infrastructure projects of the government in jeopardy since foreign carriers support the physical expansion and construction of DMIA through fees.

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Wigberto E. Tañada, Lead Convenor

In his April 13 column, Raul Pangalanan found fault with the Fair Trade Alliance’s support for reciprocity rights for the Philippine aviation industry in the sizzling ‘open skies’ debate. He further branded the old ‘Filipino First’ policy as a ‘failed experiment’ and those seeking to build a national economy nothing but a bunch of ‘statist’ orthodoxists. In effect, what Raul wants is to completely open up the economy just like what the cha-cha proponents are now perorating about, that the remaining Constitutional restrictions on foreign control of Philippine land, media, natural resources and public utilities are retarding national growth.

What is wrong in seeking reciprocity or equality rights in trade, especially when one is dealing with the big developed economies? Why give the foreign commercial interests more rights than they are willing to give to our own domestic producers? In the WTO, the seven-year old Doha Round of negotiations has not progressed precisely because most of the developing countries are not prepared to give in to the free ‘market access’ demand of the United States, European Union and other developed countries without the latter giving up on their own trade-distorting subsidies ($1 billion a day in agriculture), on their global control over the monopoly-inducing patent and IPR system and on their obstinate refusal to recognize the special-and-differential needs of developing countries.

And yet, here in the Philippines, we have been opening up unilaterally our economy since the l970s, way ahead of our own neighbors. Two years ago, our WTO Ambassador in Geneva, Manuel Teehankee, pointed out that due to unilateral trade liberalization, our industrial and agricultural tariffs are only one-third of those of Thailand and much, much less compared to those obtaining in China, India and Vietnam. These ‘protectionist’ countries happen to be the ones flooding our domestic market with industrial and agricultural goods that are displacing our own industries and jobs. Thailand does not even want to allow the entry of cigarettes manufactured in the Philippines under normal trading arrangement; they have imposed restrictions on cigarettes made in Batangas by Philip Morris.

The question we would like to pose to Raul and others espousing similar economic views: Where is the Philippines today after three-four decades of one-sided economic liberalization? Why are foreign investments flowing into the above protectionist countries, not in the deregulated Philippines? From an industrial leader in the l960s, why has the Philippines become Asia’s industrial laggard and virtually the only country in East Asia with a shrinking industrial sector?

No, the Fair Trade Alliance is not seeking a closure of the economy or a return to the high tariff walls erected by President Diosdado Macapagal in the early l960s. What we want are reasonable trade fences that give our own domestic industrial and agricultural producers equal opportunities to grow. We want calibrated liberalization and calibrated protection on a sector-by-sector basis that will allow both our home-oriented and export industries a fighting chance to develop and compete under fair and equitable rules. It is not a simple choice of opening up or clamping down, of deregulating or walling off, or going export oriented or producing for the home market. As what Japan and our successful East Asian neighbors have been doing, it is a question of creatively combining liberalization, protection, import substitution and export orientation in the overall context of building up domestic agro-industrial capacity and infusing dynamism in the economic system. Dani Rodrik of Harvard (Rethinking Growth Policies in the Developing World, October 2004) aptly summarized the experience of our East Asian neighbors as follows:

“The bad news, for policy reformers elsewhere, is that these high-growth countries have marched to their own drummers, and the fit between their policies and the conventional policy agenda is awkward at best. China and Vietnam are of course the chief exhibits here. Both countries have become more market-oriented, but have done so through unorthodox means. China reformed its incentives in a two-track manner (grafting a market system on top of a planned system, rather than abandoning the latter altogether), underplayed private property rights (relying instead on township-and-village enterprises owned by local governments), and opened up to the world in a partial way (complementing its highly protectionist trade regime with special economic zones). Vietnam, as a fellow socialist country, followed many of the same principles since the second half of the l980s. And India, despite the folk wisdom that relates its growth acceleration to the liberalization of 1991, actually began its take off a decade earlier, during the early l980s and under heavy protectionism.”

Moreover, in the case of China, its spectacular export growth – in the l990s – happened despite its high industrial tariff regime averaging 30 per cent and its stubbornness in resisting Western demands for China to liberalize its foreign exchange market (two-tiered system), land market (even Chinese can not buy lands up to now), domestic market (on top of high tariffs, difficult customs procedures) and investment regulations (where foreigners are often required to come in through joint ventures with clear technology transfer mechanisms).

On the other hand, the Philippine economic debacle of the last three-four decades is similar to the experience of Russia, which, as documented in the book of Joseph Stiglitz (Globalization and Its Discontents, 2003), pursued a slam-bang economic liberalization similar to the Philippines structural adjustment program of the l980s and l990s, as similarly prescribed by the IMF. In l994, our dissenting views in the Senate to hold in abeyance our membership in the WTO and for the government and the private sector to address first the manifold tasks of strengthening domestic industry and agriculture were dismissed by the proponents of early WTO ratification who projected one million jobs a year being created in both sectors beginning in l995. The exact opposite has happened.

So why are commentators like Raul confusing the economic picture by still blaming nationalism and ‘Filipino First’ for our economic debacle and our failure to develop a national economy when the policies in place in the last three-four decades are precisely those hewing closely to their ideas of unilateral, one-sided and accelerated liberalization and deregulation? When the Administration of Carlos P. Garcia raised the ‘Filipino First’, this was immediately opposed by foreign business interests and was officially buried in the early l960s under the IMF’s ‘decontrol’ program. It was stillborn.

Clearly, if the proponents of one-sided liberalization want a healthy economic debate, they should objectively look at the facts and not make sweeping generalizations. They should also find time to read up on the economic history of Japan, NICs, China, India, Malaysia, Thailand, Vietnam and, of course, our own Philippines.

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* Commentary on Raul Pangalangan’s ‘Filipino First’ — but which Filipinos published on his Passion for Reason column of the April 13, 2007 issue of the Philippine Daily Inquirer. 

From the LOWDOWN column of Jojo Robles, published in the Manila Standard TODAY

Fair skies or open skies? The choice looks fairly and openly simple.

How can something as positive-sounding as “open skies” be bad? If you ask the people in the aviation, travel and tourism industries, they will not only tell you how—they will even count the ways.

Last week, stakeholders in the aviation industry met at a forum on the so-called “open skies” policy that was sponsored by the Philippine Chamber of Commerce and Industry. During the various discussions, the government policy promoting “open skies” (or the liberalization of airport landing rights) was roundly criticized as unfair and eventually detrimental to the local industries that the strategy was supposed to protect and help grow.

How so? Hadn’t the government planned to improve tourism, help the aviation industry shape up and eventually stimulate economic growth by making air travel more affordable to every Filipino?

Not necessarily. In recent years, liberalization in the domestic air transport industry has indeed led to greater competition that made air travel more efficient and affordable. Simultaneously, this has spurred greater growth for all players, established or new, and presumably improved the economies of the localities where this increase in air travel has been most marked.

All the domestic airlines that have survived liberalization are posting robust growth rates across the board. Yet fares have been falling consistently even as the bottom lines of local carriers have continued to improve. And more people than ever before seem to be flying the newly-liberalized skies to more destinations around the country.

But that’s as far as the local scene is concerned. The picture looks quite different when “open skies” is taken to mean allowing foreign airlines unlimited access to local airports and when the industries that should benefit from such a liberalized policy start to complain that they don’t get anything in return.

How has “open skies” not worked?

For starters, aviation and tourism industry players told the PCCI forum, they have failed to bring in the tourists. According to Robert Lim Joseph, chairman of the National Association of Independent Travel Agencies, there simply is no great demand for travel to and from the Philippines that would justify an open-skies policy. “Many foreign airlines have been granted landing rights in the Philippines, yet they are not using these entitlements,” Joseph said. “Why? There is no demand. Demand must trigger supply, not the reverse.”

And if promoting tourism in the Philippines is the goal of liberalizing local skies, that hasn’t happened either, Joseph said. “Local carriers are promoting and selling the Philippines abroad as a tourist desitnation,” he explained. “The foreign airlines will promote their countries first before the Philippines.”

In the meantime, according to former Senator Bobby Tanada of the Fair Trade Alliance, there has been no reciprocation of open skies in the countries whose carriers have been granted landing rights in the various airports in the Philippines—a sore point echoed by all the stakeholders in the local aviation scene. “The unfairness is most evident when Macau denied the application of Asian Spirit to fly from Clark to Macau and back, whereas Tiger Air of Singapore has been allowed to fly freely from Clark to Macau and Singapore,” Tanada said. “As the CEO of Cebu Pacific himself was quoted, ‘We might as well register as foreign air carriers.’”

That Philippine skies are open to foreigners while foreign skies are closed to the Philippines is one of the biggest failings of the policy, speakers at the forum seemed one in saying.

***

Speaking of Clark—a.k.a. Diosdado Macapagal International Airport—that is where the biggest fight of the open-skies war is being fought. And the stakes at the envisioned premiere international airport of the country are necessarily, well, sky high.

The country’s biggest local carrier, Philippines Airlines, is staunchly against what it feels is the unfair implementation of the liberalization policy in Clark. With good reason, since PAL intends to put up the billions of pesos to convert the former US Air Force base into the new, improved version of the old, decrepit and pitifully overcrowded Manila airport.

In a paper presented at the forum, PAL detailed its plans to invest $50 million in Clark, where it also intends to employ 5,000 people. That means “more jobs, more business opportunities, more permanent investments to put Clark firmly in the aviation map of the region.”

And yet, PAL said, recent government policy statements on Clark—in particular, two executive orders—not only drastically liberalized the proposed new Philippine hub; they also declare that no reciprocity is required from foreign carriers, that they need not open up their own skies to Philippines airlines as well.

“Foreign airlines can fly to Clark and Subic with a gold-plated guarantee from the Philippine government,” PAL said. “But our own Filipino airlines will have to be totally dependent on the fickle generosity of foreign governments if we want to fly out of Clark and Subic [to go to their countries].”

In the end, the forum was told, open skies can have become as attractive to local industries as an open grave, gobbling them up as foreign companies that have no stake in this country not only refuse Filipinos’ legitimate right to compete abroad, but block them out of local airports in the bargain.

This is why, local stakeholders said, “open skies” is not as important as “fair skies,” or the even-handed, reciprocal and mutually beneficial liberalization of air space over all countries. (Besides, the forum was told, there is really no such thing as unilateral “open skies” because all countries that say they have them demand reciprocating deals. So there.)

As the PAL people said, the recent financial success of the flag carrier (and the other, smaller airlines) can no longer be attributed to government coddling, preferential treatment or an artificial monopoly. But the danger is to go off the other end and give away the skies without any care for local businesses that want to expnad abroad, inward tourism or local jobs.

“What we need is a level playing field, equal opportunity and equal access,” the national airline said. Only in such a situation will open skies have true meaning—and benefit—for the people who can actually use the tool of liberalization for the good of all Filipinos.

Fair skies or open skies? The choice looks fairly and openly simple.

By Raul Pangalangan
Published on the Passion for Reason column of the April 13, 2007 issue of the Philippine Daily Inquirer

Nationalism, how many crimes have been committed in thy name? The opponents of Open Skies equate nationalism with protectionism. Today in the 21st century, we must ask: Protection for whom? If in the 1950s the banner cry was “Filipino First,” today we ask: But which Filipinos? In the case of aviation, the airlines or the flying public? If indeed we are a democracy, would the Palace care to do a headcount of aviation-generated jobs vis-à-vis the riding public who will benefit from Open Skies, coupled with the local jobs created by an invigorated tourism industry?

Gloria Macapagal-Arroyo issued Executive Order 500, adopting an “open skies” policy at the Diosdado Macapagal International Airport in Pampanga, aiming to advance the Clark Special Economic Zone as a tourist and investment hub.

Foreign low-cost airlines soon began to operate from Clark: Tiger Airways of Singapore, Air Asia of Malaysia, Hong Kong Airlines of China, Asiana Airlines of South Korea, as well as the cargo handler United Parcel Service (UPS). There has since been a 110 percent increase in passenger traffic through Clark, boosting the local tourist industry and real estate business.

But now the full text of EO 500 is no longer available on Malacañang’s website. Ms Arroyo has since reversed herself and issued EO 500-A, restricting the Open Skies privilege and effectively barring the budget airlines from Clark — they who, in the first place, helped pioneer Clark’s success.

The papers report that a Pampanga-based group, Pinoy Gumising Ka Movement (PGKM), has urged President Arroyo to revoke EO 500-A as “the battering ram of the unrelenting campaign of Manila-centric ‘imperial dragons’ to sabotage DMIA’s viability as a global gateway.” GMA seems indeed to have awakened, and she is now poised to issue EO 500-B, which will allow a “pocket Open Skies” just for Clark.

The leading Filipino airlines have banded together in protest. In an eerie adaptation of Chairman Mao’s “united front” tactics, Philippine Airlines, Cebu Pacific Air, Air Philippines, Asian Spirit and Pacific East Asia Cargo Airlines have branded the impending EO 500-B a “threat to the national interest.” It is a sell-out of the national patrimony, they say, because it grants privileges to foreign airlines without requiring them to grant reciprocal obligations to their Filipino counterparts. Even worse, they say, EO 500-A gives foreign airlines what amounts to “Most Favored Nation” treatment, as if it were a local airline. It is this unilateral surrender of “valuable bargaining chips” that they bewail.

The Fair Trade Alliance (FTA) has chimed in, calling on the Civil Aviation Board to defend the country’s sovereignty. “Since the country’s skies [are] part of our sovereign territory and national patrimony, flight entitlements by foreign carriers must be evaluated on the basis of reciprocity, the welfare of the local aviation industry and national interest.”

The reciprocity argument is seductive to Filipinos, both the politically correct as well as the politically naïve. Indeed, why shouldn’t the government champion Filipino industry? After all, the competition have their own home governments to lawyer for them.

At the outset, the FTA really loses me when it speaks, in one breath, of “the welfare of the local aviation industry and national interest.” Haven’t we heard that one before, at the height of the Cold War? A spokesman of the military-industrial complex famously said, “What is good for General Motors, is good for the United States.” Now that General Motors has been overtaken by Lexus, BMW and Mitsubishi, don’t you think it has been good news to all motorists, American and non-American alike, Filipinos included?

But at its core, the reciprocity argument ignores the potential of our tourism industry. Why speak of just reciprocal flights? Why not reciprocal benefits?

Tourism relies on the arrival of warm bodies in our even warmer weather. Increasing the in-bound flights — by whatever airline, from whatever country of origin — should be in our interest. The upper limit, if at all, of in-bound flights should match the maximum number of tourists that we can absorb.

But reciprocity says the opposite. The upper limit is how many flights Philippine Airlines (or whatever local airline) can send to that country. If, say, there are 100 planeloads of Korean tourists each month who wish to experience “WOW Philippines,” why limit the number of flights to 50 if that is all that PAL and its Korean counterpart can absorb?

Why not open the skies, so to speak, to other airlines who wish to send more business our way? Why protect the business of the aviation moguls under the banner of nationalism, and sacrifice the thousands of mom-and-pop operations that have thrived in the downstream bonanza from the Korean influx? Why, aren’t moms and pops Filipinos, too? Why cabin the meaning of reciprocity to counting flights to and from each country? Why not weigh reciprocity in terms of the benefits that we all can reap?

The airline industry says that this debate is about aviation, not tourism, because more flights do not automatically mean more tourists. That argument sounds good in the abstract. But EO 500-A has created a simple fact: The tourists have come. To constrict the flights now and keep the tourists home simply doesn’t make sense.

It is amazing how the rhetoric of protectionism continues to have currency today. The Filipino First policy has proved itself a failed experiment, and the Filipino bourgeoisie itself, unequal to the task of building a national economy. It is time to bury these statist orthodoxies, and find a nationalism that makes common cause with the common folk.

By Ding Cervantes
Published on the Philippine Star

The battle for “open skies” continues to heat up as petitioners and counter-petitioners besiege President Arroyo.

The Fair Trade Alliance (FTA), after publishing full-page advertisements in leading newspapers, urged the Civil Aviation Board (CAB) to defend the country’s patrimony and sovereignty by resisting pressure from foreign airlines.

On the other hand, Clark Investors and Locators Association (CILA) president Frankie Villanueva squeezed through birthday well-wishers at the Diosdado Macapagal International Airport (DMIA) to hand the President a petition for her to repeal Executive Order 500-A.

The President was at the Clark Freeport Wednesday to activate the $9.3 million state-of-the-art radar system at the DMIA.

CILA and other petitioners have urged the repeal of EO 500-A and crafted EO 500-B which they want Mrs. Arroyo to adopt in its place.

“One of the centerpiece reforms of this (Arroyo) administration that is highly acclaimed by development experts throughout the world is the liberalization of the Philippine aviation sector,” the petition said, noting that “the full utilization of the country’s extensive network of airports… is a vital element for the country’s economic development and the fulfillment of the vision to make the Philippines a transport and logistics hub for the Asia-Pacific region.”

The draft EO 500-B is proposing that open skies be declared in Clark and Subic.
The FTA, in opposing EO 500-B, said it supports CAB’s strong position of carefully studying and weighing applications for increased air access to the Philippines.

“Since the country’s skies are part of our sovereign territory and national patrimony, flight entitlements by foreign carriers must be evaluated on the basis of reciprocity, the welfare of the local aviation industry and national interest,” the group said in a statement.

They stressed that they are not anti-trade liberalization per se but are for calibrated protection and calibrated liberalization.

“There must be agreements of reciprocity and the domestic aviation industry must benefit from any possible opening up of Philippine skies,” they added.

CILA’s petition countered that such reform “is being opposed by special interest groups that favor an environment of protectionism.” It also belied the claim that the reform is a threat to national interest, saying rather that it is a threat to “vested interest.”

They noted that “reciprocity since the ’90s has been defined in a broader sense to mean the exchange of rights, freedoms, and opportunities of equal or equivalent value.”

“The entry of low cost carriers (LCCs) at the DMIA has led to enormous opportunities and economic value to Central Luzon,” the petition said.

Published online on the April 4, 2007 issue of The Daily Tribune

Local airlines, in a rare move, banded together yesterday to protest plans by the government to grant foreign airlines full access to two international airports.

Flag carrier Philippine Airlines, Cebu Pacific Air, Air Philippines, Asian Spirit and Pacific East Asia Cargo Airlines called an executive order issued by President Gloria Arroyo, yet to be signed, a “threat to the national interest.”

The Fair Trade Alliance (FTA), meanwhile, urged the Civil Aviation Board (CAB) to defend the country’s patrimony and sovereignty by resisting pressure tactics from foreign airlines.

In a statement, the FTA said it fully supports CAB’s strong position of carefully studying and weighing applications for increased air access to the Philippines.

“Since the country’s skies is part of our sovereign territory and national patrimony, flight entitlements by foreign carriers must be evaluated on the basis of reciprocity, the welfare of the local aviation industry and national interest,” the group stressed.

As this developed, the FTA chided budget carrier Tiger Airways for resorting to arm-twisting tactics in pressuring CAB to grant its request for a longer extension of its operating permits for its Singapore-Clark-Macau flights.

The local carriers said the executive order would give foreign airlines “full access” to the Subic and Clark international airports, a privilege they claimed no other country would grant Philippine carriers.

The order also permits foreign airlines to pick up passengers at the two airports for onward flights to third country destinations.

This would allow foreign carriers to “operate their own network of international flights from bases in Diosdado Macapagal International Airport at the former US military base at Clark, north of Manila, and the Subic Bay International Airport, making them equivalent to Philippine air carriers in all but name.

“By bestowing a favored competitive position on foreign airlines, the (order) would have a serious adverse impact on other routes operated by Philippine carriers,” the airlines said.

They charged that the change would put some P150 billion in investment and 15,000 jobs at risk and also imperil the long-term growth of the tourism sector.
“The envisioned unilateral grants force the nation to give up valuable bargaining chips and put the government in a weak negotiating position” in any aviation talks with other nations, they warned.

The carriers called on President Arroyo to “refrain” from passing the executive order and proposed a dialog with her to thresh out the issue.
Spokesmen for the President or from the Civil Aviation Office were not immediately available to comment.

“Tiger Airways’ media pronouncements that it will downsize and unilaterally reduce flights are veiled threats meant to pressure CAB to accede to its request. We support CAB’s strongly worded letter to reminding Tiger Airways of legal prohibitions against any person or entity who wish to sway CAB’s judgement through media or via paid advertisements,” FTA said.

The group said the budget carrier has not learned its lesson even after CAB slapped it with a P720,000 fine in January last year for operating in Clark without the necessary permits from the agency.
Tiger Airways was earlier found in violation of CAB regulations for advertising, marketing and charging tariff for its services on the Singapore-Clark-Macau route without prior CAB approval from July 25 to Oct. 30, 2005.

“For this serious breach, Tiger Air got away with a fine — a mere slap in the wrist considering the gravity of its offense. If it happened to Philippine carriers in a foreign land, it’s not likely that it would be given the same ‘kid glove’ treatment, the FTA stressed




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  • FairTrade seeks to promote a job-full and progressive Philippine economy through: (1) the promotion of fair trade rules and active agro-industrial policies based on the existing development needs of the nation, (2) the development of a positive agro-industrial culture to foster innovation, hard work and solidarity between and among the productive sectors of Philippine society, and (3) the transformation of an economy debased and stunted by colonial mentality, unequal trade and neo-liberal dogma into a modern, sustainable and broad-based.
  • Fair Trade Alliance (FairTrade)
    3/f Philippine Rural Reconstruction Movement (PRRM) Headquarters
    #56 Mo. Ignacia cor. Dr. Lascano, Quezon City, The Philippines
    (+632) 372 49 91 to 92 local 30
    (+632) 372 39 24
    fta[at]fairtradealliance.org

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