Runways and bounced checks

DOTr Secretary Giovanni Lopez has reportedly issued orders for all future airports in the Philippines to have runways of 1,200 meters length and for existing runways to be likewise extended.

The directive hopes to address the claims in the aviation sector that one of the reasons for high prices in airfares is due to short runways that limit the type of aircraft and its passenger capacity.

Having experienced the detrimental impact of piece meal runway extensions done on the Busuanga airport in the 90s, I wholeheartedly support the plans of DOTr, but experience also prods me to raise warning flags.

The solution may not be addressing the actual problem, not to mention the time it will take to finish the job. How fast can the DOTr roll out those runway extensions, how do they pick or choose which airport/runway will be extended? Will it be aligned towards aircraft capacity or route profitability?

How long will it take before this solution actually produces the desired result of lowering airfares and by how much? Will it be a substantial percentage decrease or a P100 or P200 drop? Did anybody present real data, computation and projections?

A directive from the secretary does not instantly result in extended runways. Between process and actual construction, it will take at least one to two years just to extend existing runways, assuming that the funds are all there.

Previous administrations have talked about runway extensions in many parts of the Philippines, and they all took years, some decades, to actually get off the ground.

The recent pronouncements might give false hopes. The DOTr must make it clear that solutions are being made but the effects or benefits will take time or years. Better yet, find additional instant solutions to lower airfares.

The plans of the DOTr will surely be chased down by members of Congress, governors and mayors who will want their areas to be the first in line. The only way to avoid this is to be transparent and publicize how the DOTr and perhaps the DOT arrived at the priority list of runways to be extended.

Another matter of concern is what if the DOTr spends billions of pesos, but the big aircraft don’t arrive? Buying or leasing aircraft with the ideal capacity costs a lot of money.

Logically speaking, operators would want to focus on profitable routes with regular or established passenger traffic or commercial load. Just like telcos, they will make sure that there is a market and there is volume.

I can almost imagine airline operators dragging their feet on where to fly or land. So what we’ll end up with is a “who goes first: the chicken or the egg” situation. DOTr cannot spend billions on maybe’s. Some operators won’t give up monopolies and profit centers just like that.

One idea is for the DOTr to issue an incentivized requirement where airlines don’t get to pick and choose but are required to service the areas with extended runways – but they will be incentivized to do so.

In a previous article, I stressed the point that the government must share the cost and the burden of business to improve the economy. Instead of being the first to make a profit through taxes imposed on a business, the government must formulate tax reduction or shared cost in fleet upgrades.

The DOTr should also create competition by developing or supporting alternative means of transport and travel such as ferries and construction of ports at travel destinations or nearby.

Develop our train system and bus companies. Competition forces efficiency and drives prices down more than anything else!

*      *      *

I received  a tip that an “un-named” or wanting to be anonymous senator is crafting a proposed bill that pretends to streamline government medical support to indigents but is actually designed to defund and put an end to the Malasakit program of Sen. Bong Go.

I have heard of this in the past and many stakeholders in public health claim the evidence of this political assault is the creation of the Bagong Urgent Care and Ambulatory Service centers or BUCAS of the DOH.

I decided to ask around once again but what came up was even worse. My sources have informed me that many government hospitals are not just worrying about Malasakit Centers being shut down but are now absorbing the cost for Letters of  Guarantee issued by members of Congress.

These Letters of Guarantee are promissory notes issued by congressmen and senators giving medical-financial assistance to their constituents. The letters are like a political check that hospitals submit to the DOH.

A DOH undersecretary then forwards the data to the Department of Budget and Management or DBM, which in turn processes everything and presumably releases the corresponding compensation.

As of last week, word is that the DOH has submitted and followed up with the DBM on the most recent claims submitted by public hospitals, presumably the last quarter of 2025. This is not loose change but amounts to hundreds of millions of pesos.

When asked for updates, a DOH undersecretary replied, we have done our part, but the DBM still has to produce the funds. An insider suggested that the problem is due to the fact that the controversial “budget insertions” are not as easily done as before.

In banking terms, the Letters of Guarantee were “DAIF” – drawn against insufficient funds or bounced.

Ecclesiastes 5:5 it says: “It is better not to promise than to promise and not do it.”