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The Philippine aviation industry has entered a period of infrastructure modernization but institutional reforms are needed to build the momentum for a sustainable take-off
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A policy brief by The Arangkada Philippines Project puts forward recommendations that address these reforms
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One of the recommendations is the need for “greater coherence and convergence among entities undertaking airport development and their implementation”
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Another is separating “regulatory and developmental (i.e. operations and maintenance) functions, which are currently in singular entities”
The Philippine aviation industry has entered a period of infrastructure modernization but institutional reforms are “urgently needed for a sustainable takeoff,” according to a new policy brief on Airports by The Arangkada Philippines Project (TAPP).
The brief put forth recommendations that include providing “greater coherence and convergence among entities undertaking airport development and their implementation”.
It recommended as well separating “regulatory and developmental (i.e. operations and maintenance) functions, which are currently in singular entities.” In particular, the brief said Civil Aviation Authority of the Philippines’ (CAAP) developmental, proprietary, and investigation functions should be de-linked so the agency “can focus on its regulatory role”.
The recommendations “reiterate the need to provide linkages where there should be convergence and to decouple where there should be independence.”
More specific recommendations include:
- Upgrading and modernizing gateways to increase value proposition of destinations and to improve ease and safety of travel and movements of goods. Sustained financing support for airports not covered by public-private partnership programs is needed as is continuous upgrade of facilities and services in provincial airports.
- Prioritizing investments in national aviation safety management systems and security. The brief noted that under the National Aviation Safety Plan 2022- 2025, CAAP identified challenges it encountered in performing its safety oversight function. These include: insufficient number of qualified inspectors, budget, trainings for oversight personnel, and tools (hardware and software) for implementation of effective State Safety Oversight and State Safety Program; lack of independent status of the Aircraft Accident Investigation and Inquiry Board as an accident and investigation authority; and ineffective enforcement of policy implementation.
- Strengthening and modernizing air transport institution. In order to perform safety regulatory functions, agencies need human and financial resources as well as the legal, regulatory and organizational infrastructure. The brief noted CAAP should be strengthened “as a non-economic regulatory oversight agency and make it conform with international protocols, reinstate the fiscal autonomy of CAAP, and de-link the developmental, proprietary, and investigation functions so that CAAP can focus on its regulatory role.”
Proposed policies to achieve these goals include amendments to Republic Act No. 9497 (Civil Aviation Authority Act of 2008) to reinstate CAAP’s fiscal autonomy; creation of a Philippine Airports Development Corporation or Philippine Airports Authority to transfer CAAP’s developmental and proprietary functions; creation of an independent Philippine Transportation Safety Board; and amendment of the Civil Aeronautics Act of 1952 to modernize the Civil Aeronautics Board (CAB) as an economic regulator with a strong mandate.
- Combating illegal charter operations. CAAP and CAB must devise “a more effective policy to identify illegal operators” plus “conduct stricter ramp inspections at various airports.”
- Facilitating Philippine aircraft finance by ratifying the 2001 Cape Town Convention on International Interests in Mobile Equipment and the Associated Protocol on Matters Specific to Aircraft Equipment. Both serve as a “legal safety net for lessors and lessees”, aiming to “resolve the problem of obtaining rights to high-value aviation assets to protect the international interests of the sellers, purchasers, and creditors through the creation of an International Registry, and to reduce the risks of lending for aircraft financiers and for other parties involved in aircraft purchasing and leasing.”
- Instituting a system of incentives to increase competitiveness of the aviation industry and sustainability of air service development. In particular, airport operators must provide competitive incentive schemes offered by other airport authorities in the region to international airlines.
- Investing in human capital development. The government and industry need to address the brain drain of aviation talents via an analysis of pay structures and benefits of aviation professionals in the Philippines vi-a-vis those in other countries, as well as the strengthening the Civil Aviation Training Center.
- Incorporating sustainability in the long-term development strategy of Philippine aviation, with the policy brief noting that “the latest developments in aircraft technology, use of sustainable aviation fuels, efficiency in operations, and mechanisms to offset or eliminate carbon emissions show sustainable flight path is highly possible.”
Administered by the American Chamber of Commerce of the Philippines in partnership with the Joint Foreign Chambers of the Philippines and with support from the University of the Philippines Public Administration Foundation Inc. – Regulatory Reform Support Program for National Development, the policy brief is an update of the first edition published in 2017. – Roumina Pablo
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