CAAP failed to collect P6 billion receivables – COA

MANILA, Philippines — The Commission on Audit (COA) has scolded the Civil Aviation Authority of the Philippines (CAAP) over its failure to collect P6.395 billion in overdue receivables from various airlines.

In its 2020 annual audit report, COA said it would now be difficult to recover the money, given the current crisis faced by the aviation industry because of the COVID-19 pandemic.

COA records show P1.32 billion of the receivables were due from the Philippine Airlines (PAL), P300.23 million from the Air Transportation Office  and P4.77 billion from various private airlines.

PAL filed for bankruptcy protection in the United States last month.

The COA’s breakdown showed that P1.91 billion of the uncollected receivables were due in 2020, P1.26 billion in 2019, P391.34 million in 2018 and P1.21 billion in 2017 and prior years.

COA said the uncollected receivables include lease fees for the use of CAAP properties or office space as well as Air Navigation Charges (ANCs) for both scheduled and non-scheduled flights.

The audit body said under CAAP rules, fees and charges for these flights should be payable within 10 working days upon receipt of the bill.

CAAP contracts and rules also indicate that lessees’ failure to pay rent within 60 days from the due date is sufficient ground to terminate the lease “without need for further notice or court action,” COA said.

The COA noted that the CAAP did not even file any collection cases against those responsible for the unpaid overdue receivables.

State auditors said the CAAP’s Memorandum Circular 03-11 lacked specific guidelines on the responsibilities of offices concerned in collecting receivables and the imposition of penalties for failing to pay ANCs.

The CAAP has agreed to the audit recommendation to intensify its collection efforts and to “initiate the appropriate legal remedies, if necessary,” according to COA.

The aviation body also agreed to revisit the circular or issue another “prescribing the rules, procedure and processes in the billing, collection, and recording of the income from ANCs.”