1. Background

International air transport is a critical pillar in the overall competitiveness and sustainability of the Philippine economy. The availability of an efficient network of air transport services to move goods and people is a major attraction for investments in high value production and in service-oriented facilities. International air connectivity is the major infrastructure that will harness the widely-recognized yet least appreciated strategic geographical location of the country for tourism and high value trade and logistics in the Asia-Pacific region. About 70 percent of the value of Philippine exports is moved by air. Ninety-eight percent of visitor arrivals arrived by air. The network of 8 million Overseas Filipinos including the 3.5 million Overseas Filipino Workers (OFWs) travel by air to and from their place of work. The country has an existing and extensive network of international and domestic airports and most of which remain underutilized.

2. Policy Developments

The Republic Act No. 776 also known as the 1952 Civil Aeronautics Act of the Philippines established the laws governing the economic (Civil Aeronautics Board) and technical (Civil Aeronautics Administration) regulation of the industry. Executive Order No. 125 and 125-A bestowed to Air Transportation Office (ATO) the function of establishing and prescribing rules and regulations for the inspection and registration of all aircraft owned and operated in the Philippines and all air facilities. In June 1959, the government passed the Republic Act No. 2232 that designated the Philippine Airlines as the national flag carrier of the country. In 1973, the Marcos administration established a one-airline policy in both the domestic and international routes with the passage of the Letters of Instruction No. 151 and 151A. The monopoly of PAL was challenged with the issuance of Executive Order No. 333 by the Aquino administration.

Read full text of “Air Transport Policy Reforms” (in .PDF, 7pp.).