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The Commission on Audit has flagged the Philippine Aerospace Development Corp. for a P177.9-million loss in the past six years.
State auditors said the PADC was a non-performing government-owned-and-controlled corporation.
They said the PADC turned in a profit in the 1980s until the 1990s, and even lost money in the late 1990s.
“PADC is no longer performing its core mandate, which warrants a comprehensive review of its structure, policies, financial capability and business market to determine the sustainability and economic viability of its continued existence,” the commission’s audit report read.
The GOCC incurred losses of P149.6 million between 2013 and 2017, and that in 2018, it suffered a P28.29-million loss.
But in 2018, PADCC earned a P5.9-million revenue with P34.2-million expenditures.
“With these in view, it is clear that PADC is no longer performing and carrying out its principal/core mandate,” the COA said.
PADC’s main source of income was derived from the lease of budget airline Cebu Pacific and eight other airlines for the use of its three hangars within the Manila International Airport Authority.
In 1973, Presidential Decree No. 286 paved the way for the creation of PADC in a bid to develop a reliable and efficient aviation and aerospace industry.
According to CoA, PADC was able to earn rental payments for its hangars in 2018 at P43.45 million.
State auditors blamed PADC’s limited poor resources, tax dispute filed with the Bureau of Internal Revenue, expired Civil Aviation Authority of the Philippines’ accreditation, poor facilities, non-serviceable vehicle units, and lack of landline and Internet connections to its low revenue opportunities.
Also in 2015, the Philippine Navy put PADC in its blacklist over non-compliance of its contractual obligations, CoA said, adding its services were no longer needed by private aviation schools.
On March 15, President Rodrigo Duterte issued an executive order transferring PADC from the Department of Transportation to the Department of National Defense.
CoA told PADC to review the conditions of the aviation industry.
The PADC said it has already ordered the agency’s personnel to fix its tax liabilities with the BIR and to renew its accreditation with CAAP.