Philippine Airlines said Thursday it has a valid lease contract signed and mutually executed with state-run Philippine Amusement and Gaming Corp. to use a 10-hectare portion of the old Nayong Pilipino complex.
“The existing contract between PAL and Pagcor is legal, valid and binding based on the terms negotiated and finalized by both parties three years ago,” PAL said.
The flag carrier made the statement after Pagcor stated that it was “not yet the absolute and registered owner of the property.” PAL said this claim by Pagcor was inconsistent with covenants under the contract signed in 2014.
PAL president Jaime Bautista said last week the company submitted an unsolicited proposal to build a P20-billion passenger terminal at Nayong Pilipino complex.
PAL said that on July 30, 2014, it entered into a contract of lease in good faith with Pagcor covering the said property at P40 per square meter, effective until July 11, 2033.
PAL said it paid one month advance rental and security deposit equivalent to five months rental or P24 million.
Article 12.8 of the contract states: “Pagcor covenants and warrants it is the lawful owner of the leased premises; that is free from all encumbrances; that it has a right and has been duly authorized to lease the same as aforesaid and that it will warrant and defend the same against the lawful claims and demands of all persons.”
Pagcor then carried out succeeding actions in line with its authority as owner of the leased premises such as acceptance of PAL’s initial payments, permission to conduct tests and issuance of statement of account.
The agency also asserted that PAL was allowed to use the rented property as aircraft parking, ramp, apron facility and thus any other use would need “prior written consent from Pagcor.”
PAL said the latest statement by current Pagcor management was immaterial and irrelevant. “Assuming for the sake of argument Pagcor is not the absolute and registered owner of the property, it can still enter into a valid contract owing to the fact that it has control and/or possession over the area and has the legal personality to do so,” PAL said.
PAL said it was expecting Pagcor to respect the terms of the contract.
The airline said the authority of Pagcor to lease the 10-hectare property at the old Nayong Pilipino premises to PAL “is very clear in the contract itself.”
PAL said it recognizes the role of Pagcor and was willing to engage with Pagcor and other stakeholders in pursuit of its goal to work with the government in building, developing, enhancing and upgrading airport infrastructure.
“PAL has been doing its share to help decongest Naia while stimulating air travel to the Philippines,” Bautista said.
PAL said it was prepared to renegotiate the terms of its contract with Pagcor if the proposal would merit the approval of the government authority.