Recommendations (Airports)

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Headline Recommendations

  1. Prioritize investments in airport terminal, runway, and communication facilities. A Transportation Master Plan for Central Luzon until 2050 is needed.
    DMIA should become the primary international gateway and NAIA primarily a domestic airport.74
    NAIA: renovate T-1 for wide-body international; connect T-1 and T-2; use T-3 for narrow-body domestic/international. DMIA will need a 2nd parallel runway, a new passenger terminal, and high-speed rail connection to NAIA/Makati. Settle the NAIA T-3 investor case.
  2. Each region should have one international airport only (convert existing airports). Prioritize Laguindingan. Expand Mactan. Reform the Civil Aviation Authority of the Philippines (CAAP) in order to reverse Federal Aviation Administration (FAA) and EU downgrades. Implement the Japanese governmentfunded Air Traffic Management Project of the Department of Transportation and Communications (DOTC).
  3. Prioritize international tourism and increase international carrier service through reduced costs and pocket open skies (starting with Palawan). Prepare for ASEAN open skies. Before more foreign airlines terminate Philippine service, replace Customs, Immigration, and Quarantine overtime, meal, and transportation fees with 24/7 government service and end unwarranted taxes on carriers (gross Philippine billings and common carriers tax), which other countries do not charge.

Recommendations (15):

A. The GRP should prioritize investments in airport terminal, runway, and communication facilities. There is a need for an NCR/Central Luzon Transportation Master Plan that includes a strategy for development, until mid-century, of the major gateway airport(s) as well as minor airports. The plan should include ground rail and road transport infrastructure linking the airports and cities, including major ports. (Medium-term action DOTC and NEDA)

B. There should be only one international airport per region, with existing airports converted into international airports, in preference over building new airports. (Medium-term action by DOTC and NEDA)

C. Outside Central Luzon, priority should be given to Laguindingan in Northern Mindanao. At Mactan, the runway should be extended and high-speed ferry links to Tagbilaran increased rather than creating a new airport at Panglao. (Medium-term action DOTC and NEDA)

D. Make Clark an alternative gateway to Manila/NAIA.75 Eventually make Clark the primary international gateway and NAIA the secondary, but still the primary domestic hub.76 Connect with a high-speed rail line (see Map 1). (Long-term action DOTC and NEDA)

E. The local Expropriation Court should quickly decide the amount due to NAIA T-3 investors. Subject to needed repairs and additional construction, begin to fully utilize the terminal for growing domestic traffic and for regional traffic using narrowbody aircraft. (If widebody aircraft are to use T-3, a new taxiway should be built separate form domestic runway 13-31.) (Immediate action DOT and DOJ with private sector)

F. Because T-1 is closest to international runway 06-24 and the international cargo terminals, T-1 should undergo phased renovation for continued use by long-distance widebody aircraft. T-1 should eventually be connected to T-2 to allow domestic to international transfer between buildings.77 (Medium-term action DOTC)

G. A new fuel depot for NAIA is needed as the current depot leaks and is too close to T-1 and T-2. (Medium-term action DOTC)

H. If most international traffic is moved to Clark, there should be a second parallel runway, a terminal with a 20-million passenger capacity, and a high-speed rail connection.78 (Long-term action DOTC and private sector)

I. Quickly resolve the downgrading of the CAAP from Category 1 to Category 2 status by the US FAA and the 2010 EU decision to prohibit Philippine carriers from European airports. (Immediate action DOTC and CAAP)

J. Improve the business and investment climate for international air carriers and enhance long-term connectivity, tourism, and trade competitiveness by setting the level of aviation taxes and charges to conform to international agreements and standards by removing discriminatory tax burdens such as the CCT and GPB.79 (Medium-term action DOF, DOT, and Congress)

K. Amend the Immigration Act of 1940, Tariff and Customs Code of the Philippines, and the IRRs of the Quarantine Act to relieve the burden from customs, immigration, and quarantine overtime, meal, and transportation charges for airlines and shippers. Declare 24/7 operations at all international airports and ports and make the State shoulder the overtime payments for CIQ personnel. (DOT, DOTC, DOF, DOJ, DOH, and Congress)

L. Revise take off and landing fees, make weight the main determinant, charge the same fees to international and domestic airlines.80 (Immediate action by DOTC)

M. Modify equity rules to allow Asian low-cost carriers to compete in the domestic market.81 (Medium-term action Congress)

N. Complete US$ 270 million GOJ-funded Communications, Navigation, and Surveillance/Air Traffic Management project of the DOTC to modernize Philippine airports and improve air travel safety. (Medium-term action DOTC)

O. Make Palawan a Tourism Economic Zone, adopting pocket open skies supported by infrastructure and a favorable tax regime (e.g. relief of taxes and fees such as GPB and CCT)82 (Medium-term action DOTC, DPWH, DOF, DOT, Congress, and LGU).

Airports and Seaports FGD Participants, Moderator and Secretariat Members November 26, 2009 Joint Foreign Chambers of the Philippines FOCUS GROUP DISCUSSION ON AIRPORTS AND SEAPORTS


  1. There is another view that NAIA should remain the primary international gateway since transferring to a less convenient airport may curb the growth of carrier services through a decrease in demand and an increase in operating expenses. There will be a market for regional, domestic, and general aviation services in Clark but not a full scale international gateway, even with a high speed rail connecting the airport to the CBDs in Metro Manila. Instead, NAIA should be expanded by expropriating land around the airport, be improved through major upgrades, and be optimized through better terminal allocation and efficient airport use management.[Top]
  2. NAIA has a land area of only 600 hectares, while DMIA has 2,367 hectares. NAIA is hemmed in by roads and dense commercial and residential development; Clark is not. NAIA cannot expand; Clark can.[Top]
  3. NAIA handles 90% of the country’s international and 75% of domestic traffic. Manila Domestic Terminal is the oldest. Terminal 1 is the second oldest (1980s) and in an advanced stage of dilapidation. Over 20 foreign carriers use its 16 gates. Terminal 2 was opened in 1999. PAL, using 7 gates for domestic and 5 for international, has outgrown T-2. Terminal 3 has 20 gates but was built along the domestic runway which cannot handle wide-body aircraft. NAIA runways are currently operating at full capacity from 7:00 am to 7:00 pm. Tourism is growing steadily, increasing the need for more international flights at Clark.[Top]
  4. For T-1 and T-2 to connect, the fuel depot and NAIA cargo terminal must be relocated; the fuel depot at its current location is a hazard to both terminals.[Top]
  5. Other Asian countries have relocated international gateway airports outside congested capital city airports. Hanoi, Hong Kong, Incheon, Jakarta, Kuala Lumpur, Nagoya, Shanghai, and Tokyo are examples. In some cases (such as in Nagoya and Tokyo) the older inner city airports have subsequently been allowed limited international flights. For residents of northern parts of the NCR, Clark is closer than Manila because of better highway connections to DMIA.[Top]
  6. These tax burdens often exceed profit margins of international carriers and are not imposed in other regional countries. In the past decade Air Canada, Air France, British Airways, and United Airlines ended service to the Philippines, and Northwest Airlines dropped one of its daily wide-body flights.[Top]
  7. International airlines pay double the take off and landing fees charged to domestic airlines even for the same aircraft types, in effect subsidizing the domestic carriers.[Top]
  8. ASEAN is moving towards complete open skies and may someday adopt unrestricted ownership of airlines operating within ASEAN. Indonesia, Malaysia, and Vietnam permit up to 49% foreign ownership of an airline. Most bilateral air service agreements (ASAs) specify that beneficiary national airlines have substantial if not majority local ownership.[Top]
  9. Successful pocket open skies examples in Asia include Hainan province in China, Kota Kinabalu in Malaysia, and Siam Reap in Cambodia. In 2009, each received 750,000, 562,000, and 2.2 million international visitors, respectively.[Top]