CLARK INTERNATIONAL AIRPORT CORPORATION

 CLARK INTERNATIONAL AIRPORT CORPORATION CONTENTS: 1 Message from the Chairman 4 Message from the President and CEO 8 Corporate Awareness 10 Beat the Odds: 9 in 9 12 Passenger and Cargo Statistics 15 Year 2009 Milestones 4 DMIA Air Entitlements 4 ISO 9001:2008 Project 4 Zest Air commences international flights via DMIA 4 Spirit of Manila unveils new aircraft at DMIA 4 15th World Route Development Forum 4 SIAEP starts operations in Clark 4 CIAC launches DMIA Product Update 4 Corporate Social Responsibility 25 Infrastructure Development Project: DMIA Passenger Terminal Expansion Project (Phase I) 26 Flights at DMIA Airport Facilities Transport Providers Board of Directors Executives Managers Assistant Managers Table of Organization Capability Building and Organizational Development Financial Report 4 Balance Sheet 4 Statement of Income and Expenses 4 Cash Flow Statement 4 Notes to Financial Statement 27 28 30 32 33 35 36 37 40 MESSAGE FROM THE CHAIRMAN Banking on its well‐established plans and program of activities in the past years, the Clark International Airport Corporation (CIAC) continued to grow amid the trying global economic times to undertake its mandate and objectives and move along with global economic development, boosting the morale and confidence of the management as well as its partners in the aviation industry. The years under review also saw the conduct of several Strategic Planning Workshops that further broadened CIAC’s scope of activities to accomplish new levels of achievement in the region through collective experience and expertise. In accordance with this successful outcome of events, the Office of the Chairman and the CIAC family has built the foundation for the establishment of an efficient and globally‐competitive international service and logistics center in the Asia‐Pacific Region. The expansion of the existing Passenger Terminal, inaugurated by no less than Her Excellency President Gloria Macapagal‐Arroyo in April 2008, has increased not only the floor area and facilities of the terminal but also its passenger capacity, a move in accordance with the President’s declaration that the DMIA will be the country’s premier international gateway. 1
Logistics services at Clark have also been given a big boost with the development by Kuwait and Gulf Link (KGL) of the 167‐hectare Global Gateways Logistics City (GGLC). The groundbreaking ceremony for the GGLC was held in August 2008 and is currently undergoing development. The US$1‐billion project gives KGL authority over the administration, operation and control and streamlining of different activities of the project, focusing mainly on, but not limited to, logistic support on lease, contract and rental basis. The establishment of the Singapore Airlines Engineering Philippines (SIAEP) of its Maintenance, Repair and Overhaul (MRO) facility in the Clark Civil Aviation Complex will bring forth a new wave of aerospace activities into the Philippines and will put Clark and the Philippines in the roadmap of the aviation industry. The MRO facility that is now operational was developed with an initial cost of $19 million, SIAEP invested in infrastructure and the workforce to create a world‐class MRO Centre of Excellence in the Philippines. The year 2008 also saw the inauguration of Miascor‐Gate Gourmet’s US$1.3 Million in‐flight catering facility, further boosting the capability of the DMIA to accept legacy carriers. Capable of preparing 4,000 meals a day, the in‐flight catering facility can provide meals not only for regional carriers but serve long‐
haul carriers as well. CIAC roadshows that saw CIAC officials and employees bringing the DMIA and its services to local government units and travel agents in the Northern Philippines, particularly in the Ilocos Region, Central Luzon and Baguio City in the Cordillera Administrative Region (CAR) was also conducted to encourage people in the said regions to travel through the DMIA. An international roadshow was also held in the Hong Kong Special Administrative Region where tourism officials and travel agents were invited to the Philippines via the DMIA. A result of the North Luzon Roadshows is the increase in passenger volume in 2009 that has breached the half‐million mark. The international passenger volume reached 559,792 passengers, or a fourteen percent (14%) increase in passenger volume compared to 2008. The international passengers were flown in by flights that also increased in 2009 to 2,613 as compared to 2,039 in 2008. CIAC has taken advantage of the operations of low‐cost carriers, such as Air Asia, Tiger Airways and our very own Cebu Pacific Air, which were mainly responsible for bringing in much of the passenger volume to the DMIA in the past years. 2
Low cost carriers or budget carriers, offering generally lower fares than full service airlines, have played a major role in an industry that continues to grow and evolving at the same. Asiana Airlines of South Korea, being the first airline to operate regular flights to the DMIA, also contributed significantly to the increase in passenger volume with its daily flights from Clark to Incheon. The DMIA is well on its way to becoming a world‐class airport, especially after its team of dedicated, experienced and well‐trained people worked together to pass the Stage 1 Audit for the ISO 9001:2008 Certification Project for the international passenger facilitation process. All these activities are aimed at developing the corporation and the airport to make them more competitive in an industry that continues to evolve as the times change. As US President Barack Obama said: “This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few, and not the many.” Thank you and good day. ARCHITECT NESTOR S. MANGIO Chairman 3
MESSAGE FROM THE PRESIDENT AND CEO It was indeed a positive year for the Diosdado Macapagal International Airport (DMIA) in 2009. Inspite of the challenging economic environment, the Clark International Airport Corporation (CIAC) continued to grow. Despite the fact that the airline‐
members of the Association of Asia Pacific Airlines are experiencing a surge in losses estimated at US$ 3.6 billion, CIAC is taking advantage of the aviation market in the Asia‐Pacific Region that has been reported as the world’s largest aviation market in year 2009. CIAC posted a twenty one percent (21%) growth for the first half of 2009 in spite of the sixteen percent (16%) slump showed in as early as the first five months of 2009 in the entire Asia Pacific aviation industry caused by the global economic recession and more recently the Influenza A (H1N1). Aside from the unprecedented increase in the international passenger volume that passed the half‐
million mark, CIAC participated in air talks with various countries and secured flights, thousands of seat entitlements and thousands of tons of cargo entitlements for the DMIA. 4
One of the most significant developments for CIAC in 2009 was the increase in international passenger volume that reached 559,792 passengers, or a fourteen percent (14%) increase compared to the 2008 figure of 490,748 passengers. The international passengers were flown in by flights that also increased in 2009 to 2,613 flights as compared to 2,039 flights in 2008. The increase in passenger volume was based primarily on the aggressive and relentless operation of budget carriers in Clark. As legacy carriers struggled with the downturn in the aviation industry around the world, the Asia‐Pacific aviation market of which DMIA has become a major player flourished with the budget carriers. Several of which have been operating at the DMIA since 2005. CIAC also launched a North Luzon Road Show covering Regions 1, 2, 3 and the Cordillera Administrative Region (CAR) that updated the people of Northern and Central Luzon on the developments of “The Airport of the North.” Local and international road shows were successfully implemented by various airline partners, stakeholders at the Metro Clark and travel agencies in Pampanga. Kicking off in the Clark Freeport Zone on March 20, 2009, the road show visited major cities that include Dagupan City in Pangasinan, the heritage city of Vigan in Ilocos Sur, Laoag in Ilocos Norte, Baguio City in Benguet, Olongapo City in Zambales, and Malolos in Bulacan as well as mall exhibits in Cabanatuan City in Nueva Ecija and Tarlac City in Tarlac. An international version of the road show was also held at the Hong Kong Special Administrative Region (SAR) in the last quarter of August 2009. Plans are already underway for the holding of other local and international road shows. President Gloria Macapagal‐Arroyo also inaugurated on April 5, 2009 the Clark South Interchange of the Subic‐Clark‐Tarlac Expressway (SCTEX), further boosting the viability of the DMIA and Clark as a logistics center as it provides direct access to the airport and the Freeport for the seamless flow and management of goods, people and services. A simple blessing ceremony was held on August 1, 2009 with Spirit of Manila Airlines’ (SOMA) new MD‐83 aircraft which will be utilized for its international flights. The airline is expected to fly for the coming year via Taiwan and Macau and in the Middle East via Qatar, Dubai, Bahrain and Kuwait. CIAC was also among the more than 300 participants that include airline representatives in the 15th World Routes Development Forum held in Beijing, China on September 12 to 15, 2009. It is the biggest global air transport forum conducted annually. CIAC officials showcased the Clark airport programs and developments at the DMIA to the airlines of the world. The developments at the DMIA caught the attention of an international magazine at the said event. Anna.aero magazine, one of the leading airline network news and analysis magazine in the United Kingdom which covers airport developments, adjudged the DMIA as the “Most Promising Upstart Airport.” 5
August 2009 also saw the start of operations of the US$100‐million SIA Engineering Philippines (SIAEP) MRO facility. The new MRO hangar is currently servicing maintenance checks for narrow bodied aircrafts. Other developments include the DMIA Passenger Terminal Expansion Project (Phase 1) that will feature two aerobridges to provide a more convenient way of boarding and disembarking from aircrafts. The development of the 167‐hectare Global Gateway Logistics City (GGLC) will host aviation‐related and dependent business to support the activities within the Clark Civil Aviation Complex. We also launched and passed the ISO‐9001:2008 DMIA International Passenger Facilitation Process. The project is intended to raise the bar of service and performance at CIAC as it aims to standardize and systematize the departmental processes and procedures that cover passenger facilitation and passenger terminal operations at the DMIA. A Quality Management System (QMS) will be instituted at the airport which will improve business operations, create a positive effect on investment and growth and establish a competitive advantage for CIAC. The ISO certification will benefit the traveling public at the airport as it will make travel easier and more comfortable. The certifying body, TÜV Rheinland Philippines Inc., informed the CIAC ISO Project Team that CIAC passed the first stage of the audit of the ISO‐9001:2008. The Stage 1 Certification Audit was conducted on December 21, 2009 which involves General and Documentation Requirements, Management Commitment, Customer Focus, Quality Policy and Planning. The DMIA had done its part in helping the country, not only by flying in and welcoming domestic and international passengers and tourists, but also in humanitarian efforts, especially during the latter part of the year when the Northern parts of the country were beset by typhoons Ondoy and Pepeng in rapid succession that affected millions in the areas that the tropical disturbances swept. On October 15, 2009, the DMIA was used as a port of entry of more than 15 tons of humanitarian aid from the Spanish government intended for the thousands of victims of Typhoons Ondoy and Pepeng. The Antonov cargo aircraft flew in the humanitarian aid, consisting of blankets, family hygienic kits, kitchen set, jerry cans, tarpaulins and 4x4 tents worth an estimated 200,000 Euros which were donated by the Spanish government for the flood victims of Metro Manila, Central and Northern Luzon staying in various evacuation centers. This is the first of a series of assistance facilitated by the CIAC management to solicit donations from airport locators and airport‐related or concerned agencies to help the victims of the two typhoons. On October 27, 2009, the SIA Engineering Company (SIAEC) donated twenty thousand dollars (US$20,000) for the victims of the typhoon. The funds were turned over to the Department of Social Welfare and Development (DSWD) and the Philippine National Red Cross (PNRC) in a simple ceremony at CIAC. 6
A few days later, on November 5, 2009, US‐based international shipping company United Parcel Service (UPS) donated fifty thousand dollars (US$50,000) to the Philippine National Red Cross (PNRC) as assistance for the victims of the typhoons. CIAC President and CEO Victor Jose Luciano and UPS Asia Pacific Region Senior Vice‐President KM Liu led the turn‐over of the fifty thousand dollars (US$50,000) donation to the PNRC that was received by Chairman Emeritus former Justice Leonor Ines‐Luciano and Secretary General Gwendolyn Pang at CIAC. These developments and more may be gleaned in detail on this 2009 Annual Report that shows how CIAC has developed and grown in the past year. These are great steps that the organization dared to take and confront the economic challenges posed by global economic crisis face to face and we emerged on top. The Year 2010 will be another year of challenges for the organization so let us join hands and meet these challenges. As the unknown author said: “Life is not about waiting for the storms to pass... it’s about learning how to dance in the rain.” Mabuhay! VICTOR JOSE I. LUCIANO President and CEO 7
The Clark Civil Aviation Complex encompasses approximately 2,367 hectares of the sprawling 4,400 hectare Clark Freeport Zone where the Diosdado Macapagal International Airport (DMIA) is located. The basis for the existence of the Clark International Airport Corporation (CIAC) is Republic Act No. 7227 known as the "Bases Conversion and Development Act of 1992" accelerating the conversion of military reservations into other productive uses, creating the Bases Conversion Development Authority (BCDA). The purpose of the authority is to adopt, prepare and implement comprehensive and detailed development plan for the sound and balanced conversion of the Clark and Subic military reservations. Executive Order No. 62 was issued on February 27, 1993 to prescribe policies & guidelines to implement Republic Act No. 7227. The Clark Special Economic Zone (CSEZ) was envisioned as a new industrial zone and a major Civil Aviation Complex for international passengers and cargo. Proclamation No. 63 declared the lands covered by the Clark military reservations and its contiguous extensions as CSEZ. BCDA was designated as the governing body of the CSEZ. The BCDA shall promulgate all necessary policies, rules and regulations to govern and regulate the CSEZ. The CSEZ was designated as the future site of the premiere international airport of the Philippines pursuant to Executive Order No. 174 issued on April 28, 1994. Its existing runways and airport area of more than 2,200 hectares provides sufficient area for phased expansion to serve the air traffic demand of the 21st Century. CIAC was created by Executive Order No. 192 dated July 27, 1994 as a wholly‐owned subsidiary of Clark Development Corporation (CDC) to operate and manage the Clark Civil Aviation Complex. Its capitalization shall include cash equity to be provided by CDC, portions of government lands covered by the Clark Civil Aviation Complex, permanent improvement and fixtures and all other assets which the President may transfer to CIAC as part of the equity contribution of the government. CORPORATE AWARENESS 8
Executive Order No. 360 was issued on August 16, 1996 amending Executive Order No. 192, and made the BCDA as the direct stockholder of the CIAC in compliance with Republic Act No. 7227 which provides that the BCDA will serve as the holding company of the subsidiary companies. CDC and CIAC were merged on March 26, 2001 pursuant to Executive Order No. 7. The BCDA Chairman is directed to prepare a plan and take all the necessary step towards effecting the merger of CDC and CIAC, with CDC as the surviving corporation. CDC Board Resolution 07‐08 was approved on July 20, 2001 renaming Clark International Airport to Diosdado Macapagal International Airport (DMIA) on the occasion of the 91st birth anniversary of former President Diosdado Macapagal. On March 10, 2003, CIAC was re‐
established as a subsidiary of BCDA to focus and prioritize the development of the DMIA. On April 4, 2003, Executive Order No. 193 was issued declaring CIAC as a subsidiary of CDC in order to foster synergy in the development of the DMIA as well as the CSEZ. Executive Order No. 716 was issued on April 3, 2008, transforming CIAC into a subsidiary of BCDA subject to the policy supervision of DOTC. CIAC has jurisdiction over Clark Civil Aviation Complex comprising an area of 2,200 hectares including approximately 166.9 hectares within Industrial Estate‐5. 9
BEAT THE ODDS: 9 IN 9
For a start, the CIAC has successfully lobbied for separate air entitlements for the Clark route readying the DMIA for more international flights. DMIA is assured of more air entitlements in the future because CIAC is a member of the RP Air Negotiating Panel. The CIAC is now closer to getting the ISO 9001:2008 Certification in a bid to keep up with industrial and commercial standards. As more airport‐related projects come in and passenger volume continues to grow, CIAC deemed it necessary to further improve its services. On December 21, 2009, TÜV Rheinland Inc., the certifying body for the ISO Certification confirmed that CIAC has already passed the “Stage 1 Audit” for the ISO Project. CIAC kicked off a series of road shows in the provinces of Central and Northern Luzon to inform the public of the on‐going development at the DMIA. The CIAC Road shows culminated in Hong Kong where OFWs have vowed to support the development of the airport as an “airport of choice.” In the same year, CIAC participated in the World Routes convention in China. Last September 2009, SIA Engineering Philippines (SIAEP) opened its Maintenance, Repair and Overhaul (MRO) Facility and started servicing aircrafts of Cebu Pacific Air, the first flag carrier to locate in Clark. SIAEP is also bent on constructing additional hangars to accommodate wide‐body aircrafts solidifying the capability of DMIA to service long‐haul aircrafts in the future. Amid the turbulence being experienced by the airline industry all over the world, CIAC has gained headway in the development of the DMIA, the next premier airport of the country. It had been a rough ride but the path to development had been smoothened, giving way to unprecedented growth at the DMIA in terms of the rise in passenger volume and the entry of new airlines. 10
CIAC 9‐POINT AGENDA FOR THE YEAR 2009: 1. Fiscal Autonomy 4 Adoption of fiscal measures and prioritization of 2.
3.
4.
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CAPEX requirements Revenue Enhancement 4 Additional international and domestic flights Efficiency Rate Achievement 4 Savings on Maintenance and other Operating Expenses Enhancement on Personnel Training on Human Resource Development 4 Trainings/ workshops on values formation and improvement of competencies towards culture change and work ethics Systems Enhancement 4 Publication of manuals for Finance, Human Resource, Procurement and Operations Department to systematize departmental processes and improve delivery of services in terms of speed and consistency Revision of CIAC Table of Organization 4 Formulation of a revised Table of Organization that will be most responsive to the current requirements of CIAC ISO 9001:2008 Accreditation 4 Standardize and systematize the existing departmental processes and procedures that covers the Passenger Facilitation and the associated Passenger Terminal Processes Implementation Plan of Executive Order No. 716 4 Executive Order No. 716 Implementation Plan which will truly realize the transformation of CIAC as a subsidiary of the BCDA Active Partnership within CIAC and the Clark Network 4 Intensify networking and support of CDC, CIAC concessionaires, airport partners and other agencies within the Civil Aviation Complex 11
PASSENGER AND CARGO STATISTICS
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CIAC posted a 21% increase in International and Domestic Passenger Flights with 3,185 flights from January to December 2009 compared to 2,623 flights in year 2008, making it one of the busiest airports in the country. This only proves that DMIA, compared to the previous year, continues to attract passengers especially those in the communities of Central and Northern Luzon who are enjoying the economic benefits generated by the airport in Clark. International and Domestic Passenger Volume at DMIA also increased by as much as 11% with a total of 590,544 passengers in 2009 as compared to the 530,429 passengers in year 2008. PASSENGER FLIGHTS
Year 2009: 3,185 Year 2008: 2,623 % Change: 21% PASSENGER VOLUME
Year 2009: 590,544 Year 2008: 530,429 % Change: 11% 13
The total number of International and Domestic Cargo Flights in year 2009 was recorded at 3,176 flights, representing a 20% increase over the previous year of 2,640 flights. On the other hand, International and Domestic Cargo Tonnage increased by 1% from 130,585 tons in 2008 to 132,078 tons in 2009. With the positive growth that the DMIA posted in 2009, the airport is optimistic for the continued development in the coming years despite the global economic situation. All these are being undertaken with the end vision of developing the DMIA as the next premier international gateway of the Philippines and the best service and logistics center in the Asia‐Pacific region. CARGO FLIGHTS
Year 2009: 3,176 Year 2008: 2,640 % Change: 20% CARGO TONNAGE
Year 2009: 132,078 Year 2008: 130,585 % Change: 1% 14
YEAR 2009 MILESTONES
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ADDITIONAL DMIA AIR ENTITLEMENTS FOR THE YEAR 2009
COUNTRY DATE OF AIR TALKS VENUE Qatar 14‐15 Jan. Manila UAE 28‐29 Jan. Abu Dhabi PASSENGER CAPACITY CARGO CAPACITY FOR DMIA FOR DMIA 14 freq (any aircraft except A380) 400 tons 42 freq Kuwait 16‐17 Feb. Manila 14 freq Bahrain 25‐26 Feb. Manila 28 freq Australia 12‐13 Mar. Canberra 4,000 seats [Add 1,000 after approval to operate (5,000 seats)] [Add 1,000 after approval to operate 4,000 seats (6,000 seats)] 1,300 tons Brunei 30‐31 Mar. Manila 1 freq 7 (1,400 tons‐ Bandar Seri Begawan) Singapore 6‐7 May Singapore 10,000 seats May convert the foregoing capacity wholly or in part to cargo services at the ratio of 4 seats to 1 ton Spain 19‐21 May Madrid 14 freq (Madrid/Barcelona) With 3rd, 4th & 5th freedom traffic rights and with any type of aircraft United Kingdom 7‐9 July London 7 freq for B747’s or 10 freq for smaller aircrafts Libya 21‐22 Oct. Manila 5 freq Oman 13‐14 Dec. Muscat 7 freq (passenger, combination and/or all cargo services; any aircraft except A380) 300 tons 16
DMIA AIR ENTITLEMENTS COUNTRY PASSENGER CAPACITY FOR DMIA CARGO CAPACITY FOR DMIA Bahrain Belgium Cambodia Canada China Egypt Finland Germany Hong Kong India Iran Indonesia Japan Korea Kuwait Macau Malaysia Nauru Nepal Netherlands New Zealand Pakistan Palau Qatar Russia Singapore Switzerland Taiwan Thailand United Arab Emirates USA Vietnam 17
2 freq
2 freq 32 freq 7 freq 6,000 seats 3 freq 7 freq 7 freq 6,300 seats 7 freq 7 freq 3000 seats 14 freq 19,000 seats 6 freq 6,300 seats 9,000 seats 1 freq 2,500 seats 7 freq 3 freq 2 freq 200 seats 3 freq 10 freq 5,000 3 freq 450 seats 8,700 seats 5 freq Unlimited Unlimited 700 tons 1400 tons (Clark/Subic) 700 tons 400 tons No restriction on capacity & aircraft 700 tons 700 tons 4 seats can be converted to 1 ton 700 tons ISO 9001:2008‐DMIA International Passenger Facilitation Process The launching of the International Organization for Standardization (ISO) 9001:2008 Project on January 19, 2009 is aimed at improving the delivery of services, especially in operations and international passenger facilitation at the passenger terminal building to make DMIA globally‐competitive. The ISO 9001:2008 Project will standardize and systematize the processes and procedures that will cover international passenger facilitation and other terminal support operations. This will develop a Quality Management System (QMS) that will meet international quality standards. CIAC tapped leading firms in the country that provide ISO 9001:2008 services to facilitate the undertakings to improve the terminal operations of the airport. In doing so, CIAC utilized the services of EC Management Systems represented by Danilo Carreon and Elmer Cruz. A series of activities, trainings and workshops were conducted during the implementation stage of the project. On November 2009, CIAC conducted the final ISO workshop—a three‐day course which dealt with Internal Quality Control. Twenty three (23) participants were certified as ISO Internal Quality Auditors and conducted an Internal Quality Audit on the CIAC‐QMS. To certify the Quality Management System of CIAC to ISO 9001:2008, CIAC tapped the services of TÜV Rheinland Philippines as its certifying body. The auditors of TÜV Rheinland conducted the Stage 1 Audit on December 21, 2009. On the same day, they advised the ISO Core Group that CIAC successfully passed the Stage 1 Audit and prepared to undergo the Stage 2 Audit on February 10 and 11, 2010. The target date for the ISO 9001:2008 Certification is set on February 2010. The Phase 2 of the ISO Project that will cover the Administrative and Finance Processes is scheduled to commence on the second quarter of 2010. 18
Zest Air commences international flight via DMIA On March 2008, AMY Holdings Corporation established Zest Airways Inc., as it sees the opportunity for growth in the Airline and Aviation Industry in the country. Zest Air started their South East Asian flights and 20 local destinations on June 2009. On October 24, 2009, Zest Air started its international daily flights via Clark‐Hong Kong. CIAC President and CEO Victor Jose I. Luciano, Zest Air President and CEO Ambassador Alfredo M. Yao and Subic‐ Clark Alliance for Development Council (SCADC) Secretary Edgardo Pamintuan led the program for the inaugural flight. A roundtrip ticket for only seventy dollars (US$70) was sold by Zest Air as part of their promotional campaign at DMIA. Zest Air is the newest budget carrier to operate at the DMIA that will further boost the passenger volume of the airport by the end of 2009. Zest Air (formerly Asian Spirit) uses its brand new Airbus A320 with a passenger capacity of 166 seats. Zest Air is the second local airline to operate international commercial flights at DMIA. The air carrier also flies domestic operations via Clark‐Caticlan. 19
Spirit of Manila Airlines unveils new aircraft at DMIA On August 1, 2009, the Spirit of Manila Airlines (SOMA) unveiled its new MD‐83 aircraft which will be utilized for its international operations at DMIA. The ceremony was led by CIAC President and CEO Victor Jose I. Luciano and other CIAC Officials. Also present in the occasion were Department of Transportation and Communication (DOTC) Secretary Leandro R. Mendoza, SOMA Chairman Basilio Reyes, President and CEO Jimmy Matibag, Vice President Rene Ocampo and their foreign partner Vice Chairman Hamad Altani. The airline will be using other aircrafts which include MD‐83, Boeing 747‐300 and Boeing 747‐400 to complete its fleet in time for their full operations in 2010. The air carrier is expected to fly to Taiwan and Macau by early January 2010. The airline is expected to fly to the Middle East via Qatar, Dubai, Bahrain, and Kuwait to serve the bulk of the Overseas Filipino Workers (OFWs) mostly coming from Central and Northern Luzon. SOMA is the latest Filipino‐owned airline company offering scheduled international and regional passenger services to Asian and Middle Eastern countries from DMIA. Spirit of Manila acquired a 10‐hectare property at DMIA to house its fleet of aircrafts. The airline offers budget fares and other innovative schemes to cater to the OWFs.
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CIAC participates in the 15th World Route Development Forum The World Route Development Forum is an annual networking occasion for the aviation industry. It is a unique meeting place for the world’s airlines and airports where market information is shared, new air services are planned & implemented, recovery strategies are discussed and the economics of established air services are improved. Aware of the advantages it could bring in terms of global promotion & branding and the role it plays in the realization of the goal for the DMIA to become the country’s next premier international gateway, CIAC participated in this event. It was one of the 279 airports, 350 airlines and 100 national tourism organizations comprising of 2,200 delegates who attended the forum held from September 12‐15, 2009 at the New China International Exhibition Center in Beijing—the capital city of China. The CIAC delegation was composed of Darwin L. Cunanan, ECE (Manager for Corporate Planning and MIS/IT Department), Atty. Perlita M. Sagmit (Corporate Secretary), Atty. Milani I. Reyes (Sr. Legal Officer), Lyn P. Sanchez (Investment Promotions Assistant) and Jesito M. Ponio, Jr. (Market Research Specialist). During this three‐day gathering, the team engrossed itself in meeting with various airlines such as Jetstar Asia, Shenzhen Airlines, Jeju Airlines, All Nippon Airways, China Southern Airlines, Air Asia, Hainan Airlines and MASkargo to invite them to operate at the DMIA. CIAC was featured in two (2) magazines being circulated during the event which are Airline Business Daily and Routes Beijing Daily. The magazines showcased the potentials of the DMIA and its role in the airport development in the Philippines. At the end of the forum, CIAC was able to catch the attention of Anna.aero, a leading airline network and analysis magazine based in United Kingdom which covers airport developments and network planning used by airlines and airports worldwide. It recognized the DMIA as the "Most Promising Upstart Airport” for the year 2009. 21
SIA Engineering Philippines starts operations in Clark A world class Maintenance, Repair and Overhaul (MRO) hangar facility started its operations in Clark on September 2009. The new state‐of‐the‐art MRO hangar, constructed by the SIA Engineering Philippines (SIAEP), a subsidiary of the Singapore Airlines Engineering Company (SIAEC) based in Singapore, will provide heavy and maintenance checks for narrow bodied aircraft such as the Airbus A320. The next hangar to be built by 2010 will cater to wide‐bodied aircraft such as the Boeing 747 and Boeing 777 aircrafts. Three (3) other hangars are expected to be set up to complete SIA’s facilities at the DMIA. On November 2008, President Gloria Macapagal Arroyo led the ground‐breaking ceremony in Clark with CIAC President and CEO Victor Jose I. Luciano, SIA President William Tan and Cebu Pacific Air President and CEO Lance Gokongwei. SIAEP is a Joint Venture between SIAEC and Cebu Pacific Air. The project will generate at least 1,100 jobs for highly‐skilled Filipino specialists that will provide world‐class service to commercial aircrafts of airlines around the world. The hangar occupies ten (10) hectares of land inside the Clark Civil Aviation Complex and currently employs 103 personnel. An initial US$19 million had been invested for the construction of the first hangar. The project involves the construction of ultimately five hangars that will service narrow and wide‐body commercial aircrafts. The SIAEC will invest in the infrastructure and workforce to create a world‐class MRO Center of Excellence in the Philippines. SIAEC is a major MRO service provider in Asia Pacific. The company has a client base of more than 80 international carriers and aerospace equipment manufacturers. It provides line maintenance services at the Singapore Changi Airport for more than 60 international carriers as well as airframe and component overhaul on some of the most advanced and widely‐used commercial aircrafts in the world. 22
CIAC launches DMIA Product Update CIAC has intensified its marketing strategies by launching in 2009 its North and Central Luzon Road Shows aimed at promoting the DMIA as the next Premier International Gateway of the Philippines. CIAC Chairman Nestor S. Mangio and CIAC President and CEO Victor Jose I. Luciano led the launching of the DMIA Product Update on March 20, 2009 at the Widus Hotel, Clark Freeport Zone. Stakeholders at the Metro Clark area as well as those from the Travel Agencies in Pampanga and Metro Manila, Hotel Associations, Business Chambers and Local Government Units among others attended the Road Show to promote the International and Domestic flights to the people of Central and Northern Philippines. DMIA is host to foreign and local carriers operating international flights in the South East Asian Region. The delegations to the Road Shows include CIAC, foreign and local carriers such as Cebu Pacific, Zest Air, South East Asian Airlines (Seair), Asiana Airlines, Tiger Airways, and Air Asia. The group went to Central and Northern Luzon provinces as part of their mission to introduce to the people living in the said areas the availability of flights at the DMIA. On August 2009, the CIAC delegation including the airline partners went to Hong Kong for the first ever DMIA International Road Show in the former British Colony. The event was attended by travel and tourism representatives and OFWs working in Hong Kong. The three‐day international road show was held at the Langham Place Hotel. The event saw the emergence of DMIA as the newest airport in the Northern part of the Philippines which provides world class services to passengers taking international and domestic flights at the airport. The road show also covered other provinces in Central Luzon such as Bulacan, Tarlac, Nueva Ecija, Bataan and Olongapo City in Zambales. The delegation also went to the Northern Luzon as far as Baguio City, Dagupan City in Pangasinan, Vigan and Laoag City in Ilocos Norte. 23
Corporate Social Responsibility Humanitarian assistance intended for the victims of typhoons Ondoy and Pepeng in Northern and Central Luzon were facilitated by CIAC. Officials of the Spanish Embassy headed by Deputy Head of Mission Alvaro Trejo, the Department of Social Welfare and Development (DSWD) Region III headed by Regional Director Minda Brigoli and CIAC officials led by EVP and COO Alexander S. Cauguiran and VP for Administrative and Finance Lauro A. Ortile received the cargo donated by the Spanish government through its Agencia Española de Cooperacion Internacional para el Desarrollo (AECID). The Antonov‐12 cargo aircraft carrying more than 15,000 tons of aid which consists of blankets, hygienic kits, kitchen set, jerry cans, tarpaulins, and tents arrived at the DMIA on October 15, 2009. The aid, worth an estimated two hundred thousand euros (€200,000) was turned‐over to the regional office of the DSWD. SIA Engineering Philippines (SIAEP) General Manager Liu Kim Yoong turned‐over a check worth twenty thousand dollars (US$20,000) to Philippine National Red Cross (PNRC) Governor Leonor Ines‐Luciano and Secretary‐General Gwendolyn Pang as the company’s assistance to victims of the typhoons on October 27, 2009. United Parcel Service (UPS) also chosen the PNRC through the American Red Cross as the recipient of the fifty thousand dollars (US$50,000) donation intended to help the victims of typhoons. CIAC President and CEO Victor Jose I. Luciano and UPS Asia Pacific Region Senior Vice‐President KM Liu led the turn‐over donation to the PNRC on November 5, 2009. A simple turn‐over ceremony with the SIAEP and UPS executives were conducted at the CIAC Board Room. The support provided by the CIAC locators and concerned agencies were distributed to the thousands of flood victims displaced by the calamities. CIAC is constantly committed to support community activities, especially in providing assistance to the victims of calamities in the Philippines. 24
INFRASTRUCTURE DEVELOPMENT PROJECT DMIA Passenger Terminal Expansion Project (Phase 1) The Php 309 Million DMIA project involves the expansion of the pre‐departure and arrival areas to accommodate the increasing number of flights of both Legacy Carriers and Budget Carriers. The new expanded terminal will also feature two (2) Passenger Boarding Bridges on its second floor that will provide more convenience to passengers boarding and disembarking from aircrafts. The new terminal building will be equipped with elevators, escalators, x‐ray machines, electrical equipment and devices, fire protection and alarm system, ground lighting system, structured cabling system, flight information display system, closed circuit television system, access control system and public television system. Bidding was conducted through open competitive bidding procedures in accordance with the Revised Implementing Rules & Regulations of Republic Act No. 9184 on November 6, 2009. The DMIA Passenger Terminal 1 Project was awarded to A.G. Araja Construction and Development Corporation on November 21, 2009, Notice to Proceed was issued on November 28, 2009. Civil works started on December 5, 2009 and expected date of completion is on April 2010. The DMIA Passenger Terminal 1 expansion is expected to accommodate an additional 500,000 passengers annually. This is the second expansion of the existing passenger terminal since April of year 2008. 25
FLIGHTS AT DMIA AIRLINE DESTINATION FREQUENCY Air Asia Kuala Lumpur, Malaysia Kota Kinabalu, Malaysia Daily Daily Asiana Airlines Incheon, Korea (with connecting flights to the USA, Japan and China) Daily Cebu Pacific Bangkok, Thailand Hongkong, China Macau, China Singapore Cebu, Philippines 2x per week 6x per week 4x per week 4x per week 3x per week Daily Tiger Airways Singapore Seair Caticlan, Philippines Daily Zest Air Hongkong, China Caticlan, Philippines 26
3x per week 2x per week The DMIA is located at the heart of Central Luzon, making it the most viable and convenient airport of choice for travelers from North‐Central Luzon and the northern Metro Manila area who wants to avoid the hustle and bustle of the city streets. It is easily accessible by shuttle bus from various points in Metro Manila and North Luzon. The DMIA is one of the biggest aviation complexes in Asia with two (2) runways in parallel configuration that can easily be extended to 4 kilometers to accommodate new generation wide‐bodied aircrafts. The primary runway (Runway 02R/20L) has a length of 3,200 meters and a width of 61 meters. It is fully equipped with all navigational aids and lighting facilities and has a Category 1 rating for precision approach. The secondary runway (Runway 02L/20R) has a length of 3,200 meters and a width of 45 meters. It is not yet equipped with navigational aids and lighting facilities and is currently used for Visual Flight Rules (VFR) only. The airport is well equipped with a Terminal Radar Approach Control, Navigational Aids, Meteorological Equipment, Airfield Ground Lighting System and Crash, Fire and Rescue facilities. The DMIA takes pride in its modern amenities complemented by airline support services such as Gate Gourmet, the world’s largest in‐flight catering service provider; SIA Engineering Philippines, for Maintenance Repair Overhaul Facility; Lubwell Corporation, for into plane fuel service provider and Clark Airport Service Support Corporation (CASSC), for ground handling facility to name a few. All these are being undertaken with the end vision of developing the DMIA as the next premiere international gateway of the Philippines and the best service and logistics center in the Asia‐Pacific region. AIRPORT FACILITIES 27
I.
TAXI SERVICE Airport Shuttle Service Inc. Type of Vehicles: Toyota Innova Destinations: Any point in Luzon Metro Asia Car Services Inc. Type of Vehicles: Toyota Innova / Nissan Van Destinations: NAIA, Manila, Makati, Subic, Angeles City and Mabalacat Pampanga Avis Philippines Type of Vehicles: Toyota Innova / Toyota Vios / Hyundai Starex Destinations: NAIA, Makati, Quezon City, Manila, Subic, Baguio City, San Fernando La Union, Dagupan, Bocaue, Tarlac, San Fernando Pampanga, Magalang Pampanga, Mabalacat Pampanga, Angeles City and Clark Freeport Zone D8 Brothers Transport Service Type of Vehicles: Hyundai Starex Destinations: NAIA, Makati, Manila, Subic, Baguio City, Mabalacat Pampanga, San Fernando Pampanga, Angeles City and Magalang Pampanga 28
TRANSPORT PROVIDERS Triangle Taxi Type of Vehicles: Mitsubishi Adventure Destinations: NAIA, Makati, Manila, Subic, Mariveles Bataan, Baguio City, La Union, Pangasinan, Tarlac, San Fernando Pampanga, Magalang Pampanga, Mabalacat Pampanga and Angeles City JMW Type of Vehicles: Toyota Innova Destinations: Within Central Luzon II.
Bus Service Genesis Transport (Cubao Terminal) Destinations: Mariveles, Baguio and Avenida Partas (Pasay and Cubao Terminal) Destinations: Pasay, Cubao, Pangasinan, La Union and Ilocos PhilTranco (Pasay Terminal) Destinations: Pasay, Cubao and Megamall 29
NESTOR S. MANGIO
CHAIRMAN
BOARD OF DIRECTORS 30
BENIGNO N. RICAFORT
VICTOR JOSE I. LUCIANO
VICE CHAIRMAN
PRESIDENT & CEO
ALEXANDER S. CAUGUIRAN
ALFONSO G. CUSI
DIRECTOR
DIRECTOR ROMEO N. DYOCO, JR.
JESUS S. NICDAO
DIRECTOR
DIRECTOR
SILVESTRE MANUEL G. PUNSALAN, JR. MAXIMO L. SANGIL DIRECTOR DIRECTOR NARCISO L. ABAYA ALOYSIUS R. SANTOS ADVISER ADVISER PERLITA M. SAGMIT CORPORATE SECRETARY 31
EVANGELINE G. TEJADA CORPORATE TREASURER B O A R D O F D I R E C T O R S E X E C U T I V E S VICTOR JOSE I. LUCIANO
ALEXANDER S. CAUGUIRAN PRESIDENT & CEO
EXECUTIVE VICE PRESIDENT & COO ROMEO N. DYOCO, JR. LAURO A. ORTILE VICE PRESIDENT FOR OPERATIONS & BUSINESS DEV’T
VICE PRESIDENT FOR ADMINISTRATIVE & FINANCE 32
M
ANAGERS
SURESH A. DASWANI MARKETING DEPT. MELITO S. DESALES INTERNAL AUDIT DEPT. 33
RUEL T. ANGELES
HILARION RITCHE D. NACPIL
ENGINEERING & MAINTENANCE DEPT.
AIRPORT OPERATIONS DEPT.
JOSE MARLOWE S. PEDREGOSA
FEDERICO E. PRIMERO, JR.
AIRPORT SECURITY DEPT. EMERGENCY SERVICES DEPT. FEDERICO G. GARCIA, JR.
BIDS AND AWARDS COMMITTEE EDGAR M. GUEVARRA PUBLIC AFFAIRS OFFICE MANAGERS
DARWIN L. CUNANAN CORPORATE PLANNING & MIS DEPT. SILVERIO A. CLEMENTE
PROPERTY, PROCUREMENT & GEN. SERVICES DEPT.
CYNTHIA C. DUNGCA (OIC) LEGAL DEPT. MARIE‐TESSIBETH T. CORDOVA
HUMAN RESOURCES DEPT. NANCY C. PAGLINAWAN (OIC) FINANCE DEPT. 34
ASSISTANT MANAGERS
FERNANDO S. TORRES ALEX G. ABSALON
AIRPORT OPERATIONS DEPT. EMERGENCY SERVICES DEPT. MARCELINO O. IBAÑEZ, JR. JESUS ABELARDO F. PUNZALAN
MARKETING DEPT. AIRPORT SECURITY DEPT.
JOSEPH RAYMUND P. CANLAS ENGINEERING & MAINTENANCE DEPT. ARNEL P. SAN PEDRO
PUBLIC AFFAIRS OFFICE 35
BONIFACIO M. YADAO
PROPERTY DEPT. MILANI I. REYES
HUMAN RESOURCES DEPT. RIZA L. SISON
PURCHASING DEPT.
Table of Organization
Board of Directors
Board Secretariat Internal Audit President & CEO
EVP & COO
Public Affairs Office Bids & Awards Airport Security Office Office of the Vice President Office of the Vice President for Admin. & Finance for Operations & Bus. Dev’t Corporate Planning Human Resources
Airport Safety Office Airport Operations & MIS
OCC Marketing Finance Legal
Airport Security Customer Service & Property, Procurement Concessionaries & Gen. Services Emergency Services Engineering & Maintenance Manpower Summary
RANKS YEAR 2009 YEAR 2008 President & CEO Executive Vice‐ President & COO Vice‐President Manager Assistant Manager Supervisor Rank and File TOTAL
1 1 2 9 13 27 299 352 1 1 2 8 12 27 302 353 36
INCREASE (DECREASE) 0 0 0 1 1 0 ‐3 ‐1 CAPABILITY BUILDING AND ORGANIZATIONAL DEVELOPMENT 37
I.
LOCAL TRAININGS TRAININGS NO. PARTICIPANTS Strategic Planning Workshop 82 Aviation Security Audit Awareness Training 12 DATE Jan. 29‐30 Feb. 03‐04 "Managing Financial Resources…Effectively" 2 March 23‐24 Traffic Management and Accident Investigation Seminar 15 April 23‐24 Standard First Aid Training and Adult Cardio Pulmonary Resuscitation (Adult CPR) 2 ICAO National Inspectors Course 2 Ramp Management and Safety Seminar 37 April 27 to May 01 May 26‐ June 03 May 23 Seminar on Basic and Advance Paralegal 1 May 27‐29 R.A. No. 9470 and Basic Records and Archives Seminar 2 June 9‐11 Gawin ang Tama Seminar 297 June 22‐23 Emergency Medicine Perspectives 1 Labor Laws for Managers and Layman 1 July25 July30 Fundamentals of Criminal Investigation 26 Emergency Department: When Every Second Counts 1 July 27‐30 August 6 Seminar on the Revised Implementing Rules and Regulations of R.A. No. 9184 4 September 10‐
11 46th People Management Association of the Philippines 1 October 1‐2 Seminar on Transportation and Environment 3 September 14 Property and Supply Management System 2 October 27‐30 Revised Implementing Rules and Regulation of R.A. 9184 6 October 26‐27 Integrity Development Action Plan and Moral Renewal Program Orientation 308 October 20‐21 National Trainers Training on the Basic Awareness Orientation Seminar on Trafficking in Persons 2 October 27‐29 Graduate Certificate Course on Corruption Prevention 1 November 16‐
June 30, 2010 38
II.
FOREIGN TRAINING TRAININGS "ICAO' s Workshop on Airport and Air Navigational Services Economics" Asia Pacific Runway Safety Programme Seminar Airport Security Operation Civil Aviation Management Programme Safety Management System Airport Terminal Operations and Management International Civil Aviation Organization (ICAO) Integrated Safety Management Systems ‐ Achieving World Class Safety Standards NO. PARTICIPANTS DATE Feb. 25‐27 Bangkok, Thailand 1 April 6‐10 Bangkok, Thailand 2 May 25‐29 1 May 25‐June 05 Incheon, Korea Singapore 1 1 June 14‐27 July 20‐31 Bangkok, Thailand Singapore 1 November 3‐5 Hong Kong 1 November 16‐26 Singapore 39
VENUE 2 FINANCIAL STATEMENTS 40
Condensed Balance Sheet (Unaudited)
2009
December
ASSETS
Current Assets
and Cash Equivalents (Notes 2 & 3)
14,090,865.80
Cash
Receivables (Note 4)
48,495,512.20
(Notes 2 & 5)
2,653,386.24
Inventories
Prepaid Expenses (Note 6)
49,611,631.00
179,192.05
Other Current Assets (Note 7)
Total Current Assets
115,030,587.29
Investments
(Note 8)
884,000.00
Non-Current Assets
1,331,639,444.54
Property, Plant and Equipment (Notes 2 & 9)
Due from Central/Home Office-CDC (Note 10)
589,897,821.46
Total Non-Current Assets
1,921,537,266.00
Other Assets
Restricted Fund/Assets (Note 11)
192,060.00
Total Other Assets
192,060.00
2,037,643,913.29
TOTAL ASSETS
LIABILITIES AND EQUITY
Current Liabilities
Payable Accounts (Note 12)
54,217,881.40
Inter-Agency
Payables (Note 13)
5,759,736.39
Intra-Agency Payables (Note 14)
2,938,688.83
Other Liability Accounts (Note 15)
26,191,667.74
89,107,974.36
Total Current Liabilities
Liabilities
Non-Current
Loans Payable (Note 16)
46,332,000.00
Long-Term Liabilities (Note 17)
195,399,321.89
Due to CDC (Note 18)
2,382,849,399.79
Due to BCDA (Note 19)
37,074,315.60
Total Non-Current Liabilities
2,661,655,037.28
Deferred Credits (Note 20)
508,787.47
2,751,271,799.11
TOTAL LIABILITIES
Equity
Capital Stock (Note 21)
1,250,000.00
(714,877,885.82)
Retained Earnings (Deficit)
TOTAL EQUITY
(713,627,885.82)
TOTAL LIABILITIES AND EQUITY
2,037,643,913.29
41
2008
December
171,001,487.11
49,157,084.60
712,211.48
4,535,042.45
1,196,603.24
226,602,428.88
884,000.00
1,420,411,717.43
510,676,335.06
1,931,088,052.49
192,060.00
192,060.00
2,158,766,541.37
29,649,106.75
4,417,738.90
2,692,239.34
12,471,815.78
49,230,900.77
197,926,844.83
2,342,719,464.97
37,074,315.60
2,577,720,625.40
67,990.64
2,627,019,516.81
1,250,000.00
(469,502,975.44)
(468,252,975.44)
2,158,766,541.37
Condensed Statement of Income and Expenses
Year Year 2009 2008 Income
341,912,121.11
273,985,639.53
Business Income
341,912,121.11
273,985,639.53
Gross Income
Less: Expenses
Personal Services
111,012,509.08
91,186,214.19
Salaries and Wages
Other Compensation
50,305,626.24
41,703,827.09
Personnel Benefits Contribution
7,836,876.83
6,879,018.61
Other Personnel Benefits
31,003,463.17
27,963,351.26
Total Personal Services
200,158,475.32
167,732,411.15
and Other Operating Expenses
Maintenance
Traveling Expenses
3,233,292.81
3,996,544.41
2,633,227.32
1,856,384.18
Training and Scholarship Expenses
Supplies and Materials Expenses
6,658,875.45
9,374,988.88
22,945,235.61
17,970,193.33
Utility Expenses
Communication Expenses
2,421,969.40
2,553,246.36
Awards and Indemnities
21,691,391.90
Advertising Expenses
5,097,727.76
3,673,427.38
Printing and Binding Expenses
554,195.00
828,949.28
Rent Expenses
227,500.00
124,000.00
Representation Expenses
1,886,899.46
2,395,820.38
Subscriptions Expenses
255,207.02
339,963.54
Professional Services
29,854,946.09
26,437,036.26
and Maintenance
19,063,014.34
10,342,060.39
Repairs
Donations
250,000.00
155,000.00
Extraordinary and Miscellaneous Expenses
2,569,830.00
330,653.17
Taxes, Insurance Premiums and Other Fees
7,178,652.13
7,232,968.23
Depreciation
Expense
125,448,089.88
82,106,165.93
169,717,401.72
Total Maintenance and Other Operating Expenses 251,970,054.17
Financial Expenses
26,398,163.62
7,223,189.38
Total Expenses
478,526,693.11
344,673,002.25
Income (Loss) from Operations
(136,614,572.00)
(70,687,362.72)
Add/(Deduct) Other Income/Expenses
10,172,561.25
18,157,477.78
Net Income (Loss)
(126,442,010.75)
(52,529,884.94)
Provision for Income tax
263,828.30
562,939.87
(126,705,839.05)
(53,092,824.81)
Net Income (Loss)
42
Cash Flow Statement
Particulars
Cash flow from operating activities:
Income Items
Year-to-Date
2009
2008
436,160
591,890
OPEX
(221,397)
(170,167)
Payables
Advances, Receivables & Others
(103,809)
(169,321)
(79,562)
(211,275)
Total Cash Provided (Used) for operating activities
(58,367)
130,887
Cash flow from investing activities:
Proceeds from maturing placements
136,950
191,134
(51,610)
(152,604)
(159,640)
(110,344)
Total Cash Provided (Used) for investing activities
Cash Flows from Financing Activities:
Proceeds from Borrowings
Total Cash Provided (used) by Financing Activities
(67,264)
(78,850)
Total Cash Provided (Used) for the period
Add: Cash and cash equivalents, beginning
(79,299)
75,451
52,037
23,414
(3,848)
75,451
4,015
13,924
95,550
17,939
95,550
14,091
171,001
Placements
CAPEX
Cash and cash equivalents, ending
46,332
46,332
-
Add: Temporary Investments/Time Deposits (year-to-date)
Local Currency
Foreign Currency (Peso Equivalent)
Total Temporary Investments
Total Cash and Cash Equivalents
43
Notes to Financial Statements
1.
HISTORICAL BACKGROUND By virtue of Executive Order No. 192, CIAC was created as the implementing arm of BCDA to operate and manage the Clark Civil Aviation Complex. On July 5, 2002, the Securities and Exchange Commission (SEC) approved the merger of CDC and CIAC pursuant to Executive Order No. 7, with the former as the surviving entity. Thus, the financial statements of CIAC for CY 2002 were combined with the financial statements of CDC. 2.
On April 4, 2003, Executive Order No. 193 was issued authorizing the re‐establishment of CIAC as a subsidiary of CDC. SEC subsequently approved this on September 4, 2003. Relative to this, all transactions related to CIAC operations were separated from CDC books starting October 1, 2003. However, transfer of assets acquired prior to and during the merger was effected only in November, 2006. On April 3, 2008, Executive Order No. 716 was issued transforming CIAC as a subsidiary of BCDA. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Inventories Office supplies inventory valuation is based on the moving average method while for the other inventories such as other supplies, drugs & medicines, gasoline, oil & lubricants, spare parts and construction materials are valued at cost using the first in‐first out (FIFO) method. Property, Plant and Equipment Property and equipment are carried at cost less accumulated depreciation. Significant improvements and renewals, including incidental costs are capitalized, while cost of maintenance and repairs is charged to expense. When property is disposed, the cost and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is credited or charged to current operations. 44
Depreciation policies are as follows: a. Straight‐line method of depreciation is used based on the economic lives of the assets. b. Transportation equipments are depreciated for 5 years using the Sum of the Years Digit Method. c.
COA Circular Nos. 2003‐007 and 2004‐005 were implemented starting January 2004. Foreign Currency Transactions 3.
Transactions in foreign currency are recorded in Philippine peso based on the exchange rate prevailing at the time of the transactions. Exchange gains or losses are being realized as follows: 1) at the end of the year based on the closing/prevailing rate as of balance sheet date; 2) when there are periodic adjustments and 3) when there are trading/conversion of dollar to peso. Last in‐first out (LIFO) method is used in recording dollar withdrawals. Under this method, withdrawals are converted to peso at the rate of exchange prevailing at the time of the latest deposit. Income Recognition Accrual method is used in recognizing rent income, landing & parking fees and income from concessionaires, except interest charged to locators which are recorded at the time of payment (cash method). CASH AND CASH EQUIVALENTS This account consists of: Cash ‐ Collecting Officers 12/31/09 P 1,821,640 P Cash ‐ Disbursing Officers 3,391,531 Cash on Hand ‐ Petty Cash Fund 113,922 Cash in Bank ‐ Local Currency PNB Clark (1,475,412) Cash in Bank ‐ Local Currency PVB Clark (14,588,038) Cash in Bank ‐ Local Currency PVB Clark 1,300,000 Cash in Bank – Local Currency, Time Deposits 4,014,837 Cash in Bank ‐ Foreign Currency PNB $ 1,602,425 Cash in Bank ‐ Foreign Currency PVB $ 3,986,199 Cash in Bank ‐ Foreign Currency, Time Deposits 13,923,761 Total P 14,090,865 P 45
12/31/08 0 4,018,702 90,322 7,768,518 22,465,945 0 0 1,500,035 39,607,486 95,550,479 171,001,487 4.
RECEIVABLES Balances are as follows: Accounts Receivable – Trade Allowance for Doubtful Accounts Accounts Receivables (Accrued Landing & Parking Fees) Accounts Receivable – Others Notes Receivable Due from Officers and Employees Interest Receivable Due from GOCC (MIAA) Due from GOCC (CIAC Provident Fund) Other Receivables Total 12/31/09 12/31/08 P 31,912,653 P 33,259,850 (3,487,256) (3,487,256)
11,780,042 8,020,324 125,093 65,265
4,484,529 8,869,159 2,949,230 1,540,434 38,535 176,999
173,434 173,434 1,116 1,116 518,136 537,759 P 48,495,512 P 49,157,084 The Accounts Receivable – Trade account are collectibles on rent and aeronautical fees from various locators, airline operators and concessionaires previously recorded in CDC books, of which the outstanding balances (including the corresponding allowance) as of October 31, 2006 were transferred by CDC to CIAC in November 2006. Henceforth, the setting‐up of receivables will be done in CIAC books. Also the Allowance for Doubtful Accounts in the amount of P3.4M was included on accounts transferred by CDC in November 2006. Prior to the merger of CIAC with CDC, the said allowance for doubtful accounts was already set‐up. Charged under the Accrued Landing and Parking Fees are the aeronautical fees and charges of various airline operators. Under the Accounts Receivable – Others are charges to concessionaires representing their power consumption. Charged under the Notes Receivable is the restructured Asian Aerospace account. The Due from Officers and Employees account are receivables from CIAC personnel for personal calls, medical expenses and cash advances from official travel. 46
5. The Interest Receivable account represents the accrued interest income from time deposits as of December 31, 2009. Due from GOCC (MIAA) refers to the expenses paid by CIAC for MIAA for the capsule laying activity. An effort to collect the same has been exerted. Due from GOCC (CIAC Provident Fund) are the expenses incurred in the registration of the Provident Fund with the Securities and Exchange Commission. Other receivables refer to the personal telephone calls of employees of support agencies; SSS benefit claims advanced by CIAC to its employees, receivable from Tiger Airways for the meals served to their stranded passengers due to cancelled flights and those which were turned‐over by CDC in November 2006. INVENTORIES Under this account are as follows: 12/31/09 12/31/08 Office Supplies Other Supplies Drugs and Medicines Gasoline, Oil and Lubricants Spare Parts Construction Materials P 664,234 P 692,693 293,181
0 193,670 19,518 25,680
0
856,610 0 620,011 0
Total P 2,653,386 P 712,211
The inventory of office supplies, other supplies, gasoline, oil & lubricants, spare parts and construction materials are maintained by the Property Division while the inventory of drugs and medicines is maintained by the Corporate Clinic and the Emergency Services Department. The valuation of the office supplies is based on the moving average method, while the first in‐first out method is used for the rest of the inventory accounts. 47
6. PREPAID EXPENSES This account includes: 12/31/09 12/31/08 Prepaid Insurance P 1,951,647 P 2,331,662 Advances to Contractors 46,332,000 0 Deferred Charges 577,984 2,203,380 Other Prepaid Expenses 750,000
0 Total P 49,611,631 P 4,535,042 Prepaid insurance represents premiums (unexpired portion) for the insurance of DMIA occupied buildings and airport liability insurance. The Advances to Contractors account represents the 15% mobilization paid to A.G. Araja Construction & Development Corporation for the DMIA Passenger Terminal Expansion Project. Lodged under the Deferred Charges account is the unamortized balance of the CBA Signing Bonus for the period January to December 2010. Other Prepaid Expense represents the amount advanced by CDC for the CIAC’s share per their MOA in the Philippine Hot Air Balloon Festival on February 11‐14, 2010. 7. OTHER CURRENT ASSETS Classified as other current assets is the Guaranty Deposits account amounting to P175,837. These are payments to utility companies (electric, water, etc.) and various suppliers that are refundable upon cancellation/termination of contracts. The balances of these deposits as of October 31, 2006 were turned over by CDC on November 2006. The unused tax credits for P3,354, also lodged as other current asset, represents the tax withheld by airline operators on aeronautical fees which can be applied by CIAC as a deduction from its income tax payment. 8. INVESTMENTS Lodged under this account is the CIAC’s investment of P884,000 related to MGCC shares which was turned over by CDC on May 2007. 48
9. PROPERTY, PLANT AND EQUIPMENT Breakdown is as follows: At December 31, 2008 Furniture & Fixtures Land & Building Improvem
ents Construction in Progress Equipment Cost Accumulated Depreciation P 50,418,410 Net Book Value Year Ended December 31, 2009 Opening Net Book Value Additions Depreciation for the Year Closing Net Book Value At December 31, 2009 50,418,410 1,419,742,911 11,163,669 525,056,837 6,526,239 894,686,074 4,637,430 TOTAL 810,630,356 339,960,553 470,669,803 50,418,410 894,686,074 4,637,430 470,669,803 1,420,411,717 (42,891,759) 72,096,450 (147,777,701) 574,918 (470,856) 63,570,675 93,350,284 (33,874,000) (182,122,557) 7,526,651 819,004,823 4,741,492 500,366,478 1,331,639,444 7,526,651 1,491,839,36
1 Accumulated Depreciation 2,385,305,63
0 1,053,666,18
6 Cost 11,738,58
7 Net Book Value 49
672,834,538 P 7,526,651 819,004,823 874,201,03
1 373,834,55
6,997,095 3 4,741,492 500,366,478 2,291,955,346 871,543,629 1,420,411,717 1,331,639,444 Properties of CIAC previously booked in CDC before and during the merged period costing P1.186B with a net book value of P565M as of October 31, 2006, were turned over by CDC to CIAC on November 2006, and were thus included in the property and equipment and accounted for the huge increase as of December 31, 2006. Included under the equipment account is the Terminal Radar Approach Control (TRACON) Project awarded to Selex Sistemi Integrati (formerly Alenia Marconi Systems). The project was funded through a term loan facility granted by Deutsche Bank S.P.A. and guaranteed by the Trade and Investment Development Corporation of the Philippines. The project was completed on May 25, 2007 and total cost reached P593M as of August 31, 2007. The TRACON was commissioned by the Air Transportation Office effective October 25, 2007. 10. OTHER NON‐CURRENT ASSET The Due from Central/Home Office (CDC) account represents booked revenues of CIAC as of October 31, 2006 but whose corresponding receivables are booked in CDC. The accounts as of October 31, 2006 were turned over by CDC on November 2006, thus, the booking henceforth will be done by CIAC, except for UPS’ payment of rent and aeronautical fees which are still remitted to CDC for the purpose of paying the Philippine Veterans Bank loan’s interest and bank charges. Said loan was acquired by CDC for CIAC in financing the UPS Phase II Project. 11. OTHER ASSETS Under this account is the Restricted Fund/Assets for the P192,060 amount deposited at UCPB representing supersedeas bond posted by CDC on labor case of CIAC employee. This account was turned over by CDC on November 2006. 12. PAYABLE ACCOUNTS This account includes: 12/31/09 12/31/08 Accounts Payable P 54,097,034 P 29,257,198 Due to Officers and Employees 120,847 391,909 Total P 54,217,881 P 29,649,107 The accounts payable refer to the accrual of various expenses, primarily of which are the payables for emergency standby power system amounting to P13.9M and for the DMIA Passenger Terminal Rehabilitation and Expansion Project amounting to P6.7M. The Due to Officers and Employees account represents the tax refund due to CIAC personnel. 50
13. INTER‐AGENCY PAYABLES Lodged under this account are: 12/31/09 12/31/08 Due to BIR P 5,182,223 P 4,398,760 Due to SSS 271,060 9,079 Due to HDMF (Pag‐ibig) 203,390 5,700 Due to Philhealth 103,063 4,200 Total P 5,759,736 P 4,417,739 The Due to BIR refers to the withheld taxes on salaries of employees and expanded taxes on suppliers while the Due to SSS, HDMF and Philhealth are the premiums and loans for remittance. 14. INTRA‐AGENCY PAYABLES Under this account are: 12/31/09 12/31/08 Due to Provident Fund P 2,543,419 P 2,350,503 Due to AMWSLAI 3,550 6,230 Due to CIAC EMPC 377,170 321,956 Due to SMD 14,550 13,550 Total P 2,938,689 P 2,692,239 The Due to Provident Fund, AMWSLAI and CIAC EMPC refer to premiums and loans due for remittance while the Due to SMD are the union dues for remittance. 15. OTHER LIABILITY ACCOUNTS This account consists of: Guaranty Deposits Payable Performance Bond/Bidders Payable Concessionaires' Advance Fee & Security Deposit
Locators' Advance Rent & Security Deposit Total 51
12/31/09 P 1,999,613 P 6,286,879
587,222 17,317,954 P 26,191,668 P 12/31/08 2,641,158 3,639,420 307,981 5,883,257 12,471,816 Charged under these accounts are advance guaranty, performance bond, advance rent and security deposit payments from various bidders, concessionaires and locators which are expected to be realized and/or returned within the current period. 16. LOANS PAYABLE A domestic loan from the Philippine Veterans Bank was availed for the DMIA Passenger Terminal Expansion Project. The first loan drawdown amounting to P46,332,000.00 representing a 15% mobilization paid to the contractor of the DMIA Passenger Terminal Expansion Project. 17. LONG‐TERM LIABILITIES Lodged under this account are as follows: Locators' Security Deposit 12/31/09 P 98,483,692 P Locators' Performance Bond 25,109,848 Advance Rent 71,800,072 Advance Concessionaire Privilege Fees 5,710 Total P 195,399,322 P 12/31/08 99,626,923 25,109,848 73,178,364 11,710 197,926,845 Charged under these accounts are payments from various locators representing security deposits, performance bond, advance rent and concessionaire privilege fees expected to be realized and/or returned beyond one year. Included in these accounts are security deposits and performance bond amounting to P4M and P1.8M, respectively, transferred by CDC to CIAC in November 2006. 18. DUE TO CDC Part of the Due to Central/Home Office (CDC) account were various CIAC operating expenses and capital expenditures paid for by CDC. Also included in this account are the various assets and liabilities with a net amount of P597.85M as of October 31, 2006 transferred by CDC to CIAC in November 2006. 52
19. DUE TO BCDA An amount of P37M was advanced by BCDA to fund the payment to Selex Sistemi Integrati representing 35% initial payment for the purchase of spare parts for the Terminal Radar Approach Control (TRACON) Project and the supply of radome, spare parts, accessories and installation. 20. DEFERRED CREDITS 12/31/09 12/31/08 Deferred Credits P 508,787 P 67,990
Charged under this account are the power consumption and service fees for the period January 1 to December 13, 2010 covered under the lease contract of Philippine Veterans Bank which are amortized every month; the power consumption of various operators and inter‐branch collections from untraced accounts. 21. EQUITY Capital Stock No. of Shares Amount Authorized 200,000 P 20,000,000 Paid‐up Capital 12,500 1,250,000 CIAC has an application for an increase in capital authorization lodged at the Securities and Exchange Commission for P2.5B which was approved by the Board of Directors in June 2007. 53
Clark International Airport Corporation
Corporate Office Building, Civil Aviation Complex,
Clark Freeport Zone, Pampanga
Contact Number
:
(+6345) 599-2888
54
Facsimile
:
(+6345) 599-2044
Website
:
www.clarkairport.com