MANILA - The Commission on Audit (COA) has flagged the Philippine Aerospace Development Corp. (PADC) for incurring operating losses worth P28.289 million, saying it was no longer performing its key functions.
The agency, considered as a Government Owned and/or Controlled Corporation (GOCC) which engages in commercial activity, was created in 1973 to develop projects for a reliable aviation and aerospace industry in the country.
Government auditors, however, noted in their 2019 annual audit report on PADC that the agency has seen a decline in earnings since the '90s. Over the last five years, its operational losses amounted to P149.615 million.
The report also noted that for 2018, its total sales was only P5.918 million from the sale of aircraft parts and labor services but had operating expenses of P34.207 million, resulting in losses of P28.289 million.
“With these in view, it is clear that PADC is no longer performing and carrying out its principal/core mandate,” the COA report said.
The office of PADC President and Chief Executive Officer Steve Victor Siclot received a copy of the report on June 11, 2019.
The audit team also noted other factors contributing to losses such as tax cases filed by the Bureau of Internal Revenue, expired accreditation from the Civil Aviation Authority of the Philippines to conduct repairs, poor facilities, and lack of service vehicles.
The PADC management said that its president had already issued directives to the concerned officers and personnel to address the audit team's recommendations.
Through an executive order, President Rodrigo Duterte recently transferred the agency from the Department of Transportation to the Department of National Defense.
“The supervision of PADC had been transferred to the Department of National Defense effective March 15, 2019, thus, major developments are expected to happen considering the number of air assets maintained by the Armed Forces of the Philippines,” the PADC management told the audit team.
The full report on the PADC can be found on the COA website under GOCCs: