THE Department of Justice (DOJ) has expressed its objection to the plan of the Manila International Airport Authority (MIAA) to spend the P1.2-billion unrefunded passenger service charges (PSC) or terminal fees to refurbish and upgrade its equipment.
In a four-page legal opinion, Justice Secretary Jesus Crispin Remulla said while PSCs are considered “government funds” these are only being held in trust by the MIAA for the account of passengers who failed to proceed with their flights.
“Clearly, the unrefunded PSC’s in question are funds which, while considered ‘government funds,’ are held by MIAA merely as a custodian to address the refund claims to be made by passengers. The MIAA acts as the trustee on behalf of the passengers, and is not free to unilaterally utilize such funds,” the DOJ declared.
The DOJ made known its objection to the plan in response to the letter by MIAA General Manager Cesar Chiong, seeking the department’s legal opinion on whether the agency can use the unrefunded PSCs on unused airline tickets, which are being held in trust by the MIAA for the account of passengers, to finance its capital expenditure requirements.
The collection of PSCs, also called terminal fees, was covered by a twin memorandum of agreement with domestic and international air carriers aimed at addressing the congestion and passenger queues at the Ninoy Aquino International Airport (Naia).
Under the two memoranda, PSCs are integrated in the airline tickets at the point of sale, and as a result, passengers are no longer required to stand in queues at the Naia to pay for the terminal fees.
However, Chiong told the DOJ that there were occasions when a fully paid airline ticket, which already incorporates the full payment of the PSC, remains unused when a passenger decides not to proceed with his or her flight.
Based on MIAA’s records, the total PSC on unused tickets remitted by airline carriers has reached P1.2 billion as of March 31, 2023, of which, only P26,000 were claimed for refund.
Chiong also noted that despite the open-ended policy for refunds, information disseminations and posting in MIAA’s official website and social media accounts, there is still a very low turnout of passengers claiming for refunds.
Furthermore, Chiong assured that the MIAA would set aside P1 million, to be replenished continuously, from the PSCs of unused tickets to ensure that there will be sufficient funds for the refund.
Remulla, however, stressed that Section 3 (4) of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines, defines trust funds as “funds which have come officially into the possession of any agency of the government or of a public officer as trustee, agent, or administrator, or which have been received for the fulfillment of some obligation.”
Furthermore, the justice chief noted that Section 63 of the said law provides that “money and property officially received by a public officer in any capacity or upon any occasion must be accounted for as government funds and government property.”
In relation to this, Remulla pointed to the justice department’s 2003 legal opinion on the nature of the fees collected by the Land Transportation Office (LTO), a government agency, and remitted to Stradcom as its contractor’s fees.
The DOJ held in the said legal opinion that the said fees fall within the definition of a “trust fund.”
It explained that under PD. No. 1445, trust funds shall be made available and may be spent only for the specific purposes for which the trust was created or the funds received.
Still, the DOJ advised the MIAA to seek the opinion of the Department of Budget and Management (DBM) or the Commission on Audit (COA) as the issue involves remittance, use and allocation of government funds.
“Sound administrative practice, more than official courtesy, demands that the DBM and COA should be accorded first the opportunity to consider and resolve the issue presented,” the DOJ stressed.
“This time-honored policy is dictated for the competence, expertise on, as well as familiarity with, the policies relating to the subject and the rightful exercise of jurisdiction by a co-equal and coordinate branch of government,” it added.
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