Battered by the continuous decline in arrivals, the Commonwealth Ports Authority is unable to raise the much needed revenues to meet its debt coverage ratio of 1.25 for the airport and seaport bonds.
According to CPA’s financial report, the airport debt coverage ratio is off by 1.05 or approximately $1.3 million from the operating activities to meet the required ratio of 1.25 in the last 10 months of fiscal year 1999,
This is translated into a monthly shortfall of $130,000. Actual cash available for debt service as of July 1999 is only $53,834.
Interest on the $20 million bond is payable semi-annually at 6.25 percent.
On the other hand, the seaport debt service ratio is off by .92 or approximately $2 million from the operating activities for the 10 months of the current fiscal year. This means that the seaport has a monthly shortfall of $200,000. As of July 1999, the ports authority only has $283,376 cash available for debt service.
Operating revenues at the airport from October to July of FY 1999 amounted to $8,235,430, which is still $1,064,650 short of the required revenue. The airport division must generate $9,300,080 to meet debt coverage ratio requirement.
Currently, the airport division is able to meet the fund requirements by financing the debt service payment from the capitalized interest fund. However, the capitalized interest fund will be depleted by September of this year. But based on the FY 2000 operating budget, the operating activities will be able to adequately service the outstanding debt.
The decline in revenue at the airport division was due to the huge reduction of enplaned passengers among the four signatory airlines compared to 1998. Japan Airlines already replaced Continental Airlines in terms of controlling the market share of enplaned passengers.
Based on the traffic count through July in FY 1999, Japan posted 39 percent market share to 160,142 enplaned passengers, while Continental Airlines had 33 percent or a total of 134,015 passengers.
At the seaport division, the operating revenues from October to July 1999 amounted only to $3,053,665, or $1,688,545 less of the required operation funds.
Based on the inbound traffic at the seaport by origin through July in FY 1999, Guam, U.S. Direct, Japan and transshipment posted significant difference from their levels in FY 1998 for the same period. While others, particularly Hong Kong and Singapore, have rebounded significantly.