PHILIPPINE OFFICIALS PRAISE AVIATION PACT

PHILIPPINE OFFICIALS PRAISE AVIATION PACT

Philippine officials welcomed the new bilateral aviation agreement reached Monday in Washington.

"I think the deal is a win-win situation," said Jesus B. Garcia Jr., the Philippines' secretary of transportation and communications.Speaking Monday at a briefing in New York designed to attract investment in his country's infrastructure, Mr. Garcia said Philippines Airlines, the nation's flag carrier, should be satisfied with the seven-year extension of the deadline for complete open skies between the two countries to 2003.

Philippine officials had said PAL would be unable to compete against U.S. passenger carriers if the market were completely deregulated.

The pact also opens the door for expanded cargo service to the Philippines. Federal Express this month began using the former U.S. naval base at Subic Bay as the hub for its new intra-Asia operation.

Under the accord, each country may designate two additional all-cargo carriers to serve the market.

''The more the merrier," said Richard Gordon, administrator of the Subic Bay Metropolitan Authority.

"This reinforces what we have been saying all along - that the Philippines' strategic location makes it the gateway to Asia," Mr. Gordon added.

Amsterdam-based TNT Express Worldwide also has an intra-Asia operation based in Manila, while DHL Worldwide Express plans a similar venture in conjunction with Continental Micronesia Airlines.

Dave Fonkalsrud, a DHL spokesman, said the deal would allow DHL to operate the hub on its own. It also converts Continental Micronesia's temporary operating permit for all-cargo service into a permanent right, Mr. Fonkalsrud said.

The pact also has significant benefits for FedEx, giving it unlimited rights to transfer cargo from large planes to smaller ones and to serve any countries in Asia where it can obtain landing rights. It also gives FedEx intermodal rights inside the Philippines and permits it to provide ground- handling for other carriers, said Gina Adams, managing attorney for international regulatory affairs.

At the infrastructure briefing, Mr. Garcia said the priorities include a light-rail system, telecommunications, airports, ports, and freight railroads.

"On a scale of one to 10," he said, the nation's freight rail system ''rates a one."

One of the executives present was Barry Suskind, president of New York- based International Technologies & Finance. "We're looking at the Philippines as a strong investment market," he said.