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Philippine Airlines (PAL) chairman Lucio Tan has formally agreed to inject US$200 million in fresh capital to keep the debt-burdened carrier afloat.

 But members of the Securities and Exchange Commission (SEC) said they remained sceptical over Mr Tan's promise and might still move to have the airline liquidated.

 PAL said Mr Tan had make his commitment about the new capital creditors are demanding at a special board meeting.

 'Lucio Tan [yesterday] pledged to put together a group which will infuse $200 million into the Philippine flag carrier as he expressed his continued commitment to work for the survival of PAL,' the airline said.

 It said Mr Tan had 'offered to immediately place in escrow $100 million, subject to certain conditions, including similar commitments from the government and the airline's creditors and unions.

 Philippine securities regulators last week gave PAL - which has defaulted on more than $2.3 billion in loans - a May 4 deadline to identify its prospective investors or face liquidation.

 A senior SEC official said yesterday 'the situation since last week has not changed'.

 SEC chairman Perfecto Yasay last week said PAL's rehabilitation plan was 'unacceptable'.

 He said PAL needed to identify the investors who would infuse the $200 million investment - the minimum estimated amount needed to keep the airline operating.

 PAL's latest statement 'did no such thing', said the senior SEC official.

 Mr Yasay said yesterday: 'It's good that the money's coming in, but we'd like to know where it's coming from.'  The conditions attached to the capital infusion had yet to be agreed, said Mr Yasay.

 'We have to look into them yet, to know if the conditions are acceptable,' he said.

 As of yesterday afternoon, according to Mr Yasay's staff, the SEC had not received a formal proposal from PAL.

 Creditors have threatened to withdraw their support for rehabilitating PAL if the $200 million in capital is not infused by June 4.

 Mr Tan has provided as much as 20 billion pesos (about HK$4.04 billion) in capital to PAL over the past six years. It lost more than $250 million in the nine months to December 31.

 Meanwhile, Philippine president Joseph Estrada repeated his commitment to sustain PAL.

 'What is important is the operations of PAL should not be stopped. That is the priority,' he said.

 Mr Estrada's chief aide, executive secretary Ronaldo Zamora, said he could not identify the prospective investors of new capital.



Tan pledges to provide money for PAL rescue