State-owned Philippine Aerospace Development Corp. (PADC) is shutting down its operation by May this year due to the non-renewal of its congressional franchise. This move has sparked concern among the domestic general aviation sector, which is now calling for either the continuation of the agency or the establishment of a new entity to support aviation development and related manufacturing activities, including maintenance, repair, and overhaul (MRO) operations.
PADC’s franchise is set to expire on May 9, 2025. The corporation currently employs 28 regular staff.
Founded in 1973 under the administration of the late President Ferdinand Marcos, PADC was created as the government’s arm in developing the Philippine aviation and aerospace industry.
The goals behind its establishment included promoting self-reliance, enhancing national security, and facilitating technology transfer within the aviation sector. PADC’s capabilities include aircraft structural repair, modification, fabrication, complete knock-down assembly, and aircraft manufacturing.
The House of Representatives approved a 50-year extension of PADC’s franchise in 2022, but it stalled in the Senate committee due to opposition from the Department of National Defense, which has a different Self Reliance Defense Posture program.
Max Motschmann, a member of the Board of Governors of the Asian Business Aviation Association (AsBAA), said that the PADC issue is expected to be a key topic at the 2025 Aviation Summit, scheduled for October 8-9. The summit is co-organized by the European Chamber of Commerce of the Philippines (ECCP) and AsBAA, with Philippine Airlines (PAL) serving as Event Co-Presenter and Official Carrier.
Motschmann compared the situation to that of Indonesia, which established its aircraft manufacturing company IPTN (now PT Dirgantara Indonesia) in 1976. “IPTN is already manufacturing aircraft, while the Philippines is closing down its own aerospace development agency,” he lamented.
The general aviation sector, which expects a 10 percent increase this year to a fleet size of 400, is advocating for a revival of PADC—possibly through a new entity that could remain government-owned but be privately managed. “It might not carry the same name, but it could have expanded authority or a broader mandate,” Motschmann said. Unlike major airlines, the general aviation sector primarily serves companies with needs such as cargo transport and operational support.
Emphasizing PADC’s importance to the local aviation industry, he said, “It’s very important for us that the Philippines has a proper aviation manufacturing and repair organization.”
He added that smaller general aviation operators are currently sending their aircraft to Singapore for MRO services, as local facilities largely cater to major airlines. Challenger, a company under the San Miguel group, is the country’s largest general aviation operator, while ICTSI Group also maintains its own fleet.
“We’re flying our aircraft to Singapore now. But if you ask who’s actually working in those MRO shops—Filipinos. So why can’t we do it here in the Philippines?” Motschmann questioned.
He shared that one of their workshops in Clark is exploring the potential of the area as an aviation industry incubator.
Aviation Incubator
The general aviation sector hopes the government will support the creation of an incubator entity to attract foreign aviation companies looking to establish operations in the Philippines.
“The idea is to give these companies a foothold—to get their feet wet. If they choose to grow here, they can do so independently, but with initial support from the government to help them start without sinking,” he explained. “That means incentives and other support mechanisms. These are the ideas we’re working on in our workshops.”
At the 2025 Aviation Summit, Motschmann said, “We will present the outcomes of our workshops, which include sessions on aircraft financing, taxation, and MRO development—to show the world that the Philippines can do this. I may not be Filipino by birth, but my heart is more Filipino than most.”
The summit is expected to draw around 400 local and international participants. The organizing team is already engaging with regulatory bodies and global aviation companies such as Lufthansa, the European Union Aviation Safety Agency (EASA), the Federal Aviation Administration (FAA), Canada’s transport regulatory body, and the International Air Transport Association (IATA).
