Balancing Iloilo Airport Expansion Costs

The expansion of the Iloilo International Airport is undeniably overdue as passenger traffic surges, pushing the current facilities to their limits.

However, the path forward presents a conundrum: should the government prioritize expansion without imposing burdensome fees, or should a private partner like the Villar Group take the reins, despite concerns over cost spikes and inexperience in airport development?

This dilemma echoes what is happening at Manila’s Ninoy Aquino International Airport (NAIA), where private partnerships have resulted in improved services but also higher fees for passengers and airlines.

Similar projects in Cebu and Davao under private management have shown tangible improvements in efficiency and capacity, yet these airports benefit from significantly higher passenger volumes that justify the financial risks and rewards of private investments.

Iloilo’s current passenger volume pales compared to Cebu and Davao. Annual throughput hovers below five million passengers, roughly half of these major hubs. While demand is growing, it is not yet clear if the economic returns from expansion can justify the projected PHP 14.7-billion investment without creating undue financial burdens. This raises the question: would the Villar Group’s unsolicited proposal lead to prohibitively expensive fees for passengers and airlines, similar to other privately managed airports?

The Villar Group, primarily known for real estate and retail ventures, lacks a track record in airport development. Airport management requires expertise in passenger flow optimization, infrastructure maintenance, and compliance with international aviation standards—competencies not yet demonstrated by the Villars.

Globally, examples abound of how to balance costs and passenger affordability in airport expansion. In Singapore, the government has shouldered substantial costs to maintain Changi Airport’s status as a premier hub while keeping fees competitive. In Japan, Kansai International Airport is managed under a public-private partnership (PPP) model, but the government retains significant oversight to ensure affordability and quality.

Closer to home, the Clark International Airport adopted a PPP model but mitigated cost increases through targeted subsidies and government oversight. These examples show that private partnerships can work if structured thoughtfully and with a clear balance between profit motives and public service.

However, rushing into a PPP deal for Iloilo’s airport risks overlooking these considerations. The Department of Transportation (DOTr) and Civil Aviation Authority of the Philippines (CAAP) have allocated substantial funds for rehabilitation under the General Appropriations Act, totaling PHP 645 million for 2025 alone. This suggests that the government may have the capacity to fund gradual improvements without immediately resorting to a private operator.

Expanding the airport under public management could allow Iloilo to maintain affordable rates while scaling up to meet demand. If the passenger volume grows significantly, a future PPP might then be justified with stronger leverage to negotiate terms that protect the public interest.

Modernizing air travel infrastructure is essential for Iloilo’s continued growth as a business and tourism hub. But it must be done with a clear-eyed focus on both practicality and ambition. Iloilo deserves a modern airport, but not at the cost of accessibility for the ordinary traveler or undue financial strain on airlines.

The debate over who should expand Iloilo Airport—government or private sector—is not just about technical expertise or financial capability. It is about ensuring that progress is inclusive and sustainable. As the project moves forward, transparency, fairness, and public consultation will be crucial to achieving a balance between improving facilities and keeping costs manageable.

Modernization is essential, but so is making sure the airport remains a gateway for everyone, not just the privileged few.