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US Court Approves PAL Access to $505M Bankruptcy Loan

September 10, 2026

2 min read

Key Takeaways

US court allows PAL to access $505M bankruptcy loan.
PAL filed for creditor protection under Chapter 11.
Lucio Tan-led Buona Sorte Holdings will bankroll the first $250M tranche.
PAL expects to exit Chapter 11 proceedings before 2021 ends.

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Strategic Implications

This approval may indicate a positive outlook for PAL's restructuring efforts, which could strengthen its competitive position in the market. The access to additional liquidity suggests that PAL may be able to meet its current and future obligations, which could benefit its customers and the Philippine economy.

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What Happened

Philippine Airlines Secures Financing to Continue Operations

A US court has allowed Philippine Airlines (PAL) to access the rest of its $505-million bankruptcy loan, enabling the flag carrier to continue operating as usual. The decision, issued by US Bankruptcy Judge Shelley Chapman, grants PAL’s motion to access its debtor-in-possession (DIP) financing. PAL had filed for creditor protection under Chapter 11 of the US Bankruptcy Code, and the restructuring plan includes $505 million in long-term debt equity and debt financing. This development was first reported by Rappler.

Source | Originally Published: September 10, 2026

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