He earlier said PAL needed six billion pesos from existing and new stockholders to put the company back on the recovery route.

The remaining two billion pesos would come from the group of PAL chairman Lucio Tan, he said.

``I think investors, including the existing private investors, are programming a minimum of six billion pesos capital infusion,'' Espiritu told Reuters on the sidelines of a business conference.

``I think this is the amount that has been established as a capital contribution of all stockholders.''

Asked on how much Cathay planned to contribute, he said: ``I think they're putting up about $100 million, which is about four billion pesos.''

In return for the investment, Cathay was expected to take management control of the 57 year-old PAL.

Last week, Cathaychairman Peter Sutch said in Hong Kong the airline would ``insist on having management control'' in PAL.

Espiritu also said Cathay felt that PAL would be better off if the government was not a stockholder.

``The government right now, including all its financial agencies, holds about 20 per cent of PAL, with the government itself holding a small amount of less than two per cent,'' Espiritu said.

He said the government's objective ``is in any case -- the gradual phasing out of its investment in PAL.''

``Even without the phase- out, there will be a dilution of government holdings because we are committed not to subscribe to new shares.''

The acceleration of the government phase-out would depend on the amount of capital infusion in PAL, he said.

PAL, Asia's oldest airline, is preparing a rehabilitation programme that includes the restructuring of its $2 billion in debts and a reduction in fleet size and staff.

Earlier, sources said US firm Northwest Airlines had offered to manage PAL but no cashproposal was given.

The offer was made late last week but it involved ``only management'' and no capital infusion, the source said.

Northwest and Cathay conducted due diligence studies on PAL.

PAL shut down operations on September 23 because of a protracted labour dispute and huge financial losses.

It resumed domestic flights on October 7 after president Joseph Estrada persuaded its biggest labour union to accept a management offer of 20 per cent equity in exchange for a 10-year freeze on strikes and labour bargaining.

The airline began operating international flights on October 29, six weeks after its temporary closure.