"The exclusivity (clause) will last until end of the year but it does not mean it will extend that long," Jaime Bautista, former PAL chief finance officer and currently member of its permanent rehabilitation receiver, said late on Friday.

"If there will be something, maybe between September and December."

Both parties are discussing valuation for the assets, but Bautista declined to disclose details.

Earlier, PAL creditor US Export-Import Bank questioned the agreement, saying there had been no bidding process and the deal had not been disclosed in advance to creditors.

The bank said in a letter to the Securities and Exchange Commission (SEC) that an auction processshould have been followed to ensure the highest obtainable price for PAL assets to be disposed under its rehabilitation programme.

"Normally, what we do is bidding, get the highest bidder.But what Lufthansa is saying is: `We've been talking to you for the last three years'," Bautista said. "They have demonstrated to us their seriousness and their willingness, their capability. They are fair and equitable in the negotiations. So we think it would be better to talk to them first before other organisations," he added.

PAL owes about $2.2 billion to thousands of creditors and lessors. Of this amount, at least $350 million in principal payments is owed to Eximbank.

Eximbank's objection to the deal is partly based on the fact that another Lufthansa unit, Lufthansa Consulting, has been hired by PAL Chairman Lucio Tan to help the local carrier in its restructuring programme. Eximbank earlier withdrew its support for PAL's debt restructuring programme, which the SEC had approved following the consent of PAL'screditors representing 55 per cent of its total debt.