Allowing Foreign Ownership or Direct Investments in the Philippine Media

[Requested by MJH]

LORDING THE HOUSE. House Speaker Lord Allan Velasco is spearheading a radical plan of action for the recovery in COVID-19 and people are still getting skeptical about this.

EARLIER THIS MONTH, House Speaker Lord Allan Jay Velasco made a pronouncement on amending our Constitution as a path to recovery from the pandemic as Moody’s Analytics feared that our country will be dead last in bouncing back among Asia-Pacific nations. Currently, they are tackled at their Committee on Constitutional Amendments with a problem on which mode they’ll use.

Whenever people think of constitutional reform or in lesser syllables, Charter Change, they are automatically associated with “term extension” for incumbent politicians who do not much represent or do not earn the trust of the public.

However, the third person in the Presidential line of succession specified that the economic provisions (a.k.a. the 60-40 rule) will be amended. The intention to place such an amendment will be put to a public vote next year, alongside the Presidential election.

It may sound radical to you, dear readers, but not for those associated with constitutional reform advocacy groups. Allowing foreign direct investments of all industries (including mass media) is a stepping stone to bounce back our economy from the impacts of the pandemic (e.g. closures of small and non-essential businesses and repatriation of OFWs).

So how does this idea apply to our sphere of mass media?

Quick PH Media History Lesson

The South Triangle Duopoly was founded initially as radio stations in Manila and were operated by American citizens. This is due to the Parity Rights approved in 1947. When President Ferdinand Marcos got his 1973 Constitution ratified (with more protectionism clauses, including mass media) and let the Parity Rights expire the year after. From that point onward, this is where Felipe Gozon and the gang stepped in to get Channel 7 from Robert “Uncle Bob” Stewart (even though the founder stayed in the country until a decade after) and the unforgettable brand of Marcosian cronyism began.

To this day, the present (1987) Charter continues the prohibition of any foreigner or foreigner to own any percentage of ownership in mass media as stated under Article XVI, Sec. 11 (1):

The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.

(The) Congress shall regulate or prohibit monopolies in commercial mass media when the public interest so requires. No combinations in restraint of trade or unfair competition therein shall be allowed.

This provision was invoked by GMA Network’s lawyers against TV5 in 2008, which soon resulted in Channel 5’s partnership with MPB Primedia to cease and handed over to the present reins of Manny V. Pangilinan’s MediaQuest.

At the tail-end of the preceding decade, President Rodrigo Duterte accused Rappler of the allegations of being not owned by Filipinos, which a year later lost its registration with the Securities and Exchanges Commission (SEC) for issuing Philippine Depositary Receipts (PDRs). The same accusation is thrown against the Six-Letter Media Giant by Congress last year that put their lease in life as a TV broadcaster to its consequential fate.

In this living zeitgeist of the challenged yet the globalized economy, they say, Nadine Lustre-style, that it’s “2021 na, not 19-copung-copung.” For Velasco’s case, they’ll append the wordings “unless provided by law” but constitutional reform advocates (even the most hardcore ones) wanted those provisions deleted altogether.

Removing the barriers of entry doesn’t mean a sudden — albeit, gradually — the hegemonic takeover of the nearest rising superpower than the traditional one but as an encouragement to challenge head-to-head competition between their firms and ours and a means to diversify our portfolio and sources of funding. (For a start, we can make amends with Southeast Asian neighbors.)

 

What Would Happen in Our Media?

Tackling the pros and cons of lifting economic barriers in all industries is cumbersome but we can tackle it in one specific industry: the media industry. How will this result?

First of all, we cannot undo the specifics that they agree upon. For one, we already adopted the digital TV standard, the ISDB-T from Japan, but it significant deficiencies. Like in the Land of the Rising Sun, we are in the Pacific Ring of Fire wherein earthquakes are prone in the world. In the originating country, they already made the technology of the Early Earthquake Warning System but we didn’t due to misunderstanding with involved stakeholders (e.g. PHIVOLCS, NTC and digital TV receiver manufacturers). Nevertheless, if any of their expertise stationed here, then we could have set a clear policy for the whole Emergency Warning Broadcast System (EWBS).

Operations-wise, liberalizing the economy could mean easier content distribution. For an anime fan, they want the latest anime to reach our shores (legally) as soon as possible.

The Networks’ Response

  • Had that Six-Letter Broadcaster continued with the lease of their life in the free airwaves, they would procure high-tech cameras and their transmission equipment would’ve gone into an astounding 4K UHD quality by now and everyone else would follow. *sigh*
  • GMA’s endless promotion of Voltes V: Legacy will finally be materialized when representatives of Toei Company get the checking and supervision in-site.
  • TV5, the network that aired last year’s Asian Television Awards, will probably take some cues and best practices from their continental neighbors.
  • For CNN Philippines, they will have an easier link with the headquarters in Atlanta and other worldwide bureaus.
  • PTV will easily make partnerships with public broadcasters around the world. (Good luck getting the audience though.)

On OTT

 

Perhaps, the best case for raising economic liberalization is due to this news. In 30 days, Disney+ will enter Southeast Asian territory, specifically in Singapore and soon in their neighbor, Malaysia. And here at home, we all just wonder why and drool with jealousy and envy.

 

Conclusion

The mistakes of 2020, including the after-effects of the pandemic, will continue to persist this year and beyond if we don’t get a course of action and this is just one of them.

Of course, removing protectionist provisions doesn’t mean we have to go with the status quo as the reformists persistently believed. Pitching to make our country business-friendly is not a simple walk in the park if the leaders and representatives do not behave well, especially with the incumbent leadership. (No wonder, they wanted a shift to a parliamentary form of governance but that would be a story for another time.)


What do you think? Is it the best time to lift the restrictive economic provisions?


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Photos courtesy of House of Representatives of the Philippines and Walt Disney Company

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