Critics go after ABS-CBN in House franchise hearing

By Christian V. Esguerra, ABS-CBN News

Posted at May 26 2020 06:29 PM

MANILA — Critics of ABS-CBN Corp on Tuesday called on Congress to reject its application for a new operating franchise, accusing the shuttered broadcast network of violating tax and labor laws.

A position paper, read during the highly anticipated committee hearing on the franchise, raised legal issues against ABS-CBN, from alleged tax evasion to unfair labor practice and foreign ownership violations, many of which the network had clarified in the past.

The critics said they would show “with clear and convincing evidence” in subsequent hearings that the network had “deliberately and with impunity violated” the terms of its previous 25-year franchise and the constitution.

“It is but right for the House of Representatives to deny this time the franchise of ABS-CBN,” according to the paper read by Deputy Speaker Rodante Marcoleta, who had also raised many of these issues during House deliberations last week.

Save for a March 10 meeting on “ground rules,” the joint committee hearing was the first since ABS-CBN’s application for a new franchise during the present Congress. 

Several other bills seeking to renew its operating franchise had not moved in the House of Representatives since 2014, until the network’s free TV and radio channels were forced to shut down last May 5.

Tuesday’s hearing, held after Houjse leaders dropped a plan to grant a 6-month provisional franchise, set off what could be a protracted process by the media network to resume regular broadcasts.

The next sessions are expected to tackle in detail accusations, for instance, of “unfair labor practice” with most of ABS-CBN’s employees allegedly not hired as regulars.

Labor Secretary Silvestre Bello III earlier said his department had discovered “some violations” of labor regulations but that ABS-CBN later complied.


Marcoleta raised ABS-CBN’s alleged tax avoidance, claiming the network did not pay taxes in 2018, and the right amount the following year.

In February this year, a Bureau of Internal Revenue official said the company had no pending tax liability, and had a lone case pending before the Court of Tax Appeals.

The anti-ABS-CBN position paper echoed Solicitor General Jose Calida’s allegation that the company violated the country’s foreign ownership restrictions “through an intricate web of corporate layering.”

Its issuance of Philippine Depositary Receipts (PDRs), through ABS-CBN Holdings Inc., gave foreign holders “beneficial ownership and potential voting rights,” Marcoleta alleged.

A former Philippine Stock Exchange chief earlier likened such financial instruments to purchasing a ticket for a horse race.

"You don't own the horse, but if that horse wins, you have a share in the winnings," said lawyer Francis Lim.

"At most, what it gives you is the right to own a share but that right is subject to law. For example, if you are a foreigner, you cannot convert it into a share in ABS-CBN Corp because you are disqualified from owning.”

Marcoleta also claimed that Eugenio “Gabby” Lopez III, ABS-CBN Corp’s chairman emeritus, was an American citizen during the time he headed the company, in supposed violation of the constitutional provision against foreign ownernship in mass media.

In a previous statement, ABS-CBN said Lopez was born in the United States in 1952 to Filipino parents and was automatically a Filipino citizen under the constitution prevailing at that time.


Marcoleta echoed a complaint by a group of cable operators that ABS-CBN violated the terms of its old franchise by introducing a pay-per-view feature in its TV Plus box, and having 6 channels under 1 franchise.

However, another group of cable operators corrected the claim of the Federation of International Cable TV and Telecommunications Association of the Philippines, saying a franchise was not required for every channel.

At a Senate hearing last February, Justice Secretary Menardo Guevarra also said the PPV feature was authorized under ABS-CBN’s franchise.

Marcoleta also confronted the network for its alleged “bias” in favor of Benigno Aquino III in the 2010 presidential elections, as well as Sen. Grace Poe and then Rep. Leni Robredo, who ran separately for president and vice president in 2016.

The lawmaker recalled an anti-Rodrigo Duterte political ad aired by ABS-CBN during the 2016 campaign, and a Duterte campaign ad that was not aired by ABS-CBN regional stations. Since 2016, President Duterte has complained about these two incidents involving political ads.

“You are a broadcasting company, not a political kingmaker. Either you play ball or you play fair,” Marcoleta said.

ABS-CBN president Carlo Katigbak earlier explained that all of Duterte’s national ads were aired in 2016, except for around P7 million worth of local ads, which could no longer be accommodated close to the elections.

The company refunded P4 million but Duterte refused to accept the remaining P2.6 million, which was delayed.

The next committee hearing on ABS-CBN’s franchise application is set on June 1, the final week before Congress goes on a break.