The ironies: House swiftly OKs 85 franchises plus RBH 2 after rejecting ABS-CBN plea
This article is part of a series commemorating the House of Representatives' 70-11 vote on July 10, 2020 rejecting ABS-CBN's franchise renewal.
For 66 days last year, the nation waited with bated breath to see if ABS-CBN would go back on air after its broadcast operations were shut down by the National Telecommunications Commission on May 5, 2020.
Those 66 days seemed like an eternity as the House Committees on Legislative Franchises and Good Government and Public Accountability conducted 13 hearings in an unprecedented joint investigation into ABS-CBN’s operations.
Usually, only the franchise committee hears franchise applications—and these rarely go over a handful of hearings, if they even have more than one hearing at all.
That there were 2 panels dissecting the objections to the renewal seemed to be a portent of things to come as franchises usually get approved with very little fanfare.
For Bayan Muna Rep. Carlos Zarate, that’s just one of many ironies in the House of Representatives in the last year since its Legislative Franchises Committee hammered the final nail on the coffin of the ABS-CBN franchise. The House in particular and Congress as a whole has been approving franchises without the same intense scrutiny that ultimately killed the ABS-CBN franchise renewal.
In an interview with ABS-CBN on June 23, 2021, Zarate said:
“Several instances in the past, even after the denial of the franchise of ABS-CBN, marami silang pinapalusot na prangkisa na marami ring pagkukulang binigay nila at ni-renew nila. In fact, niratsada pa 'yung ibang prangkisa diyan sa committee on legislative franchises para mapagbigyan 'yung mga interests behind these franchises.”
85 FRANCHISE BILLS APPROVED AFTER ABS-CBN SHUTDOWN
Analysis of House data by the ABS-CBN News Investigative and Research Group showed that the House Committee on Legislative Franchises approved 85 franchise bills from July 11, 2020 to June 17, 2021, based on the dates of submission of the respective committee reports.
Of this, 42 House bills were consolidated and substituted by a Mother bill, 43 House bills were forwarded to the plenary for hearing, 8 were passed into law, 6 were signed by the President (4 broadcast franchises, and 2 telecommunication franchises), 2 lapsed into law (a broadcast franchise and an airport franchise), 6 were approved on second reading and 19 were transmitted to the Senate.
Those sent to the Senate include 11 approved by the House and received by the upper chamber, 7 measures where the House agreed to the amendments of the Senate, and 1 passed by the Senate with amendments.
Since the start of the 18th Congress, 230 measures were referred to the House Committee on Legislative Franchises from July 1, 2019 to June 17, 2021.
These include 205 House Bills on granting new franchises and renewing or repealing existing ones: 123 franchise bills to operate broadcasting stations; 57 to operate telecommunications systems; 12 to operate power distribution systems; 5 to operate horse race tracks; 4 to distribute water and maintain sewerage systems; 2 to establish an international airport in Bulakan, Bulacan; 1 to repeal the franchise to establish the above airport; and 1 to operate cockpit arenas and off-cockpit betting stations.
Among the franchises approved was House Bill 8976, which grants a franchise to the newly formed FICTAP Broadcasting Network, Inc. Speaking to ABS-CBN by phone, FICTAP National Chairman Estrellita Juliano-Tamano declined to comment except to say that it’s a different group from theirs.
She encouraged ABS-CBN News to check with the Securities and Exchange Commission (SEC) instead.
FICTAP had opposed the ABS-CBN franchise renewal.
Documents from the SEC, however, showed that Tamano and some FICTAP officers are also officers of FICTAP Broadcasting and FICTAP Telecommunications, which were granted their respective franchises. SEC records also show that both companies shared the same address for its offices as the FICTAP that opposed the ABS-CBN franchise, based on FICTAP’s own website.
Juliano-Tamano has not yet responded to persistent ABS-CBN requests for comment on the documents it obtained from the SEC.
On June 29, 2021, Deputy Speaker SAGIP Rep. Rodante Marcoleta insisted that ABS-CBN's TV Plus Service violated its original franchise.
On the same date, Juliano-Tamano told the hearing, “the franchise bill that was filed in Congress is different from their original franchise; second, this new franchise application, if to be granted as such, will become a broadcast super mega franchise."
Of the 230 measures, 126 House Bills were approved by the Committee on Legislative Franchises while 104 remain pending with the committee as of writing.
Of the 126 franchise bills approved by the committee, 23 were passed into law. Of these, 12 were signed by President Rodrigo Duterte into law, including 10 broadcast franchises and 2 telecommunication franchises.
The remaining 11 lapsed into law, including 5 franchises to operate broadcasting stations, 2 for power distribution, 1 telecommunication, 1 airport, 1 horse racetrack franchise, and 1 measure amending sections of Republic Act 7993, which granted a franchise to the Philippine Collective Media Corporation in 2009.
A total of 33 were transmitted to the Senate— 23 approved by the House and transmitted to and received by the Senate, 9 measures where the House agreed to the Senate amendments, and 1 passed by the Senate with amendments. Six have been approved on second reading.
Cebu 3rd District Representative Pablo John Garcia, who led the technical working group that drafted the report that was adopted to ultimately deny the ABS-CBN franchise bid, maintained that the franchise panel carefully went through each franchise it approved.
“Regarding the franchise bills that we approved that you mentioned, each franchise is evaluated on its own, and the Congress’, the House’s, the committee’s action on one application cannot be made a basis of saying it should have been granted.”
WHAT HAPPENED BEFORE
But before all of these, on July 10, 2020—the House of Representatives Committee on Legislative Franchises decided on the ABS-CBN franchise question—a quest that began under the 16th Congress during the Aquino Administration.
On that day a year ago, of the 85-member franchise panel, 70 lawmakers voted to deny the franchise, while 11 stood by ABS-CBN. Two abstained, and 1 did not participate.
The rest of the House—about 216 lawmakers— no longer got to vote because according to House rules, a denial at the committee level would mean sudden death for the franchise.
This despite a July 9, 2020 appeal by Cebu City 2nd District Rep. Rodrigo Abellanosa to let the whole House decide the fate of ABS-CBN.
To this day, the House of Representatives has not yet responded to ABS-CBN News’ requests for an official copy of the list of how each congressman of the committee voted.
At least 2 reliable ABS-CBN News sources, however, attested to the accuracy of one unofficial list ABS-CBN obtained.
No thanks to the COVID 19 pandemic, physical distancing rules forced Congress to conduct hybrid hearings instead of traditional face-to-face hearings where each lawmaker had to physically manifest their votes by raising hands, standing up, or shouting their votes.
The hybrid nature of the hearings saw only Bayan Muna Rep. Carlos Zarate and then-Minority Leader and now Deputy Speaker Manila 6th District Rep. Bienvenido Abante physically manifesting their votes in the session hall.
While others were also in the session hall, they opted to cast their votes directly through the committee secretariat which consolidated their votes with lawmakers who joined via video conferencing and voted through electronic channels.
ABS-CBN HAD NO VIOLATIONS
In the same June 23, 2021 interview, Zarate pointed out another irony.
“That is the tragic irony of all these things they have been raising, a lot of issues before with ABS-CBN—sa ownership, non-payment of taxes, a lot of things but here we are, the reality after that is parang kinain ng Kongreso 'yung kaniyang mga sinabi. Ang dami franchise na pinasa, the latest 'yung 'cha-cha' (charter change) proposal that even allows foreign ownership sa media institution, which they made a big fuss [about] and issue during the franchise hearings dahil daw hindi Pilipino si Mr. Gabby Lopez.”
For Zarate, none of the regulatory agencies invited to the hearings actually determined that ABS-CBN had violated any law.
“Even doon sa issue ng citizenship napaliwanagan 'yun bakit naibalik ang franchise sa ABS-CBN after EDSA. Naipaliwanag rin 'yung usapin ng taxes, 'yung usapin ng violations of labor standards, naipaliwanag rin 'yun na walang nalabag na regulasyon at batas. At even if we say there is or there are [violations], we said then hindi 'yun sapat para i-deny mo ang prangkisa ng ABS-CBN dahil several instances in the past, even after the denial of the franchise of ABS-CBN, marami silang pinapalusot na prangkisa na marami ring pagkukulang. Binigay nila at ni-renew nila, in fact, niratsada pa 'yung ibang prangkisa diyan sa committee on legislative franchises para mapagbigyan 'yung mga interests behind these franchises,” Zarate said.
As early as the July 9, 2020 hearing, one of the sponsors of the ABS-CBN franchise bills, Baguio Rep. Mark Go, told his colleagues that the committee was not the proper venue for determining violations of law.
Still, the Committee on Legislative Franchises ultimately rejected the renewal of the ABS-CBN franchise on the following allegations contained in its Technical Working Group’s (TWG) Report which the panel adopted: allegations of former ABS-CBN Chairman Eugenio Lopez III’s American citizenship and doubtful Filipino citizenship and allegiance to the Philippines; possible violation of the constitutional prohibition against ownership and management of mass media by non-Filipino; alleged numerous violations of the previous congressional franchise; allegations of anomalous tax avoidance schemes; alleged use of a dummy; and alleged labor violations.
FOREIGN OWNERSHIP OF MASS MEDIA
In another irony as Zarate pointed out: the House passed a proposed amendment to the 1987 Constitution that could actually pave the way for non-Filipinos to own mass media.
During the franchise hearings, the lawmakers raised hell over the alleged ownership or influence of non-Filipinos in ABS-CBN, citing the constitutional prohibition of mass media ownership by non-Filipinos.
For lawmakers, the matter of foreign influence on mass media was a matter of national interest and national security—at least when it came to the ABS-CBN franchise issue.
“The reason for the restriction is to prevent any conflict of interest should the two countries of citizenship be at odds with each other. The Constitution itself states that 'dual allegiance is inimical to the national interest and shall be dealt with by law.' Thus Congress should consider this declaration of policy in exercising its legislative prerogative,” The TWG Report said.
And yet despite all these, Congressional records on the House website showed that the whole House approved on June 1, 2021 Resolution of Both Houses (RBH) #2 which seeks to amend the Constitution to empower Congress to relax foreign investment limits by merely passing a law—a measure could eventually pave the way for the passage of laws allowing foreigners to invest, own and or control mass media. RBH 2 is pending at the Senate as of June 2, 2021.
Garcia, however, doesn’t see an inconsistency.
“Regarding RBH 2, again the premise I think is flawed because first of all, RBH 2 does not automatically grant foreign ownership in media. It is merely a resolution of both Houses, if approved by the Houses, that would propose an amendment to the constitution to sort of relax the foreign ownership requirements under the present constitution," the lawmaker said.
"If Congress should deem it fit, that's why the operative phrase there is 'as maybe provided by law, unless otherwise provided by law.' Even if this is approved by the Senate, this is not a self-executing measure. Future congresses will have to determine whether to relax foreign ownership of land or foreign ownership of media in the Philippines.
"I don't think there is an inconsistency. In fact, this would reiterate the stand of the House that as the constitution now stands, it is very strict on the foreign ownership and control of the media. So, let’s give leeway to future congresses should they deem it appropriate to relax these provisions by passing a law. I don't really see any inconsistency in our action on the franchise application and all these other measures we have mentioned.”
Aside from these, the House also passed other measures that would give non-Filipinos more access to the Philippine economy.
The House on March 10, 2020 approved House Bill 78 which redefines public utilities to cover only electricity distribution and transmission and water pipeline and sewerage system, effectively opening up more industries to more non-Filipino investors.
The 1987 Constitution restricts foreigners to just 40% ownership of public utilities. This is pending at the Senate as of this writing.
Likewise, the House on September 9, 2019 also approved on 3rd and Final Reading House Bill 300 which amends the Foreign Investments Act of 1991. This is pending at the Senate as of this writing.
If this becomes law, it will exclude the practice of professions from the coverage of the Foreign Investment Negative list by amending Section 4 of Republic Act 8179. It will lower the employment threshold from 50 to 15 direct employees for small- and medium-sized enterprises established by foreign investors with a minimum paid-up capital of $100,000.
Finally, the House on March 11, 2020 approved on third and final reading House Bill 59 amending the Retail Trade Liberalization Act of 2000. This is pending at the bicameral conference as of May 25, 2021.
If this becomes law, it will remove barriers to foreign investments in the local retail sector. It mandates foreign-owned partnerships, associations and corporations formed and organized under Philippine laws which desire to engage in local retail trade to put up a minimum paid-up capital of $200,000 upon registration with the proper government agency.
It will remove the requirement under Republic Act 8762 for foreign investors acquiring shares of stock of local retailers. It also removes the requirement under RA 8762 for the public offering of shares of stock by foreign-owned retail enterprises and eliminates the required net worth, number of retailing branches and retailing track record conditions for foreign retailers to engage in retail trade in the Philippines.
TAX MEASURES PUSHED AS GOV'T SCRAMBLES TO RAISE FUNDS AMID ECONOMIC PINCH DUE TO PANDEMIC
Another irony is that Congress approved several tax measures aimed at raising much needed funds for the government that has been cash-strapped after the COVID-19 pandemic shuttered the economy.
This in the wake of closing down broadcast operations of ABS-CBN Corp., which for years had been a top source of tax revenues for the state.
Latest data from the office of House Ways and Means Committee Chair Albay 2nd District Joey Salceda showed that Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which reforms the corporate income tax and tax incentives systems in the country, became law on March 26, 2021.
On the other hand, several other tax measures are pending at the Senate.
During the hearings, it was revealed that not only did the BIR not find any violations or pending tax liabilities, but that ABS-CBN had, until its shutdown, been a cash cow for government with its tax payments.
Tan on July 1, 2020 gave an idea of how much taxes it has paid: “Your Honor, I can give you a 17-year look. From 2003 to 2019, ABS-CBN as a group paid P71.5 billion in taxes."
Garcia rejected any inconsistency on this matter.
“The other tax measures, I don't see what you're referring to but I don't see any inconsistency in the tax measures that we approved and our denial of the ABS-CBN franchise application. “
IT WAS POLITICAL ALL ALONG—ZARATE.
For Zarate, the approval of several of these measures after the denial of the ABS-CBN franchise only confirms that yanking ABS-CBN off the airwaves was nothing but a political decision.
“It only confirms 'yung sinabi noon, the denial of the franchise is not actually based on reason, based on law, and based on grounds that should have been followed or because there were violations of the laws and regulations by ABS-CBN.
“The denial is now very clear because this is what Malacañang wants, this is what President Duterte wants. 'Di naman niya tinatago 'yan even if Malacanang’s spin masters are saying walang pakialam si Pangulong Duterte. Several instances na rin sinabi ni Pangulong Duterte, kahit pa pumasa sa Kongreso 'yan eh hindi niya talaga pipirmahan 'yung prangkisa ng ABS-CBN. 'Yun ang sinunod ng majority ng members ng committee on legislative franchises despite the several reasons they cited why they don't want to renew the franchise of ABS-CBN na contrary naman sa testimonies ng heads of agencies the committee invited,” Zarate said.
NO INCONSISTENCY, SAYS GARCIA
Despite all of these, Garcia does not see any inconsistencies in the way the House panel rejected ABS-CBN's franchise bid and the chamber's actions in its wake.
”I don't think there is any need to reconcile because I don’t see any inconsistency at all.”
Garcia went back to what many of his colleagues had repeatedly said during the hearings—that a franchise is a privilege given at the prerogative of the state and not an entitlement.
“I understand the premise of the question but I just don’t agree with the premises. First of all, the premise is that if the House does this, then it should have granted the application of ABS-CBN. The premise would be wrong because a franchise application is not a matter of right but a privilege. One is not entitled to a franchise because Congress did this or that in another matter," Garcia also said.