Privilege Speech on Filipino Film Industry

Mr. President, my dear colleagues, good afternoon. I rise today on a matter of personal and collective privilege.

For the past several weeks, I have been subjected to numerous tirades over a comment I made during the hearing on the proposed 2023 budget of the Film Development Council of the Philippines or FDCP last October 18. 

THE ABYSMAL STATE OF LOCAL FILM INDUSTRY: Sen. Jinggoy Ejercito Estrada, during Tuesday’s plenary session November 8, 2022, raises the issues “plaguing the barely surviving” film industry in the country, noting that only nine local movies have been released out of 20 Filipino films reviewed by the Movie and Television Review and Classification Board (MTRCB) since January this year. Estrada, himself a movie actor, said that the audio visual services sector, which comprised of 760,000 workforce is nowadays “on the verge of collapse even during the pre-pandemic period.” To help the ailing industry, the senator said the government should consider removing the amusement tax from ticket sales, which will also help film producers recover from losses. Aside from government subsidy, Estrada said “the government should encourage the promotion of Filipino culture/cuisine, tourism and heritage as part of the content; create or provide scholarships, workshops for scriptwriters, production personnel, musicians to strive for excellence in this field/industry; and provide tax breaks or lower taxes on the industry to incentivize the local entertainment industry.” (Bibo Nueva España/Senate PRIB)

The records of the Senate, specifically the Finance Subcommittee M, will bear me out that I was trying to take a grasp of the state that the audiovisual services sector has been in nowadays, which by and large, is on the verge of collapse even during the pre-pandemic period and which was painted in that hearing to be now in the ICU needing critical care from specialists.

Sadly, my statements were magnified and even misconstrued by many, including a number of industry members who are part of the more than 760,000 workforce in the film and AV sector, who I was trying to protect and fight for. What reverberated in the minds of many was the furthest thing from my mind. I was portrayed as a villain, an antagonist. 

Nakakalungkot na mas nanaig sa kaisipan ng marami ang mga katagang hindi ko layon na mangyari.

Be that as it may, I deem it best to put forth the issues plaguing the barely surviving industry that is personally close to my heart, with the desire of lighting even a glimmer of hope that it can still be salvaged.

This, Mr. President, is the abysmal state of our local film industry. 

For this year, only nine (9) local movies have been released, according to  theater group operators. Nine out of the 20 Filipino films reviewed by the Movie and Television Review and Classification Board or MTRCB since January this year. 

Nakapanlulumong isipin na may panahon na umaabot sa tatlong daan ang napo-produce na pelikula kada taon. Now, it’s not even a fraction.

To come up with a quality film, producers have to fork out between P10 to P30 million, according to FDCP chairperson and CEO Tirso Cruz III, and to recoup this, they have to earn at least triple or 270%.

But how can an industry barely in survival mode and among the most heavily taxed entertainment in Asia, recover from its current state?

To further illustrate, for a 50-million film production with a hundred million box office revenue, the producer needs to pay amusement tax, value-added tax and distribution fee. 

Ten percent (10%) will go to amusement tax and 90% will go to the theater owner and film producer then 45% of the ticket sales will go to theater owners. That has been the “standard arrangement” between the producers and cinema owners or operators for the longest time as the latter claim that they invest in the construction and maintenance of theaters.

On top of this, there is VAT to be paid by the producer and from the 45 million peso ticket sales, the amount will dwindle to 39.6 million. From these figures, a 5% distribution fee will still be deducted which leaves the producer with the final amount of 37.62 million pesos which means that the producer loses twelve million three hundred eighty thousand pesos (P12,380,000).

And if a producer makes a profit, he still has to pay a 30% income tax. 

The film industry, following the onset of the COVID-19 pandemic, is confronted by an unprecedented phenomenon of almost no revenue coming in despite the easing of social restrictions. 

Likewise, our kababayans have to spend around 280 to 450 pesos per person in admission tickets when they watch in movie houses. Konti na lang ay katumbas na ito ng arawang kita ng mga minimum wage earners na nasa P316 to P537 kada araw. 

Sa panahon ng kagipitan, kung kailan mahina ang piso kontra sa dolyar, mataas ng presyo ng langis at mga bilihin, madaling unawain na hindi praktikal sa mga kababayan natin ang gumastos ng ganitong halaga. Tama nga ang sinabi ni Kathryn Bernardo sa Hello, Love, Goodbye – “ang choice para lang sa may pera.” 

Paano ba natin matutulungan ang naghihingalong industriya? Kailangan ba nating i-subsidize ang paggawa ng mga pelikula? How will we do it? Should we give incentives to the movie producers or review the current tax structure?

Sa pag-aaral na isinagawa ng ating Senate Tax Study and Research Office o STSRO at batay na rin sa datos ng National Tax Research Center o NTRC, the revenue collections from amusement taxes are relatively insignificant as compared to other types of taxes. [1]

Mula  2014 hanggang 2018, on the average ay nasa higit isang bilyon lamang ang koleksyon mula dito. 

Not having to pay this tax would also significantly help Filipino producers recover their invested capital and enable them to produce more films in the long run. But even with fewer taxes to pay, the producers will still have to pay other taxes like VAT and income tax. 

Sa aspeto naman ng amusement tax na nasa ilalim ng Local Government Code at 1997 Tax Code limitado lamang ang saklaw nito. 

Naniniwala ako na hindi malaking kawalan ito sa kita ng gobyerno. Sakali man na tanggalin ito, maaari natin ito na mabawi dahil kung mapapasigla natin ang entertainment industry, lalaki ang labor force at lalago ang industriya na maaaring mapagkunan ng mga tinatawag na recoupment tax gaya ng business tax or business permit para sa mga local governments, corporate income tax ng mga bagong korporasyon, withholding tax sa mga manggagawa sa industriya at lalago ang consumption tax o VAT. 

May mga bansa gaya ng France, Italy, Spain, Canada, South Korea at Malaysia na nagpapataw ng minimum quota requirements upang mapanatili ang exposure o masiguro ang pagpapapalabas sa sinehan ng mga locally-produced films. [2]

At the expense of being tagged as second rate trying hard, copy cat, baka napapanahon nang gawin din natin ito sa Pilipinas. Sa ganitong paraan, masisiguro ang paglalaan ng screening sa mga sinehan, lalo na ng mga dekalidad na pelikulang Pilipino. 

We are replete with world-class artists and on many occasions, Filipino filmmakers and artists brought honor and pride to the country by winning top prizes in international film festivals around the world. [3]

Brillante Mendoza bested renowned directors like Ang Lee, Quentin Tarantino and others when he became the first Filipino to win the coveted Best Director award during the 62nd Cannes Film Festival for his film “Kinatay”, while Lav Diaz won major awards in the 2014 Locarno International Film Festival, 2016 Berlin Film Festival and 73rd Venice Film Festival. 

The most recent were veteran thespian Jacklyn Jose , the first Filipina to bag the best actress award at the Cannes Film Festival for her stirring portrayal in “Ma’ Rosa,” while accomplished actor John Arcilla won the Volpi Cup for best actor at the 78th Venice Film Festival for his outstanding performance in “On The Job: The Missing 8.” These achievements exemplify the remarkable artistic talent and skill of Filipinos, on par with the world’s best. 

Naniniwala ako na kaya nating makipagsabayan sa mga gawang banyaga

ngunit aminado ako na kailangan ng industriya ng suporta ng gobyerno. 

One good thing that came out of this issue is that it has paved the way for the discussion on the matters concerning the Philippine entertainment industry. Our ailing film industry needs all the support not only from the government but more so from the movie-going public. 

And just like what some vloggers or YouTubers are doing, promoting local tourist destinations or hidden gems in the country, movies can also create a boost for tourism. This is what is now happening, admittedly, in South Korea and it has similarly had the same effect in other countries following the release of films such as Lord of the Rings, Braveheart , Harry Potter, and TV series such as Crash Landing On You. 

On the local front, some movies and TV programs that were well received by the audience are now engraved in our collective consciousness. 

Some of these include iconic scenes like Mt. Kiltepan from the movie “That Thing Called Tadhana,” the beauty of the Cordillera region courtesy of the movie “Don’t Give Up on Us,” Batanes in “You’re My Boss” and the fictional local community Sitio La Presa in Tuba, Benguet  due to the 2014 TV series “Forevermore” to name a few. 

The Philippines also played host as the filming location for acclaimed Hollywood movies such as Apocalypse Now (1979), Platoon (1986), Born on the Fourth of July (1989), and The Bourne Legacy (2012). 

It’s probably high time for the government to consider the idea of providing government subsidy to film industry just like what the investments made by the South Korea’s Ministry of Culture, Sports and Tourism to fund a five-year plan (2015-2019) for their domestic animation and character industries. It provided support to start-up operations through a new state facility and automatic subsidies to established animation studios based on the performance of their earlier projects. 

Government should encourage the promotion of Filipino culture/cuisine, tourism and heritage as part of the content; create or provide scholarships, workshops for scriptwriters, production personnel, musicians to strive for excellence in this field/industry; and provide tax breaks or lower taxes on the industry to incentivize the local entertainment industry.

The government could probably consider institutionalizing or replicating the programs of the Movie Workers Foundation, Inc. or MOWELFUND. The MOWELFUND, the only one of its kind in Asia provides social welfare program for movie workers and a development program to uplift the movie industry.  

Many outstanding new talents in the local movie industry are products of the MOWELFUND Film Institute which conducts workshops in directing, cinematography, photography, animation, scriptwriting, stunts, documentary, and acting.  

In ending this issue, I just want to lay emphasis that I’m merely trying to alleviate the plight of my colleagues in the film industry. After all, development starts with the most important element in the industry, the movie worker, just like what my father said. Also, I am merely carrying out my duties and responsibilities, as an elected member of this august chamber, in advancing the interests of those in the country’s film industry. Sa hanay ng mga miyembro ng Senado, masasabi ko na makakaasa ng suporta ang taga industriya mula sa tatlo ko pang kasamahan kabilang rin sa entertainment industry – sina Senators Ramon “Bong” Revillar Jr., Robinhood “Robin” Padilla at Manuel “Lito” Lapid — at pati na rin anak ng nag-iisang Hari ng Pelikulang Pilipino at dating MTRCB chairperson, Sen. Grace Poe. 

Hindi po ako nagpapakabayani, o nagpapabida sa isyung ito. Bagkus, ang tanging hangad ko lamang ay mapanatili at mapalawak pa ang mga oportunidad sa industriyang nanatiling malapit sa akin at patuloy ko na pinapahalagahan hanggang sa ngayon.  

Maraming salamat sa inyong pakikinig at mabuhay ang pelikulang Pilipino!