SENATOR Robinhood C. Padilla advocated temporarily providing tax exemptions for films produced locally; thus throwing full support for a proposal pitched by Sen. Jinggoy Estrada in a privileged speech on Tuesday.
Padilla said a temporary suspension of a slew of taxes would help in the fast recovery of the Philippine movie industry. In his manifestation during the plenary session last November 8, Padilla added that granting the local film industry temporary relief on tax could help the industry get back on its feet.
“I hope the industry would be given a chance to breathe. We are not asking for a total suspension of tax but only temporary,” Padilla said in Filipino.
This developed as several senators backed the enabling bill bolstering the film industry, following Sen. Estrada’s speech.
The lawmakers lined up support behind the bill seeking to improve the economic viability of the Philippine film industry, and its potential as an effective tool for boosting tourism, in the way that several global destinations have benefitted from hosting film locations.
In his privilege speech, Estrada cited the dire straits in which many workers and stakeholders in the local film industry—or the audiovisual services sector in its entirety—have found themselves in with the pandemic.
Verge of collapse
TAKING the floor “on a matter of personal and collective privilege,” Estrada recalled that “for the past several weeks, I have been subjected to numerous tirades over a comment I made during the committee hearing on the proposed 2023 budget of the Film Development Council of the Philippines or FDCP last October 18.”
The senator affirmed that records of the Senate committee hearing “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 [intensive care unit] needing critical care from specialists.”
“Sadly,” the lawmaker lamented, “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 audio-visual sector who, the senator said, he was trying to protect and fight for.
Villain, antagonist
THE senator deplored that “what reverberated in the minds of many was the furthest thing from my mind,” ruing that “I was portrayed as a villain; an antagonist.”
“Nakakalungkot na mas nanaig sa kaisipan ng marami ang mga katagang hindi ko layon na mangyari,” he added. [It is unfortunate that the words I did not intend to happen prevailed in the minds of many.]
“Be that as it may,” Estrada said, “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.”
Lamenting that “this is the abysmal state of our local film industry,” the senator reminded that for this year, only nine local movies have been released, according to theater group operators, noting that the nine were from the 20 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,” he said. [It is depressing to think that there was a time when 300 films were produced each year.] “Now, it’s not even a fraction.”
Standard arrangement
ESTRADA explained that in order to come up with a quality film, producers have to fork out “between P10 million to P30 million,” according to FDCP Chairman and CEO Tirso S. Cruz III. And to recoup this, they have to earn at least triple or 270 percent of that amount.
“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, Estrada explains that for a P50-million film production with a P100 million box office revenue, the producer needs to pay amusement tax, value-added tax and distribution fee.
He adds that 10 percent will go to amusement tax and 90 percent will go to the theater owner and film producer. About 45 percent of the ticket sales will go to theater owners.
That, Estrada affirms, 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 [value-added tax] to be paid by the producer; and from the 45 million peso ticket sales, the amount will dwindle to P39.6 million,” he said.
Unprecedented phenomenon
ESTRADA explained that from these figures, a 5-percent distribution fee will still be deducted, which leaves the producer with the final amount of P37.62 million.
This means that the producer loses P12,380,000, the lawmaker said.
And if a producer makes a profit, he still has to pay a 30-percent income tax, Estrada said.
The lawmaker relates that the film industry, following the onset of the Covid-19 pandemic, was “confronted by an unprecedented phenomenon of almost no revenue coming in despite the easing of social restrictions.”
“Likewise, our kababayans [compatriots] have to spend around P280 to P450 per person in admission tickets when they watch in movie houses,” Estrada said. “Konti na lang ay katumbas na ito ng arawang kita ng mga minimum wage earners na nasa P316 to P537 kada araw.” [It is just a little bit equivalent to the daily income of minimum wage earners, which is around P316 to P537 per day.]
Besides Padilla, the Estrada proposal for a fiscal relief for the industrh was backed by: Sen. Grace Poe, former MTRCB chair and daughter of “King of Philippine Movies” FPJ; Sen. Ramon “Bong” Revilla Jr., an actor-producer from a showbiz clan; and, Sen. Francis N. Tolentino. The latter threw full support to the economic gains of the industry when he chaired the Metro Manila Film Festival for several years.