ABS-CBN did not commit violations – BIR, SEC

Metro Manila (CNN Philippines, February 24) — ABS-CBN did not violate any corporate laws and has regularly paid its taxes for the past years, regulators told a Senate body on Monday.

Representatives from the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC) said the network has been compliant with regulations, contrary to allegations lodged against the media company.

"They are regularly filing and paying their taxes for the past number of years," Simplicio Cabantac, Jr., head of a unit of the BIR Large Taxpayers Service, told the Senate Committee on Public Services.

BIR initially did not release the network's tax payments due to privacy laws, but later on disclosed that ABS-CBN has paid ₱14.398 billion from 2016 to 2019. The amount excludes income taxes which are due April 15, Cabantac added.

He clarified that the amount also excludes income tax payments paid by ABS-CBN artists, employees, and talents.

ABS-CBN President Carlo Katigbak said separately that the company paid ₱8.859 billion in taxes withheld from its employees from 2009 to 2018.

The Lopez-owned network earlier denied accusations lodged on social media that it has not been paying its dues. ABS-CBN has secured a tax clearance certificate from the BIR for 2019.

Last year, the TV network went through a settlement deal to pay ₱152.44 million in taxes to the BIR for assessed deficiencies in its income tax, value-added tax, and documentary stamp tax payments.

SEC Commissioner Ephyro Luis Amatong also said separately that he is not aware of any violation or ongoing complaint against ABS-CBN before the corporate regulator.

Solicitor General Jose Calida asked the Supreme Court to void the media conglomerate's existing franchise for supposedly violating the law when it issued Philippine Depositary Receipts to foreigners, which he equated to ceding control and voting rights to foreigners. The 1987 Constitution prohibits foreign ownership of media entities in the country.

The network has submitted its response to Calida's allegations before the high court on Monday, but did not share its contents to media. ABS-CBN also responded to Calida's request for a gag order that will stop the network, as well as its representatives, from discussing the merits of the quo warranto case in public, saying this would influence court magistrates in deciding on the case.

ABS-CBN has also denied practicing "endo," or hiring workers under short-term contractual arrangements to save on benefit payments. Mario Carlo Nepomuceno, head of the network's Corporate Services Group, said program employees are covered by PhilHealth, PAGIBIG, and Social Security System through the company.

Jon Villanueva, president of the ABS-CBN Rank and File Employees' Union, described the long wait for the network's franchise renewal as "torture," with employees and their families facing an uncertain future. He said they would likely have a hard time finding similar jobs, as slots in other TV networks are likely filled.

Apart from 11,017 artists, office workers, and talents, some 6,000 informal jobs from security agencies, janitorial services, and even production equipment suppliers are at risk, Katigbak said.

The Philippine Competition Commission also warned that the possible shutdown of ABS-CBN could limit competition among TV networks, saying that this would lead to fewer choices for the public in terms of news and entertainment content. Commissioner Johannes Bernabe said ABS-CBN, together with GMA, TV5, and CNN Philippines, control 89 percent of the industry, with at least a third controlled by the Lopez-owned channel. He warned that authorities have to be "cautious" against such a scenario, noting that more players in the market would do good for the economy.