THE House yesterday announced it is expanding its inquiry into alleged violations of the constitutional prohibition on foreign ownership of mass media to include all the other major media outfits in the country requiring congressional franchise to operate.
Bulacan Rep. Jose Antonio Sy-Alvarado, chairman of the House committee on good government and public accountability, said the panel will now look into the Philippine Deposit Receipts (PDRs) issued by all the other media companies in the country.
The panel is holding a joint hearing with the House committee on legislative franchises on allegations that ABS-CBN committed violations of its operating permit, including allowing foreign investments.
Sy-Alvarado said the inquiry will now also scrutinize similar investment structures used by other broadcast companies with franchise granted by Congress.
“Regardless of the fact that it is only ABS-CBN that is seeking renewal of its franchise at this point, this committee wishes to see all the PDRs of all mass media and broadcasting companies who have been previously granted a franchise or are still applying for one,” he said.
He ordered the panel secretariat “to secure copies of all PDRs of all major broadcasting and mass media companies in the country that will apply or otherwise applied and given franchise by this committee.”
He said the documents should be ready when the joint panel resumes its hearings next week, “so we can compare if they are using the same system in issuing PDRs.”
During Wednesday’s hearing, ABS-CBN’s legal counsel Cynthia del Castillo said there was nothing irregular or suspicious about the media outfit’s issuance of PDRs to raise funding.
She said the use of PDRs as an investment or financial instrument is nothing new in the country and is in fact commonplace all over the word.
“This is convenient for companies in the Philippines because you don’t have to dispose of ownership to obtain financing. In the same manner, this is better than going into debt because then you have to pay the principal and the interest regardless of the performance of the shares,” she said.
Del Castillo noted that under Section 11, paragraph 1, Article XVI of the Philippine Constitution, the only things expressly barred are foreign ownership and management of a mass media company.
She pointed out that it is the ABS-CBN Holdings that issues the PDRs while it is ABS-CBN Broadcasting Corp. that is involved in mass media.
She added that while ABS-CBN Holdings owns shares in ABS-CBN Broadcasting, it is only one of many other companies and individuals who hold shares in the company.
“ABS-CBN Holdings is just a holding company. Its sole role is just to invest in shares. The PDR is just an instrument where the only parties are the investors and ABS-CBN Holdings.
Neither has any link to the management of ABS-CBN Broadcasting,” she clarified.
Party-list Rep. Mike Defensor (Anakalusugan), countered that based on documents submitted by the media outfit, there appears to be a circumvention of the constitutional prohibition on foreign ownership of mass media.
Quoting Supreme Court pronouncements in the case of Tawang Multi-Purpose Cooperative vs. La Trinidad Water District, he said, “What cannot be legally done directly cannot be done indirectly. If the acts that cannot be legally done directly can be done indirectly, then all laws would be illusory.”
“One PDR is equal to one ABS-CBN Broadcasting Corp share. Not even a drop or a grain of foreign equity is allowed. I’m sorry to say this but the PDR was used to breach the rule against foreign ownership,” he said.
A petition filed by ABS-CBN Corp. seeking to void the cease-and-desist order issued by the National Telecommunications Commission on May 5 is up for another deliberation next month.
Chief Justice Diosdado Peralta said the Court en banc will meet on July 13 to deliberate on the petition.
By then, ABS-CBN would have been closed for more than two months. — With Ashzel Hachero
