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10 Government Rules (or Lack of it) that Destroy Philippine Movies

Updated on May 13, 2015

From the 1960s all the way to the late 90s, The Philippine film industry boasted a sterling track record as they managed to produce an average of 140 domestic films per year. It was a golden age for their film industry and saw movies and actors have so much clout that one of the more famous action stars, Joseph Estrada, managed to leverage his mass appeal in order to claim the highest seat in the government.

However, the past decade wasn’t so good to the industry. The average number of films being produced locally plunged to almost a half, averaging only 73 domestically produced films per year. In 2011, about 75% of films shown commercially in the country were foreign films, according to the country’s National Statistical Board.

The decline could be attributed to many things, but one thing that contributed to the problems is the government’s treatment of the industry. Here are 10 government rules (or lack thereof) that severely affects the health of the Philippine movie industry:

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#1 Censorship

The Philippines, despite being influenced heavily by the liberal West, still has a huge conservative sector, and it is reflected in the way the government handles ratings of movies. While violence and sexual content can be addressed in a movie, the ratings board is very strict in allowing what they believe would offend traditional values and mores. Filmmakers are forced to tone down their creativity and serve the masses watered down content or risk getting their films banned or slapped with a rating that severely limits the audience.

The strict (and some would say hypocritical) approach to censorship makes it hard for innovation and creativity to flourish, as filmmakers and producers would have to stay within the commercially viable and the non-offensive in order to avoid losing money.

There are even cases when complete and ready for release projects get wasted due to unnecessary censorship. One of the most popular recent examples is the 2001 film Live Show (also known as ‘Toro’), which follows the lives of poverty-stricken men and women who are forced into performing live sexual acts in exchange for money.

The sex scenes in Live Show, while graphic, are merely simulated acts and no genitalia was shown onscreen. But it was still recalled a few days after its initial release because the country’s then-president buckled under pressure from lobbyists.

The outright banning of the film left such a bad impression on people that the censorship board’s own chief, Dr. Nicanor Tiongson, resigned in disgust and labeled the banning as a “suppression of freedom of expression.”

#2 Excessive Taxation

Taxes are seen as a necessary evil, but in the case of the Philippine film industry, the necessary part no longer applies. Producers and studios have to contend with 12 % value added tax, 30% corporate income tax, 2% cultural tax, and of course the 10-20%t income tax of the talents and all the permit fees. What’s worse, some projects fall under the 12% extended value added tax (E-VAT) due to the vague provisions taxing “sale or exchange of services” combined with the equally vague “…and other similar services.”

This excessive taxation makes the Philippine film industry one of the most heavily-taxed industries in Asia. It means producers and filmmakers struggle to even break even as it creates a catch-22: the only way they can make a profit is by increasing ticket prices, but an increase in ticket prices would drive away a lot of moviegoers, resulting in less profit.

They can cut down the pay of the talent and the staff, but that would mean low quality work and lack of manpower, which in turn would also result in the audience being turned off.

The excessive taxation is counter-progressive especially when you consider that other neighboring countries’ governments are actually encouraging their film industries by providing seed money or offering tax exemptions. For instance, China has partnered with studios like DreamWorks in order to build local studios in their country, which would provide work for their local talent and would keep production costs down (the deal was ideal for both sides, to the point where DreamWorks shuttered a studio in Canada so they can focus their resources on the new Chinese arm.)

#3- Unlimited Foreign Movies Screenings

There’s no denying that foreign films, particularly ones that came from Hollywood, have the advantage – they have better funding, they have access to the most advanced props and special effects, and their talent are known the world over. If you screen a foreign film alongside a local one, chances are the foreign film will beat the local film in ticket sales. At the very least, it’s going to eat away at the local film’s profits as moviegoers that only have the time and money to watch one will most likely ignore the local film. Theatre owners will also choose to devote more theatres to Hollywood films, as that’s the one that will earn them more money.

In South Korea, their local films are beating Hollywood films, or at least going toe to toe in terms of profits. The reason is that they didn’t magically produce better-than-hollywood films overnight Rather, South Korea has a screen quota since 1993, which limits the amount of times a theatre can screen foreign films. The Philippines doesn’t have any such protection for its domestic films.

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#4- Piracy Control Plan

The government has a poor, if not outright wrong, approach to stopping piracy. They keep wasting money on going after small time vendors and launching expensive ad campaigns (including silly and environmentally unfriendly publicity stunts such as mass burnings of pirated DVDs).

In May of 2014 alone, the Optical Media Board along with the local authorities staged a mass raid of small shops in Angeles, Pampanga, and managed to confiscate over P10M worth of pirated DVDs from small shops. But keep in mind that the vendors are just a fraction of the establishments selling pirated media and the loss of their livelihood will not affect the syndicates who are really making a profit off of piracy.

It did nothing to stop the flood of pirated films as new vendors just sprout like mushrooms, and even if they miraculously manage to throw every single one of them in jail, it will not stop people from just pirating the movies online.

Their approach to piracy will not work because it is merely reactive and other countries have already learned that it is futile. Instead, the government should encourage and help the local film industry adopt more progressive distribution methods that will allow them to compete with pirates. The U.S., Australia, U.K., Japan, and other countries have already achieved this via affordable digital distribution methods such as Netflix, Hulu, and the like.

#5- Import Taxes on Movie Production-Related Equipment

As mentioned above, the local film industry is already suffering from over taxation, with several taxes that are exclusive to their sector (culture tax, for instance) on top of the ones that the rest of the country has to endure, but they are also affected by the government’s exorbitant taxes on imported equipment. Many of the equipment used in filmmaking are not manufactured locally and have to be imported from overseas or bought from retailers that imported them from other countries – in both cases, the import taxes will make the cost higher than it should be.

#6- Politics in the Yearly Manila Film Festival

The Philippines has a yearly film festival designed to highlight and celebrate the country’s homegrown cinema. In an ideal world, this should allow the audience to finally discover the local film industry’s offerings as theatres are not showing foreign films during the event. However, the films are almost always overshadowed by all the politicians trying to use the Festival for their own gain, using it as a platform for campaigning or even going so far as to star in the movies themselves.

A great example of this blatant politicking is the film one of the flagship films in the 2014 Metro Manila Film Festival, My Little Bossings. The film featured the Philippine president’s sister, his nephew (who won awards even though he’s vastly inexperienced and had no comedic timing), and had more product endorsements than it had any semblance of plot:

#7- Amusement Tax

If you think the 2% “culture tax” is already stretching it, the local film industry has another unnecessary tax to shoulder on top of all the other taxes that are hoisted upon their already struggling industry: the Amusement Tax. This tax, which amounts to 30% of gross profits, isn’t really paid for by the producers, as it is applied to establishments that are related to entertainment and leisure (theatres, resorts, circus, sports venues,) but it has a big effect because the owners of theatres need to raise ticket prices in order to offset the amusement tax.

With an increase in ticket prices, moviegoers with a limited budget (which is a majority in the Philippines) would forego watching movies or just resort to piracy. The film industry is at the complete mercy of this tax, as they can’t even choose to let the tax eat at their profits. If theatre owners decide to jack prices, there’s nothing they can do.

#8- Provinces or Towns With No Cinema

Some far-flung areas in the Philippines have provinces or towns that have no cinema, which means people can’t watch any movies even if they can afford it, unless they are willing to regularly travel to neighboring provinces. Some Asian countries like China and South Korea have the same problem, but the government tries to address the situation by either directly funding cinemas or encouraging businesses to build one by offering subsidies or tax exemptions.

#9- Unregulated rights of writers, directors, editors, and production staff

The government has very little support for the people whose names aren’t in the marquees. There’s very little legislation that were specifically written to protect the rights of writers, directors, editors, and production staff, and there are no unions formed to at least help fight for these sectors. The lack of support from the government is particularly puzzling because there are a lot of former actors and media men in key positions both in the local and national government, so they should be privy to the problems and challenges faced by the industry.

One key effect of the lack of regulation and protection is that many of the behind the scenes people are underpaid and overworked, and it will show in the quality of the films. Manpower is stretched too thin and you have unhappy workers. If you have both in the mix, it doesn’t matter how talented or popular the actors are – the film will be subpar and will turn away the audience.

It’s understandable that the Philippines will be behind pioneers like America (which had unions for directors, producers and other production staff, not to mention a writer’s guild that had enough influence to force Hollywood into a standstill during the writer’s guild strike in 2007-08), but even when compared to neighbors in Asia and developing countries, the Philippine industry is lagging behind.

South Korea, despite issues with regard to management companies, has various guilds and unions designed to protect the interests of their film industry, the most recent one being Film Korea, which consists of industry professionals and is backed by NGOs and their government. Additionally, the DBSK-JYJ debacle shows that their courts are not afraid to rule in favor of the artists regardless of how powerful the defendants are.

#10- Lack of Integration of Philippine movie appreciation to education

In South Korea, love for the arts is instilled early on as there are schools that invest in movie equipment such as cameras and green screens, and incorporate filmmaking into their curriculum even at the grade school. The effects may be subtle, but it is part of the reason why their citizens have an inherent love for the film industry and why many of its citizens pursue a career in the field.

In the Philippines, schools cannot afford that kind of equipment, and the curriculum in most of them are outdated – even classic cinema (which is as much a part of the country’s history now, especially since many of our leaders were former actors and celebrities) is not discussed, much less paid tribute to. This is probably part of the reason why movies and the performing arts are not taken seriously by many kids, and they bring this same point of view with them when they grow up to be leaders and lawmakers thus creating a cycle of neglect for the Philippine film industry.

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