Anaya Nolan
ABS-CBN is a broadcast network in the Philippines. In 2020, the National Telecommunications Commission issued a cease and desist order to stop the network's broadcast, including its radio stations DZMM and MOR, following the expiration of its broadcast franchise. The network has been accused of violating the terms and conditions of its franchise, as well as existing laws and the country's Constitution. These accusations include tax evasion, offering a pay-per-view service through free-to-air signals, and unfair labour practices. However, the network's president and CEO Carlo Katigbak has denied these claims, stating that the network has not violated any laws and is innocent until proven guilty.
| Characteristics | Values |
|---|---|
| Non-compliance with franchise terms | Failure to air President Duterte's political advertisements during the 2016 campaign period despite receiving payment |
| Non-compliance with existing laws | Tax evasion |
| Non-compliance with the Constitution | 100% Filipino ownership and management of mass media companies not met |
| Unfair labour practices | Denial of benefits required by law |
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What You'll Learn
Non-compliance with franchise terms and laws
It has been claimed that ABS-CBN did not comply with the terms and conditions of its franchise, as well as with existing laws and the country’s Constitution. Deputy Speaker Rodante Marcoleta stated that the network deliberately violated the conditions of its legislative franchise, and the country's laws and Constitution.
Marcoleta also claimed that the network committed unfair labour practices, which consequently denied its employees the benefits required by law. He further argued that the network is foreign-owned because of its Philippine Depositary Receipts (PDR), which virtually allowed foreign holders beneficial ownership and potential voting rights. The network’s former president, Eugenio “Gabby” Lopez III, was an American citizen when he took the helm of the company in 1986. It was only in 2000 that Lopez petitioned for recognition of Filipino residency.
Marcoleta also said that ABS-CBN failed to air some of President Duterte's political advertisements during the 2016 campaign period despite receiving the payment of these political ads. He also claimed that the network engaged in "tax evasion" schemes, and violated the terms and conditions of its franchise by offering its TV Plus boxes for a one-time fee, but using the free-to-air signal authorised in the franchise granted by Congress to ABS-CBN at no cost.
However, during the same hearing, ABS-CBN president and CEO Carlo Katigbak said that the network has not violated any laws. “We agree. The law is the law. And under the law, we are innocent under proven guilty. Up to now, there is no court that has determined we have broken any laws,” he said.
On the same day, a Senate hearing concluded that there was no breach of laws or franchise terms.
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Tax evasion
It has been alleged that ABS-CBN has been involved in tax avoidance, with the company accused of using distribution companies in Luxembourg, Hungary, and the Cayman Islands to avoid paying taxes. However, it is important to note that tax avoidance is not illegal. The Bureau of Internal Revenue (BIR) has confirmed that ABS-CBN regularly filed and paid taxes, with the broadcasting network paying at least P14.398 billion in taxes from 2016 to 2019. ABS-CBN has also paid settlements with the BIR, including around P152 million for assessed deficiencies on its income tax, value-added tax, and documentary stamp payments.
Despite these payments, some have claimed that ABS-CBN was not able to renew its franchise due in part to tax evasion. However, this claim has been refuted by the BIR, which has stated that the company has been compliant with tax laws.
ABS-CBN has existing compromise agreements with the government over taxes. A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and avoid, or put an end to, a lawsuit. These agreements do not include the supposed tax avoidance, which the BIR has been urged to look into.
Overall, while there have been allegations of tax avoidance and evasion by ABS-CBN, the company has been found to be compliant with tax laws and has made significant tax payments and settlements.
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Foreign ownership
It has been claimed that ABS-CBN violated the Constitution, which requires 100% Filipino ownership and management of mass media companies. The network’s former president, Eugenio “Gabby” Lopez III, was an American citizen when he took the helm of the company in 1986. It was only in 2000 that Lopez petitioned for recognition of Filipino residency. It has also been argued that the network is foreign-owned because of its Philippine Depositary Receipts (PDR), which virtually allowed foreign holders beneficial ownership and potential voting rights.
ABS-CBN has denied violating any laws. During a Senate hearing, the Senate concluded that there was no breach of laws or franchise terms. However, Deputy Speaker Rodante Marcoleta has claimed that the network did not comply with the terms and conditions of its franchise, as well as with existing laws and the country’s Constitution. Marcoleta stated that ABS-CBN deliberately and with impunity violated the conditions of its legislative franchise.
Other violations enumerated by Marcoleta include offering a pay-per-view service Kapamilya Box Office (KBO) channel (via TV Plus) through free-to-air signals, and tax evasion schemes. He also cited unfair labor practices, which consequently denied employees the benefits required by law.
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Unfair labour practices
ABS-CBN has been accused of violating the terms and conditions of its franchise, as well as existing laws and the country's Constitution. Deputy Speaker Rodante Marcoleta claimed that the network deliberately and with impunity violated the conditions of its legislative franchise. Marcoleta also cited that ABS-CBN violated the Constitution, which requires 100% Filipino ownership and management of mass media companies. He argued that the network is foreign-owned because of its Philippine Depositary Receipts (PDRs), which allowed foreign holders beneficial ownership and potential voting rights.
Marcoleta also accused ABS-CBN of committing unfair labour practices, which denied its employees the benefits required by law. However, ABS-CBN president and CEO Carlo Katigbak denied that the network has violated any laws, stating that "under the law, we are innocent until proven guilty. Up to now, there is no court that has determined we have broken any laws".
During a Senate hearing, public services panel chair Grace Poe stated that the Senate concluded that there was no breach of laws or franchise terms by ABS-CBN.
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Failure to air political advertisements
ABS-CBN has been accused of violating the terms and conditions of its franchise, as well as existing laws and the country's Constitution. Deputy Speaker Rodante Marcoleta claimed that the network deliberately and with impunity violated the conditions of its legislative franchise. Marcoleta also cited that ABS-CBN violated the Constitution, which requires 100% Filipino ownership and management of mass media companies. He said that the network's former president, Eugenio "Gabby" Lopez III, was an American citizen when he took over in 1986 and only petitioned for recognition of Filipino residency in 2000. Marcoleta further argued that the network is foreign-owned because of its Philippine Depositary Receipts (PDRs), which virtually allowed foreign holders beneficial ownership and potential voting rights.
ABS-CBN has also been accused of failing to air some of President Duterte's political advertisements during the 2016 campaign period despite receiving payment for these ads. This failure to air political advertisements is a serious allegation, as it could be seen as a form of censorship or an attempt to influence the political process. It is important to note that ABS-CBN has denied any wrongdoing and has stated that it has not violated any laws. The network's president and CEO, Carlo Katigbak, emphasised that under the law, they are innocent until proven guilty and that no court has determined that they have broken any laws.
Despite these denials, the National Telecommunications Commission issued a cease and desist order to stop the network's broadcast, including its radio stations DZMM and MOR, following the expiration of its broadcast franchise. This order covered 42 television stations operated by ABS-CBN across the country, including Channel 2, 10 digital broadcast channels, 18 FM stations, and 5 AM stations.
In addition to the allegations of failing to air political advertisements, Marcoleta also enumerated other violations, including offering a pay-per-view service through free-to-air signals and tax evasion schemes. He claimed that ABS-CBN violated the terms and conditions of its franchise by offering its TV Plus boxes for a one-time fee but using the free-to-air signal authorised in the franchise granted by Congress at no cost. These allegations have sparked a debate over the network's compliance with the law and the appropriate consequences for any violations.
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Frequently asked questions
Yes, according to Deputy Speaker Rodante Marcoleta, who claimed that the network did not comply with the terms and conditions of its franchise, as well as with existing laws and the country’s Constitution. Marcoleta also cited that ABS-CBN violated the Constitution, which requires 100% Filipino ownership and management of mass media companies. However, the Senate concluded that there was no breach of laws or franchise terms.
According to Marcoleta, ABS-CBN did not pay its rightful taxes in 2019 by entering into a compromise agreement with the Bureau of Internal Revenue. However, ABS-CBN president and CEO Carlo Katigbak denied that the network had violated any laws, stating that "under the law, we are innocent until proven guilty".
Marcoleta argued that the network committed unfair labour practices, which consequently denied its employees the benefits required by law.
Marcoleta claimed that ABS-CBN failed to air some of President Duterte's political advertisements during the 2016 campaign period despite receiving payment for these ads.
