OPEN LETTER FROM FAP DIRECTOR GENERAL


For the past several years, an outcry from the various Filipino filmmakers and film workers is being heard with regularity. The film industry is dying. Film production is at its lowest, jobs are hard to come by, learning new techniques and acquiring the latest equipment remain a dream. However hard organizations like the Film Academy of the Philippines try but lifting the industry from the drudge has become a Herculean effort requiring dogged determination and clear purposes. FAP just feels so alone in this undertaking.

As I see it, the film industry’s decline is a manifestation of the equally diminishing support it is getting from government. This, I believe, stems from the government leaders’ inability to define just what this industry is and how it plays in the country’s scheme of governance.

For example, this industry has always been referred to as the entertainment industry. How simplistic the connotation of our work. How superficial.

If our leaders and lawmakers would just dissect our industry intelligently and with sincerity, they will realize that films are not merely for entertainment. Films promote culture. They reflect the Filipino psyche. They express the Filipino’s problems as well as aspirations. Through films, our countrymen in the provinces learned to understand and speak the national language. Undoubtedly, the film industry is inherent to Philippine culture.

Therefore, the film industry being part of our culture should be recognized by the government as an essential commodity. It should be taken care of so that it flourishes and gives back beneficial returns to a caring government.

But the deal we are getting is just the opposite. While other governments like Korea and India create incentives and structures to showcase their film industries, the Philippine government imposes a hefty 30% taxation on film production, a burden that automatically jacks up production costs and inhibits film producers from venturing into more film projects. It also discourages the acquisition of updated and highly technological production equipment, a necessary resource if we are to even think of producing globally competitive films. Heavy taxation and lack of equipment are two of the expressed problems by film producers in the country.

Gambling and vices fare better. They are imposed only 10% to 18% amusement tax. How one wishes that the film industry be given the same tax consideration.

The local film industry is one of the most heavily taxed sectors. Consider: 30% amusement tax; 5% withholding tax on the producers’ film share; 32 % corporate income tax; 10% VAT on producers’ film share. Other countries collecting amusement taxes do not have VAT, and those with VAT do not collect amusement taxes. We are imposed both. Only in the Philippines indeed.

And still there are other taxes levied on the movie industry – the National tax, the local tax, the Regulatory Fees – no wonder that this industry is floundering. It is being milked too much.

To underscore further the government’s lack of recognition on the importance of the film industry, it does not provide for a representative in government that will speak for its well-being. Even if by some miracle the government deems the film industry as cultural in nature, there is no Secretary on Culture or such person in the President's cabinet. What the President has is a Presidential Consultant on Entertainment.

Presumably, the government created the Film Academy of the Philippines by EO 640-A in 1981 to be the institution that will oversee the technological development of the various film production and technical guilds that are comprised of the industry workers and in so doing move the industry forward. What the government did not create was the funding component to run the Academy.

Nonetheless, the FAP tried to find its own means buoyed by the need for leadership within the industry.

After its creation, it used to get 5 centavos from every 25 centavo cultural tax. However in 1984, the cultural tax remittances from the Metro Manila mayors stopped. So FAP, together with the Movie Workers Welfare Fund (MOWELFUND) and the Motion Pictures Anti- Film Piracy Council (MPAFPC), worked to become beneficiaries of the Metro Manila Film Festival, with shares apportioned from the local governments’ income from the festival. Under this agreement, the Metro Manila mayors have willingly donated funds (the amusement tax for that period) to help the three beneficiaries sustain operations.

In 1986 to 1998 under the terms of President Aquino and Ramos, the MOWELFUND was getting 60%, the MPAFPC 20% and FAP 20%. Under President Estrada, the MOWELFUND’ s share was upped to 70%, MPAFPC became 10% with FAP maintaining its 20% share.

In 2002 under President Arroyo, the sharing was revised. MOWELFUND and MPAFPC both got 35% while FAP still maintained its 20%. But this time, there was a new recipient – the President’s Social Fund which asked for 10% share.

FAP being the government entity appealed to the President in 2004 to be given a bigger share than MOWELFUND and MPFAPC which are in truth, private corporations. What evolved instead was a 30-30-30-10 sharing among the four recipients.

This year, for reasons unclear, the President based on the recommendation of the Presidential Consultant on Entertainment issued a directive increasing the MOWELFUND’s share to 35%, the President’s Social Fund to 35%, and giving the Film Development Council of the Philippines (FDCP) 10% and Optical Media Board (OMB) 5%. The share of FAP was reduced to a measly 10% and MPAFPC even lower to 5%.

I am not a lawyer but I believe that if there is an anomalous arrangement of funds, this is it. MOWELFUND is a private corporation and is getting the bigger share. The President’s Social Fund is getting local government funds and making it its own. The President is giving the funds of the local government to FDCP and OMB who both have their own GAA budget allocations from the national government.

Meantime, FAP which is a government-created entity that has no budgetary provisions is left to fend for itself. How will this enhance the film industry? How can FAP run educational programs that are supposed to improve the film community when it itself is financially handicapped?

This is a confused government. What do our national leaders and lawmakers, yes, even the actor-Senators really want for the film industry? It is easy to mouth good intentions but present decisions indicate otherwise.

One can only hope that government decides to respect the film industry. Give it its due recognition as an important and essential commodity and devise a more rational taxation scheme that will encourage, not impede, its development.

It should introduce representation for the film industry in the affairs of government by creating a Secretary on Culture, not a mere Consultant on Entertainment. And it should ascertain further that such representative is not a film producer who is biased towards his own ilk but someone who has a clear vision that encompasses the welfare of the whole film community.

And it would not hurt our country if government recognizes the Film Academy of the Philippines as a government instrumentality deserving of both moral and financial support. It should give FAP priority instead of the private corporations that have been getting the larger shares in fund allocations. It should work hand in hand with FAP, not annihilate it.

LEO G. MARTINEZ
Director-General,Film Academy of the Philippines