ABS-CBN Case Study: A Thorough Analysis of the Issue

After the 13 hearings and debates whether the congress will issue another 25-year franchise to ABS-CBN or not has come to an end last July 3, 2020, with the vote of 70 members for “yes” over 11 for “no”. This is one of the acts that we can say that the government does not afraid of the influential people who are connected with ABS-CBN.

The root of these 13 hearings is the issues that involve ABS-CBN that prevent them to grant another franchise to operate. The company uses various mechanisms to increase its net worth that is questionable to the House of Representative and National Telecommunication Commission (NTC). One of them is the use of pay-per-view TV Plus which leads to the removal of ABS-CBN and Cinemo Channel in the device of TV plus. As stated in the Inquirer last June 30, 2020, the National Telecommunication Commission (NTC) dealt ABS-CBN a new blown on Monday, telling lawmakers it would stop the shuttered media network from airing its shows via a digital channel on its TV plus service. Another issue is the labor that is a longstanding issue of network employees not being regularized despite some of them working in the company for 10 to 20 years. ABS-CBN also accuse that they used Big Dipper Digital Content and Design, Inc. – a subsidiary 95-percent owned by the network that repurposes ABS-CBN’s content into various formats to be licensed by markets abroad – as a tax shield. This was allegedly done by registering the Big Dipper as an information technology enterprise to avail itself of tax incentives granted by the Philippine Economic Zone Authority (PEZA). Salo claimed that in 2019, Big Dipper declared only P474 million of its P25.4-billion profit while also declaring P2.3 billion in tax-free dividends.

Overall, their request to grant a 25-year franchise is considered void due to the issues connected to the network. The methods used by ABS-CBN to increase profit are being discussed and debated in Congress in accordance with the due process of law. Thus, the government is not tolerating big companies to disobey the rules and regulations. At the end of the day, the goal of the government is to act in the best interest of its citizen through the system of check and balance and make sure also that all business entities must comply with all the government requirements.