Privatizing PTV-4 but keeping subsidies ‘unfair,’ says GMA-7
GMA-7 chair complains that keeping state subsidies, which include taxes paid by rival broadcast groups, for PTV-4 will be unfair

DON'T DO IT. GMA tells the government to not privatize PTV4 if the now government-owned station keeps it subsidies. Graphic by Mich Garcia

MANILA, Philippines – GMA Network, Inc. strongly opposed the government’s plan to privatize state-owned broadcast station People’s Television Network, Inc. (PTV) as it would be unfairly competing with private players.

“It is very unfair. It’s like we are supporting our own competitor because part of the taxes that we pay will be used for Channel 4 (PTV-4). I think that this should also be the stand of Channels 2 and 5,” Felipe L. Gozon, chair of GMA-7 operator GMA Network Inc., told reporters during a company event.

GMA-7, he noted, already requested the Senate to put in writing its opposition to the Bill No. 3316 amending Republic Act 7306, also known as the PTV-4 Charter.

The pending legislation wants to revitalize PTV-4 by infusing additional capital and allowing it to engage in more diverse programming.

In particular, the bill seeks to modify Section 19 of RA 7306 so PTV 4 will be able to generate income via advertising and airtime sales.

Government capital injection

Under the proposed legislation, PTV-4 will receive P5 billion capital infusion from the national government, of which P2 billion will come from the planned privatization of Radio Philippines Network (RPN-9) and Intercontinental Broadcasting Corporation (IBC-13).

Another P2 billion will be taken from the incremental increases of the spectrum user’s fee of the National Telecommunications Commission, and P1 billion will come from the General Appropriations Act.

Public funds will be earmarked from the national budget to enable PTV 4 to buy equipment, build infrastructure, produce programs, purchase content, hire personnel and recruit creative staff for its operations.

To sustain these operations operations, the network will now be permitted to generate revenue by selling airtime and commercial ads.

“If they want to sell airtime then they have to remove the subsidy. We pay billions in taxes and part of those taxes will be used by PTV 4,” stressed Gozon.

Unfair competition

Gozon is complaining that PTV-4 will receive funds from the national budget derived from the taxes collected from and paid by taxpayers, which include commercial broadcasters.

While receiving subsidies from the taxes and fees paid by broadcasting institutions, the network will be competing with the same companies for the source of income providing the said funds: commercial ads and airtime.

Gozon claimed that if the Senate bill becomes law, PTV-4 will have the upper hand in competing with the private sector in terms of generating ad revenue.

The state-funded competitor can provide airtime value at lower rates, which may diminish the ability of private broadcasters to attract ad revenues.

This may lead sponsors and advertisers to opt for reduced airtime costs and place their ads in PTV 4 instead of with commercial broadcasters, which may not be able to match PTV’s low but subsidized ad rates.

“It would be the height of unfairness,” said Gozon. –