Jan 15
FAP POSITION PAPER ON MMFF FUND ASSISTANCE by fapweb  |  Posted in Articles  |  on Fri, Jan 15, 2016

FAP Director General

One of the purposes for which the Metro Manila Film Festival was created was to provide fund assistance to film-related organizations that are not of government but are deemed significant in the local film industry. They were called beneficiaries and the Film Academy of the Philippines (FAP) was one of them. Fund assistance by the MMFF was to be in the form of a mandated percentage sharing between the beneficiaries of the income from the amusement tax collected by the MMFF’s Executive Committee for the duration of the festival period.

The FAP, since the start, has been an active participant in the MMFF organization particularly as member of the ExeCom until two years ago when it was dropped from the committee. FAP remains as a beneficiary though, and therefore as one, it behooves us to be aware of the MMFF’s monetary dynamics particularly on the amusement tax collected to protect the proper and fair distribution of such to the intended users.

In the early years of MMFF’s operation, the distribution of the amusement tax to the beneficiaries based on the mandated percentage sharing, was comfortably on track. The 2000s saw, however, the dwindling and arbitrary allocation by MMDA/MMFF of the beneficiaries’ share in spite of obvious huge increases in the yearly MMFF income. In September 2009, a Senate Committee hearing called for a special audit by the Commission on Audit (COA) of the MMFF Funds for CYs 2002-2008.

The COA findings specifically pointed out violations by MMDA/MMFF in the management of the amusement tax collection and most especially its distribution to the beneficiaries. These findings form the core for the following issues that we, the Film Academy of the Philippines (FAP), are herewith submitting to this Committee for information and hopefully, resolution.

1. The FAP would like MMFF-P to abide by the COA findings. This sentiment has been regularly communicated through letters to then MMDA Chairman Francis Tolentino since July 30, 2010 and then again on October 2013, and to the current chairman Atty. Emerson Carlos last November 9, 2015. The COA findings include:

1.1 That the full amount collected as Amusement Tax should be deposited in trust pending identification of beneficiaries.
The MMFF-P alleges that it can charge festival expenses against the Amusement Tax, the balance of which may then be shared by the beneficiaries. The practice of using the amuse-ment tax for festival expenses is deemed illegal by COA.

1.2 Because of this, MMFF-P has shortchanged the beneficiaries
an accrued balance of PhP 82,787,440.00 for the festival years
2002 to 2008, plus the amount of P25,989,570 for the years
2009 to 2013 that it should pay to the beneficiaries.
The total balance due to the beneficiaries therefore is PhP108,777,010.00 to be paid to Mowelfund -50%, Film Academy of the Philippines -20%, Anti-Piracy Council – 20%, Optical Media Board -5%, and Film Development Council -5%.

1.3 That the amusement tax should be paid to the beneficiaries in full a month after the last day of the festival, and not in four to six tranches in a span of one year, as is being practised. This has never been followed all these years and FAP would like this rule effected strictly starting the 2015 festival. For example, FAP’s 20% share in MMFF 2014 is being paid in five tranches with the last tranche to be given January 2016. It cannot be said that tax collection is ongoing year-round. Proprietors, lessees or theater operators remit their taxes directly to the Executive Committee not later than twenty (20) days after the last day of the Festival, else they are exacted penalties.

2. MMFF-P should explain the phenomenon of the festival’s gross income getting bigger every year yet the share of the beneficiaries keep getting smaller. From 1986 to 2002, the share of the beneficiaries vs. the gross receipts ranged from 10% to 19%. In the last five years, the gross receipts have doubled but only 1% to 2% went to the beneficiaries.

3. The MMFF-P has two income sources: the Amusement Tax from Metro Manila theaters and the Price Increase or Non-tax Revenues from theaters outside of Metro Manila. This translates to 50% from Metro Manila and 50% from the rest of the Philippines. FAP and the other beneficiaries have not received any share in the Price Increase or Non-Tax Revenues since 2005.

4. And in yet another research result, there are four (4) versions of financial statements covering the same period. Why is this? These are indications that there is no specific unit within the MMFF organization that properly accounts for the income and usage of the MMFF money.

5. Apparently, the MMFF issues have caught the attention of VeraFiles, a body of investigative journalists which issued an article that enumerated facts and information regarding the festival and the controversies in its operation. The FAP regrets the statements made by MMFF Executive Chairman Jesse Ejercito and ExeCom members Marichu Maceda and Dominic Du in this article. The MMFF representatives maintain they should not be subject to audit by the COA to begin with. We are seeking clarification from this body of lawmakers if indeed their statements are valid and correct, to wit:

5.1. Executive Chairman Ejercito rejected the idea that the FAP
had the right to demand an accounting of the MIFF fund. “Our
position is consistent with the law and existing jurisprudence,
where the right to demand an accounting may be exercised
only by the trustors over the trustee (MMFF), which in this
case are the Metro manila government units (LGUs),” his
letter read.

5.2. MMFF Spokesperson Marichu Maceda said the Department of
Justice considers the MMFF a private entity. “So, by law, COA
has no authority over private companies. We have our own
auditor. COA is to audit only government,” she said.

5.3. ExeCom Member Dominic Du believes that although FAP is
one of the beneficiaries or trustors, it doesn’t necessarily
have the right to demand accounting. “If I’m only helping you
and you’re only benefitting from what I give you, do you have
the right to demand how I spend the money?” he said.

6. In summary, the FAP, after submitting all these issues to this Committee, want only three things:

6.1. A full accounting be made of MMFF-P Funds from 2005 to

6.2. For MMFF-P to follow the COA recommendations. To right what is wrong.

6.3. For the Committee to take into consideration giving back to
the film industry the management of MMFF-P. Bills have
previously been filed to this effect: HB 2378:Transferring
MMFF to FDCP by Cong. Grex Lagman, SBN 2218:
Transferring MMFF to FDCP by Sen. Bong Revilla and SBN
2041: Transferring MMFF to Mowelfund by Sen. Jinggoy

(Delivered during the committee hearing held by the Committee on Metro Manila Development, Belmonte Hall, South Wing Annex, House of Representatives, Quezon City on Wednesday, January 13, 2016.)

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