Palace infuses P5B into PTV-4, drops IBC-13, RPN-9

Thursday, 21 March 2013

Malacañang is set to dispose of the two bankrupt sequestered television networks, the Intercontinental Broadcasting Corp. (IBC) Channel 13 and the Radio Philippines Network  (RPN) Channel 9, but will maintain the equally bankrupt People’s Television Channel 4 and IBC remains the undisputed number 3.

Presidential Communications Operations Office chief Secretary Sonny Coloma  yesterday declared that after the signing by Presi-dent Aquino of Republic Act 103901, now known as “An Act Revitalizing the People’s Television Network Incorporated” this would pave the way for the government to sell the “bleeding-non-performing assets.” Coloma said the Aquino admi-nistration was met with the problem of PTV-4 network that has been expe-riencing financial hemorrhage and is currently cash strapped in resolving the problem of payment of salaries of employees as well as its continuously bloating debts from various suppliers, unpaid electric bills, taxes, PhilHealth premiums and GSIS premiums.

“That is a network that is experiencing financial hemorrhage and President Aquino at once recognized that the problem had to be addressed strategically,” Coloma said. PTV-4 is being utilized by the Palace as one of its propaganda arms.

Coloma said “there was an initial capitalization of P 1 billion  and, by the time we took on the  management of the network in July of 2010, the financial hemorrhage had already taken place and the capitalization of the network had been fully depleted. That means to say the network treasury has no money”.

“As of the time that the Aquino administration took over, the only revenues were coming from two government agencies, namely Philippine Charity Sweepstakes Office and Philippine Amusement and Gaming Corp. or Pagcor, and these two agencies were contributing to the revenues that were used to keep the network afloat,” Coloma said. Coloma said Aquino directed the crafting of a proposed bill, that later on, this bill was included in the priority list of the Legislative Executive Development Advisory Council (Ledac).

“So we worked on the Senate and the Congress to pass a new charter for the People’s Television that had two important features: number one, infusion by government of fresh capitalization in the amount of P 5 billion pesos; and, number two, giving the network authority to collect commercial revenues,” Coloma said.

In the old charter, RA 7306, the network was given a period of 10 years within which to collect commercial revenues. “After which it was prohibited from doing so, and we are told this was because of the objections of the private commercial networks that PTV or the government television might pose a direct competition to commercial TV in terms of revenue generation.

“That was the rationale for giving the network only 10 years within which to achieve financial viability and stability,” Coloma said. Coloma explained that according to the law, P3 billion will be appropriated in the General Appropriations Act. Since there are three years remaining on this administration.

“Notionally, we wish to be able to get this in tranches of at least P1 billion a year starting with the 2014 budget,” Coloma said. Coloma said his office has been doing the financial coordination with the Department of Budget for the timely release of the funds while waiting for the proceeds of the disposal of the two government networks.

“We are working closely with the DBM on the amount and the timing of the release of the tranches. The remaining P2 billion, according to the law, will be the derived from the proceeds of the privatization of IBC and RPN.

“As you know, IBC is still 100 percent owned by the government and it will be privatized under the auspices of the Governance Commission of Government Corporations (GCG). Chairman Cesar Villanueva and his team are working closely with us so we can come up with the guidelines for the privatization and get this done soon,” Coloma said. Coloma said that with respect to the privatization of RPN-9, “ RPN-9 ceased to be a government corporation after July 2010 when the Supreme Court awarded 32 percent of ownership to the Roberto Benedicto group. Effectively at present, private equity accounts for 66 percent of the equity structure of RPN.

The other 34 percent belongs to Solar Entertainment which obtained this through a debt-to-equity conversion sometime in 2009 or 2010”. Coloma said the government holds a minority position of 20.8 percent. “But there is still a significant amount of liabilities owed by the network to the government so this will have to be factored into the proposed privatization package. We are working on this together with the Privatization Management Office and the economic management cluster,” Coloma said.

Coloma said the Aquino administration continues to prosecute those officials in the past administration who had abused and exploited the government networks.

“Following this administration’s commitment to good governance, we will pursue proper administrative or legal action against people that are found to have been involved in whatever irregularities that could be properly documented or substantiated,” Coloma said.

Coloma said the employees of the networks would be informed of the new developments on labor relations. “There is specific provision in the law that allows the Board of Directors and the management to implement a reorganization of the network. And it also says there that provided an employee has rendered at least one year of service, such employee may be entitled to retirement and/or separation benefits. The employees will be properly informed and they will be duly consulted as one of the relevant stakeholders. So we would like them to get involved in the process of working out what is properly due them,” Coloma said.

Coloma stressed that the government network has plans to be at par with the private networks in terms of technical capabilities. “That is what we want to achieve. Just to give you an eyeball of the situation: When I traveled to Zamboanga City a few months ago, well, I wanted to know if I could watch PTV, because Zamboanga is far away from Manila, and I did.

In the hotel room where I stayed that had cable TV facilities, the transmission via the cable carrier was locally available, the transmission of PTV programs. It varies from one city to another depending on the quality of transmission,” Coloma said.

Coloma said the privatization of IBC 13 has been already going-on as the Board of Directors of IBC channel 13 headed by Chairman Eric Canoy has already met with Chairman Cesar Villanueva of the GCG.

“IBC, by the way, is now operating profitably due to their steady stream of blocktime revenues with Viva Commiunications, Inc.,” Coloma said. Coloma said the office of PTV 4 although a government cororation is still under the supervision of the Commission on Audit. He said the board of directors are to be appointed by the President as required by law.