POSITION PAPER ON HOUSE BILLS NUMBERED 2015, 4255 AND 4910 PROVIDING

AN ANNUAL FILM QUOTA WHICH ONLY FILIPINO FILMS SHALL BE PUBLICLY

The Film Development Council of the Philippines (FDCP) commends and lauds the
House of Congress, particularly the Committee on Public Information, for the support on
the development of the country’s film industry. We acknowledge the efforts of the
Committee to table various bills that would encourage production, distribution and
exhibition of local films, recognizing its economic and cultural value.

The FDCP supports the policies that set an annual film quota where forty percent
(40%) of Filipino films and sixty percent (60%) of foreign films shall be screened in the
cinemas across the country. Relatedly, we respectfully recommend that parity should be
considered and observed in cinemas for screening of foreign and local films. Each cinema
owner shall screen both local and foreign films at a given time.

Likewise, we agree on the provision where Filipino films shall be accorded with 7-
days guaranteed booking in theatres. There are instances that local films are only
screened for a day when cinema owners observe that such movies are not profitable. This
clearly halts the earning capacity of the movie in commercial theaters. The seven (7) day
guarantee will give the producers and distributors enough opportunity to generate
income and intensify their promotion and marketing if necessary.

In 1United Kingdom, the distributors are given two (2) to four(4) weeks exhibition
periods for their films. 2South Korea imposed mandatory annual running days for
screening of Korean motion films, which is no less than one hundred twenty 120 days. For
3Singapore, the exhibition period usually lasts for about one (1) to three (3) weeks from

the date of release. However, to strike a balance on the profitability of the distributors and
exhibitors, a seven (7) day guarantee may be enough in the Philippines which is also beig
practived

Further, the FDCP proposes that the bill stipulate that only Filipino films shall be
screened and showcased during Philippine Cinema Month, which is scheduled
everySeptember. This is to promote more awareness on the value of the PH film industry
and in support for the country’s local filmmakers.

Meanwhile, it may be recalled that FDCP issued Memorandum Circular 2019-001

The increase in the number of film screens in commercial theaters in the country
created more platforms for producers and distributors to release their titles
commercially. 4Currently, there are around nine hundred twenty 920 screens in the
Philippines. However, foreign films remain to be the most screened in commercial

1
https://www.oecd.org/daf/competition/sectors/1920038.pdf
2
https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=44192&type=sogan&key=8
3
https://www.gv.com.sg/FAQ#/
4
https://www.screendaily.com/features/philippines-film-industry-plots-international-course/5131968.article
theaters, leaving behind local films. 5In 2018, the ratio is seventy percent (70%) foreign
films to thirty percent (30%) local films.

In addition, the trade sector has now recognized the creative industry, which
covers film and audio-visual artistry, as one of the drivers of the economy. 6While the
creative industry contributed 5.44% to the country’s GDP in 2009, 7movie spending
contributed 0.06% to the GDP in 2011, noting that out of the 0.06%, local films
contributed only 0.016% to the GDP and foreign films 0.046%.

With the above in consideration, the Memorandum Circular indicates that all films
booked for theatrical release must open on a Friday of every week unless otherwise
agreed by both exhibitor and distributor or for good cause. This is in order for films to
take advantage of the weekend crowd. Most Filipino prefer to do recreational activities
on Friday and/or weekends and giving them a selection of new movies on a Friday until
weekend will entice them to watch a movie instead of doing something else. This would
be a good venue to market local films.

During FDCP’s consultation with producers, distributors and exhibitors, they were
in agreement that 8many smaller films are at a disadvantage when they open midweek as
they tend to draw a sparse crowd which results in the cinemas pulling them out before
the weekend. Friday opening could draw more cinemagoers at a time when they are free
from the concerns of work and school and are assumed to have more free time to see a
movie.

Furthermore, the Memorandum Circular prohibits split screenings. The rationale

Notwithstanding the efforts of FDCP to come up with policies and programs that
would develop and protect all the players in the film industry, some stakeholders
remained resistant with such initiatives. It is noted that during the implementation of the
Memorandum Circular, 9the Cinema Exhibitor’s Association of the Philippines Inc. (CEAP)
has not adhered to the policy and guidelines while they were consulted and involved
during the crafting of the said policy issuance. Instead, they have challenged the legality
of the document, citing that it is unconstitutional as FDCP has no mandate on matters
related to the theaters’ scheduling of movie screenings. 10CEAP is an association of
different cinema owners and operators in the country responsible for booking of films
that are for exhibition in the cinema/theaters of their members. (Note: To date, the Court
is yet to issue its ruling on the case filed by CEAP after both parties submitted their
comments.)

5
https://www.bworldonline.com/quo-vadis-philippine-cinema/
6
http://industry.gov.ph/wp-content/uploads/2015/05/8th-TID-Ms.-Del-Prados-Presentation-on-Creative-
Industries.pdf
7
https://www.rappler.com/business/1505-movie-spending-contribute-0-06-to-gdp-–-nscb
8
https://www.bworldonline.com/quo-vadis-philippine-cinema/
9
https://www.pep.ph/news/local/144603/cinema-owners-sue-fdcp-for-imposing-unconstitutional-film-
screening-rules-a716-20190717-lfrm
10
https://ceap.com.ph/
As CEAP facilitates booking of movies for most cinemas in the country, FDCP is of
the view that producers and distributors should have the freedom to go directly to cinema
owners for booking of their films. This is to avoid monopoly of movies shown in most of
the screens across the Philippines at a given time. While FDCP acknowledges CEAP’s
contribution in the promotion of local films, said organization should not hinder booking
opportunities for the producers and distributors. On this note, FDCP is of the opinion that
the authority of CEAP to organize a booking committee should be reviewed. This practice
needs to be evaluated considering that no agency has been monitoring the economic
aspect of film distribution and exhibition in the country. 11According to the Department
of Trade and Industry, transactions involving cinemas including its monitoring are not
within their mandate.

Meanwhile, 12in South Korea, the Ministry of Culture, Sports and Tourism is
working on addressing screen monopolies by block buster films and unfair competition
practices in the film industry. The said agency is slated to propose to the parliament for
theater operators not to be allowed to show a single film on more than 50% of screens
nationwide. More than 90% of cinema screens in Korea are owned by oligopoly, thus,
concentration of so many screens is in few hands. This is the same with how the cinema
theaters are run in the Philippines. Most screens are owned by a few companies such as
SM, Robinsons and Ayala, among others.

While South Korea’s proposed policy is not included in the MC 2019-001 as well as
in the proposed bills, FDCP is of the view that such provision could be useful for the
country’s local film industry. This policy would balance the opportunity between block
buster and non-block buster films screened at the same time whether these are foreign or
local films. This will likewise serve as a platform for indie films and films with unpopular
casts to thrive alongside with the blockbuster films.

Indeed, certain rules and guidelines should be put in place to ensure a sustainable
and inclusive approach in promoting and developing the film industry. It is significant that
all film practitioners are given an arena that upholds fair competition and value-driven
practices. Hence, FDCP supports the prospect of enacting a law that would benefit all
stakeholders of the audio-visual industry and optimize the potential of local movies vis-
à-vis the policies on their theatrical release.

11
DTI Letter to FDCP dated 22 November 2019
12
https://variety.com/2019/film/asia/korea-law-limit-film-releasing-monopolies-1203369437/