I. The
Topic
My
topic deals in general with the political economy of mass media in the
Philippines, as it relates to the production and dissemination of news. I would
like it to have the title “The Political Economy of Philippine Mass Media and
the Production of News.” I would like to challenge the grand narrative that the
news media are nothing more than benevolent, disinterested, and neutral
observers whose primordial goal is to tell the truth, which will then allow the
public, ostensibly, to make informed decisions. I will argue that more often
than not, the reverse is happening—that the news media are prone to being used
by vested interests and are failing, in their duty to inform the public. And
this is mainly because mass media have benefited from decades of
constitutionally sanctioned economic protection. The industry is exclusive to
Filipinos, thus closed to foreign equity.
Why am
I interested in this topic? I cannot explain this without going into some
detail about my professional background. I was bent on pursuing a career in
journalism, having been enamored by the perceived glamor of the profession. My
mother however dissuaded me from taking up journalism in college, concerned
over the economic returns of such a plebeian calling. I acceded to her wish as
she was paying for my education. I chose the major corresponding to the general
education subjects in which I had excelled—economics. In my senior year, I got
into the campus paper and thus was able to train in journalism. When it was
time to look for a job, I married both fields as a reporter for BusinessWorld, back then the country’s
top daily business newspaper. I thought I’d give it five years and then move to
another field, say banking. But I stayed on for nearly 12 years, rising from
the ranks: reporter, senior reporter, sub-editor, associate editor, and
finally, research director.
BusinessWorld
was back then one of the few independent national newspapers in the
Philippines. It had a unique setup compared with the others in the industry,
where most owners of media outfits also hold other business interests. In
BusinessWorld Publishing Corp., as much as 70 percent of the shares of stock
were held either directly by pioneer employees or indirectly by all regular
employees through a provident fund. When editor-publisher Raul L. Locsin formed
the newspaper in 1987 as the successor to the shuttered BusinessDay newspaper, he held the majority stake. (A loan extended
by businessman Enrique Zobel was later converted to 30 percent equity. At any
rate, Zobel was a minority shareholder and had no management and editorial
control.) Later, Locsin, a Ramon Magsaysay Awardee, donated his shares to the
employees through the provident fund. As a result, the employees got to enjoy
the fruits of their labor through better-than-industry-average compensation,
three extra months of bonuses, and profit-sharing. BusinessWorld was the envy
of the newspaper industry.
More
than that, the paper was editorially independent. There were no sacred cows, be
they in government or in business. Reporters got free rein to pursue their
scoops. The editors issued no injunctions versus stories critical of whoever
was in power, advertisers big or small, or even shareholders (RCBC
Vice-Chairman Cesar Virata was an independent director). Only that the
reporters kept their noses clean.
I
wrote stories critical of the Arroyo administration, particularly its broken
budget policies and disjointed trade policies. One particular story that caught
attention was that the Japan-Philippines Economic Partnership Agreement allowed
duty-free entry to toxic waste. Another was an expose about a questionable deal
involving land reclaimed from Manila Bay, which won an award from the
prestigious Jaime V. Ongpin Awards for Investigative Journalism.
“A
newspaper is a public trust,” was the motto on the BusinessWorld masthead. That
was how Locsin viewed the paper’s mission. It was like holding a public office.
He was not without his faults. This desire for independence went to the extent
of forbidding his employees from organizing a labor union that would have a say
on hiring and firing. A strike had forced him to shut down the paper’s predecessor,
BusinessDay, in 1987.
The
entire staff nonetheless looked up to Locsin, who relentlessly guarded the
paper’s independence until his death in 2003. The story that went around was
his tussle with PLDT. The paper published a story that the publicly listed
telecom giant didn’t like. PLDT henceforth withdrew all its advertisements from
BusinessWorld in retaliation for the negative publicity that the story had
caused. Six months later, PLDT came knocking at the door, wanting to place an
advertisement. Locsin declined and said it was PLDT’s turn to wait for six
months.
I left
the paper last year. It was the only employer I knew from graduation. But I
felt burned out and wanted to look for other work experiences. Plus, the paper
was headed for financial trouble, the only solution being capital infusion from
the minority shareholders. Advertising and circulation revenues were at record
lows. Competition from two newer business dailies (BusinessMirror and Malaya
Business Insight) was also tough. At that time, the PLDT group under Manuel
V. Pangilinan had acquired the 30 percent stake of Enrique Zobel in
BusinessWorld that was inherited by his son, Iñigo. Iñigo didn’t want to have
anything to do with a media asset. True enough, PLDT ended up owning a
controlling stake in BusinessWorld that year. It was truly the end of an era of
independent journalism.
Today,
the closest thing to the Locsin style of newspapering would be Malaya Business
Insight, the former Ang Pahayagang Malaya
of Joe Burgos that was bought by veteran business journalist Jake Macasaet and was converted into a
business paper a few years ago. Macasaet’s paper survives partly
on subsidies from the Filipino-language tabloid Abante and Abante Tonite.
Until how long?
Independent
reporting, I feel, is what’s lacking in the industry today. It’s a situation
where the major players like the Philippine
Daily Inquirer, the Philippine Star,
ABS-CBN Corp., GMA Network, Inc., and ABC Development Corp. (TV5) — mostly led
by big conglomerates — are thriving amid a commercialism that tends to be at
the expense of independent reporting. It’s also a situation in which
journalists may not be getting adequate compensation and benefits. To my mind,
these and other factors have contributed to the general lowering of
journalistic standards in what is supposed to be Asia’s freest fifth estate.
What
is at stake for me here? As an instructor in one of the country’s centers of
excellence in journalism education, I specialize in business, economics, and
other advanced reporting topics; newsroom management; and the use of
information technology in reporting. As a researcher, I’d like to look into the
politics of mass media in the Philippines, and the economics of such a highly
protected industry. I’d like such studies to become chapters in a future book
on journalism practice and methods.
II.
The Research Questions
In the Philippines, mass media ownership is
restricted to Filipino citizens or corporations, cooperatives, or associations
wholly owned and managed by Filipino citizens. The injunction is by no less
than the Constitution (Article XVI, Section 11), and enforced by the President
through the Foreign Investment Negative List, which is currently on its ninth
edition. Working amid a prevailing nationalist sentiment following the
overthrow of the Marcos dictatorship, the framers of the Constitution sought to
protect sectors of the economy deemed critical to national interest, including
land, the practice of professions, education, and public utilities. No foreign
equity was allowed in mass media ostensibly to shut out foreign propaganda and
keep control of the media discourse in the hands of Filipinos. The 1987
Constitution, however, was contemplated prior to the explosion of cable
television and, much later, the emergence of the Internet as a new medium.
Foreign publications such as Time
magazine, the Wall Street Journal,
and the Financial Times have also
been freely circulating through local distribution channels.
My
preliminary observation is that under a regime of protectionism, mass media
owners have built a formidable political influence and used it to their economic
advantage, to the detriment of the public. It could also be partly responsible
for the quality of media output as well as working conditions. Also because of
lack of foreign competition or equity, firms may not be operating efficiently.
The research questions are:
a. To what extent have mass media players
benefited from protectionism? Did they benefit economically, and by how much?
How efficient (or inefficient) have mass media outfits been under
protectionism?
b. How have ownership and funding sources
affected media content? Did mass media owners exert political influence? How?
c. Is it time to ease foreign equity
restrictions on mass media? To what extent should the industry be liberalized?
These
questions are more important than the others primarily because the prevailing
regulations have stifled independent reporting to the detriment of the public,
whose interests may not be the only considerations in the minds of the media
elites. In fact, foreign equity restrictions in mass media have not
led to dispersal of ownership to Filipino investors. Only two television
networks (ABS-CBN and GMA Network) and one national daily newspaper (Manila
Bulletin Publishing Corp.) are listed on the Philippine Stock Exchange (PSE).
Only one radio network, Manila Broadcasting Co. (DZRH), is listed on the bourse
but is an inactive issue.
Even then, public investors are a minority, thus
without significant influence in management and more so, media content. Data
from the PSE show that ABS-CBN, which is controlled by the Lopez family’s Lopez
Holdings, Inc., has a public float level of only 45%. Rival broadcaster GMA
Network, jointly owned by three influential families, has a public float level
of only 24.99%. Manila Bulletin,
acquired by the late Emilio Yap from Marcos associate Hans Menzi, has a float
of just 21.51%. The inactive Manila Broadcasting Co., controlled by the
Elizalde family, has the lowest float level of 10.19%. The public at large
cannot become part owners of other mass media industry leaders, namely ABC Development
Corp. (TV5), Philippine Daily Inquirer, Inc. (Philippine Daily Inquirer), and
Philstar Daily, Inc. (Philippine Star), as their shares of stock are not
publicly listed. Under
a regime of no foreign equity, industry leaders have obtained solid market
shares and high profitability.
More
recently, the acquisition of the Pangilinan-led PLDT group of television (TV5),
radio (NBC), and newspaper (Inquirer, Star, BusinessWorld) assets in addition
to existing telecommunications operations has raised the issue of mass media
cross-ownership and the lack of a competition policy. Pangilinan’s business
rival, San Miguel Corp. President Ramon S. Ang, has also invested in a major
broadcast network (GMA Network), although in his personal capacity. This was
after Pangilinan’s failed bid to acquire a stake in the same broadcast firm
after negotiations with the Gozon, Duavit, and Jimenez families—the main
shareholders—fell through.
The
country’s trading partners, in particular the United States and the European
Union, have long requested the Philippines to open up mass media ownership to
foreign equity as part of a broader push to liberalize trade in services. In
its most recent trade policy review for the Philippines, the Geneva-based World
Trade Organization likewise said: “In spite of the Government's concern about the Philippines sub-optimal
record of attracting investment, compared with other ASEAN countries, and its
determination to change this situation, there remain extensive constitutional
and statutory limitations on foreign investment.”
III. The Approach
My
approach to obtaining the answers to the research questions would be a mix of
empirical positivism and critical analysis. First, an empirical approach would
be needed to establish the fact that media owners have benefited immensely from
constitutional ownership restrictions. There will be a need to quantify these
economic gains with the use of financial disclosures and other relevant
documents. A quantitative approach will also be used to study productive efficiency
(e.g. data envelopment analysis, total factor productivity). The empirical approach is needed if the goal is to convince those in power of the need to amend the fundamental law of the land and allow foreign investments in mass media.
For
the latter, I would like to be guided by the conceptual framework developed by
Herman and Chomsky in their seminal work Manufacturing
Consent: The Political Economy of the Mass Media. Critical analysis of content fits the task. Herman and Chomsky clearly
situate the mass media in the realm of political economy through their stinging
critique of the media power structures that control content and as a result,
produce conformity without resistance. They proposed a “propaganda model”
explaining the behavior of media elites, exposing as antidemocratic the very
institutions supposed to function as bastions of democratic ideals.
The
propaganda model suggests that the media serve a “societal purpose,” but not in
the egalitarian sense that allows the public to participate meaningfully in the
democratic processes. Rather, media’s societal purpose is actually to
“inculcate and defend the economic, social, and political agenda of privileged
groups that dominate the domestic society and the state.” Media function as
such through the “selection of topics, distribution of concerns, framing of
issues, filtering of information, emphasis and tone, and by keeping the debate
within the bounds of acceptable premises.” Based on this model, information
goes through several “filters”: the owners, financial sources (advertisers),
relationships with official sources of information, pressure groups that
provide adverse criticism, and ideology.
Echoing Herman and Chomsky, I believe that this propagandist bent and its filters must be overcome. One way is by encouraging alternative media outfits. Alternative media should challenge well-entrenched editorial biases and propaganda masquerading as facts. They may have biases of their own, and this is unavoidable. At the very least, they have to be honest about it. The good thing is that this is becoming a reality online, with the increasing popularity of blogging and social media tools like Twitter and Facebook. What Kovach and Rosenstiel call "industrial journalism" won't fade away, but the old guards will have to contend with instant fact-checking, feedback, and reprisal from a more engaged web audience. This is all good for democracy.
