A bleak storyline for the Filipino film industry

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Piracy, Hollywood competition and low incomes take their toll

By Carlos H. Conde
International Herald Tribune
Published: February 11, 2007

MANILA: Dominic Du, a Chinese-Filipino businessman, stopped producing movies in 1996 because in the five years that he spent making mostly action films, he never made a profit.

“I lost a total of 100 million pesos,” Du said. “I lost my shirt. Those were the worst years of my life.”

But Du’s $2.1 million loss did not drive him out of the movie business. These days, he works at the National Cinema Association of the Philippines, an industry group. His main task is scheduling dates for movies that are to be shown around the country.

This is not to say, however, that his heart no longer bleeds. “What is written here,” Du said, jabbing his finger at a pile of movie schedules, “is a testament to the collapse of the Philippine movie industry.”

Just 17 Filipino-made movies have been scheduled through June, Du said. By contrast, he has scheduled 21 foreign films for the first half — from just one of the Hollywood studios, Columbia Pictures.

“We used to produce more than 200 films a year,” Du said. But since 1997, right after the Asian financial crisis that devalued the peso, Filipino movies became fewer. Last year, only 56 films were made. It was likely, Du said, that only 30 films would be produced this year, making it the least ever.

In the country that produced “The Blossoming of Maximo Oliveros,” a coming-of-age story of a gay teenager that has won several international awards, the film industry is beset with problems, supporters say: domination by Hollywood movies, rampant piracy, overtaxation and a poor economy. More so than other developing Asian economies, the Philippines movie business has been eroding for years, and few see any hope for a comeback.

Although Hollywood has long been a part of the movie industry in the Philippines, which is a former U.S. territory, experts said its dominance was never like this. “Hollywood competition is out of control here,” said Tilman Baumgaertel, a professor at the University of the Philippines Film Institute. “It has been bulldozing the local market.”

Last year, “Superman Returns” was the top-drawing movie in the Philippines, and the top 10 included just one local film, “Sukob (The Wedding Curse).”

For both local and imported films, though, the cost of a night at the movies is daunting for many residents, said Leo Martinez, an actor who is also the director general of the Film Academy of the Philippines. “A poor or lower middle-class family earning 400 pesos a day — these are the majority of Filipinos — cannot afford to spend 500 pesos a week on movies,” he said.

These families either stay at home to watch television or they buy bootlegged discs. A pirated video compact disc movie here can be had for less than a dollar — 20 to 40 pesos — while a DVD is usually 50 to 80. A movie ticket, meanwhile, typically costs 75 to 100 pesos.

Industry leaders claim their business is the most overtaxed in the world and that, in part, is what leads to relatively high-priced admissions. Aside from the national government’s 12 percent value added tax, there are the 30 percent amusement tax levied by local governments, taxes on film stock and other equipment as well as fees for permits. All in all, Martinez said, more than half of a film’s revenue goes to the government.

The Philippine government does give tax rebates in an effort to encourage the production of high-quality movies. But only nine of the 150 or so films produced from January 2003 to January 2006 received such a rebate. In 2001, President Gloria Macapagal Arroyo asked town and city mayors to reduce the entertainment tax; a few did, but most did not.

“The industry is floundering because it is being milked too much,” Martinez said.

While other Asian countries have increased their number of movie screens, the Philippines is consistently losing them. According to a report by the European Audiovisual Observatory, the Philippines had 970 screens in 1997. Last year, the number had shrunk to 600, Du said.

The Philippines also registered the world’s steepest drop — more than 50 percent — in theater admissions, to 63 million in 2004 from 131 million in 1996, according to the observatory, an organization that tracks trends in the film, television, video and multimedia industries.

Although the Philippines still has the highest number of theater admissions in Southeast Asia, that may not last long. Indonesia, the most populous country in the region, had 42 million admissions in 2004, up two million from a year earlier. In that period, Philippine admissions dropped to 63 million from 80 million. Du forecast that admissions would drop to 30 million in the next two years.

The film industry is certain that piracy plays a far larger role here than elsewhere. According to Du, 4.5 billion pesos, or $92.8 million, worth of pirated movies were sold in the country in 2005. That year, the gross box-office receipts of Filipino movies was 2.8 billion pesos.

Havoscope, a U.S. company that tracks what it calls illicit markets, estimates the market for pirated movies in the Philippines at $33 million.

Faced with all these problems, Philippine filmmakers are at their wit’s end, said Martinez of the film academy. Suggestions to impose huge taxes on Hollywood films instead of local movies, or to put a cap on the number of foreign films being distributed here never got off the ground.

But Baumgaertel, the film professor, said that Filipino filmmakers could start thinking of ways to penetrate the international market, particularly the millions of overseas Filipinos, and take advantage of the talents of an emerging generation of Filipino filmmakers.

“This,” Baumgaertel said, “is the silver lining that I see.”