The yearly Metro Manila Film Festival (MMFF) is considered by American filmmakers as a market access issue that US trade officials should address.
"During typical film festivals, such as the annual MMFF in December, only local independent films are allowed to screen. Such restrictions without flexibility limit screen time for US films during peak annual movie-going times and depress investment in the sector by limiting the ability of cinema owners to program their theaters according to market demand," the Washington, DC-based Motion Picture Association (MPA) told the Office of the United States Trade Representative (USTR) back in October.
Boasting on its website as "the leading advocate of the film, television, and streaming industry around the world," MPA groups Hollywood's who's who movie studios—Netflix Studios LLC, Paramount Pictures Corp., Prime Video and Amazon MGM Studios, Sony Pictures Entertainment Inc., Universal City Studios LLC, Walt Disney Studios Motion Pictures, and Warner Bros. Discovery.
The 50th staging of the MMFF in 2024 showcases 10 Filipino movies from Christmas Day until Jan. 7 of next year.
According to reports early this year, the 2023 edition of MMFF generated a record-high P1.07 billion in total gross receipts.
Aside from the MMFF considered by MPA as a "screen restriction" that needs to be addressed, Hollywood also complained to the USTR about movie industry taxation in the country.
"Film companies doing business in the Philippines are subject to some of the highest taxes in the Asia-Pacific region. Foreign companies are burdened with a 30-percent income tax on net profits, a five-percent withholding tax on gross receipts chargeable to income tax liability, and a 10-percent tax on the distributor's share of the box office," MPA noted.
"A municipal license tax of 0.75 percent of a company's prior year gross receipts is also imposed on motion picture companies. Moreover, the Philippines imposes a tax on all related advertising materials and royalty remittances," it added.
For MPA, the Philippine film industry's tax regime is "oppressive," hence "harms the continued development of a legitimate audiovisual (AV) marketplace."
MPA likewise lamented foreign ownership restrictions in the domestic film industry, which the group urged to be scrapped.
"Foreign investment in mass media, including film distribution and the pay-TV and terrestrial broadcast sector, is prohibited under the Philippine Constitution of 1987. However, 40-percent foreign direct investment (FDI) is allowed in the telecom sector. Disparate treatment of these related network-based industries discourages business development in a capital-intensive sector," MPA said.
"These restrictions impede investment in innovative and creative sectors, limit consumer choice, and favor domestic investors. Such restrictions are also outdated in the digital and internet era, which has upended traditional definitions and structures in the 'mass media' industries. Such restrictions should be removed," according to MPA.