Ad sector won’t lose self-regulation

Self-regulation, which has been a mainstay of the local advertising industry, would be retained despite the relaxing of restrictive provisions in the Constitution through Charter change (cha-cha).

The sought amendments include allowing full foreign ownership in the advertising sector.

Cagayan de Oro Rep. Rufus Rodriguez, chairperson of the House Committee on Constitutional Amendments, allayed fears domestic advertisers would be on the receiving end of the cha-cha campaign.

“We are focused on the ownership issue. There is no plan to disturb whatever internal arrangements exist in the ad industry like self-regulation. I will not support any proposal to change that,” Rodriguez, a staunch proponent of cha-cha, said on Saturday.

Rodriguez’s remarks came in response to the concerns aired by local advertising stakeholders during the Senate hearing on Thursday on Resolution of Both Houses (RBH) 6 which seeks to ease the constitutional restrictions on foreign ownership of public utilities, educational facilities, and the advertising industry.

The plan to liberalize the advertising sector by opening it up to full foreign ownership has met with opposition from several stakeholders such as the Philippine Association of National Advertisers (PANA).

Expressions of fear

PANA raised concerns that liberalization “may increase the Philippines’ dependency on foreign investments in the advertising sector.”

In a position paper, PANA explained that while foreign direct investments can bring in capital and expertise, overreliance on foreign firms could undermine the development of domestic capabilities and hinder the growth of indigenous advertising agencies.

Moreover, it warned that the inrush of international players to the Philippines would pose a formidable threat to domestic advertising firms, which may not be able to keep up with the foreign competitors.

Meanwhile, DDB Group Philippines, which is 97-percent locally owned, expressed concern that once foreign ownership is allowed, the expenditures that would be drawn from advertising will go overseas.

Ad Standards Council legal counsel Rudolph Jularbal, however, leaned toward the contrary.

Jularbal said foreign ownership would not be a problem as long as self-regulation in the local ad sector “is functional, regardless of the ownership of advertising agencies.”

Rodriguez’s remarks came in response to the concerns of local advertising stakeholders during the Senate hearing.

“Content will be effectively regulated,” he said.

Rodriguez, who said that Congress might alter the percentages of ownership of advertising companies from the present 70-percent Filipino and 30-percent foreign, did not buy the idea that the entry of foreign investors would not add value to an ad agency.

“The infusion of additional funds in a business organization, whether in the ad industry or any other sector of the economy, always adds value to that entity,” Rodriguez said.

Independence not affected

Rodriguez also dismissed fears about editorial independence and advertisers dictating content, asserting that editorial independence would be left to the best judgment of the ad agencies.

The ad content would also be left to the discretion of both the advertiser and the ad agency, according to the solon.

Congress, particularly the House of Representatives, is adamant that lifting the economic restrictions of the 37-year-old Constitution would lure more FDIs into the country, which would result in generating thousands of jobs for Filipinos.

Attempts to revamp the Charter had failed in past congresses due to suspicions the move was a veiled bid by politicians to lengthen term limits and perpetuate themselves in power.

Several experts believe that economic growth could be attained without tinkering with the Constitution if the government concentrates on enforcing existing laws and combating corruption.

In March, the House of Representatives approved its RBH 7, which mimics the Senate’s RBH 6, with the only distinction being the manner of voting on the constitutional amendments.

We are focused on the ownership issue. There is no plan to disturb whatever internal arrangements exist in the ad industry.