Media Law Prof Blog

Editor: Christine A. Corcos
Louisiana State Univ.

Tuesday, November 10, 2009

Philippines Mass Media Law and Foreign Ownership Rules

Diane Alferez Desierto, Yale Law School, has published "Restriction and Rhetoric: A Critique of the Constitutional Prohibition Against Foreign Ownership in Philippine Mass Media," forthcoming in the Journal of Applied Economy. Here is the abstract.
The total prohibition against foreign ownership of Philippine mass media exemplifies a broader polemic on nationalism - as a legitimate priority for constitutional protection, as opposed to being an appealing mass strategy for political rhetoric. Within this theoretical setting, I propose a differentiated analysis of the issue of foreign ownership prohibition in mass media. I draw three (3) brief lines of critique against the total prohibition of foreign ownership of Philippine mass media. First, I dispute the traditional "public interest" justification for barring any form of foreign ownership in mass media in the Philippines, showing that the fear of "foreign influence" over media content is dependent on an asserted political truth that is in no way self-evident, much less materially relevant from apparently (and already) "internationalized" Philippine media practices. Second, I question the implicit assumption that foreign ownership restrictions improve economic growth through wholly-owned Filipino companies, showing that there is no strict causal nexus between total exclusion of foreign ownership and the improvement of shareholder value of Philippine mass media companies. In fact, as many empirical studies affirm, at least some degree of foreign ownership, even in media sectors, has tended to improve domestic economic growth in developing countries, through the infusion of necessary capital and the dismantling of monopolistic structures.

Third, and most crucially, I argue that the constitutionalization of the complete prohibition against foreign ownership merely creates a convenient ideological cover that locks in specific and entrenched oligarchic interests which have long since dominated Philippine mass media. Instead of being a significant constitutional policy, "nationalism" acquires disutility through its reduction to mere inflammatory political rhetoric, as in the case of the foreign ownership prohibition in mass media. The latter not only stifles open competition in providing the service of access to information, but more problematically, denies genuine contestation in a fully democratic marketplace of ideas envisioned in the 1987 Philippine Constitution. By pre-committing the Philippines to an absolute and total constitutional prohibition against foreign ownership of mass media, the 1986 Constitutional Commissioners inadvertently achieved perverse results antithetical to the goals of national development and social equality. Thus, in order to avoid this disingenuous locking in of special interests in Philippine mass media in the guise of nationalist rhetoric, I advocate a de-constitutionalization of the total prohibition of foreign ownership in Philippine mass media and advertising, in order to turn the issue over to more flexible and open legislative processes of speech and debate, and concomitantly, to cyclically-repeated exercises of public auditing.

Part I juxtaposes the constitutional and legal framework of foreign ownership with the present structure of Philippine mass media ownership, pointing out key political and legal institutions that have traditionally protected specific family or oligarchic interests in Philippine mass media. Part II discusses public interest, economic, and sociological lines of critique against the constitutional prohibition against any foreign ownership in Philippine mass media. Part III then argues the proposal for de-constitutionalization, and concludes that the presence or extent of any foreign ownership restriction in Philippine mass media can be better debated, vetted, and adjusted through the dynamic interaction between legislative controls and the unprecedented expansion of judicial review under the 1987 Philippine Constitution.

Download the paper from SSRN here.

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