DTI exec: Film industry 'highly dependent' on freelancers, should be looked into

The country's movie and TV industry is "highly dependent" on freelance workers and it should be looked into, a Department of Trade and Industry (DTI) official told lawmakers Tuesday.

"Our study showed the industry is highly dependent on freelancers, and we need to look into that because even big studios could only hire full-time workers in limited numbers," Assistant Director Jo-Dann Darong of the DTI's competitiveness bureau said in a hearing by the House Committee on Creative Industry and Performing Arts.

"These unorganized film workers and technical crews in the Philippines may have resulted in bargaining down pay and other compensation items."

As of 2018, there are only 5,927 fully employed individuals in the motion picture, video and television industry (MPVT), Darong said, adding it is unlikely that the figure has increased due to the COVID-19 pandemic.

"This (5,927 figure) is as of 2018 which is the last census, and we really need to provide data on those employed as freelance workers," Darong said.

"We need a lot of effort in making sure that the official statistics are available because the freelance workers, the self-employed ones, are the ones pushing the agenda and generating revenues in film production and stages," he added.

The House panel probe, sought by Las Piñas Representative Camille Villar, looked into the plight of Philippine cinema aimed at generating employment in movie productions, reviving Philippine cinema's golden era and maximizing efforts to secure the country’s first nomination or win in the Academy of Motion Pictures and Sciences.

COVID-19 pandemic

Darong said the pandemic has resulted in constrained movie production process, with studios being confined to a production bubble or confining the entire cast and crew in one location to prevent COVID-19 transmission.

He said this setup resulted in scheduling problems for many freelancers who are now forced to commit to being present in the production bubble, limiting the number of engagements they can do.

"This (production bubble) also entailed added cost for the producers which would increase the investment necessary to produce a movie," the DTI official said.

And while Filipino film workers have adequate level of skills, Darong said there is a need to enhance their competencies by engaging them in training and workshops abroad.

"There are emerging new competencies that need to be embraced by the Filipino film workers and players so we can globally compete," he said.

Aside from restricting production, Darong said the COVID-19 pandemic also reduced earnings from the Metro Manila Film Festival (MMFF), noting that box office revenue in 2020 only reached P50 million or way behind pre-pandemic earnings of P995 million in 2019 and P1.06 milion in 2018.

"There is really a need to look at revenue sources and reduce cost associated, transactional or not, in establishment and production of film," Darong said.

High taxes

Lawyer and film producer Joji Alonso agreed, saying that a box-office film, which grossed at least P100 million, could still result in losses for that movie’s producer due to high taxes.

She cited that a film producer would need to pay for the following:

• 10% amusement tax
• 20% value added tax (VAT)
• 5% distribution fee and
• 25 to 35% income tax for cast and crew

"In all aspects such as pre-production, principal photography and post-production, film producers pay all the withholding taxes and VAT of the artists, staff and crew," Alonso said.

By Alonso's computation, a film that grossed P100 million in the box office would be left with just P37,620,000 million after paying amusement tax, VAT and distribution free alone.

"For a film with a production cost of P50 million, a producer loses P12,380,000 million. If a producer does make a profit, the corporation pays an income tax of 20 to 25%, and in the case of single proprietors, they pay taxes as high as 35%. Most movies released in 2022 did not even reach P10 million in gross sales,” Alonso pointed out.

Both Darong and Alonso appealed for government support in the movie industry.  —KBK, GMA Integrated News