PHILIPPINES Trends and Developments Contributed by: Ignatius Michael Ingles, The Law Firm of Ingles Laurel Calderon
taxes collected on imported athletic equipment shall be automatically remitted directly to the Commission and are hereby constituted as the National Sports Development Fund. Further, the Philippine Postal Service Office is hereby author - ized to print paper and gold stamps which shall depict sports events and such other motif as the Philippine Postal Service Office may decide, at the expense of the Commission. Any deficiency in the financial requirements of the Commission for its sports development program shall be covered by an annual appropriation passed by Congress” . The PSC Before moving into the arguments, a quick over - view of the PSC is necessary. The PSC is the government agency tasked with formulating policies for national sports and providing fund - ing to local sports federations or national sports associations (NSAs) in the Philippines. It was created in 1990 by the Philippine Sports Com - mission Act. The policy behind the creation of the PSC is contained in Section 2 of the Philip - pine Sports Commission Act. It states: “It is the policy of the State to promote physical education, encourage and sustain the develop - ment of sports in the country to foster physical fitness, self-discipline, teamwork and excellence for the development of a healthy and alert citi- zenry through a unified national sports promotion and development program, and that the estab - lishment and creation of a single, unified and integrated national sports policy-making body shall further this objective” . The PSC has a number of legally mandated functions. It must plan and oversee any bids to host the Olympic Games. It is also responsible for establishing, supervising, maintaining and managing publicly-funded sports complexes.
Additionally, it must provide incentives, recogni - tions and awards to athletes, coaches, referees and other sports stakeholders. The PSC is empowered to assist and support NSAs, which are legally recognised as being autonomous but still fall under the supervisory and visitorial powers of the PSC. The PSC allo - cates much-needed funding to certain NSAs, especially those NSAs whose sports have a good chance of bagging medals in the Olym - pics and other prestigious international sports events. Given the huge amount of money need - ed to support a potential Olympic medallist, this funding from the PSC is essential and is why Coach Guiao filed his petition in the first place. Proceedings As part of his evidence, Coach Guiao offered two PAGCOR memoranda which sought to remit just a little over 2% of its earnings to the PSC. This was well below the 5% requirement under the law. The memoranda were then approved by then President Fidel V. Ramos. To justify its practice, the PAGCOR claimed that it was not mandated to remit the entire 5% of its gross income. It argued that any remittance to the PSC was subject to deductions for the payment of PAGCOR’s 5% franchise tax owed to the national government and the 50% share of the national government. The PAGCOR relied on an old Presidential Decree that imposed a 5% franchise tax on it before any other deduction was made. In short, the PAGCOR was under the impression that its PSC contributions were considered “any other deduction” that should take a backseat to its 5% franchise tax obligation.
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