Philippines: Rappler beats the rap

by Christopher Leahy, ACGA

30 March 2023

The acquittal of Nobel laureate journalist Maria Ressa on tax evasion charges raises hopes of greater state tolerance of critics, writes ACGA Southeast Asia Specialist Chris Leahy

A five-year dispute between independent media website Rappler and the Philippine government ended in victory on 18 January 2023 for the media outlet and its Nobel laureate founder and editor in chief, Maria Ressa, as the Philippines’ Court of Tax Appeals acquitted the journalist and Rappler Holdings Corporation (RHC) of tax evasion.

The original tax evasion charges were brought by the Bureau of Internal Revenue (BIR) under the previous Duterte administration in March 2018 and were widely regarded as politically-motivated. Rappler and the indefatigable Ressa angered Duterte after criticism over his controversial war on drugs that saw thousands of civilians summarily executed by police and vigilante gangs.

The acquittal of all charges against her is widely seen as further confirmation that the new Philippine administration led by Ferdinand Marcos Jr., is adopting a more commercial and less politically-motivated approach to opposition figures, despite the fact that Duterte’s daughter, Sara, is Marcos’ Vice President. Politically rock-solid after receving the strongest popular mandate in Philippine history, Marcos has toned down the rhetoric against civil society and media since his election and has instead focussed on practical policies aimed at reforming the tax code to increase government revenues, continuing major infrastructure programmes and proposing to modernise agricultural farming to boost desperately needed food production.

The decision in favour of Ressa also supports the emerging trend among the new Marcos administration of a more pro-American stance than his predecessor. Marcos has wasted little time in reopening access to several military bases in the Philippines to US forces, denied by Duterte. The pragmatic Marcos, whose kleptocrat father enjoyed US protection even after his ouster and exile to Hawaii in 1986, knows that the Americans are still his best ally and the country’s surest bet to countering increasing regional concerns about China’s growing military belligerence.

The Rappler tax evasion case followed earlier action taken by the Securities and Exchange Commission (SEC) against RHC claiming that its May 2015 placement with US investors, North Base Media and Omidyar Network of Philippine Depositary Receipts, violated the Philippine constitution that bans foreign ownership of media. President Duterte even claimed at one point, without proof, that Rappler was funded by the Central Intelligence Agency. In January 2018, the SEC revoked Rappler’s licence to operate, following which Omidyar Network, philanthropic investment vehicle for eBay founder, Pierre Omidyar, simply donated its investment to Rappler managers.

The BIR then filed its tax case against Ressa and RHC, claiming that RHC acted as a securities dealer during the capital raise, even though it in fact was simply the holding company for Rappler. Philippine Depositary Receipts have been widely used in the past by local media companies to attract foreign investment and the speed with which the BIR brought its tax case, just days after the Omidyar Network donation, offered further evidence that the action was politically-motivated.

The January 2023 Court of Tax Appeals’ decision ordered Ressa and RHC to be acquitted of all four charges brought against them. The court’s cited the prosecution’s “failure…to prove their [Ressa and RHC] guilt beyond reasonable doubt.”

In 2021 Maria Ressa was awarded the Nobel peace prize for her work to “safeguard freedom of expression” in the face of the growing authoritarianism of President Duterte.

About the Author(s)

Christopher Leahy
ACGA Specialist Advisor, Southeast Asia, ACGA

Christopher Leahy
 is a founder of Blackpeak, a leading investigative research and advisory firm founded in Asia. Prior to working in the investigative field, he was a journalist, holding positions as Asian Editor for Euromoney and a contributing editor for AsiamoneyChris began writing for ACGA in 2003, specialising on Southeast Asia. He has written the Indonesia and Philippines chapters in ACGA’s CG Watch report since 2007 and has contributed to other markets as well, including Malaysia, Thailand and Singapore.

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