Philippine regulator revokes news site's license over ownership rules, media outraged

MANILA (Reuters) - The Philippine corporate regulator has rescinded the operating license of an online news platform that has been critical of President Rodrigo Duterte’s policies, arguing it used a “deceptive scheme” to violate restrictions on foreign ownership rules.

A guard opens a door at the office of Rappler in Pasig, Metro Manila, Philippines January 15, 2018. REUTERS/Dondi Tawatao

The Securities and Exchange Commission (SEC) on Monday said news website Rappler (( had violated foreign equity restrictions on domestic media because it “sold control to foreigners”, a decision Rappler said was baseless because its two foreign investors owned no shares in the company.

SEC Secretary Armando Pan said the Jan. 11 decision announced on Monday was, however, “not final and executory”, and Rappler “may continue” to operate pending appeal.

Philippine journalist groups expressed outrage at the decision against Rappler, which has had a rocky relationship with Duterte, who has publicly vented his annoyance at its reporting and said it was entirely owned by Americans.

It is the latest critic or opponent of Duterte to be subjected to legal scrutiny brought about by the president’s political allies, some apparently in response to his frequent public outbursts against his detractors.

Solicitor General Jose Calida, who took the case to the SEC, said the outcome showed that even influential media could not skirt constitutional restrictions.

Rappler said its filings to the SEC in 2015 made it clear that just like several other media outlets, foreigners had invested in some of its Philippine Depositary Receipts (PDR), but did not own any shares, or have a say in operations.

It said it would appeal, and operate as normal.

“We will continue to hold power accountable and we will continue to tell the truth,” Chay Hofilena, Rappler’s acting managing editor, told reporters.

“This has been a continuing wave of harassment ... Now it’s out there in the open, we know how to deal with it.”


Rappler has not shied away from challenging Duterte and its reporters have frequently been threatened by his online army of supporters, often in response to social media postings by pro-Duterte bloggers, some in government.

It has published investigations critical of what its chief executive Maria Ressa said was the administration’s “weaponising” of the internet and creation of “an ecosystem used to cripple journalists”.

The administration has rejected that and Duterte has previously said he has no need for anyone to defend him.

The Foreign Correspondents Association of the Philippines said the SEC ruling was “tantamount to killing” Rappler, and “sends a chilling effect to media”.

The National Union of Journalists of the Philippines called on media to resist intimidation and said the decision was “but one of many threats Duterte has made against media critical of him and his governance”.

The move against Rappler comes at a challenging time for press freedom in Southeast Asia. Journalists are still being jailed in Myanmar even though decades of rule by a junta that tightly controlled the media has given way to a government led by Nobel peace laureate Aung San Suu Kyi.

A crackdown on critics of Cambodian Prime Minister Hun Sen has led to the dissolution of the main opposition party and action against some independent media.

Media freedom watchdog Reporters Without Borders last year said the Philippines was fairly free and diverse, but dangerous for the media.

In its 2017 annual report, it said the Duterte “has alarmed media freedom defenders with his unveiled encouragement of violence against journalists”.

Duterte’s spokesman, Harry Roque, said the SEC decision was about complying with the constitution, not infringing on press freedom.

“No one is above the law,” he said. “Rappler has to comply.”

The two U.S.-based organisations that invested in Rappler are Omidyar Network, created by eBay founder and entrepreneur Pierre Omidyar, and North Base Media, which advocates independent media and was founded by three prominent foreign journalists.

SEC Commissioner Antonieta Ibe told Reuters the decision was carefully reached and was not an attack on the media.

The decision could put into question other media groups that have issued PDR, including ABS-CBN and GMA Network, said Luis Teodoro, a former journalism professor at the University of the Philippines. “Do all that issued PDR have foreign ownership? Will the certificate of incorporation of the others also be cancelled?” Teodoro told DZMM radio.

Additional reporting by Manolo Serapio Jr in MANILA and John Chalmers in JAKARTA; Writing by Martin Petty; Editing by Robert Birsel