Republic of the  Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City
NINETEENTH CONGRESS
Second Regular Session
HOUSEBILLNo.   9710
RECEIVED
DATRE±±2m8
Introduced by Representative Ramon Rodrigo L. Gutierrez
EXPLANATORY NOTE
The grant of franchise is a  special  privilege that constitutes a right and a duty
to be performed by the grantee. The grantee must not perform its activities arbitrarily
and whimsically but must abide by the limits set by its franchise and strictly adhere to
its terms and conditions. A corporation as a creature of the State is presumed to exist
for the  common  good.  Hence,  the  special  privileges  and  franchises  it  receives  are
subject to the laws of the State and the limitations of its charter. There is therefore a
reserved  right of the  State to  inquire  how these privileges  had  been  employed,  and
whether they have been abused,t This right of the State is vested  in Congress in the
exercise of its oversight function.
It is Congress that prescribes the conditions on which the grant of the franchise
may be made. Thus, the manner of granting the franchise, to whom it may be granted,
the mode of conducting the business, the charter and the quality of the service to be
rendered,  and  the  duty of the  grantee  to the  public  in  exercising  the franchise,  are
almost always defined in clear and unequivocal language.2
Further,  not  only  does  Congress  has  power to  grant  a  legislative  franchise.
Article XII, Section 11  of the Constitution expressly states that "Neither shall any such
franchise  or  right  be  granted  except  under the  condition  that  it  shall  be  subject to
amendment,  alteration,  or  repeal  by  the  Congress  when  the  common  good  so
requ/`res". Thus, the grant of a franchise will always be a privilege and not a right, as it
is imbued with public interest.
The   Committee  on   Legislative   Franchises  was   able   to   identify  numerous
transgressions  and  abuses  on  the  part  of  franchise  grantee  -  Swara  Sug  Media
Corporation   (SSMC)  which  operates  under  the   business   name  Sonshine   Media
Network International (SMN I). In the conduct of its hearings to deliberate on the issues
raised  by  Honorable  David  Jay-Jay  Suarez  in  his   Privilege  Speech  delivered  on
November 28,  2023  on  the alleged  fake  news  peddling of SMNl,  as well  as,  House
Resolution No. 230 and House Resolution No.1428 on the alleged fake news peddling
and baseless red-tagging of individuals, groups, and organizations by SMNl and grave
threats against Rep. France Castro, the following facts were established:
1 Jaworski vs.  PAGCOR, G.R.  No.  144463, January 14,  2cO4.
2  Byung vs.  PAGCOR, G.R.  No.  163553,  December 11,  2009.


Swara Sug Media Corporation was granted its original franchise under Republic
Act 8122  on  July  16,1995.  In  2019,  Republic Act  11422 was enacted  renewing the
Same.
In the course of its operation,  however,  Swara  Sug committed  multiple grave
infractions in violation of its franchise grant.
First, Swara Sug violated See.10 of its grant. Section 10 of RA 11422 provides:
"SEC.  10.  Sale,  Lease,  Transfer,  Grant  of  Usufruct,  or Assignment  of
French/.se.-The grantee shall not sell, lease, transfer, grant the usufruct of, nor
assign  this  franchise  or  the  rights  and  privileges  acquired  thereunder  to  any
person, firm, company, corporation or other commercial or legal entity, nor merge
with any other corporation or entity,  nor shall transfer the controlling interest of the
grantee,  simultaneously  or  contemporaneously,  to  any  person,  firm,  company,
corporation, or entity without the prior approval of the Congress of the Philippines.
Congress  shall  be  informed  of  any  sale,  lease,  transfer,  grant  of  usufruct,  or
assignment of franchise or the rights and privileges acquired thereunder, or of the
merger or transfer of the controlling interest of the grantee, within sixty (60) days
after the  completion  of the  said  transaction.  Failure  to  report to  Congress  such
change of ownership shall render the franchise ipso facto revoked. Any person or
entity to which this franchise  is  sold, transferred,  or assigned shall  be subject to
the same conditions, terms, restrictions, and limitations of this Act.
During  December 5,  2023  hearing,  it was established,  and  admitted  by SMNl
that there were changes  in  the  corporate structure  of the  Grantee and  that no such
prior approval was  given  by Congress.  In  this  case,  the  majority owner of Grantee-
Swara Sug,  The  Executive Pastor of the  Kingdom of Jesus Christ, the  Name Above
Every  Name,  Inc.,  effected  several  changes  that affected  its  ownership.  In  2006,  it
transitioned from being a non-stock, non-profit corporation to a corporation sole under
Pastor  Apollo  Quiboloy.  However,  in  2023,  The  Executive  Pastor  changed  hands
anew, as Apollo Quiboloy was replaced by one Bro.  Marlon Acobo jn the corporation
sole.
The terms in its franchise grant are clear -the grantee shall seek prior approval
of Congress for any transfer, usufruct, or assignment of its franchise or the rights and
privileges  acquired  thereunder to  any  person.  Even  clearer stated  in  the  grant  that
failure to report to Congress such change of ownership shall render the franchise /'pso
facto revoked .
Further,   the   mandatory   requirements   in   Section   10   on   the   necessity  for
Congressional approval  and  Section  11  on the dispersal of ownership requirement in
RA 11422 are distinct and separate from the annual  report required to be submitted
by the grantee under Section  12 of the same Act. The mere inclusion of any change
in   ownership   in   the   annual   report   is   not  the   compliance   contemplated   by  the
aforementioned  sections,  considering  that the  grantee  is  operating  a  business  that
requires   100%   Filipino  ownership,   and  any  change  therein   requires  scrutiny  and
acquiescence by Congress to protect public interest.
Second,  Swara Sug or SMNl also violated Section.  11  of its grant.  See.  11  states
that:


"SEC.   11.   a/.spersa/  of  Ownershi.p.-ln   accordance   with   the   Constitutional
provision to encourage public participation in public utilities, the grantee shall offer
to Filipino citizens at least thirty percent (300/o) of its outstanding stock, or a higher
percentage  thereof  that  may  hereafter  be  provided  by  law,   in  any  securities
exchange in the Philippines: Provided, That in cases where public offer of shares
is  not  applicable,  the  grantee  shall  apply  other  methods  of encouraging  public
participation  by citizens and  corporations  operating  public  utilities as  allowed  by
law. Noncompliance therewith shall render the franchise ipso facto revoked".
Even after twenty-nine  (29) years of operation,  they still failed to comply with the
thirty percent (30%) requirement on dispersal of ownership.
Neither   can   Swara   Sug   claim   compliance   with   the   dispersal   of  ownership
requirement through Jesus Christ Workers Members Cooperative's 0.19% stake in Swara
Sug, since the establishment of a cooperative as a mode of complying is not provided in
its  grant.  Similar to  Section  10,  noncompliance  with  Section  11  of RA  11422  shall  also
render the franchise /.pso facfo revoked.
Third,  Swara Sug or SMNl has failed to deliver truthful and balanced  reporting
to  its  audience.   As evidenced  by various cases filed  against it in the  Kapisanan  ng
mga  Brodkaster ng  Pilipinas,  National Telecommunications  Commission,  Movie and
Television  Review and Classification Board, and the Philippine Courts, Swara Sug or
SMNI  has engaged  in red-tagging and fake news peddling,  labeling members of the
House, the former Vice President of the Philippines, and private persons as members
of the New People's Army.  The Grantee corporation also attempted to create discord
between the Upper and the Lower House by insinuating that unnamed and unverified
Senate  sources  have  claimed  that  Congress  has  spent  Php   1.8  billion  in  travel
expenses  in  2023  without  any  basis  or  proof.  In  fact,  this  baseless  allegation  was
subsequently disproved  by no  less than the head  of the  Finance Department of the
House of Representatives.  Clearly, all these acts of SMNl run contrary to its mandate
provided under Sec. 4 of its franchise grant. Section 4 states:
``SEC. 4. Respons/'b/.//.fy to the PL/b//'c.-The grantee shall provide, free of charge,
adequate  public service  time  which  is  reasonable  and  sufficient to enable the
government,  through  the  broadcasting  stations  or  facilities  of the  grantee,  to
reach the  pertinent populations or  portions thereof,  on  important public issues
and   relay  important  public  announcements  and  warnings  concerning   public
emergencies and calamities, as necessity,  urgency or law may require; provide
at  all  times  sound  and  balanced  programming;   promote  public  participation;
assist in the functions of public information and education; conform to the ethics
of honest enterprise;  promote audience sensibility and empowerment including
closed  captioning;  and  not  use  its  stations  or facilities for the  broadcasting  of
obscene or indecent language, speech, act, or scene; or for the dissemination of
deliberately false information or willful misrepresentation, to the detriment of the
public  interest;  or to  incite,  encourage,  or  assist  in  subversive  or treasonable
acts."
Finally,  Swara  Sug  violated  Section  12  of its  grant.  Section  12  of  RA  11422
states that:
"SEC.   12.  Reporfort.a/  Requi.remenf.-  During  the  term  of  its  franchise,  the
grantee shall submit an annual report to the Congress of the Philippines, through
the Committee on Legislative Franchises of the  House of Representatives and
the Committee on Public Services of the Senate, on its compliance with the terms


and  conditions  of the franchise  and  on  its  operations  on  or  before April  30  of
eN eny y ear .
The   annual-report   shall   include   an   update   on   the   roll-out,   development,
operation, or expansion of business; audited financial statements; latest General
±nteTmafronjsheet offlcialiv submitted to  SE_Q (If applicable);  certification oiiF;
NTC on the status of its permits and operations; and an update on the dispersal
of ownershjp undertaking, if applicable.
The  reportorial  compliance  certificate  issued  by  Congress  shall  be  required
before an application for permit, certificate, or any equivalent thereof, is accepted
by the NTc.
In a hearing conducted on 11  December 2023, it was bared and admitted to by
Swara Sug's legal counsel that the versions of the notarized annual reports submitted
to the Committee are different from those submitted to the Securities and  Exchange
Commission.
Moreover,  the  Committee on  Legislative  Franchises  approved  the committee
report adopting  House Resolution  No.1499 urging the National Telecommunications
Commission to suspend the operation of Swara  Sug or SMNI for violating the terms
and conditions of its franchise.   The Committee finds  that these acts of the grantee
corporation  should  not  be  countenanced.   Having   exposed  Swara  Sug's  multiple
franchise violations,  it is incumbent upon the House of Representatives, therefore, to
exercise  its mandate  provided for under Article XII  Section  11  of the Constitution,  by
repealing RA 11422 in the interest of justice and the common good.
Knowing  further that  misinformation  and  misrepresentation  can  have  serious
jmplications, most especially in shaping public opinion, and thus create potential social
and  political  divide,  the  operation  of Swara  Sug  or SMNI  is  considered  a  threat to
national  security  and   stability  as   it  continues  to  use  its  platform  to  disseminate
unverified  and  untruthful  statements,  the swift passage  of this  measure  is earnestly
sought.
RAMON RO
1 -RIDER Par
GO L. GUTIERREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City
NINETEENTH CONGRESS
Second Regular Session
House BILL NO. tho
Introduced by Representative Ramon Rodrigo L. Gutierrez
AN ACT
REvOKING  THE  LEGlsLATrvE  FRANCHlsE  GRANTED  TO  SWARA  SUG
MEDIA   CORPORATION,   OPERATING   UNDER   THE   BUSINESS   NAME
SONSHINE MEDIA NETWORK INTERNATIONAL,   REPEALING FOR THE
PURPOSE  REPUBLIC  ACT  NO.  11422,  ENTITLED  "AN  ACT  RENEWING
FOR ANOTHER TWENTY-FIVE  (25)  YEARS  THE  FRANCHISE  GRANTED
TO SWARA SUG MEDIA CORPORATION UNDER REPUBLIC ACT NO. 8122,
ENTITLED "AN ACT GRANTING THE SWARA SUG MEDIA CORPORATION
OF   THE   PHILIPPINES   A   FRANCHISE   TO    CONSTRUCT,    INSTALL,
OPERATE  AND  MAINTAIN  FOR  COMMERCIAL  PURPOSES  RADIO  AND
TELEVISION BROADCASTING STATIONS IN THE PHILIPPINES AND FOR
OTHER PURPOSES"
Pe it prvqc.ted bg  the  Senate  and the  House  Of Represeritc[fii)es  Of the
Philippines in this Congress crssembl.ed, thai:
1                 SECTION  1.  The  legislative  franchise  granted  to  Swara  Sug  Media
2      Corporation,  operating under the  business  nalne  Sonshine  Media  Network
3      International, under Republic Act No.11422,  entitled  "A7t Act Renezut.ng For
4     Another Tweutg-Fiije  (25) Years The Franchise Cha;riled To Swara Sug  Media
5      Corporedon under Republie Act No. 8122, Endtled "An Act Grcmting The swara
6     Sug  Media Corporation ey The Philippines A Franchise To Construct,  Irrstall,
7      Operate   And   Malrctaln   For   Corrrmercial   furposes   Radio   And   Televisi,on
8      Brocidcasting Stcthous ln The Philippines And For Other Purposes" , is hereky
9      revoked.
1o                  SEC. 2.    Republic Act No.11422 is hereby repealed.
11                  SEC. 3. This Act shall take effect fifteen (15) days after its publication
12      in the oJ7jJicz.ciz Gczzette or in a newspaper of general circulation.
Approved,