Sports Law 2025

Last Updated March 27, 2025

Philippines

Law and Practice

Author



The Law Firm of Ingles Laurel Calderon (ILC Law) is a nine-member boutique law firm located in the business district of Makati City in the Philippines. Established in 1992, the firm specialises in corporate, labour, litigation, tax and foreign investments law. Its dedicated sports law practice focuses on athlete representation and protection, trade mark and brand protection, labour and immigration law compliance and advisory work for sports associations and federations. Its managing partner, Enrico Ingles, sits as the only Filipino arbitrator of the Court of Arbitration for Sport. The firm’s sports law team has recently helped protect national and professional athletes comply with immigration and labour laws, represented professional football players in front of FIFA, and advised national athletes on anti-doping matters. It currently serves as the legal counsel of FIBA in the Philippines for trade mark registration and protection and also crafted and implemented the Rights Protection Programme for the 2023 FIBA Basketball World Cup.

Doping is not a criminal offence in the Philippines. However, the use of World Anti-Doping Agency (the “WADA”) designated substances of abuse is a criminal offence. The possession, use, sale and trafficking of cocaine, heroin, methylenedioxymethamphetamine and tetrahydrocannabinol (cannabis/marijuana) are prohibited under the Comprehensive Dangerous Drugs Act of the Philippines. On a related matter, doping may be argued to be prohibited under Presidential Decree No 483, which criminalises any fraudulent, deceitful, unfair or dishonest means, method or practice employed to influence the result of any sports contest. Doping can be seen as a dishonest means or method employed to influence the result of any sports contest.

The national anti-doping organisation in the Philippines is the Philippine National Anti-Doping Organisation (the “PHI-NADO”). The WADA has accredited the PHI-NADO. The purpose of the PHI-NADO is to implement the WADA Code and spread awareness about anti-doping, which it does through educational programmes and co-ordinating with local national sports associations (NSAs). The Philippine Olympic Committee and NSAs are responsible for implementing anti-doping measures in their respective sports.

Some recent noteworthy anti-doping cases involved cyclist Ariana Dormitorio (erythropoietin) and basketball player Justin Brownlee (Carboxy-THC) during the Asian Games in 2023.

Presidential Decree No 483 (“PD 483”) criminalises game-fixing, match-fixing, point-shaving and game machination in the Philippines. These offences are punishable with imprisonment for a period of up to six years. The sports governing bodies or NSAs deal with integrity issues through their own internal disciplinary mechanisms and sanctions, without any prejudice to criminal prosecution by the state under PD 483. The Games and Amusements Board (the “GAB”) is also tasked with investigating game-fixing in professional sports and meting out sanctions against erring players and coaches.

Recent cases involve alleged game-fixing by players of a collegiate basketball team in 2019 and players in a professional basketball tournament in 2021. After investigation, the GAB revoked the professional basketball licences of the players involved in the 2021 incident.

Sports betting is legal in the Philippines, as long as the sports betting activity or operation is registered with the Philippine Amusement and Gaming Corporation (the “PAGCOR”). Established by Presidential Decree No 1869 (as amended by Republic Act No 9487) the PAGCOR is a government-owned and controlled corporation which regulates gambling and sports betting. Would-be sports betting operators must secure a licence from the PAGCOR before starting their activities. Those who operate without a licence face sanctions and penalties.

The sports governing bodies or NSAs typically follow the betting-related rules and guidelines of their respective international federations as regards betting-related offences of athletes. At the time of writing, there have not been any noteworthy betting cases in sports involving athletes and their sports governing body.

The sports governing bodies or NSAs have their own respective internal mechanisms and procedures for disciplinary proceedings against their athletes. The rules and guidelines governing these internal procedures are often difficult to secure, even by the athletes facing disciplinary sanctions themselves. However, as a minimum requirement by law, due process must be afforded to the athlete in the form of a written notice and the chance to be heard. Unfortunately, there have been cases where an athlete has been penalised even without the benefit of a notice and a chance to be heard.

Notable sports-related commercial rights include the usual rights under the Intellectual Property Code (“the Code”) such as trade mark and copyright. On the tax side, athletes have a right to tax exemption for any prizes and awards they win in local and international sports tournaments sanctioned by their respective sports organisations. National athletes are also granted commercial benefits in the form of 20% discounts on purchases of food, sports equipment and medicine. This 20% discount extends to lodging and transportation expenses.

Rights-holders and event organisers have commercial rights over merchandising and ticketing profits as well. To protect rights-holders from the proliferation of counterfeit merchandise and the unauthorised use of marks, the Code and local ordinances provide remedies ranging from criminal conviction to immediate forfeiture of goods. While there is no national law that deals with and punishes ticket touts and scalping, cities that normally host sports events have their own local ordinances that criminalise ticket touting and scalping. These ordinances were used to great effect during the FIBA 2023 Basketball World Cup to combat the illegal sale of tickets.

One major way sponsors use sports is to own a team in a professional league, such as the Philippine Basketball Association (the “PBA”) and the Premier Volleyball League (the “PVL”), which adopt a franchise system. For example, teams in the PBA include the Rain or Shine Elastopainters, named after a brand of paint, and the Barangay Ginebra San Miguel, named after a brand of gin. In the PVL, there are teams named after a chocolate snack, Choco Mucho Flying Titans, and after a media company, Cignal HD Spikers. Brands, therefore, get exposure through team names, logo exposure in arenas and logo placement on jerseys.

Companies that own teams in professional leagues and those that do not, use athletes as models for their print advert materials and as influencers. For example, former professional basketball player Chris Tiu has posed for skincare adverts and current professional player Kiefer Ravena is the brand ambassador of the Jordan brand in Asia. Professional athletes such as Alyssa Valdez and Jia Morado de Guzman and national athletes like Junna Tsukii, Maxine Esteban and Sandro Reyes are examples of influencers who use Instagram to promote brands they partner with.

Professional and collegiate athletes in the Philippines are treated as celebrities. Therefore, product launches, store openings and other launches will have athletes on their guest lists.

Sports rights-holders attract sponsor investments through airtime adverts during live events, in-arena bannering and advertising, logo placements in pre-game and game uniforms and sponsorship of key events as well as highlights and promotions during the games.

Typical sponsorship contracts will include the terms and obligations on social media engagement (what to post, when to post, how frequently to post, etc), the schedule of photo or video shoots, the compensation and a lockdown/non-compete exclusivity clause that may last two to three years beyond the term of the contract.

In the Philippines, broadcasting rights for the televised leagues are awarded through bidding. A memorandum of agreement contains how much the deal is worth, how many years or seasons the contract would be live for and whether the broadcasting rights are exclusive, among other terms. Once broadcasting rights are granted to a media company, they have the right to choose which of the TV or radio stations owned by the company will air the games. Media companies may also bundle these rights with the right to stream through YouTube or other online streaming services.

For leagues with multiple sports, such as the popular University Athletics Association of the Philippines (the “UAAP”), the media company also decides which sports to air. The media company must also promote the games they air.

One way in which sports organisations attract broadcaster investment is through the marketing of rivalry games. For example, demand for tickets for rivalry games in the UAAP is higher than for any other game, even if the game is not a play-off or final four match. Likewise, TV viewership is also higher when the game is between rivals Ateneo de Manila University and De La Salle University. This is the same for PBA games. The rivalry between Magnolia and Ginebra has been known as Manila Classico and games featuring these teams generate a higher viewership than other regular games.

Lastly, sports associations may also allow the filming of athletes off the court for certain promotional videos, such as clips of them saying “only here on [insert media company name]” or through clips of them answering short personal questions for the entertainment of fans, to be aired during commercial breaks.

According to the Code, broadcasts are protected by copyright for a period of 20 years from the date of the broadcast. Rights of broadcasting organisations can be found in Chapter XIV of the Code.

Sports events are typically organised and managed by a professional league (such as the PBA) or a college or university athletic association (such as the University Athletics Association of the Philippines). International events in the Philippines are normally organised by a local organising committee set up for that particular event (such as the South-East Asian Games) or the sports governing body for that specific sport.

As rights-holders, these sports organisers have proprietary rights in sports events, based on both copyright and trade marks under the Code. Sports organisers control these rights through the enforcement of contracts and with the help of local law enforcement. Organisers also co-ordinate with social media platforms to immediately remove illegal live streaming of sports events.

Commercial participation in these events is typically governed by sponsorship, licensing and broadcasting contracts. The Civil Code of the Philippines therefore also serves as supplemental legislation because of the chain of contracts which generally characterise sports events.

Duty of care in sports is governed by the provisions of the Civil Code of the Philippines, particularly Article 2176 which obligates one who causes damage to another, either by fault or negligence, to pay for the damage done and Article 1173 which sets the general duty of care as the diligence of a good father. Sports event organisers fall under this general standard of care.

When minors are involved, the standard is stricter, as seen in a Supreme Court case where a sports organiser was held liable for the death of a teenage mini-marathon runner. Clear and unequivocal waivers may be used to limit liability, but liability arising from intentional harm, future fraud and gross negligence may not be excluded. The assumption of risk doctrine may also be invoked by sports organisers, as long as the risks are reasonably foreseeable. To keep sporting events safe, organisers often contract security agencies. For larger events, organisers co-ordinate with the local government and local police to maintain peace and order both inside and outside the venues.

The same duty of care applies to athletes’ liability to spectators. However, athletes are protected if the injury to a spectator is a foreseeable event, based on the assumption of risk. An athlete may therefore be held liable for spectator injury if these were intentional (as was seen in a basketball incident where an athlete attacked a fan).

Professional sports clubs are commonly stock corporations registered with the Securities and Exchange Commission (the “SEC”). As professional sports clubs exist with a view for profit, stock corporations are adopted as these allow the owners to earn profits via dividends as stockholders. Adopting a different structure would prevent investors from receiving dividends.

Non-professional sports clubs and sports governing bodies or NSAs are commonly non-stock non-profit corporations and are also registered with the SEC. Non-stock corporations are established and operated by their members who are not allowed to receive any dividends. As amateur clubs exist more to develop camaraderie among their members and not to earn profits, these clubs adopt a non-stock non-profit structure which has tax benefits. Sports governing bodies or NSAs are required to adopt a non-stock non-profit structure in order to apply for membership and recognition with both the Philippine Olympic Committee and the Philippine Sports Commission (the “PSC”).

There are no sport-specific corporate governance codes, except the provisions found in Republic Act No 6847 which created the PSC. These provisions govern the sports governing bodies or NSAs of each sport. Among these are the requirements that these NSAs are autonomous and that no team, school, club, organisation or entity will be admitted as a voting member of the NSA unless 60% of the athletes comprising the team school, club, organisation or entity are Filipino citizens.

Owner and directors’ tests, such as tests on self-dealing directors, may be found in the Revised Corporation Code which apply to these sports governing bodies or NSAs.

The PSC is the main governmental funding source for Philippine sports. Congress allocates PSC’s funds from the Annual General Appropriations Act. To augment the budget allocated by Congress, the PSC also receives a legally mandated portion of the gross income of the PAGCOR, the government-owned and controlled corporation in charge of regulating gambling and casinos.

After finding that PAGCOR had not been remitting the full 5% of its gross income to the PSC, the Supreme Court has recently ordered the PAGCOR to account and remit the full amount of its gross income per year from 1993 up to the present. The PSC’s funds are pooled into the National Sports Development Fund (the “NSDF”), which finances the sports events in which the Philippines participates.

As for distributing these funds to NSAs, the PSC has discretion to decide which NSA receives a portion of the NSDF and how much. Factors that influence the distribution and allocation of funds include the prestige of the sport and also the chances of securing Olympic medals for a particular sport. Once the NSA receives the money, it is then held accountable by the PSC and is subject to an audit.

Private funds being allocated for sports is a recent trend in the Philippines to help boost sports. Seeing the success of corporate sponsorships and investments in sports, both for-profit companies and non-profit foundations have funnelled funds to various sports. The range of private involvement in sports in the Philippines varies, from top companies owning sports teams for marketing purposes to multimillion-peso sponsorships of top college and professional athletes to sports foundations (organised by wealthy philanthropists and businesspeople) spending on Olympic athletes.

Private funding has been considered to be one of the reasons why the Philippines has improved in international sports, as government funding is normally unsustainable to finance prolonged training and development required by high-level international athletes.

Trade marks may be registered online with the Intellectual Property Office (the “IPO”). Trade mark owners only get the rights in a mark through registration. Only a registered trade mark is generally protected by law. Once registered therefore, third parties may not use it without the owner’s consent.

The law prohibits the registration of a mark which:

  • is immoral, deceptive, or scandalous;
  • disparages or falsely suggests a connection with a person (whether living or dead), institutions, beliefs or national symbols;
  • brings contempt or disrepute to another;
  • has the flag of the Philippines (or the flag of another country) on it;
  • includes the name, portrait or signature of a living person, except with their consent;
  • uses the portrait of a dead president, during the life of their spouse, except with the latter’s consent;
  • is misleading as to nature, quality, characteristic or geographical origin;
  • is generic or simply identifies the product it will be used on;
  • is simply descriptive of the product; or
  • is contrary to public order or morals.

Notable registered sports trade marks involve collegiate teams, where the numerous marks associated to a college or university are all registered with the IPO and the respective brands of sports teams and the companies which own them.

The law on copyright is found in Part IV of the Code. Under the Code, literary and artistic works are considered original intellectual creations, and are protected from the moment of their creation. Common defences include fair use, the fact that the work is a non-copyrightable work, private reproduction in a single copy for use in study or research and personal use.

As regards the existence of a legal database right, the law on copyright protects the creation of the database, as it might be considered as a derivative work or as a compilation of data and other materials. To establish a claim, it must be proven that the process of creating the database (such as the selection, co-ordination and arrangement of the compiled information and data) is original to the maker.

Image rights in the Philippines generally equate to the right of publicity (a right recognised in the United States). While the right of publicity has yet to explicitly find its way into Filipino jurisprudence or express provisions of law, aggrieved parties may use Section 169.1 of the Code for relief. This Section refers to false designations of origin or false description or representation.

World Champion Boxer Manny Pacquiao used Section 169.1 to sue a videoke product-maker for making use of his image without his consent. He won the case in the Court of Appeals in 2009, with the Court of Appeals stating that Pacquiao’s image should be protected from unauthorised endorsements under Section 169.1.

Sports bodies and athletes monetise their IP and image rights through licensing and endorsement contracts. In terms of assigning IP rights to third parties, the assignment must be in writing and filed with the IPO. If the assignment is not registered, it is void as to third parties. However, it is still binding between the parties.

The use of athlete and spectator data is not as extensive in the Philippines as compared to other jurisdictions. However, there has been a push to commercialise and monetise sports data in live sports events to further enhance fan experience. The recent legalisation of sports betting has opened up opportunities for monetising sports data but it still has to comply with any data-sharing regulations under the Data Privacy Act of 2012 (the “DPA”).

The DPA is the main law which governs data protection in the Philippines. It is supplemented by the Implementing Rules and Regulations (the “IRR”) issued by the National Privacy Commission (the “NPC”), which is the government agency tasked with implementing the DPA. The DPA protects any personal information, defined as any information in which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual.

The DPA protects sensitive information to a greater and stricter extent. Sensitive personal information pertains to a person’s race, education, criminal record and religion, among others. Processing and sharing sensitive personal information requires prior consent at all times. This is an important consideration in collegiate sports, especially as student athletes must give their prior consent to the sharing of their transcript of records when they transfer from one school to another.

The role of national courts in dealing with sports disputes varies depending on the type of sports dispute. In terms of field-of-play calls, the Supreme Court, in a 1995 case, set a policy of refusing to resolve field-of-play call disputes. Unless there is an arbitrary and brazen violation of sports rules by the sports officials and organisers, national courts will leave things as they are.

For sports disputes involving the application of local laws within the sports context, parties may immediately seek redress in the national court system, unless there is a provision between the parties mandating recourse through alternative dispute resolution (ADR) methods or via the internal processes of a sports governing body. Examples of these sports disputes are those involving sports injuries and employment claims.

For sports disputes involving the interpretation of the rules of sports governing bodies (such as on eligibility matters and disciplinary issues), parties must generally exhaust the internal mechanisms of the sports governing body before national courts can be asked to rule on the matter. This is based on the analogous doctrine of exhaustion of administrative remedies. However, if there is a human rights element or the act of the sports governing body is oppressive or arbitrary, immediate recourse to a local court may be possible.

The Philippines does not currently have any specific mode of dispute resolution for sports. Parties who wish to use ADR may do so under the aegis of the Republic Act No 9285, which is the ADR Act of the Philippines. Private dispute resolution providers, such as the Philippine Dispute Resolution Centre, Inc, have drafted their own sports mediation and arbitration rules, which may be used by sports governing bodies if they choose.

Sports governing bodies may enforce sanctions on their players and members either through their own internal rules (as long as minimum due process requirements of prior notice and the chance to be heard are met) or through the court system (with contract law principles and remedies as a basis).

Parties who wish to challenge decisions of governing bodies will have to exhaust the internal mechanisms first. This will generally involve requesting reconsideration of an assailed decision and thereafter referring it to the international federation with jurisdiction over the local governing body. If the decision is wantonly arbitrary and oppressive, local courts may also be an avenue of redress.

The governing law for labour and employment in the Philippines is the Labour Code. To determine whether an employer/employee relationship exists between parties, the Supreme Court has repeatedly used the fourfold test employing the four elements:

  • the selection and engagement of the employee;
  • the payment of wages;
  • the power of dismissal over the employee; and
  • the employer’s power to control the employee’s conduct.

Despite the presence of all four elements in the relationship between professional teams and their players, and a 2012 Supreme Court case involving the illegal dismissal of a player-employee by their professional team, professional sports teams have still treated their players as merely independent contractors in practice. This is in clear contrast to what is written in the law, the nature of the relationship and the international trend that considers players employees of their professional teams. This leads to both tax and employment law complications and removes protections that should have been afforded to a player if they were to be considered an employee in the first place.

The PBA, the longest-running professional basketball league in the Philippines, employs both a standard contract for its players and a salary cap. Other professional leagues leave it up to their teams to have their own contracts with their players.

Despite the employer/employee nature of the relationship between the professional team and its players, legal precedence and international trend, the rules on employer/employee rights are rarely applied or followed in professional leagues in the Philippines. Professional athletes who are illegally removed or dismissed from their teams are therefore often left in a quandary on the proper legal course of action to take. Should they file with the Labour Arbiter as employees or with the regular courts as independent contractors?

While the answer should be with the Labour Arbiter, the practice in the Philippines of considering professional athletes as mere independent contractors has given erring employees the additional defence of lack of jurisdiction whenever a case is filed with the Labour Arbiter.

A noteworthy case is the 2012 Supreme Court Case of Negros Slasher, Inc v Alvin Teng, where the Supreme Court ruled that a player-employee was illegally dismissed by their professional basketball team after they had refused to play a championship game. The Supreme Court recognised the player as an employee and that dismissal was too harsh a penalty.

There are no specific laws capping the number of foreign athletes competing in a sports tournament or competition, as these caps are normally set by the league or association conducting the competition. However, there are visa, immigration and labour law considerations that foreign athletes or coaches must consider before playing or working in the Philippines. In a nutshell, foreign athletes or coaches must secure a prearranged employee commercial visa (9g visa) and an alien employment permit (AEP) before working in the Philippines.

One of the substantial conditions to secure an AEP is the prior determination of the non-availability of a person in the Philippines who is competent, able and willing to perform the same services which the foreigner will be engaged to do. This was the main issue in a 1991 Supreme Court case involving an American basketball coach employed by a professional basketball team. In that case, the Supreme Court ended up cancelling the American coach’s AEP after it found that there were other local coaches who could have done the same job.

The sports landscape in the Philippines has historically been male-dominated and basketball-centric. However, recent trends have swayed the pendulum towards women’s sports. Collegiate and professional women’s volleyball bring in crowds of nearly 25,000 to big games, which is significantly more than the attendance numbers of a typical professional basketball game. The success of women athletes on the international stage has also shone a well-deserved light on women’s sports.

Olympic gold medallist Hidilyn Diaz leveraged her success by starting a weightlifting academy for children and signing lucrative endorsement deals. The Philippine National Women’s Football Team made waves in its first appearance in the FIFA World Cup, with their success pushing for more grassroots development throughout the country and also earning them an enviable kit deal with Adidas. International athletes such as Maxine Esteban and Junna Tsukii have also found success in other sports such as fencing and karate.

The PSC has since created a gender and development programme to hold tournaments and share updates and news about women’s sports and female athletes. Other private organisations, such as Girls Got Game, have also popped up to bolster different sports in the youth sector.

Esports is extremely popular in the Philippines. Its rise from the early 2000s to the present has been exponential. It is predominantly mobile-based, with Mobile Legends: Bang Bang being the most popular game with more than 25 million monthly active users in 2020. Professional esports players ranked within the world’s top 20 for aggregate earnings in 2023, bolstered by a popularity brought about by successes in international esports events (both held in the Philippines and abroad) and the near-celebrity status of players and gaming influencers sponsored by gaming companies.

Notable deals include the launch of a gaming platform by esports gaming company Mineski Global on apps such as GCash, LYKA and Viber. The popularity of esports has also spilled into academia, with the Lyceum of the Philippines University recently launching a four-year undergraduate course specialising in Esports Management and Game Design and Development.

A few athletes ventured into the world of NFTs in late 2020 and 2021 to start various NFT projects. A well-known athlete actually started an NFT project to help fund a certain national team, but this was later scrapped after negotiations fell through and the NFT bubble popped in late 2021.

While the NFT market in the sports sector in the Philippines is currently and virtually non-existent, there are still opportunities for those who seek an alternative mode of funding and are brave enough to face the risks of such a volatile environment.

There is no key AI legislation and regulations in the Philippines. At most, general laws concerning intellectual property and data protection will apply to AI in the field of sports. Both intellectual property and data protection will also be most affected by AI, as there are inherent risks of infringement and leaks of personal data with AI and sports.

The Philippines has always been a country known for its internet use and social media engagement, with data showing that sponsors can reach up to 69% of the country’s population through Facebook and nearly 50% through YouTube. The application and use of the metaverse in sports in the Philippines therefore holds great opportunities for sports stakeholders, despite the adoption rate of the metaverse still remaining quite low compared to traditional internet use.

Stakeholders can use the metaverse to further boost individual and corporate brands, enhance the reputation of personal coaches and athletes through more access to highlight videos and teaching seminars and give sponsors a new platform to increase brand recognition.

However, those who wish to make the jump into the metaverse must recognise the natural risks of data breaches and manipulation, intellectual property violations and the proliferation of bot and troll accounts. Enforcing the underlying laws will also be an issue, given the already ephemeral nature of the internet and the easy anonymity that comes with it.

The Law Firm of Ingles Laurel Calderon

Suites 7A/B The Valero Tower
122 Valero Street
Salcedo Village
Makati City
Metro Manila
1227
Philippines

+632 8812 9333

imdingles@ilclaw.com.ph www.ilclaw.com.ph
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Trends and Developments


Author



The Law Firm of Ingles Laurel Calderon (ILC Law) is a nine-member boutique law firm located in the business district of Makati City in the Philippines. Established in 1992, the firm specialises in corporate, labour, litigation, tax and foreign investments law. Its dedicated sports law practice focuses on athlete representation and protection, trade mark and brand protection, labour and immigration law compliance and advisory work for sports associations and federations. Its managing partner, Enrico Ingles, sits as the only Filipino arbitrator of the Court of Arbitration for Sport. The firm’s sports law team has recently helped protect national and professional athletes comply with immigration and labour laws, represented professional football players in front of FIFA, and advised national athletes on anti-doping matters. It currently serves as the legal counsel of FIBA in the Philippines for trade mark registration and protection and also crafted and implemented the Rights Protection Programme for the 2023 FIBA Basketball World Cup.

Introduction

The funding of national sports in the Philippines is a trend to look out for in 2025 and the years to come. With reports estimating the support needed to fund an Olympian with a chance of winning a gold at over tens of millions of pesos, the search for the next Carlos Yulo (two-time gold medallist) and Hidilyn Diaz (the first Filipino gold medallist) got a well-needed boost from a Supreme Court decision that promises much needed funding for national sports in the Philippines.

Background

Decided in 2024, Joseller M. Guiao v PAGCOR, PSCO, and the Office of the President is a landmark case for sports law in the Philippines. Professional basketball coach Yeng Guiao, then serving as a member of the House of Representatives, filed a petition for mandamus with the Supreme Court questioning why the Philippine Amusement and Gaming Corporation (the “PAGCOR”), the government corporation mandated to regulate gaming in the Philippines, had not been remitting 5% of its gross income to the Philippine Sports Commission (the “PSC”) for the National Sports Development Fund (the “NSDF”), and requiring them to do so.

As well as the petition against the PAGCOR, Coach Guiao also brought the Philippine Charity Sweepstakes Office (the “PCSO”) to court, questioning why the PCSO was not remitting its share to the PSC either. The PCSO is the main government agency mandated to raise funds for health programmes, which it does through sweepstakes and the national lottery.

Under Section 26 of Republic Act No 6847 of 1990 (the “Philippine Sports Commission Act”), the PAGCOR is mandated to remit 5% of its gross income to the PSC to improve sports funding in the Philippines. The PCSO is also supposed to remit 30% of the proceeds of six sweepstakes or lottery draws per year to the PSC as part of the NSDF. For clarity, Section 26 of the Philippine Sports Commission Act states:

“In order to provide the necessary funds required for the organizational and initial calendar year of operational expenditures of the Commission, the amount of Twenty-five million pesos (P25,000,000.00) from the National Treasury is hereby appropriated: Provided, That operating expenses for the Commission itself shall not exceed twenty percent (20%) of the annual appropriation and that at least eighty percent (80%) of said annual appropriation and all of the national sports development funds, as hereinafter provided, shall be disbursed for the national sports program, particularly in support of the identification, recruitment and training of athletes in pre-regional, regional, national and international competitions, including the implementation of the Decade of Physical Fitness and Sports: 1990-2000.

To finance the country’s integrated sports development programme, including the holding of the national games and all other sports competitions at all levels throughout the country as well as the country’s participation at international sports competitions, such as, but not limited to, the Olympic, Asian, and Southeast Asian Games, and all other international competitions, sanctioned by the International Olympic Committee and the International Federations, thirty percent (30%) representing the charity fund of the proceeds of six (6) sweepstakes or lottery draws per annum, taxes on horse races during special holidays, five percent (5%) of the gross income of the Philippine Amusement and Gaming Corporation, the proceeds from the sale of stamps as hereinafter provided, and three percent (3%) of all 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 authorized 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 overview of the PSC is necessary. The PSC is the government agency tasked with formulating policies for national sports and providing funding to local sports federations or national sports associations (NSAs) in the Philippines. It was created in 1990 by the Philippine Sports Commission Act. The policy behind the creation of the PSC is contained in Section 2 of the Philippine Sports Commission Act. It states:

“It is the policy of the State to promote physical education, encourage and sustain the development of sports in the country to foster physical fitness, self-discipline, teamwork and excellence for the development of a healthy and alert citizenry through a unified national sports promotion and development program, and that the establishment 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, recognitions 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 allocates much-needed funding to certain NSAs, especially those NSAs whose sports have a good chance of bagging medals in the Olympics and other prestigious international sports events. Given the huge amount of money needed 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.

Meanwhile, the PCSO claimed its contributions to the PSC should only be sourced from sweepstake draws and not from other PCSO lottery games. The PCSO claimed that its lottery games did not fall within the definition of “lottery draws” under Section 26 of the Philippine Sports Commission Act. It argued that its lottery operations were not contemplated under Section 26 for the simple reason that the PCSO was not in existence at the time Section 26 was enacted. In any case, the PCSO claimed that it showed good faith and steadfast compliance because it had been remitting what it could despite the decline of its sweepstakes sales.

Judgment

The Supreme Court sided with Coach Guiao and dispensed with the arguments of both the PAGCOR and the PCSO.

Sitting en banc, the Supreme Court found that the PAGCOR’s obligation was to remit all 5% of its gross income to the PSC, as the law made no qualifications or deductions as to the amount, contrary to the PAGCOR’s arguments. The Supreme Court stated that Section 26 “does not state that the computation of the 5% is arrived at after deducting the franchise tax”.

In finding that the remittances must be based on gross income without deductions, the Supreme Court also looked at other laws that likewise require the PAGCOR to distribute its gross income. For example, it looked at a law which required the PAGCOR to distribute its income to the National Power Corporation. In that law, the Supreme Court found that any subsidy should only be remitted after certain deductions. The lack of a similar instruction in its remittances to the PSC was proof to the Supreme Court that the PAGCOR should, in fact, remit all 5% of its gross income, without any deductions.

In finding against the PCSO, the Supreme Court went into the definition of “lottery”. The term “lottery” in this jurisdiction is defined as extending to “all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize, concerts, raffles at fairs, and various forms of gambling”. A lottery is said to have three essential elements: consideration, prize and chance.

These three elements applied to the PCSO’s “lotto draws” as “the payment of the prize of the lotto ticket is the consideration for the chance to win the prize offered in the lotto draw”.

The Supreme Court reminded the PCSO that its lotto games and any other future games that fall within the definition of “lottery” will be subject to contributions to the PSC for the NSDF.

The PAGCOR was ordered to account and remit all 5% of its gross income per year from 1993 up to the present.

The PCSO was ordered to account and remit the 30% representing the charity fund of the proceeds of six sweepstakes or lottery draws per year (including lotto draws) from 2006 onwards to the PSC.

The Supreme Court also had a strong reminder for the PSC, noting that it should have been the PSC that filed the petition, not Coach Guiao, stating:

“It seems that the Philippine Sports Commission has turned a blind eye to its own mandate and has instead allowed the Philippine Amusement and Gaming Corporation and the Philippine Charity Sweepstakes Office to remit however which way they desire, despite the wordings in the law. Consequently, this Court will not sit idly by as the Philippine Sports Commission sleeps on its rights and duties. In the end, it is not the Commission which stands to be adversely affected by the lack of remittance of other governmental agencies. Instead, it is the Filipino athletes and youth that lose the most”.

Civil Code

Under the Civil Code of the Philippines, judicial decisions of the Supreme Court form part of the legal system of the Philippines. These decisions are considered law of the land. It was therefore with great relief that the Supreme Court set in stone the need for proper sports funding with these parting words:

“Given both respondents’ patent violations of Section 26 of Republic Act No. 6847 to the detriment of all athletes and even the youth of our country, this Court finds it proper to grant the instant Petition for Mandamus. The Philippine Sports Commission’s funding directly affects the advancement of the nation’s sports programs, our athletes’ ability to progress in the international forum, and the development of our youth. Given the significant role of sports in nation-building, petitioner’s direct resort to this Court through this instant Petition for Mandamus is justified”.

Conclusion

This is an enormous win for sports funding in the Philippines. Estimates of the arrears from 2010 to 2015 alone reached up to PHP4 million, a giant boost in the arm for sports in the Philippines. The Supreme Court decision, promulgated in August 2024, also came in the afterglow of the country’s best Olympic outing yet (two gold medals and two bronze medals). Hopefully, the afterglow burns longer and brighter for the country’s golden dreams.

The Law Firm of Ingles Laurel Calderon

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122 Valero Street
Salcedo Village
Makati City
Metro Manila
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Philippines

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The Law Firm of Ingles Laurel Calderon (ILC Law) is a nine-member boutique law firm located in the business district of Makati City in the Philippines. Established in 1992, the firm specialises in corporate, labour, litigation, tax and foreign investments law. Its dedicated sports law practice focuses on athlete representation and protection, trade mark and brand protection, labour and immigration law compliance and advisory work for sports associations and federations. Its managing partner, Enrico Ingles, sits as the only Filipino arbitrator of the Court of Arbitration for Sport. The firm’s sports law team has recently helped protect national and professional athletes comply with immigration and labour laws, represented professional football players in front of FIFA, and advised national athletes on anti-doping matters. It currently serves as the legal counsel of FIBA in the Philippines for trade mark registration and protection and also crafted and implemented the Rights Protection Programme for the 2023 FIBA Basketball World Cup.

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The Law Firm of Ingles Laurel Calderon (ILC Law) is a nine-member boutique law firm located in the business district of Makati City in the Philippines. Established in 1992, the firm specialises in corporate, labour, litigation, tax and foreign investments law. Its dedicated sports law practice focuses on athlete representation and protection, trade mark and brand protection, labour and immigration law compliance and advisory work for sports associations and federations. Its managing partner, Enrico Ingles, sits as the only Filipino arbitrator of the Court of Arbitration for Sport. The firm’s sports law team has recently helped protect national and professional athletes comply with immigration and labour laws, represented professional football players in front of FIFA, and advised national athletes on anti-doping matters. It currently serves as the legal counsel of FIBA in the Philippines for trade mark registration and protection and also crafted and implemented the Rights Protection Programme for the 2023 FIBA Basketball World Cup.

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