Philippine cellcos have notified that they will increase end-user SMS charges if the government insists on taking half the revenues generated from them to fund new health and education initiatives in the country. Froilan Castelo, head of regulatory affairs of Globe Telecoms and Roy Ibay, senior manager for regulatory and telecom relations of Smart Communications said, Senator Richard Gordon’s bill would effectively increase production costs which would ultimately have to be passed on to consumers. In the end this will add up to our cost. Part of our cost of production is the tax being paid, the income tax etc so this will be another imposition, added Castelo.

Cellcos are not against the spirit of proposal but they hesitate at the idea of the state raking in 13.5 centavos of the 27 centavos currently charged, arguing that once other taxes and costs are taken into account, it gripes their margins too much. ‘We are looking at it as part of our social responsibility programmes of helping education and health. What we are proposing is a technical working group so that we will not resort to imposition of levy, taxes but on how the telcos can further help,’ added Castelo. Legal representative of Smart Communications advised that the government should instead automatically divert the tax being paid by telecoms to help fund health and education initiatives.
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