Philippine News Files for Chapter 11 Protection

Times Staff Writer

The editor of Philippine News, a weekly newspaper published in South San Francisco that claims 60,000 subscribers nationally, said that he was forced into federal bankruptcy court Monday to avoid being shut down by the Internal Revenue Service.

Editor Alex Esclamado said in an interview that he had filed for protection under Chapter 11 of the U.S. Bankruptcy Code after the IRS abruptly ended negotiations to settle the newspaper's payment of late withholding taxes of its employees and threatened to "padlock the premises."

Esclamado charged that the IRS action was politically motivated by what he said is the Reagan Administration's campaign to increase U.S. aid--mostly military--to the Philippines.

The Philippine News, he explained, has outspokenly opposed President Ferdinand E. Marcos since he declared martial law in 1972.

IRS officials were unavailable for comment. The paper has struggled since 1978 to pay off nearly $1 million of debt, including back taxes, incurred over the last three years as a result, Esclamado said, of losing the paper's financial support.

The dispute with the IRS represented the final payment of overdue taxes--$63,500 by Esclamado's reckoning, $213,000 (including interest and penalties) by the IRS'.

In an effort to forestall closure, Esclamado said, the paper's attorney advised the Chapter 11 filing.

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