1 month ago
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MANILA, Philippines — The proliferation of fake persons with disabilities (PWDs) cards are pushing struggling restaurants to the brink of closure, a group of restaurant owners said, as they urged the government to crack down on the fraudulent activity.
RestoPH, a nationwide collective of chefs and restaurant owners, issued the statement a day after the Department of Justice issued a legal opinion that establishments cannot deny discounts or privileges to PWD cardholders regardless of whether their IDs are verified or found in the national registry.
RestoPH called for “fairness” from the public and the government, noting that restaurants and small businesses — not the government — bear the cost of the PWD discount.
“The PWD discount, intended to support those in genuine need, is being exploited by individuals using fraudulent cards, leading to significant financial losses for businesses already operating on thin margins,” said David Sison, RestoPH president and owner of Mama Lou’s.
When multiple fake PWD cards are used at a single table, the financial toll can be devastating, Sison said. RestoPH estimates an average of P50,000 to P100,000 lost per month.
Sison noted that it’s not just about “lost revenue” as when restaurants lose money to fraud, it affects their ability to pay employees, maintain food quality, and keep menu prices affordable for honest customers.
“It’s a cycle that ultimately hurts everyone,” Sison added.
Who suffers the most?
A common misconception about the PWD discount is that the government reimburses businesses. In reality, they don’t. Instead, businesses can deduct the 20% discount from their taxable income, which slightly lowers their taxes — but it’s not a direct refund.
“The 12% Value-Added Tax (VAT) is waived for PWD transactions, but businesses still pay VAT on the goods they purchase. This means that restaurants are left absorbing the cost, making it particularly challenging for small businesses with thinner margins,” Sison told Rappler in an interview. This means a portion of input VAT (tax paid on supplies) cannot be claimed as a deduction against output VAT.
Larger fast-food chains are usually able to absorb these costs, Sison said, due to higher sales volume, stronger corporate backing, and cost efficiencies through bulk purchasing. But small businesses aren’t as lucky — they operate on much lower profit margins, so discounted sales significantly impact revenue.
“For those with limited customer volume, repeated PWD discounts can mean operating at a loss. The difference is that fast-food chains can afford to take the hit, while smaller businesses struggle to stay afloat,” Sison said.
‘It’s crippling us’: What can others do?
Restoph’s call to action is clear: “Say no to fake PWD cards.” Sison agrees that restaurants must comply with the law, but there has to be a better ID verification system in place.
“The PWD discount is a right, and legitimate PWDs should never feel ashamed to claim it. However, we also urge the public to be responsible and honest when using these benefits. If you are not a real PWD, using a fake ID harms businesses and takes away resources from those who truly need it,” he said.
It’s about a balanced, two-way approach. According to Sison, this envisioned “balance” means that PWDs can claim their benefits without hindrance, restaurants have a unified verification system to prevent fraud, and stronger penalties are enforced against those using fake PWD IDs.
The government needs to step up. “They must take a more proactive role in balancing PWD rights and business sustainability,” Sison said.
This starts with fully implementing the National Digital PWD ID System — a QR-based or digital ID system linked to an official joint database of the Department of Social Welfare and Development (DSWD) and the National Council on Disability Affairs (NCDA) — to make verification secure and seamless. But why is it taking so long?
The main challenge now is bureaucracy and slow implementation, Sison said. The Unified National PWD ID System is in progress, but urgency is lacking. Until it’s fully operational, businesses can’t verify if an ID is real or fake, leaving them at risk of financial loss.
Sison also suggested tax credits instead of just deductions — a direct tax credit (not just a deduction) would help businesses recover part of the cost, he said, especially for SMEs.
Lastly, he calls for stronger enforcement against fake PWD ID issuers.
“Many fake PWD IDs are sold openly online. The government must crack down on those producing and distributing these fake IDs, as they are enabling fraud,” Sison said. These gaps need to be addressed on a systematic level, for small businesses to remain sustainable.
“Restaurants are also hesitant to enforce stricter verification on their own because of legal concerns,” Sison said. “If they deny a discount and the ID turns out to be legitimate, they can face penalties for violating the law.”
It’s a complex situation that needs immediate attention, and RestoPH urges the government to at least fast-track the implementation of the DSWD-NCDA Unified ID System, so both PWDs and small businesses can live and operate fairly. Real PWDs deserve real benefits and small businesses deserve support. The government must act before more livelihoods are lost.
“If you care about the restaurants you love, help protect them — say no to fake PWD cards,” David reiterated. Because when fraud wins, everyone loses. – Rappler.com
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