By Malou Mangahas
Philippine Center for Investigative Journalism
Last of Three Parts
CAN we trust them with the public purse?
At the rate they are splurging billions of pesos on political ads, with nothing or little to show in their asset records as their own spending capacity, the candidates for president and vice president in the May 2016 elections are possibly the least smart amongst us when it comes to math and money.
In truth, if they have been dipping into their pockets for pesos for their ads, nearly all of them would now be in grave deficit spending status. Or even in the throes of bankruptcy.
Altogether, four of the five seeking the presidency, six seeking the vice presidency, 22 aspiring to be senators, and few dozen local and party-list hopefuls have acquired a record P6.69 billion worth of pre-campaign political ads, mostly on television, and some on radio and the newspapers.
Three wannabe presidents – Manuel ‘Mar’ Roxas II of the Liberal Party (LP), Jejomar ‘Jojo’ Binay of the United Nationalist Alliance (UNA), and Grace Poe of the Galing at Puso (GP) slate — had even made it to the Billion-Peso Club of ad spenders ahead of the official 90-day campaign period that started on Feb. 9, 2016.
According to Nielsen Media’s monitoring reports, as of Jan. 31, 2016 and by the rate card of media agencies, the political ads featuring these three as “advertiser” and “product” had reached the billionth mark: P1,050,065,096 for Binay, P1,016,414,123 for Poe; and P969,173,267 for Roxas.
And while he decided to run only in December 2016, a fourth candidate for president, Rodrigo Duterte of the PDP-Laban Party, had also recorded a bill of P146,351,131 for his pre-campaign ads.
Six wannabe vice presidents, meanwhile, have incurred similarly significant expenses for their solo ads:
- P419,002,456 for Duterte’s official running mate Alan Peter Cayetano;
- P273,856,544 for LP’s Maria Leonor ‘Leni’ Robredo;
- P252,503,856 for Ferdinand ‘Bongbong’ Marcos Jr.;
- P29,673,341 for UNA’s Gregorio ‘Gringo’ Honasan II;
- P8,953,380 for Antonio Trillanes IV; and
- P2,776,000 for GP’s Francis ‘Chiz’ Escudero.
Caps in law, net worth
Even then, they are probably poised to splurge millions of pesos more to get elected. Election laws allow a candidate for national office to spend during the official campaign period up to P10 per voter, or a maximum of P540 million for the nation’s 54.3 million registered voters, to cover all his or her allowable expenses.
But the 2014 statements of assets, liabilities, and net worth (SALN) of the candidates show no evidence that any of them can finance multi-million-peso campaigns, let alone billion-peso ones. Nearly all of them have little to modest net worth and even the more affluent ones would have gone bankrupt by now if they financed their pre-campaign ads on their own.
For the candidates for president, here’s what their 2014 SALN numbers, compared to their pre-campaign ad expenses, reveal:
- Roxas declared a net worth of P202,080,453 and cash on hand/in bank of P24,833,667. He incurred pre-campaign ad expenses of P969,173,267. If he spent his own money, he would be on deficit spending by P767,092,814.
- Binay declared a net worth of P60,250,983 and cash on hand/in bank of P38,843,866. He incurred pre-campaign ad expenses of P1,050,065,096. He would be on deficit spending by P989,804,113.
- Poe declared a net worth of P89,464,819 and cash on hand/in bank of P1,071,406. She incurred pre-campaign ad expenses of P1,016,414,123. She would be on deficit spending by P926,949,304.
- Duterte declared a net worth of P21,971,733 and cash on hand/in bank of P13,846,733. He incurred pre-campaign ad expenses of P146,351,131. He would be on deficit spending by P124,379,398.
Four of the six candidates for vice president declared much less in net worth, and Marcos, a little more. All together though, they all would be on the path to penury, going by their own expensive ad buys:
- Robredo declared a net worth of P8,032,124 and cash on hand/in bank of P8,049,124. She incurred pre-campaign ad expenses of P273,856,544. She would be on deficit spending by P265,824,420.
- Honasan declared a net worth of P21,225,616 and cash on hand/in bank of P11,058,816. He incurred pre-campaign ad expenses of P29,673,341. He would be on deficit spending by P8,447,625.
- Marcos declared a net worth of P200,598,008 and cash on hand/in bank of P8,000,000. He incurred pre-campaign ad expenses of P252,503,856. He would be on deficit spending by P51,905,848.
- Cayetano declared a net worth of P23,314,540 and cash on hand/in bank of P8,500,000. He incurred pre-campaign ad expenses of P419,002,456. He would be on deficit spending by P395,687,916.
- Trillanes declared a net worth of P5,549,000 and cash on hand/in bank of P2,300,000. He incurred pre-campaign ad expenses of P8,953,380. He would on deficit spending by P3,404,380.
By these metrics, only two — Escudero and People’s Reform Party candidate for president Miriam Defensor Santiago — remain in surplus-spending status. Escudero had acquired, by Nielsen Media’s data as of Jan. 31, 2016, too few ads; Santiago had not run any pre-campaign ads at all.
Escudero in 2014 declared a net worth of P6,049,082, and cash on hand/in bank of P3,237,947. He incurred pre-campaign ad expenses of P2,776,000. Assuming he used his personal funds, he would be on surplus spending by P3,273,082.
Santiago, meanwhile, declared a net worth of P73,033,539 and cash on hand/in bank of P48,480,291 in her SALN for 2014.
A donor’s story
Of course, many candidates, asked by reporters recently about who financed their political ads, have pointed to donors they will not name as yet as their source of funds.
If they kept their money to themselves and let donors bankroll their election bids, it would be fair to assume that several of these candidates would remain awash in wealth. They would, however, be quite seriously and deeply — and gravely for the nation — awash in political debt.
According to a scion of a family that is among the consistent high-roller donors in Philippine elections, it is the candidate – or the candidate’s camp – that seeks out donations, rather than donors actively selecting someone to support.
In an interview with PCIJ, the donor family member says that it all starts with a gentle, secret pitch by the candidate or his/her emissary, in a visit to the donor.
“Nobody offers you (money) out of the blue,” says the source. “The candidate has to make an effort. You have to sell yourself.”
The source recounts that the pitch starts thus:”’ Boss, mabigat ito, kaya lang, heto gastos. Tatakbo ako pero maraming gastos. Ito ang survey, okay rating ko (Boss, this is serious, but the expenses would be big. I’m going to run but there are a lot of expenses. Here’s the survey, my rating’s okay)’.”
“That is why,” the donor continues, “surveys are so important. Because of the buzz surveys create, donors will start meeting with you, the money will come.”
The deal: Just win!
“Donors usually look to No.1 and No. 2,” says the source. “At some point, you will stop asking, they (donors) will approach you.”
Donor and candidate “talk constantly to each other” in the course of the campaign and between them, the source says, there is usually just one expectation or exchange: “You must win.”
No audit or reports have to be submitted by the candidates at all to high-roller donors. Says the donor: “If you give money as a campaign donor, you give, you lose it, it’s lost to them. You don’t expect reports, not before, not during, not after the campaign.”
The source confirms that all these deals are paperless transactions. Donations typically flow in crisp peso bills, cash. “Actually,” says the source, “you could fit 100 million pesos in the trunk of a car. Kasya ‘yun doon.”
Indeed, peso power drives Philippine elections. Candidates get to power with a lot of help from those with a lot of pesos to bankroll their campaigns.
What’s in it for donors? The source tells PCIJ: “It’s status, it’s influence. It’s because people would know you are influential, and most important of all, you know yourself you are influential.”
Not all large donors are as candid or self-absorbed, however. Many, if not most, in fact are hesitant to publicly acknowledge their donations to the candidates’ election campaigns.
In 2010, several major donors who were interviewed by PCIJ had noted the negative perception of the public and their peers that big donations in the tens or hundreds of millions of pesos are attempts to buy future government favors or posts. Said one prominent businessman: “Donations are seen in the same light as bribery.”
And yet the funds continue to pour in, albeit from a surprisingly small pool of donors. Over the last three presidential elections, PCIJ’s database shows, the donors to the candidates for high office make up an exclusive club of those who come from old-elite families, big business entities, big law firms, and even some parties that have secured contracts with the government.
Even fewer still are the repeat donors and families of donors who may be called the frequent spenders or high rollers in national elections since 1998.
In contrast, the number of citizens donating small amounts to the candidates – either out of faith in the politics or policies that the latter espouse, or for benign or self-serving reasons — remains negligible.
In the May 2010 elections that Benigno S. Aquino III won, only a few hundred donors (308 to be exact) contributed to the seven candidates for president and the top three political parties. The number is smaller still – 48 – if only the donors who gave P10 million and above are counted. These four dozen donors accounted for almost 80 percent of total funds of P1.58 billion raised for the campaign of the 2010 presidentiables and the three parties, including the candidates’ own money. At the time, there were 50.7 million registered voters.
In the May 2013 elections, only 2,368 donors — 2,174 persons and 194 corporations — contributed the P1.69 billion that went to the campaign purses of the 12 winning senatorial candidates and their political parties. Of the total, only 421 made up what could be called “The Millionaires Club,” or those who gave P1 million to P4.9 million each. In fact, only 10 individual donors accounted for P315.8 million or 18.6 percent of the total contributions to the 12 candidates who won. There were then 52.75 million registered voters.
Public good, duty
To be sure, donating to candidates in elections is a public good, and a public duty of all voters, according to Commissioner Luie Tito F. Guia of the Commission on Elections, in a previous interview with PCIJ. This is key, he said, to making elections inclusive and accountable. But transparency — who donated how much to which candidates — is yet a third important feature of good elections, Guia added.
Without donor support, elections are a journey to certain debt or financial ruin for the candidates. And it’s money that they may not be able to recover at all – at least by legal means — once they are elected.
That includes the country’s next chief executive whose gross monthly salary will rise to P400,000, or more than twice more than what President Benigno S. Aquino III currently receives, courtesy of a recently passed law on salary standardization in the government service.
Multiplying this amount by 13 months, Aquino’s successor will earn only P5.2 million a year in gross salary. Multiplying this by six years, the next President’s full tenure in office, means a total gross salary of only P31.2 million. A 32-percent tax applies to this salary grade, though, which means that the victor in this veritable game of chance and money called elections will take home just P21,216,000 for a six-year service to the nation.
The numbers do not make sense. A candidate would have to heap a ton of money to get elected but would earn just a lump, by lawful means, if he or she wins.
The next President’s six-year gross earnings won’t even buy many ad placements on TV.
A copy of the “2016 Elections Political Advertisement Rate Grid” of ABS-CBN network that PCIJ obtained from an ad agency puts the value of a 30-second TV ad spot for “Prime A Programs” and “Post-Prime A Programs” at P830,969, and for “Platinum Prime A Programs,” P997,163.
With the president’s total take-home pay in six years, the winner in the upcoming polls could buy just 25 units of 30-second ad spots, or about 13 more minutes of indubitable fame or infamy on national TV, if he or she wishes to. – With research and reporting by Vino Lucero and Earl Parreno, PCIJ, March 2016