Billions of pesos spent on 'pre-campaign' ads

MANILA, Philippines – One month down, two to go, more cash to flow.

The official campaign period kicked off on February 9, and since then candidates have been flooding the media with their smiling faces and warm promises.

What the Filipino audience cannot see, however, is the millions of pesos flowing behind the scenes.

During the first month of the campaign period, Senator Grace Poe spent the most on television and radio advertisements among presidential bets, based on available data from the Commission on Elections (Comelec). 

From February 9 to March 6, Poe paid ABS-CBN P51.4 million. Poe's ads are produced by Huddle Room Media Inc. 

30-second ads shown in between popular evening programs cost more than P800,000 each, while 15-second ads cost nearly P500,000.

Poe is followed by Mar Roxas at P22.4 million. He worked with the ad agency Havas Media Ortega. Meanwhile, Senator Miriam Defensor Santiago paid ABS-CBN over P3 million for her ads, which were made by Great Wall Advertising Inc. A 12% Value Added Tax applies to such ads.

Comelec's data, however, are still incomplete.

Other media networks have not yet submitted their advertising contracts, which contain information on candidates' ad spending. Vice President Jejomar Binay and Davao City Mayor Rodrigo Duterte have not yet turned in their details.

"We remind mass media entities that the period of submission of advertising contracts is not at the end of the election, but 5 days within signing," lawyer Sonia Bea Wee of the Comelec Campaign Finance Office told reporters on Wednesday, March 9 during a forum organized by the Philippine Center for Investigative Journalism (PCIJ).

Wee warned that media entities may be penalized for non-compliance. "A fine and jail time," she said.

The biggest spender so far is vice-presidential bet Francis "Chiz" Escudero, who paid ABS-CBN P86.4 million for his ads aired from February to March. For his ads to be shown from April to May, he shelled out another P56.6 million.

Solar also submitted its advertising contracts for senatorial bet Mark Lapid, with a lumpsum bill of P2.8 million.

Here are the ad spending of other candidates, as submitted by ABS-CBN: 

Advertising contracts from other networks for the rest of the candidates are yet to be released.

Billions before 2016

Although only a month has passed since the beginning of the official campaign period, it is no secret that several candidates have been dominating the airwaves and the Internet for several months already.

Since ads do not come cheap, poll watchdogs cannot help but ask just how much money aspiring public servants are forking out to win?

As much as a billion pesos, apparently.

PCIJ reported that presidential and vice-presidential tandems from the Liberal Party, United Nationalist Alliance, and Galing at Puso have already spent more than P1 billion in total on TV, radio, and print ads from March 2015 to January 2016.

PCIJ's data come from Nielsen, an independent research firm.

Binay's ads alone cost P1.05 billion, Poe's cost P1.02 billion, Roxas' cost P969.2 million, while Duterte's only cost P146.4 million. (READ: Mar is biggest spender in past campaign)

Santiago is the only presidential bet who did not spend on "pre-campaign ads." But her runningmate, Senator Bongbong Marcos spent P252.5 million. (READ: How did Binay fund his 2010 campaign?)

Technically, there is nothing wrong with such spending since the Omnibus Election Code only prohibits candidates from "overspending" during the campaign period. 

Ad spending before February 9, 2016 is therefore not monitored by the Comelec. 

"Because of this law, Comelec has no jurisdiction to go after candidates," said Wee. "They call these pre-campaign ads as 'policacies' or political advocacies."

Poll watchdogs, however, are not pleased. 

"They are benefitting from circumventing the Fair Elections Act," Eric Alvia of the National Citizens' Movement for Free Elections (Namfrel) told Rappler.

"Shows how onerous and lopsided our conditions are. We have a law that has a loophole based on that Supreme Court (SC) decision," Alvia continued.

According to the SC, one is considered a candidate not after the filing of her or his Certificate of Candidacy (COC), but only upon the start of the campaign period.

Hence, pre-campaign spending is not subject to limits.

"The Fair Elections Act has no teeth," Alvia argued. "This is the ill effect of the SC's definition of a candidate. Makes also a mockery not only of the law, but also of the elections and Comelec as an institution."

As for the Comelec, Wee said that the position of the Campaign Finance Office has been consistent. "We want to revert the definition of a candidate. Upon filing of COC, they should already be considered candidates."

But another question raised by watchdogs is this: How do political parties and candidates fund their pre-campaign ads?

Unfortunately, they are not required by law to provide us answers. 

Under election laws, candidates should disclose who their campaign funders are by submitting their Statements of Contributions of Expenditures (SOCE). This rule, however, does not cover pre-campaign donations.

In past elections, SOCEs revealed that the biggest campaign donations mostly come from a candidate's wealthy friends and relatives engaged in business and politics.

According to Wee, the biggest contribution they have on record is P100 million from Antonio Cojuangco, who donated to Benigno Aquino III's 2010 presidential campaign.

Poll watchdog Lente suggests putting contribution caps on donors.

Loopholes?

Although candidates get away with "pre-campaigning" based on election laws, problems may stir when it comes to laws on taxation, graft and corruption.

Campaign donations "duly reported" to the Comelec are tax-exempt.

However, if there are unused or excess funds, they should be returned to the donor, the Bureau of Internal Revenue (BIR) said. Otherwise, they will be subjected to income tax.

Are pre-campaign donations still tax-exempt? No, according to the BIR.

"If the money isn’t from your own pockets, if it was donated, that donation, because it’s not yet the campaign period, is not yet tax-exempt," the PCIJ quoted BIR Commissioner Kim Henares as saying. "So we have to pay the donor’s tax."

Donor's tax is equivalent to 30% if the parties involved are not relatives.

Aside from "pre-campaign" donors, the BIR will also keep an eye on media companies which raked in millions from "pre-campaign" ads.

In an interview with PCIJ, Comelec Commissioner Christian Lim warned candidates who are also incumbent officials of violating the Anti-Graft and Corrupt Practices Act.

“If you look at the civil-service rules, gift-giving should be moderate. But if it is reaching millions of pesos worth, that’s a different story. There could be a violation of civil service rules, as well as the anti-graft rules.”

Following the PCIJ report, Roxas said he is "open to a lifestyle check." Santiago also called for a probe on her rivals' ad spending. The senator authored the still-pending Anti-Premature Campaigning Act.

Campaign spending 

In 2016, presidential and vice-presidential candidates were each allowed to spend only a maximum of P557.4 million during the campaign period.

This is calculated by multiplying the number of registered voters by P10, which is the allowed amount a presidential and vice-presidential bet can spend per voter.

Number of registered voters x Authorized spending per voter = Spending cap

P10 x 55.7 million voters = P557.4 million as spending cap

According to some poll watchdogs, the spending limit is actually too small and "unrealistic." Such rules were set in 1992 and have not changed since then, dismissing the changes in inflation rates.

Lente suggested increasing the spending cap so that candidates will not be tempted to cheat in their SOCEs.

Wee, however, clarified that it was not the Comelec that set the rules but Congress. "We are sticking to those rates, because that's what the law says. We are restricted to that," she stressed.

With two months left to election day, poll watchdogs expect more money – illicit or not – to flow across the whole country. – Rappler.com

To reach the Comelec Campaign Finance Office, contact 525-9334.

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