Crossroads (Toward Philippine economic and social progress)
Philippine Star, 9 March 2016


Presidential elections are an expensive exercise both for the government and the private sector.

Cost and financing of presidential elections. A presidential election is a winner-takes-all process. The stakes are very high and the rewards to the victor even higher. Hopefully, the elections lead to high rewards for nation-building too.

In presidential elections, other national positions are also at stake: the vice-presidency and some memberships in the senate. The expenses for their election are included in the total calculation of electoral expenditures.

As far as financing the elections is concerned, several general channels are known to have facilitated elections: (1) self-finance, (2) party-finance, (3) private contributions, (4) graft and corruption.

Conservative magnitude of the financial mobilization. I use the 2010 elections as reference point to calculate total election spending for this year’s political exercise.

In 2010, 36.1 million votes were cast for all candidates. The gross domestic product (GDP) was P9,002 billion (or P9 trillion).

We could further assume that new output of one peso resulted from a peso of spending. Thus, the new output of P45 billion was caused by election spending of the same amount in 2010.

Projecting these numbers to the presidential election of 2016, we arrive at modest estimates of total election spending. If we assume that private election spending is just one-half of total election spending (another conservative estimate), we arrive at total private election spending for the election to amount to P22.5 billion.

All these numbers imply that total spending per vote cast was P1,246, a very modest estimate. Translated further into private spending per votes cast, it means P623 per vote.

Of course, election spending in 2016 would be bigger on the basis of two counts alone: the GDP has risen and the number of voters to be cast will be larger. These conservative numbers imply the cost of financing and mobilization of finances for the candidates are relatively modest.

(1) Self-finance. No candidate among the five contenders (Binay, Duterte, Poe, Roxas, and Santiago) for 2016 can afford the resources required to mount a successful candidacy on self-financing.

Even if we simply adjusted the total private election spending to be P25 billion (and not P22.5 billion), with five candidates for president in 2016, this would mean an average spending of P5 billion for each.

But the contenders have different financial means. Each is “poor” in relation to financial requirements of the presidential candidacy. About the only man who might be able to have a higher degree of self-financing might be Mar Roxas, who comes from a family that is propertied and rich.

Very rich is the candidate who could be capable of raising one-tenth of the amount required. That would still be a substantial effort on the basis of self-financing.

(2) Party finance. Given that political parties in the country have remained relatively weak and powerless as a result of the break-down of the two-party system after martial law, party-finance is also weak.

Much of the government in recent years from the post-Cory Aquino period has been ruled by a loose coalition of small and weak political parties, having failed to recover from the shock of their loss of cohesion after martial law.

Though the Liberal Party is in power, in point of fact, it is unlike its old precursor. The Nacionalista Party has practically been splintered among a number of groups. All other political parties appear to be small ones in search of alliance with others.

(3) Private contributions. The candidate who is most likely to win attracts the highest amount of private financing support. The added contributions to the campaign pot are largest when the prospects of victory are high.

In the elections of 2016, it appears a four-way close contest is emerging (leaving the fifth candidate with even much lower funding). Even then, all contenders will have different logistical and funding clout. This is so despite a difference in degree of financing support from private contributions.

The incumbent administration led by the Liberal Party candidates have the advantage of logistical control of the reins of government.

The Commission on Elections is making an attempt to track down candidate expenses and require candidates to submit reports of contributions and expenses for their campaign.

Even then, who contributes to which candidate could be kept a mystery by the candidates as long as possible. There are no limits to the amounts of contributions or on the nature of the contributions.

In this sense, private contributions in an election represent transactional contributions for protecting and enhancing programs of government that are favosred by the contributor.

This also includes the efforts of vested interests to align with their protectors and enhancers. The size of their campaign contribution could determine their clout and power relative to the candidate they support.

The possibility the contributors to the campaign of a candidate could lead to the capture of specific economic and social policies is highly likely when the elected leader is weak and subject to manipulation by the significant political contributors.

(4) Graft and corruption. Graft and corruption is not a legitimate source of financing of elections. When corruption is an endemic practice in the day-to-day life of a nation, as it appears to be in this country, the chance that elections are also financed by corruption is ever-present.

Indeed, cases of graft and corruption have figured seriously in past elections, and this year’s election is no exception.

Practices in government, the exercise of power and lack of sufficient check and balance, all these contribute to the lingering practice that is corruption in government.

Money accumulated in the past becomes wealth and income in the present. If it came from corruption then, it reflects a continuity of a practice that needs reform.

Even as corruption could be a source of financing candidates, one wonders if there are also other forms of illicit and illegal sources of campaign contribution.

The reported prevalence of import smuggling and the suspected association of such practices with corrupt agencies of the government would suggest that dirty money is also financing some candidates.

If that is so, are drug and any other dirty moneys far behind?