Overspending
FIRST PERSON - Alex Magno (The Philippine Star) - April 6, 2019 - 12:00am

Each election year, the country’s Gross Domestic Product receives a boost from election-related spending. This is not true of all countries, only those with poor governance institutions or flawed electoral systems.

We do have regulations on campaign spending. The Comelec is trying its darn best trying to police campaign materials that flood our streets. But with limited resources, the electoral watchdog can only do so much.

In the main, the poll body relies on the statement of contributions and expenditures (SOCE) submitted by the candidates themselves after the electoral exercise. This is not a reliable instrument.

Recall that in the aftermath of the 1992 elections, the poorest candidate, Jovito Salonga, who ended up seventh in a field of seven was the only one called out for overspending. He was probably too poor to hire a good bookkeeper.

The SOCE is, to put it kindly, a sanitized document. Often, the real sources of campaign contributions are never identified. An assiduous bookkeeper makes sure the expenditure side conforms to the spending limits set by law. The net result is that this document will not give us an accurate picture of actual electoral spending.

One candidate for the Senate this year did not even bother to file his SOCE in previous elections. Nevertheless, the Comelec did not disqualify him. This is not a good gesture to convey its determination to enforce spending rules.

Our voters do not vote for political parties. They vote for individuals regardless of party affiliation. Name-recall determines winners. This is stimulus for higher spending.

In previous elections, the minimum funding required for a credible senatorial run was conservatively estimated at P200 million. An elected senator will not rake that back in salaries and allowances over a six-year term. But the required amount is raised and spent anyway. This is one of the mysteries of our electoral politics.

For those running for congressional seats, the minimum campaign budget is estimated at P50 million. In some hotly contested districts, a congressional candidate may sometimes spend more than a senatorial candidate chasing after a national constituency.

Mayoral candidates in major cities need to raise at least P20 million for campaign spending. In hotly contested local contests, campaign spending could rise several-fold.

Little wonder then that with about 81,000 candidates in the fray, campaign spending will reflect in the macroeconomic numbers. During the electoral period, certain consumer items see a spike in demand.

As a large volume of money circulates, we often experience shortages of banknotes. The velocity of money circulation creates a general rise in consumer demand, creating palpable inflationary pressure.

The symptoms of election-related spending reflect in the national accounts as well as the anecdotal evidence of retailers. That is easy to monitor. What cannot be casually monitored is how “investments” in electoral campaigns are recovered in time for the next election season.

One should not wonder why elections and corruption seem hopelessly intertwined.

Low standard

The dynamic of money politics governing our electoral democracy often explains why the moral standard for candidates is alarmingly low.

This week, the DOJ indicted Daraga mayor Carlwyn Baldo for the murder of Rodel Batocabe, a potential rival. Baldo is locked in an electoral fight with Batocabe’s widow. 

Several former senators who have been accused of plunder, and actually spent time in detention, are seeking reelection. All of them have chances of winning.

Scores of candidates for local government posts have either been accused or indicted for graft. That has not dissuaded voters from supporting their candidacies.

Take the case of Edna Sanchez, now seeking reelection as mayor of Sto. Tomas, Batangas.

A technology company awarded a P5.9 million contract to upgrade the municipality’s water billing and collection system filed a graft complaint against Sanchez. The company, WeDo BPO Inc., alleges the mayor sent her bodyguard to the company’s offices to collect a check in the amount of P1,211,592.82 and a million in cash as kickback for the award of the contract.

Sanchez denies the accusation, describing it as “politically motivated”. But the complainant has submitted as evidence the copy of the check signed in the back portion by the mayor herself, a copy of her postal ID and an authorization letter she signed for her bodyguard to collect the loot. The evidence appears to be ample.

The complaint is pending at the Office of the Ombudsman, which is deluged with thousands of similar complaints.

The money involved in this case may not seem tremendous. But it is typical of so many cases and anecdotes about how elected officials use the powers of their posts to draw “rent” from business enterprises operating in their fiefdoms.

Multiply this ten thousand times and one gets an idea of how much friction in domestic economic transactions is created by an elected political class seeking to recover their campaign “investments.” That friction, more than the red tape we are infamous for, weighs on the ease of doing business in our economy.

No wonder we have such a hard time attracting investments to keep our economy growing. National government may be a problem, but local governments appear to be a more telling one for many small businesses. It will not be inaccurate to describe our political class as one organized for extortion rather than governance.

The bump in domestic demand due to campaign spending is not useful for us in the last analysis. In the end, we all pay more dearly for the sort of politics that explains the overspending.

2019 MIDTERM ELECTIONS STATEMENT OF CONTRIBUTIONS AND EXPENDITURES
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