People’s vote vs. rule of law

It’s not only shaping up to be a presidential election with the most unpredictable outcome. It can technically yield the strangest result. I am not merely referring to the technical possibility of the president being disqualified but the vice president as well. The technical result will be the assumption of the presidency by the Senate President based on our Constitution. The possible ground for ousting the president and vice president elect is – election campaign overspending.

I am not nitpicking about the numbers like an obsessed accountant as we really do not know the actual numbers. The Philippine Star has reported that before the official campaign period started, leading presidential candidates have already spent in the vicinity of P420 million to P550 million per head on television ads alone. I know – these pre-campaign period expenses don’t count because, as the Commission on Elections (COMELEC) chair said, there is a loophole in the law that allows the candidates to campaign before the official campaign period, and under the law, this is not part of the COMELEC’s monitoring mandate. Thus, even if the candidates have spent more than the campaign expense limit of P540 million (P10 per voter x 54 million voters), they are not in breach of anything as all have been spent before the start of the official campaign period.

That’s exactly the point, though. If presidential candidates used up or almost used up P540 million in TV ads alone prior to the campaign period, they would have easily breached that amount in several multiples, considering the exponentially increased TV exposure during the official campaign period. Primetime rates can easily fetch more that P500,000 for a 30-second airtime. This is still not counting headquarters, campaign sorties, logistics and transport costs. There are even costs allegedly incurred by some candidates which, I learned from our household staff, is the reason they want to time their vacation at their province during elections so they can earn some money.

Political analysts say a presidential or vice presidential candidate needs to spend at least P2 billion for the campaign, in part due to the country’s 7,100 islands layout. From what we are seeing, this level of spending may indeed be the case. In our election law, it does not matter whether the funds are donated because the law forces the candidates to recognize these donations, which will be counted in their election spending. Even a negative publicity ad against a candidate will be counted as election spending for the candidate who commissioned the ad.

Every person, including juridical persons, is entitled to political speech. But on that point, can corporations deduct political contributions or donations as business expenses? The Bureau of Internal Revenue rule, of course, is that it cannot be deducted. I believe, however, that the wrong reason was used. It cannot be deducted under the rules because there are only certain donations that can be deducted – charitable donations and the like. Arguably though, these political contributions are not donations, especially if the candidate is espousing a policy that can be beneficial to the donor’s business – in which case, there is a vested interest in the contribution and is not one arising from generosity. It is not deductible though, because the Corporation Code prohibits a corporation from giving donations in aid of any political party or candidate for purposes of partisan political activity. In other words, donations from corporations of this nature are illegal.

The same prohibition in the Corporation Code also explains why politically oriented ads (like the one where a boy was reciting questionable characteristics of a candidate) are careful not to endorse a particular candidate. If there is an implication, it will be labelled as quite vague. That ad with a boy reciting – it’s either none of the candidates have those negative qualities, or all of them have those negative qualities (but you take your pick on who has what quality).

Back to campaign overspending: Why would I get hung up on disqualification possibilities, which may not be probabilities? Maybe because there is now a recent precedent involving the highest local government or provincial position. A governor, as we all know, was ousted via Supreme Court decision because of campaign overspending. He was only allowed to spend P4.5 million but spent almost P25 million (or five times over, which can happen on a national level position). The orange cards for hospital benefits distributed to voters by the ousted governor did not help him one bit because the evidence became as bright as the color orange.

So once we have a president and vice president elect, and assuming cases to oust them for election overspending are filed, will these cases remain pending for years only until they acquire status of “moot and academic”? Or will the COMELEC headed by young blood pursue enforcement of election law? And if it does, will the Supreme Court exercise its full power to enforce the rule of law? If rule of law is so valuable, what is the consequence if the vote of the electorate is set aside? Will the public accept the decision as good law-abiding citizens or will there be a massive protest and a political crisis that can put our good economic run on a tailspin?

For once, the answer is not as easy as ABC.

* * *

Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Educated Marginalized Entrepreneurs Resource Generation (EMERGE) program of the Management Association of the Philippines (MAP). Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.