Nat’l bets splurge P4.3B,
local bets P162M on ads

THE TOP ad spender among the presidential candidates has already conceded, and his counterpart in the vice presidential race looks headed for a surprise loss as well. But it seems the government may yet end up a major winner – at least in financial terms – in what has turned out to be the costliest elections yet in Philippine history.

The net total spending on television, radio and print ads by the national candidates and party-list groups alone amounted to P4.3 billion across the 90-day official campaign period from February 9 to May 8, 2010.

Based on the PCIJ’s computation, 12-percent of the P4.3 billion corresponds to P517.3 million in expanded value-added tax (EVAT) revenues that should accrue to the public coffers.

If the amount was collected and remitted by the media agencies, it is a huge windfall that “will add to the intake of the government,” according to Dennis Arroyo, director of the National Economic and Development Authority’s National Planning and Policy Staff (NEDA-NPPS).

However, only some advertising contracts submitted by some broadcast media agencies to the Commission on Elections imputed the EVAT on the amounts that the candidates and the political parties were asked to pay. Many more advertising contracts from other media agencies did not reflect any EVAT charges.

The PCIJ arrived at the P4.3-billion figure based on data from the media monitoring group Nielsen, and factoring in all the discounts and applicable increases in TV, radio and print ad rates.

NEDA: P15B spent

Of the P4.3 billion, the top five candidates for president spent P1.1 billion, the candidates for senator another P1.5 billion, four candidates for vice president P653 million, and party-list groups P597 million.

“Omnibus ads” of the political parties for multiple candidates amounted to P297 million, and “tandem ads” for candidates for president and vice president, another P131 million.

Aside from the P4.3 billion ad spending by national candidates, aspirants for local positions altogether spent P162 million on print and broadcast ads during the two months that they were allowed to campaign.

NEDA-NPPS, which counts the spending by the national government and all the candidates – local and national – in its computations, meanwhile, estimates that the total expenditures for the May 2010 elections could reach P15 billion.

National government election spending, says NEDA, includes Comelec’s budget for locally-funded projects under the 2010 General Appropriations Act (GAA), notably the FY (fiscal year) 2010 automated national and local elections and FY 2010 overseas absentee voting.

Some of the specific cost items cited by NEDA are salaries, compensation, and honoraria of personnel involved in election activities (e.g. per diem of teachers, allowance for COMELEC Board of Election Inspectors, allowance for embassy personnel for overseas absentee voting, etc), supplies and materials, and support for operations.

“Total election spending,” the NEDA says, “could contribute 0.39 percentage points to real gross domestic product (GDP) growth rate this year.” By comparison, expenditures during the 2007 polls contributed 0.34 percentage points to the GDP that year.

Table 1. Ad Values and Indicative Real Ad Cost of Candidates
for National Elective Positions, Political Parties, and Party-list Groups

February 9-May 8, 2010, in Philippine Pesos

PRESIDENT 1,258,520,587 452,912,335 941,834 1,712,374,756 742,802,328 362,329,868 847,650 1,105,979,846
VICE PRESIDENT 821,111,677 227,794,817 2,849,583 1,051,756,078 468,401,174 182,235,854 2,564,625 653,201,653
PRES-VP TANDEM 237,788,155 317,400 193,631 238,299,186 130,911,195 253,920 174,267 131,339,383
SENATORS 2,310,662,580 287,818,789 3,808,577 2,602,289,946 1,311,846,534 230,255,031 3,427,719 1,545,529,284


332,213,418 116,996,819 580,527 449,790,764 182,717,380 93,597,455 522,474 276,837,309
PARTY LIST 968,727,855 71,632,056 6,295,502 1,046,655,413 534,571,889 57,305,645 5,665,952 597,543,486
TOTAL 5,929,024,273 1,157,472,216 14,669,654 7,101,166,142 3,371,250,500 925,977,773 13,202,688 4,310,430,961

1 Source: Nielsen database, based on published rate cards of media outfits. Covers 19 TV channels (10 free and nine cable channels), 111 radio stations in 15 areas nationwide, and 54 national and provincial print media outfits

2 The indicative real ad cost was derived as follows:

– For TV, a 30-percent discount was applied to Nielsen’s ad values for TV per RA 9006. An additional 15-percent discount was applied for political ads aired from March 1 to May 8 to approximate the average increase in TV networks’ rates starting March 1, 2010

– For radio, a 20-percent discount was applied to Nielsen’s ad values for radio per RA 9006

– For print, a 10-percent discount was applied to Nielsen’s ad values for print per RA 9006

3 Data for radio are available up to April 30 only

4 Data for print are available up to April 30 only

Table 2. Ad Values and Indicative Real Ad Cost of National Candidates,
Political Parties and Party-List Groups, and Local Candidates

TV, Radio and Print, February 9 – May 8, 2010 in Philippine Pesos

5,929,024,273 1,157,472,216 14,669,654 7,101,166,142 3,371,250,500 925,977,773 13,202,688 4,310,430,961
TOTAL LOCAL CANDIDATES 54,584,065 160,748,600 3,379,632 218,712,297 30,021,236 128,598,880 3,041,669 161,661,784
GRAND TOTAL 5,983,608,337 1,318,220,816 18,049,286 7,319,878,439 3,401,271,735 1,054,576,653 16,244,357 4,472,092,745

Profit bonanza

For sure, though, much of the monies spent during the recently concluded polls went to political ads.

The multibillion-peso ad spending spree by national candidates already makes up a significant 29 percent of the NEDA”s estimate of total poll expenditures, and even the Liberal Party (LP) and the Nacionalista Party (NP) have readily admitted that ad spending ate up much of their respective campaign budgets.

And while big ad expenditures proved to be no guarantee for big political wins (or just plain wins, for that matter), these have apparently resulted in a major profit bonanza for certain broadcast companies, along with advertising and PR firms.

ABS-CBN Broadcasting Network and GMA Network, in particular, reported a substantial boost in their profits in the first quarter of 2010, in large part because of added revenues from political ads.

Both listed companies, in separate disclosure reports, the two networks acknowledged earnings of more than P1 billion each from political ads during this period.

Indeed, despite the steep cost of TV ads, 78 percent of the official campaign period ad buys of national candidates went to television, data from the media monitoring group Nielsen reveal.

Advertising and media agencies also benefited from the political ad frenzy.

Based on telecast orders submitted by GMA Network to the Commission on Elections (Comelec), these entities took as commission as much as 15 percent of the gross media purchase amount whenever they placed ads on behalf of candidates.

In general, too, ad agencies take a cut of around 17 percent of the production cost for each commercial they make.

Pre-campaign ads: P1B

Some candidates also placed ads way before February 9, 2010, the start of the three-month official campaign period for those running for national positions.

Earlier, the PCIJ reported that from November 2009 to January 2010 alone, the total indicative value of ads placed by presidential candidates had reached as much as P1.1 billion.

Yet spending big on ads seems to have backfired on some candidates, especially NP’s Manuel ‘Manny’ Villar Jr. and LP’s Manuel ‘Mar’ Roxas II, who were the top ad spenders among the presidential and vice presidential candidates, respectively.

According to University of the Philippines political science professor Dr. Grace Jamon, political ads may have played a huge role in creating name recall among voters, but these same ads also called attention to excessive campaign spending.

This, in turn, made the public wary of the big ad spenders, she says.

Villar, for instance, landed third in the presidential race even though he had practically become a constant fixture on TV in the last year or so because of his ad blitz.

From November last year to January this year alone, Villar spent more than half a billion pesos on ‘advocacy’ ads, most of which ran on TV.

He appeared to pare down his ad buys during the official campaign period (February 9 to May 8), when campaign spending and airtime limits were already in effect. Officially, he spent P390.5 million during the period, including those ‘paid for’ and ‘paid by’ the Nacionalista Party.

Rode on party-list ads

Villar, though, also appeared in ads featuring him and his running mate Loren Legarda that were worth a total of P90.5 million, as well as in commercials with party-list groups and other candidates that were altogether worth P254 million.

During the critical last week of the campaign, Villar had only P22,000 worth of TV ads to his credit as well, even if in fact he appeared in 625 TV ad spots of six party-list groups (worth an indicative P134.6 million), and in 106 TV ad spots with some of his senatorial candidates, among them Gilbert Remulla, Gwendolyn Pimentel, and Miriam Defensor Santiago (worth an indicative P20.2 million).

Most of Villar’s ads with party-list groups even featured him solo, but the spending and the minutes would not be credited to him.

As noted by Comelec spokesperson James Jimenez, these would be credited to the groups whose names appear in the ‘paid for’ and ‘paid by’ clauses in the ad’s end tags.

In fairness, this tactic was used by other candidates as well, among them president-elect Benigno ‘Noynoy’ Aquino III.

Erap’s late surge

This may be why it was former President Joseph ‘Erap’ Estrada who emerged as the top spender on TV ads in the last week of the campaign.

From May 1 to 8, Estrada, who ran under the Pwersa ng Masang Pilipino Party, posted an indicative ad value of P45 million from May 1 to 8 alone – or a daily average ad spending of P5.6 million.

Estrada splurged on ads in the last five weeks of the campaign, spending P100.7 million, or P20 million more than his combined ad spending (P80.6 million) in the first two months of the official campaign period.

Among other things, this strategically late ad-placement surge might have helped Estrada overtake Villar eventually and place second in the presidential race.

In terms of ad spending during the campaign period, Estrada was third, coming after Villar and Aquino. In all, the three’s combined ad expenditures (including commercials ‘paid for’ and ‘paid by’ their respective political parties) from February 9 to May 8 reached P905.8 million.

Noy-Mar ads

President-elect Aquino, for his part, was credited with P334 million worth of unique ads (including those ‘paid for’ and ‘paid by’ the Liberal Party) even though, like Villar, he was also featured in 559 TV ad spots of six party-list groups the week before the polls.

These ads were worth an indicative P103 million altogether. In addition, Aquino had his own TV ads that appeared 261 times (worth P34.7 million), and 292 TV ads in tandem with running mate Roxas (worth P39 million) in the last week of the campaign.

Roxas himself was consistently the top ad spender among the vice presidential candidates even during the pre-campaign period. And from just April 1 to May 8, Roxas spent an indicative P86 million on TV ads, or an average of P2.3 million a day during the 37-day period.

All that expense seemed worth it, however, with Roxas also consistently ranking No. 1 in voter-preference surveys. That is, until the homestretch of the campaign when Pwersa ng Masa’s Jejomar ‘Jojo’ Binay surprised everyone with his sudden surge in survey ratings.

As of this writing, Roxas is still trailing behind Binay by over 800,000 votes, based on partial unofficial tally by GMANews.TV of 90.26 percent of election returns.

Binay, who was a constant third placer in surveys since December 2009, overtook survey second-placer Loren Legarda (Villar’s running mate) in April. By May, he was in a statistical tie with Roxas for the top spot in a voter-preference survey conducted by the Social Weather Stations.

Analysts attribute Binay’s surprise showing in large part to the public endorsement by Senator Francis Escudero a few weeks before the polls – an endorsement driven home by a prominent TV ad campaign.

Political strategist Ronald Jabal says that Escudero’s endorsement ads for Binay as Aquino’s vice president presented the Makati mayor as a viable alternative to Roxas, who is liked and trusted enough by the public, but is perceived as being too like Aquino – a scion of a rich and politically influential family.

By contrast, Binay has an impoverished past, which he brings up every so often in his ads.

Jabal says that it was Escudero’s ads that “made people realize that a ‘combination’ of candidates coming from different political parties is possible.” It may have also reminded them that Binay was a “Cory boy,” having had close ties with Aquino’s late mother, former President Corazon ‘Cory’ Aquino.

‘Seal-deal’ ads?

But perhaps just to “seal the deal,” the savvy Binay spent P37.7 million on TV ads during the campaign’s last week as well, or P14 million more than the combined TV ad spending of Roxas and Legarda for the same period. Nielsen data indicate that the amount made up 62 percent of Binay’s total budget for TV ads.

Up until then, the LP had run the campaign of frontrunners Aquino and Roxas as individual candidates rather than as a team, observes Jabal. At the start of the campaign, Roxas was even the one endorsing Aquino, says the strategist.

Yet with Escudero presenting Binay as Aquino’s possible partner, Roxas was soon slipping in the polls. In reaction, the LP began saturating the airwaves with Aquino-Roxas ads – this time with Aquino endorsing Roxas.

This last-ditch attempt to save Roxas in the last week of the campaign came with a hefty price tag: an indicative P121 million for a total of 723 TV ad spots, or a staggering P15 million per day on average from May 1 to 8.

These tandem ads include those ‘paid for’ and ‘paid by’ the LP, as well as those credited to party-list groups. Aside from these commercials, Roxas also had 87 TV ad spots that feature him solo (worth P9.7 million) in the last week of the campaign, as well as 59 TV ad spots (worth P14.3 million) with party list groups Katipunan ng mga Anak ng Bayan/All Filipino Democratic Movement (Kaakbay) and Parents Enabling Parents (PEP).

Such efforts, however, may have been a little too late for Roxas. Still, the recent polls did result in his party’s standard bearer now heading for Malacañang.

NEDA’s Arroyo also points out: “Every new elections infuse new political energy for the incoming administration, which is helpful for investments.”

Noting the wide margin of votes for President-elect Aquino, Arroyo remarks, “It is definitely safe to say that it is an advantage for investments.” PCIJ, May 2010