Business titans secretly fund Philippine presidential bets

Philippine presidential favorite Rodrigo Duterte has flippantly brushed aside campaign trail allegations of accepting million-dollar gifts, while his rivals have refused to disclose their backers, deepening concerns over business titans’ shadowy grip on politics.

The Philippines has one of Asia’s biggest rich-poor divides, with poverty rates remaining stuck in recent years despite strong economic growth, and analysts say one of the reasons for the disparity is the debt that politicians owe their secret backers.

Under the nation’s campaign financing laws, there are no caps on how much people or companies can give to candidates, nor are there limits on individual donations.

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They also do not have to reveal their backers until a month after polling day.

Duterte has entrenched himself as the clear frontrunner for Monday’s elections by portraying himself as a frugal, anti-establishment politician who is tough enough to take on the elites.

“When I become president, by the grace of God, I serve the people, not you,” Duterte told reporters this week, referring to the elite.

But in the final stages of the campaign trail Duterte, who is meant to earn less than $2,000 a month as the mayor of the southern city of Davao, was hit with allegations that millions of dollars had poured into secret bank accounts.

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He initially denied there were any hidden accounts. After a journalist deposited money into them, he admitted they did exist and that 193.7 million pesos ($4.2 million) were deposited into them on his birthday two years ago, nearly 10 times his declared assets.

“That only means I have many rich friends,” he said, refusing to disclose who they were.

READ: Duterte: I have P128K in BPI account, $5K in dollar account

Asked at an earlier national television debate to name his campaign donors, Duterte gave a mocking answer, answering “Emilio Aguinaldo”, a leader of the Philippines’ 19th-century war for independence from colonial power Spain.

Buying politicians

His rivals similarly have felt no obligation to tell voters who their backers are, let alone how much they have been paid by them.

Senator Grace Poe, who has been in politics for just three years and fashions herself as a lily-white poster image of change and probity, has been widely rumored to be backed by taipans Eduardo Cojuangco and Ramon Ang.

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They are in charge of San Miguel Corporation, one of the nation’s biggest conglomerates.

Cojuangco was one of dictator Ferdinand Marcos’s cronies until the 1986 “People Power” revolution sent the strongman into US exile.

Cojuangco fled on the same plane but returned three years later and kept building his business empire, while also running a political party that today is backing Poe.

When asked by AFP to confirm that Cojuangco and Ang were funding her campaign, Poe spoke only in general terms that there was nothing wrong with taking money from people linked with Marcos.

“All candidates have support from both sides of the fence. If they say they don’t have any they’re lying,” Poe replied.

She said her backers and their donations would be revealed after the election, as per the law.

Marcos’s son and namesake, who is seeking to cement a remarkable political comeback for the family by being elected vice president on Monday, also referred only to his legal obligations, when asked by AFP in an interview to disclose his backers.

Ferdinand Marcos Jr., whose late father was accused of looting $10 billion from state coffers during his two-decade rule, rejected the notion that he would be beholden to his secret donors.

“That would imply that you bought a politician. I don’t think I would allow that to happen to myself,” Marcos Jr. said.

Weak laws

In the Philippines, campaign spending is meant to be capped at 10 pesos per voter, which this year will mean a maximum budget for each presidential candidate equivalent to about $11 million.

READ: Top bets for president, VP, Senate spend P54M daily

In some advanced Western democracies the donations are typically limited to relatively small sums to encourage a larger section of the population to put their representative into office.

However in the Philippines the uncapped donations mean the funding can be provided by big-money donors in hopes of currying favors with an entire government, according to Ronald Mendoza, newly appointed dean of the Ateneo School of Government in Manila.

He said said the porous election finance safeguards made the economy vulnerable to being held captive by big-time punters’ personal interests.

“Only a few can give such large amounts…. so you’re no longer accountable to people who voted you in. You become more accountable to the person who actually financed you,” Mendoza told AFP.

Historically, Mendoza said this led to monopolies and economic stagnation, since reforms were blocked and competition discouraged to enable campaign benefactors to recoup their investment on the new leader.

A mere 308 Filipinos funded the 2010 presidential election, turning them into virtual venture capitalists financing high-risk startups, according to a study by the Manila-based Philippine Centre for Investigative Journalism (PCIJ).

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