2022 Philippine Elections

Isko says nothing wrong with keeping P50-million excess campaign funds

Isko says nothing wrong with keeping P50-million excess campaign funds

SEEKING THE PRESIDENCY. Manila Mayor Isko Moreno visits Cebu in November 2021.

Jacqueline Hernandez/Rappler

(1st UPDATE) President Duterte himself admitted in 2017 to keeping his leftover campaign funds, which led to an increase in his net worth

MANILA, Philippines – Manila Mayor and presidential aspirant Isko Moreno admitted he still has the P50 million in excess campaign funds he declared after the 2016 senatorial elections.

He disclosed this during an interview with GMA news anchor Jessica Soho that aired on Saturday, January 22.

Back in 2016, after his failed bid for a Senate seat, Moreno declared to the Commission on Elections that he had P50.8 million left over from his campaign funds. Moreno’s Statement of Contributions and Expenses showed that he was the senatorial bet that received the biggest contributions – P171 million. Of this, P50.8 million was unspent.

Moreno then told the Philippine Center for Investigative Journalism (PCIJ) that he had later on declared P50.5 million of this as income and even paid P9.7 million in taxes for it. He had sent PCIJ his quarterly income tax return and manager’s check to prove this.

To Soho, Moreno maintained he had not violated any laws by keeping the excess funds.

As long as nagbabayad ka ng buwis (As long as you pay the proper tax),” said the Manila mayor.

“‘Yon ang sinasabi ng BIR. Kasi hawak mo ang pera. E limited ang gastusin mo sa kampanya, sumobra ang donation mo…. So kailangan mo magbayad ng buwis at ‘yon ay lumalabas na income mo,” he said.

(That’s what the BIR said. Because you are holding the money. You had limited expenses during the campaign but your donation exceeded what you spent…. You need to pay tax and it will come out as income.)

Before the 2016 elections, Moreno’s net worth was much smaller than P50 million. In 2007, he declared a net worth of P7.5 million, based on his Statement of Assets, Liabilities, and Net Worth (SALN). 

In 2014, it shot up to P12.9 million. Last October, during a Kapihan sa Manila Bay forum, he said his net worth was P70 million “more or less.”

So Isko really didn’t violate anything?

It’s true that election rules in the Philippines are silent about what candidates should do with the campaign finances they are left with after election day.

According to the rules, as long as they paid the right taxes, they have violated nothing. 

In 2011, the Bureau of Internal Revenue issued a regulation classifying unused campaign contributions as the candidate’s income and thus subject to tax.

Section 2 of Revenue Regulation No. 7-2011 states: “Unutilized/excess campaign funds, that is, campaign contributions net of the candidate’s campaign expenditures, shall be considered as subject to income tax, and as such, must be included in the candidate’s taxable income as stated in his/her Income Tax Return (ITR) filed for the subject taxable year.”

If a candidate fails to file their campaign spending reports, the BIR will consider their entire declared campaign contributions as their personal taxable income.

President Rodrigo Duterte himself admitted in 2017 to keeping the P3.5 million in excess campaign funds from his presidential run.

“That’s surplus money that does not have a purpose anymore. I don’t know who gave it to me. This is just a small amount. I declared that as income. Income because it was already there in my hands,” Duterte had said in an interview while visiting Hong Kong.

Those campaign funds were why Duterte’s net worth grew from P24 million in 2016 to P27 million a year later, based on his SALN.

But the reality is that many candidates don’t even declare all of their campaign contributions or the excess. It’s very easy for candidates to under-declare how much they actually received from supporters for their campaigns. 

This has given rise to suspicions among political observers that there may even be candidates who run in an election just to raise funds for personal use.

Moreno was not the only candidate to declare excess campaign funds in 2016, but he was the candidate with the biggest excess amount.

In far second place was Vice President Leni Robredo, who declared P4.5 million in leftover funds. Then came President Duterte himself, with P3.5 million in excess campaign funds. – Rappler.com