campaign finance

[OPINION] How about we crowdfund candidates in the Philippines?

Emil Marañon III
[OPINION] How about we crowdfund candidates in the Philippines?
Sections 98 and 99 of the Omnibus Election Code present hurdles to people who can only contribute small amounts to their favored candidates, but there could be a workaround

I always tell people that running in an election without a substantial funding is a losing game. Often, they would always ask me back, “Why don’t you do crowdfunding?” They always refer to the United States elections, where ordinary people fund their candidates.

In the Philippines, election funding would traditionally come either from the politicians’ own pockets or they would rely on contributions from business people, a gesture that is widely perceived as an “investment” that would get business protection in return. The lucky ones would have both. This makes our elections elitist and anti-poor as only the rich and the well-connected have the realistic chance of winning.

The game in the United States is very different. For example, Bernie Sanders, who is a popular socialist senator from Vermont, was able to raise a total of $211,125,958 as of September 2020 from crowdfunded contributions. According to Open Secrets, which tracks data on campaign finance and lobbying in the United States, out of Sanders’ $211,125,958 campaign fund, $114,813,795 or 53.27% came from “small individual contributions” (less than $200 each). In Philippine peso, that would be around P5.7 billion! Meanwhile, “large contributions” (more than $200 each) amounted to $87,741,080 or around 40.70%. 

Why can’t we do this in the Philippines?

The main reason is an antiquated provision in the 1985 Omnibus Election Code, which provides:

Section 99. Report of contributions. – Every person giving contributions to any candidate, treasurer of the party, or authorized representative of such candidate or treasurer shall, not later than thirty days after the day of the election, file with the Commission a report under oath stating the amount of each contribution, the name of the candidate, agent of the candidate or political party receiving the contribution, and the date of the contribution.

This provision requires that regardless of the amount of the contribution, the donor would need to file with the Commission on Elections (Comelec) a notarized “Report of Contribution” or “ROC.” This can be traced to an antiquated notion that election contributions or donations have to be substantial.

This prohibitive requirement basically prevents small or “de minimis” donation, given the amount of paperwork and the cost of notarization. For example, if poor supporter wants to donate P50 to a campaign, why would he bother, given the requirements? The notarization alone would cost P300. Add the effort he has to exert to get the form, fill it up, and file it with the Comelec in Intramuros.

This rule also requires that the donor should be known, which runs counter to the nature of crowdfunding, where donors would more likely be anonymous!

Making matters worse, violation of Section 99 is considered an election offense, punishable with imprisonment of one year to six years!

The usual followup question I get is, “Why not let a third party pool the small donations and then donate it one-time, big time to the candidate?” Well, there is also Section 98, which, like Section 99, is an election offense:

Section 98. True name of contributor required. – No person shall make any contribution in any name except his own nor shall any candidate or treasurer of a political party receive a contribution or enter or record the same in any name other than that of the person by whom it was actually made.

And, of course, people would say, “Why not make it a secret?” Obviously, successful crowdfunding requires open and aggressive promotion. Keeping it a “secret” among friends and family would limit its reach. The success of crowdfunding campaign is in the numbers. It is about reaching as many people who are willing to give or help but do not know where to give or how to conveniently do so.

For quite some time now, I’ve been silently campaigning with friends in the Senate and in the House of Representatives to amend Section 99. My simple idea is to set a “cut off” on the “Report of Contribution” requirement and limit it to large donations – say, P10,000. For small donations, only the candidate would be required to report the same as “contribution” in his or her Statement of Contributions and Expenditures (SOCE).

After all, the idea behind this reporting requirement is to disclose vested interests in donations so that the public can monitor and guard against special favors and influences that receiving politicians might give in return. With crowdfunding, “utang na loob” is spread across so many people, it essentially becomes harmless. No politician would give franchises, lift tariffs, or ease taxes over a P50- or P1,000-donation! Unfortunately, it has not been moving and I haven’t heard from them ever since.

But I am looking at a possible workaround courtesy of the much-vilified Penera vs. Comelec (G.R. No. 181613, November 25, 2009), which decrees that no one is considered a “candidate” before the campaign period. The “Report of Contribution” requirement applies only to contributions to “candidates” and, per Penera, there are no candidates before the start of the campaign period. This means that before the February 8, 2022, start of the campaign period, donations or contributions even to those who already filed their COC will still not be governed by Sections 98 and 99. This opens an opportunity for crowdfunding!

I believe that institutionalizing a system where people can fund their own candidates will be groundbreaking. It can potentially rewrite our political landscape, where poor but deserving candidates can stand and fight head-to-head with moneyed traditional politicians with the backing of so many people giving P20 and P50!

With GCash-backed candidates, imagine the possibility of a government run by people unbeholden to big corporations or by politicians without the desire to steal government funds to recoup the money they spent from their own pocket!

Imagine the possibility of a politician motivated to do well in government service, with the hope that people will crowdfund him again in his next run! –

Emil Marañon III is an election lawyer specializing in automated election litigation and consulting. He is one of the election lawyers consulted by the camp of Vice President Leni Robredo. Marañon served in Comelec as chief of staff of the late Chairman Sixto Brillantes Jr. He graduated from the SOAS, University of London, where he studied Human Rights, Conflict, and Justice as a Chevening scholar. He is a partner at Trojillo Ansaldo and Marañon (TAM) Law Offices.

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Emil Marañon III

Emil Marañon III is an election lawyer specializing in automated election litigation and consulting. He is one of the election lawyers consulted by the camp of Vice President Leni Robredo.