FEATURES: Confidence up, but Philippine firms hesitate

Business confidence has perked up under a new Philippine administration, but it may not be enough to push marketers into advertising. Many businesses had adjusted advertising spend in the last quarter - some even putting expansion or launch projects on hold - when corruption allegations surfaced against former president Joseph Estrada. The scandals eventually toppled Mr Estrada's government on January 20, three months and 11 days from the time the damming revelations were made public. "All this has had inevitable knock-on effects to advertising," according to MindShare. While the country had the third highest adspend growth rate in Asia in 1999, at 15 per cent, full year figures for 2000 were expected to show adspend growth below media inflation, MindShare reported. Now, two issues - an election in May and the ability of new President Gloria Macapagal-Arroyo to breathe new life into the fragile economy - are likely to keep marketers on the sidelines for a while longer. For the first time in 15 years, candidates slugging it out for public office will be able to advertise following the signing of the Fair Election Act on February 7. The sheer number of candidates emerging for local and national seats is expected to translate into a windfall for media properties. But profligate spending by politicians could leave little room for other advertisers, especially as media owners look to recoup revenue shortfalls after last quarter's crisis. McCann-Erickson head of media Venus Navalta discounted this, insisting that media owners would always give preference to regular advertisers. "Only left-over advertising space will be given over to political advertisers," she said. At press-time, 24 candidates had emerged for just 12 senate seats up for grabs. Many more are tipped to fight it out for congressional and mayoral office. Although there is a ceiling on how much candidates can spend on advertising, few expect an audit by any government agency, including the Philippine Monitoring Service, to ensure these limits are adhered to. Given this, unchecked spending by political aspirants will of course raise the clutter quotient significantly as campaign dollars flow through tri-media options. "If clients historically find it effective to spend on advertising during the first two quarters, then it is not to their advantage if they suddenly stop now," said Ms Navalta. "However, we have advised a number of our clients to start spending early in anticipation of the election clutter, even if the amount of airtime and print space to be used by each political candidate is regulated." Closer to the elections, advertisers will find that it makes better business sense to lie low. Philippine elections are usually energetic affairs that keep locals riveted by the campaigning antics of their politicians. The other cloud on the short-term horizon is the new president's ability to repair the damaged economy. Compared to her predecessor, President Macapagal-Arroyo is more than up to the job; she has a Ph.D in economics. "However, from a marketer's point of view, she needs to make improvements fast," according to MindShare. "The local economy is in such a fragile state that the current outlook for the advertising world is far from rosy, at least in the short term." Although the peso has clawed its way back from the historic lows breached during the presidential crisis, economic growth remains negligible and public debt has never been higher. "In the short-term, the outlook is not great - the stalled economy will not fire up overnight and the rest of 2001 will be quite tough," reported MindShare. For bruised media properties, the only relief will come from an election spending boom. ABS-CBN, the country's leading broadcast network company, expects the political advertising windfall to push revenues to staggering levels. "The impact is something to look forward to," said Ms Patricia Daza, the station's director for corporate communications and public relations. The going rate for a 30-second exposure is expected to cost a candidate 120,000 pesos prime-time and between 70,000 and 80,000 pesos on regular programming. As the cheapest of the tri-media options, radio - many of which are owned by by broadcast stations - is seen as the preferred medium in this archipelago nation. A 30-second radio slot costs just 10,000 to 15,000 pesos compared with the next preferred medium, print, at 118,000 for a full page black and white ad, or 10 per cent more for colour. - Additional reporting by Lee Chipongian, Manila.

Sign In

Trouble signing in?

Reset Password: Click here

Contact Customer Support at

Customerservice@campaignasia.com