IT is only a slight exaggeration to say that the entire Filipino nation is behind Manny Pacquiao, eight-division world boxing champion, in his fight against undefeated American boxer Floyd Mayweather on Sunday, May 3, 2015, beginning 10 am, in Las Vegas, Nevada, USA.
The massive support represents an outpouring of national pride in the achievements of a Filipino poor boy turned international hero, by dint of ability, hard work and dedication. It is also a sincere reciprocation of the poor boy’s own identification with the dreams of his countrymen for a better life for themselves and their children.
Beyond the great honor it brings to all Filipinos and the nation, this boxing event, in a word, will contribute to the expansion of the country’s gross domestic product, at least in the medium-term.
For starters, it is said in the media that Pacquiao will earn at least $80 million from the fight and take home, after US taxes, trainer’s fees, training expenditures, etc., something like $40 million or P1.80 billion. How much of that amount Manny will spend in the Philippines we do not know. Whatever it is it will constitute an expansion of consumption expenditures. Manny may well go into investment but we shall not follow him there.
In addition, some of us will be purchasing shirts, shoes, sporting goods and mementos bearing the Pacquiao image; manufacturers will be launching commercials linking their products to the great sportsman; many people will be paying to watch from hotels, restaurants, resorts; city and municipal governments will be paying for huge television screens to show the fight to constituents; homes will be paying “pay-per-view” of the fight; and crowds of tourists will be arriving, spending money for board, lodging and tourist items.
All this will represent new income for manufacturers, owners of franchises, shops, media, hotels, restaurants and resorts, and their employees. These income recipients will spend their money on consumption items and so will the second-round recipients, and so on. At the end of the day, these expenditures will have generated output bigger than the original expenditure. How much bigger will be determined by the consumption multiplier. If this multiplier is, say, three, the total impact on the economy will be three times the original expenditure. Further, if the expansion series of the multiplier takes five iterations before it approaches zero and the velocity of money is two, then the total output is produced within 2.5 years.
In numbers, this is saying that, if the total original expenditures is P10 billion, it will expand to P30 billion, in a period of 2.5 years.
It is said that an athlete carrying the hopes of his countrymen is at a handicap and is likely not to perform well. Not Manny. From the beginning of his celebrity he has dedicated his fights to the Filipino people, even composing a song for it, “Para sayo itong labang ito, bayan ko.”
Pacquiao is a national icon in more ways than one. Our hopes for a victory are with him in this important event, already dubbed the Fight of the Century.
Image credits: Jimbo Albano