Pacquiao ran for a congressional seat to represent the 1st district of South Cotabato, but he was defeated by Darlene Antonino-Custodio. Custodio had 139,061 votes, whereas Pacquiao received 75,908 votes.
Pacquiao has said he will enter politics after he ends his boxing career. He quietly visited the Philippine Commission on Elections, escorted by Arnold "Ali" Atienza (son of then-Manila Mayor Lito Atienza), to transfer his residence from General Santos City to Manila. This fueled speculations that he may seek an elective post in the nation's capital, which even gave him the title "Adopted Son" after he won his earlier bouts.
His name was once mentioned as a possible vice-mayoralty candidate to the younger Atienza when the latter sought the city's highest post in the 2007 elections, but this did not pan out after Sen. Panfilo Lacson, then the leading candidate for Manila mayor, backed out for contentions regarding Lacson's residency issues (in which Pacquiao also had such issues).
Being known as an Arroyo supporter, his name is also being floated as a candidate of the Lakas-CMD party for the mayoralty race of General Santos City against incumbent Mayor Pedro Acharon. Instead, he was recently sworn-in as a member of the Liberal Party under the Atienza wing, thus further fueling his political ambition.
On February 12, 2007, the famed boxer announced that he was running for congress representing South Cotabato. His decision however easily turned off both his fans and the general public. Election experts stressed that as Pacquiao insists on participating in his next professional boxing match, he will immerse himself into a legal conflict regarding campaign exposure, especially since the match will be televised nationwide. Aside from that, COMELEC commissioner Benjamin Abalos mentioned a possible legal entanglement could ruin Pacquiao's candidacy because he already registered himself as a Manila resident months before.
Numerous sports personalities and analysts around the Philippines expressed that Pacquiao should think seriously and deeply about his sports career, which could potentially be destroyed by the dirty world of politics. On February 24, 2007, in Cebu City, Pacquiao was booed by thousands of spectators as his presence was acknowledged by the organizers of The Battle of Cebu, a WBO-sanctioned boxing festival.[51][52][53][54][55] The embarrassment later led to confusing statements made by then-Manila Mayor Lito Atienza that the famed fighter would withdraw. The negative sentiment among Cebuanos over Pacquiao's political aspiration was felt even before the "The Battle of Cebu" was held because at least one citizen's comment got published by local newspaper Sun Star.
In relation to the Pacquiao's April 14 fight with Jorge Solis, the political opposition stated that they would not press for a ban on the broadcasting of the match despite its potential to violate election campaign rules. Although he won over Solis, Pacquiao's appeal diminished most likely due to his political ambition. His last fight attracted noticeably smaller audiences, and his performance was considered by many as disappointing. Some election candidates even turned the Pacquiao-Solis match into campaign gigs. Over at General Santos City, Diocese of Marbel spokesman Fr. Angel Buenavides considered President Arroyo's endorsement of Pacquiao as a "curse" because constituents in the area have strong anti-Arroyo sentiments.
On May 17, 2007, Pacquiao suffered a lopsided election defeat to incumbent representative Darlene Antonino-Custodio, with a deficit of approximately 37,000 votes according to the NAMFREL tally. Meanwhile, WBC head José Sulaimán stated that Pacquiao "doesn’t appear to be having the same dynamic impact at the ballot box, as he does in the ringed square." The defeat became a depressing matter for the boxer himself because he lost a huge sum of money when his supporters allegedly funneled campaign funds to their own pockets. Pacquiao's personal money was part of the campaign budget. Ironically, Pacquiao's fans rejoiced over his defeat. Some even declared his loss as a "victory" for boxing. On May 20, 2007, Manny Pacquiao formally conceded to congresswoman Antonino-Custodio, vowing to return to boxing and spend more time with his family.
In August 2007, Pacquiao filed a P30-million libel suit against four journalists of the Manila Bulletin due to an article which stated that he "is reported to be a compulsive gambler and is known to bet hundreds of thousand in casinos, cockfighting, and billiards." The case was later dismissed via "affidavit of desistance", and Pacquiao stated that pursuing the case would only cause inconvenience to him and his family.
On September 1, 2008, Pacquiao was sworn by Secretary Ronaldo Puno, as member of Kabalikat ng Malayang Pilipino (Kampi). Pacquiao officially announced that he is retiring in August 2009, and will be running again in the Philippine general election, 2010.
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