PERCEIVED ADVANTAGES AND DISADVANTAGES ON THE SHIFT TO A

FEDERAL FORM OF GOVERNMENT OF THE COUNTRY

Submitted to:

Sir Jonathan Linatoc

Submitted by:

Christian Wayne T. Moren

 ABSTRACT
In order to federalize a country, the government should be able to research and study

thoroughly with regard to the shift to a federal form of government. The Philippines is at the

verge of shifting from a unitary government to a federal form of government. In line with this,

the People’s National Movement for Federalism (PENAMFED) offers a proposal to federalize

the country. This study unveils the perceived advantages and disadvantages on the shift to a

federal form of government. The research also discusses how the output of the data would affect

the readiness of the country to shift to a federal form of government.

The study reveals that there are more perceived disadvantages of the shift to a federal

form of government. It is prevalent in the research that there were more factors considered which

were disadvantageous rather than advantageous.

 CHAPTER I

INTRODUCTION

Background of the Study

The Philippines has been a unitary form of government for a long time. Under the current

administration of President Rodrigo Roa Duterte, there is a proposal to shift to a federal form of

government from a unitary form. As a result of this campaign, different groups emerged with

their own proposal to federalize the country.

The People's National Movement for Federalism (PENAMFED) is one of the proponents

of a proposed federal model. The chairman, Juling “Jene” Mamondiong has been reiterating the

change from a Unitary to a Federal Form of government.1 Another dominant party lead by

President Rodrigo Duterte, which is the Partido Demokratiko Pilipino (PDP-Laban), leads the

discussion and deliberation on the proposed federal model. The 2016 drafted constitution and

amendments made by the PDP Laban Federalism Institute has already caught the attention of the

Congress. As a result, it became the highlight of debates, hearings, and committee sessions.

In a Unitary form of Government, the powers and resources of the government are under

the control of the central government while in a federal form of government, the powers and

resources of the government are devolved and shared by the federal and state government.2

1
PENAMFED. (2018). Federal-Parliamentary for the Philippines.
2
PENAMFED. (2018). Federal-Parliamentary for the Philippines. PENAMFED, p.7.

1
 The common features and basic principles of federalism according to Raphael Montes

came from the distribution of powers and autonomy, participation of constituent units in federal-

decision making, and allocation of powers and resources. Federalism will give more autonomy to

Local Government Units which will ensure economic development, increased political affairs

and improved social structure of the community.3

It is apparent in the PENAMFED that majority of the corrupt countries have a unitary

form of government while the least corrupt countries are mostly federal. Federalizing the country

will be a great leap not only to the Philippine Government but also to the citizens whose

concerns are the priority of the government.

Objectives of the Study

The following are the objectives that the researcher would like to achieve:

1. To determine the readiness of the Philippines to a shift to a federal form of

government;

2. To determine perceived advantages regarding the shift to a federal form of

government;

3. To determine the perceived disadvantages regarding the shift to a federal form of

government; and

4. To know the stand of the country regarding the shift to a federal form of government.

Statement of the Problem

In line with the objectives, the study aims to answer the following questions:

1. What are the perceptions regarding the shift to a federal form of government?

3
Brillantes Jr., A. B., & Montes Jr., R. N. (2007). Federalism: Logical Step After Devolution? In Philipine Journal of Public
Adinistration (pp. 1-31). National College of Public Administration and Governance.
 2. What are the perceived advantages regarding the shift to a federal form of

government?

3. What are the perceived disadvantages regarding the shift to a federal form of

government?

4. Does the country approve the shift to a federal form of government?

Significance of the Study

The Policy makers

This study shall be significant to the policy makers wherein the advantages and

disadvantages gathered will give an idea on how they would comply with the concerns of the

respondents. The study shall also be significant to the policy makers in a way that the research

shall be an indirect tool to know the concerns of the people as well as their needs and how their

perceptions will affect future legislations.

The General Public

The study shall be significant to the general public in gaining awareness to the shift to a

federal form of government.

The Researcher

This study shall be significant to the researcher to expand the knowledge on the current

issues and debatable topics which emerges in the Philippines.

 Scope and Limitations

The research shall only be limited to the proposal with regard to the shift to a federal

form of government. The primary source of data, which is still a proposal, shall be subject to

revision or amendments. The study shall also be limited to the general advantages and

disadvantages of the shift to a federal form of government.

Definition of Terms

Operational Definition

Perception is how one views or interprets the world around them. This includes angle of view,

all the senses, including insight, intuition, or knowledge

Federalism is a system of government that creates division of governing power and authority

between national (federal) government and regional (state) government.

Conceptual Definition

Federal form of Government is one which the governmental powers are distributed between the

central and local government each being supreme in each own sphere.
 CHAPTER II

REVIEW OF RELATED LITERATURE

This section includes the review of books, journal articles and online resources from local

and foreign sources. This chapter is composed of: a.) historical and theoretical background of

decentralization; and b.) the proposed federal form of government by PENAMFED.

Introduction

The Philippines is at the verge of shifting from a unitary to a federal form of government.

In order to federalize a country, it is important to track the traces of decentralization through

knowing its historical background.

The current administration aims to remove the “Manila-centric” attitude, wherein most of

the funds are given to Metro Manila or the would be central government in a federal form.4

According to Gene Mamondiong, Chairman of the PENAMFED, there can be no equal

opportunities for the regions and the local government units to grow and develop on their own.

There will always be biases and prejudices in the allocation of government resources to the

regions and local government units especially in the Philippines where the divide-and-rule

strategy is employed to win over the support of one group to the oppression of another.5

4
Bencito, J. P. (2018, November 24). NCR gets biggest slice of national budget. Retrieved from Manila Standard:
http://manilastandard.net/news/-main-stories/top-stories/224943/ncr-gets-biggest-slice-of-p3-35-natl-budget.html
5
PENAMFED. (2018). Federal-Parliamentary for the Philippines. PENAMFED, p.2.
 Historical and Theoretical Background of Decentralization in the Philippines

According to Alex Brillantes and Raphael Montes, decentralization is linked to

empowerment and subsidiarity.6 They discussed that the central authority should let the local

government handle and decide issues concerning their local levels by bringing the government

closer to the people through administrative deconcentrating and political devolution. It has been

reasoned that this strategy will easily promote participatory governance as a result of faster

delivery of basic services. The Legal Framework for Devolution in the Philippines was

enumerated by Brillantes and Montes (2007) on their study entitled “Federalism: Logical Step

after devolution”. They affirm that the Philippines has been under several attempts of

decentralization schemes before the current decentralized set-up. The First Philippines Republic

and the American colonial government both promulgated policies in support of local autonomy.

More concrete policies were enacted in the postwar era namely, the Local Autonomy Act (1959),

the Barrio Charter Act (1959), and the Decentralization Act (1967). Even under Marcos, the

Integrated Reorganization Plan (1973) and the Local Government Code (1983) were

implemented. Only after the adoption of the 1987 Constitution came the existence of a

framework to empower and give autonomy to the local government units. Article X, Section 2 of

the 1987 Constitution states that “territorial and political subdivisions” of the country “shall

enjoy local autonomy”.7 It further states in the same article under Section 3:

Congress shall enact a local government code which shall provide for a more

responsive and accountable local government structure instituted through a

6
Brillantes Jr., A. B., & Montes Jr., R. N. (2007). Federalism: Logical Step After Devolution? In Philipine Journal of Public
Adinistration (pp. 1-31). National College of Public Administration and Governance.
7
Id. at 32
 system of decentralization with effective mechanism of recall, initiative and

referendum, allocate among different local government units their powers,

responsibilities and resources and provide for qualifications, election,

appointment and removal, term, salaries, powers and functions and duties of

local officials and all other matters relating to the organization and operation of

local units.8

Thereafter, the Local Government Code of 1991 was enacted by the Congress. The Code

decentralized three powers to local governments – political, administrative and financial.

Brillantes and Montes assessed the devolution after the enactment of the Local

Government Code. They found out that a lot of LGUs are still struggling on the aspect of

generating revenues, mismatch of revenue assignments and revenue powers, fiscal imbalance on

the share of IRA, and a very centralized system of government. Although the Local Government

Code is designed to give more power and autonomy to local officials, people still witnessed that

there are regions which have low growth and development which lead these localities to ask for

more revenue share for better implementation of projects.

After attempts on decentralization in the Philippines, series of research is conducted

regarding the adoption of federalism as step after devolution. The structure of the federal system

is an answer to solve geographical concerns caused by cultural diversity on governance. Even if

the states are fragmented, national interest is still promoted.9 In addition, the proposed federalism

will help boost the country’s development through granting autonomy to different states and

8
Article X, Section 2 of the 1987 Constitution

9
Brillantes Jr., A. B., & Moscare,D. Decentralization and Federalism in the Philippines: Lessons from Global Community.
Retrieved from http://unpan1.un.org/intradoc/groups/public/documents/EROPA/UNPAN032065.pdf
would somehow end the internal conflicts brought by separatist movements in Mindanao. It will

also raise the revenue share and taxation power of LGUs.

History shows that there is a growing decentralized system in the Philippines.

Decentralization has been used to cope with the problems encountered by the society. However,

even if the central government granted decentralized political, administrative and financial

powers to LGUs, the LGUs have been experiencing difficulties on how to address their

constituents in terms of funds and personnel. In this situation, some LGUs demand to get the

proper budget they deserve in order to address emergency and security services for the people.

Proposed Federal Form of Government

The PENAMFED proposal for federalism enumerated numerous benefits in the

proposed federal form of government in the Philippines. One of these benefits includes more

equitable sharing of revenues and resources. According to the proposal, all regions and provinces

will be provided with proportionate shares of taxes and fees unlike the present unitary system

which the revenues and resources allocated in Luzon especially in NCR is larger than other

regions. This shows that the country would be able to attain development because of the

availability of funds that will

CHAPTER III

METHODOLOGY

This chapter presents the methods used by the researcher in conducting their study. It

comprises of research design, sources of data and treatment of data.

Research Design

The study used a descriptive research design in order to present the perceived advantages

and disadvantages of the shift to a federal form of government. The objective of the

descriptive research design was to provide information about one or more variable. In this

case, the perceived advantages and disadvantages on the shift to a federal form of

government were determined.

Sources of Data

In this study, both primary and secondary sources of data collection were used by the

researcher. Primary data were taken from the proposal of PENAMFED to federalize the country.

Secondary sources used in this study are the related literatures gathered by the researcher from

books, journals, articles, laws, and online sources.

Treatment of Data

The researcher made a summary of the advantages and disadvantages regarding the shift

to a federal form of government. The data gathered was used to determine which prevailed

between the advantages and disadvantages regarding the shift to a federal form of government.

CHAPTER IV

RESULTS AND DISCUSSION

This chapter presents the results that were gathered from the resources of the study. The

answers which yielded the same outcome were enumerated and interpreted to answer the study’s
statement of the problem. This Chapter also includes the interpretations and implications of such

results supported by related literature.

1. Perceived advantages in the shift to a federal form of government

It was stated in the proposal of the PENAMFED that all revenues and taxes collected by

the local government units or by national government agencies in accordance with the Local

Government Code of 1991, Republic Act No. 7160, shall be divided in the following manner:

twenty percent (20%) of the revenues and taxes collected by the LGUs shall accrue to the federal

government and eighty percent (80%) of the state. In line with this, the LGUs will surely have

more revenue share than the national government and it would be beneficial for the

implementation of projects. Moreover, the LGUs will be granted greater tax autonomy.

a. On the increase of percentage in the Internal Revenue Allotment

There were factors with regard to the increase in Internal Revenue Allotment (IRA). The

first one was the difference on revenue share between the present and the proposed federal form

of government stated in the PENAMFED proposal. They have mentioned that there will be an

increase of percentage in the IRA under the reform. The process of IRA merely transfers or

distributes the revenue or resources from the national government down to its regions and

provinces. LGUs under the present system only receives a total of forty percent (40%) share of

the national taxes, while on the proposed revenue assignment, eighty percent (80%) will accrue

to the LGUs.10 The LGUs’ accountability will be enhanced since they are the ones who will

allocate their budget without the intervention of the national government.

10
Local Government Code of 1991
 Another factor that differentiates the present unitary system from the proposed federal

form of government is the “Palakasan System” wherein the President, granted by the

Constitution to exercise general supervision over all local governments, agencies and bureaus,

affects the manner of revenue allotment in the present system. Members of the Congress also

affect the present system for they possess the power of earmark as an individual power. The

earmarking process gives chances for local officials to have an additional funding for the

projects. However, this system, which is an unwritten rule, has a disadvantage of making some

projects overlap or compete with other local government initiatives.11

As discussed by Vazquez (2007), revenue assignment under the federal system allows

sub-national government units to implement equal or proportionate levels of financing.

According to Bahl (2008), only a properly structured revenue assignment will result to a clear

and just system which will enable the government to properly levy its taxes and equally

distribute its resources.

Yusingco (2017) assumed that once the government has shifted from the unitary to a

federal form, the IRA would be abolished. Though there is no definite answer, for the sources are

merely proposals, the fiscal regime of federal structure traditionally allocates its funds between

the federal and subnational level of governments. As stated by Ilas (2018), the share of local

governments in the national resources will likely be removed if ever the government will shift to

federalism. The present IRA will be replaced by a revenue sharing arrangement where a larger

share of the resources would go to the component states. It is for each area to prove their

independency on the utilization of allocated funds and resources. Alvarez (2018) believed that

11
Brillantes Jr., A. B., & Montes Jr., R. N. (2007). Federalism: Logical Step After Devolution? In Philipine Journal of Public
Adinistration (pp. 1-31). National College of Public Administration and Governance.
this situation would urge local governments to be competitive given the responsibility to utilize

their resources well.

b. On the devolution of powers of central government to the local government

Decentralization will give the local government units more power, authority,

responsibilities and resources.12 The process of decentralization shall start from the national

government to the local government. For a project to be implemented in the current set-up of the

government, it will pass through different agencies which slow down the implementation of a

project. On the other hand, if the federal form of government take effect, there will be fewer

agencies where the funds will pass through which would result to faster implementation of

projects. Every province has political, social and economic problems unique to the region itself.

Provincial government representatives live close to people and the most important of the time

from the same community, so they are in a better position to understand the problems and offer

unique solutions for them. The central government can think deeply about international affairs

and protect the country as the provincial government to deliver local needs Federalism is a room

for the representation of the different populations.

2. Perceived disadvantages on the shift to a federal form of government

a. On the Issue of Equalization of Funds

According to the research, poorer regions or municipalities may not be able to generate

enough revenue for their own because of lack of resources and investments. Likewise, they are

dependent on the share given by the national government. This is supported by the 2016

12
Local Government Code of 1991
accomplishment study of Bureau of Local Government Finance which pictured the sources of

revenue in the local government units. The study shows that most municipalities are IRA-

dependent wherein seventy-four percent (74%) of their revenue is coming from the national

share while cities rely mostly on their local revenues to support their locality.

b. On the Weak Implementation of the system

Decentralization of taxing and spending power allows sub-national governments to

increase their capability to match the demand of their constituency. This will ultimately increase

the efficiency of LGUs to have better information about the needs of their residents rather than

the central government. No matter how good the proposal may be to federalize a country, the

system will not work well if there is a weak implementation by the government officials. There

is inefficiency on the delivery of basic public services and loose execution of public policies that

constitutes the weak implementation. Research shows that graft and corruption is the number one

enemy in the progress of the country. Corruption results from an obvious lack of public

accountability. One corrupt scheme the respondents cited is the subnational borrowings from the

national level.13 Though subnational borrowing benefits local government units as it is a primary

source of finance for local infrastructure, it is associated with the risks related to fiscal distress

and insolvency.14 An illustration to this is when there is a passage of budget request for

infrastructure project by LGUs. It shall be passed to its respective national department. In most

13
Cabo, W. L. (2007). Exploring Accountability Initiatives in Philippine Local Governance. In Philippine Journal of Public
Administration (pp. 33-49). National College of Public Administration and Governance, University of the Philippines Diliman
14
Manasan, R. G. (2017). Designing the Fiscal Features of a Federal Form of Governmet: Autonomy, Accountability and
Equity Considerations. Philippine Institute for Development Studies, 1-36.
cases, their requested budget project as it reached the national level before it went down to the

local level were cut down. Due to many signatories and agencies in the government under the

process, the alleged budget was not given accordingly.

c. Local Political Clans may gain more Power and Influence.

Political clans would have greater control over the LGU’s resources and finances in

federalism than it can have in Local Government Code of 1991. Hence by analogy and

extension, federalism (which is designed to strengthen local government units and promote

highly decentralized government) would even more likely result in further entrenchment of local

political clans.

Moreover, in federal type of elections, it is almost certain that local elites could easily

win votes. Clans in power can cleverly utilize their money and influence to win votes. For

instance, in a municipality with only 10 to 15 thousand voters, a candidate can take the

mayoralty position by just spending one thousand pesos per voter or a total of 10 million pesos.

This amount is not enormous for a candidate who earns an average of 100 million pesos from

both legitimate and illegitimate businesses. Admittedly, this electoral practice is also prevalent

in the unitary system of government that we have today and it is not likely to be addressed by

Federal system either. Hence, the attributes of federalism make this practice more widespread

and rampant.

3. Does the country approve the shift to a federal form of government?

 Despite the aim of the current administration to equally distribute money to far

regions, the National Capital Region still get the highest allocation of revenue from the national

budget of 2017 with the amount of 519.3 billion pesos, while the ARMM gets the lowest

appropriation with 56 billion pesos. The current administration aims to remove the “Manila-

centric” attitude, wherein most of the funds are given to Metro Manila (Bencito, 2016).

According to Jonathan Malaya (2016), Executive Director of PDP Laban, the power and

development in the country is only limited to the central areas specifically in Manila and its

neighboring regions while the rest of the country suffers from underdevelopment and low

investment. Thus, this clearly shows that there is indeed an imbalance of distribution of resources

among regions and localities.

The present administration faces an issue regarding the shift to federalism. The federal

form of government empowers regional and local leaders across the country. The local

government officials will be having a greater responsibility to become leaders and to provide

service to its people. Under a federal system, most of the regional governments will raise their

own funds that will be used for the development of their own region. The approval of the country

to shift to a federal form of government would still pass year-consuming debates. What could be

inferred from the research was the readiness of the country to shift to a federal form of

government. More disadvantages were gathered rather than the advantages.

CHAPTER V

CONCLUSION AND RECOMMENDATION

Conclusion
 With all the above considerations, disadvantages prevailed over the advantages. This

might conclude that the Philippines is not yet ready to shift to a federal form of government. Due

to the absence of a concrete proposal and oneness of political parties to push the shift to a federal

form of government, the shift to a federal form might be a hole for new political, social,

economic, local, national, and even international problems to arise.

Recommendations

Based on the findings from the gathered data, the study recommended the following:

The National Government

 To come up with a final proposal of the Federal Form of Government through the

help of the committee formed by the President in order to avoid confusions on the

model in which the local government would follow

 To further conduct meetings with agencies concerned on the dissemination of

information regarding the shift to federalism.

 To issue a concrete timeline on the implementation of the shift to a federal form

of government to inform the public of the said reform

Local Government Officials

 To participate in the seminars conducted by the national or local government

regarding federalism to fully understand the proposed shift

 To make quarterly reports for an effective implementation of the said reform

concerning their clarifications and questions.

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