Federalism

(2018)

Next on Philippine President Rodrigo Duterte’s agenda is changing the country's form of government under a new
constitution. The move has provoked a backlash among certain sections of society, ranging from the business sector to
the church and media, which have questioned the rationale for constitutional change. A recent survey by Pulse Asia
found that 67% of Filipinos oppose the change, while only 18 percent were in favour and the other 14 percent were
undecided.

Critics contend that the move is part of a plot to extend the president’s term in office. In response, Duterte has sought to
reassure the public that he will not extend his term beyond his constitutionally mandated six years, which is due to end
in mid-2022.

Leaving aside the conspiracy theories, a federal form of government, if enacted, will likely prove a bane rather than a
boon for the country. Federalism may end up only reinforcing socio-economic and ethno-political fault lines in an
already divided archipelagic nation.

The Federalist Blueprint

Last month, a special consultative committee, made up of leading jurists and political scientists who were handpicked by
the president, finalized the draft of a new constitution.

Duterte has already endorsed the draft, but the Philippine Congress is not under any obligation to adopt it in its current
form. Thus, the draft serves more as a reference point rather than the final substance of a new constitution, which will
have to be approved by a majority of the electorate in a future referendum.

Nonetheless, the draft does provide some insights into the rationale of the pro-federalism camp, which includes Duterte
and his ruling party, PDP-Laban. Under the proposed constitution, the Philippines will shed the unitary, centralized form
of government it currently has in favor of a federal setup, not too dissimilar from that of the U.S.

Under the new proposed constitution, the Philippines will be divided into 18 federated regions. Regional states will have
greater power over raising their own revenues, determining their own legislation and choosing their economic
development models.

By breaking distributing some of the powers currently residing in the country's Manila-centric form of government,
Duterte and his supporters hope to bring more prosperity to its neglected peripheries.

Metro-Manila alone, which hosts barely 10% of the country’s population (103 million), accounts for more than one-third
(36.5%) of the country’s entire GDP.

Points for Concern

On paper, federalism seems well suited for the Philippines. In reality, however, it could become a recipe for disaster in a
country that is already divided by language, religion and economic inequality.

First of all, studies show that only a few regions are capable of raising enough taxes on their own. The vast majority of
provinces, which will be submerged into new federal states, lack the basic administrative capacity for generating
revenue. Not to mention duplication in taxes and further stress on the nascent bureaucracy of peripheral regions under
a federal arrangement.

Under a federal system, the richer states of the north will have even more resources to enhance their competitiveness,
thus deepening the developmental gap with other southern regions.

Even in prosperous nations like the U.S., the developmental gap between the rich coastal states of California and New
York, on one hand, and the southern and midwestern states, on the other, has barely narrowed after two centuries of
federalist experience.

In developing countries like India, Iraq and Nigeria, federalism has either failed to close developmental gaps and ethno-
communal tensions among various states or, more worryingly, in some cases reinforced and reified them over the
decades. In places such as Yugoslavia, a federal setup eventually collapsed into a genocidal civil war.

Moreover, a federal system could further strengthen the power of political dynasties and warlords, which control the
Philippines’ peripheries. According to academic studies, around 178 so-called "political dynasties" – politicians related by
kinship and blood – control 73 out of 81 provinces across the country. They also control up to 70% of the legislature,
thus they seem likely to remove any proposed restrictions on the proliferation of political dynasties.
Under a federal system, they are best positioned to dominate the newly created local legislature and state institutions,
further consolidating their grip on power in the country's poorer regions. It's no wonder, then, that most surveys show
the vast majority of Filipinos are either against constitutional change or completely unaware of its implications.

MANILA – The push for a shift to a federal form of government has been gaining steam as a possible solution to the
nation's longstanding problems.

President Rodrigo Duterte, who had a stunning electoral victory, championed federalism, envisioning it as the key to
bring "lasting peace, progress, and prosperity for all of our peoples.”

Under a federal government, power is divided between the central government and local state governments. Each state
shall be empowered to handle their own laws, finances, development plans, health, education, and infrastructure,
among others.

Currently, the Philippines is under a unitary form of government with power and authority vested in the so-called
"imperial" Manila.

For Speaker Pantaleon Alvarez, a federal setup creates opportunities for local governments to manage their own
economy and chart their own destiny.

“Now you create opportunities; now you create jobs; now you allow them to manage their own economy; now you give
them the chance to chart their own destinies," Alvarez said.

Equitable development

Alvarez said some regions, under a federal setup, may thrive using their strategic advantages in their natural resources.

He said giving these local government units power over their own resources will help boost regional development.

For Minority Leader Danilo Suarez, he believes the shift to federalism enables for an equitable and widespread
development in the country by sharing the power -- political and economic -- of the central government with the
regional government or constituent political units.

"If we adopt the federal system of government, each state or regional government will be required to produce its own
income. Towns, cities, and provinces will not be welfare-dependent," Suarez said.

Suarez highlighted that the provinces and regions can largely benefit from the richness of the Philippines' natural
resources.

Under the present system, natural resources such as minerals and agricultural products are considered national wealth
and only a small percentage is given to the regional or provincial source.

"In a federal government, provinces and regions that are rich in natural resources can enjoy the entirety of the revenues
they generate by supplying raw materials and producing goods out of these raw materials," Suarez said.

Suarez noted that the LGUs will be entitled to revenues earned by high income generating sectors such as the business
process outsourcing (BPO) and the remittances from overseas Filipino workers (OFWs).

He cited projection data from experts that the BPO sector will generate around USD40 billion in revenues, with a 9
percent growth yearly; while OFW remittances may generate USD66.7 billion, with a 7 percent growth annually.

"The Minority believes that the time is right to adopt a new system of government that would take advantage of the
currently favorable economic condition of our country," Suarez said.

“Federalism will catalyze progress in all the geographic areas of our country by allowing them to be more self-
determining, and less dependent on the national government," he added.

The 'five states'

Based on the proposals submitted by the House constitutional amendments committee, the territory of the future
Federal Republic of the Philippines will be divided into five states composed of Luzon, Visayas, Mindanao, Bangsamoro,
and Metro Manila.

Under the proposal, each state shall have its own State Constitution, adopt its name, and choose a capital, flag, anthem,
and seal.

Each state shall have a unicameral state assembly with legislative powers, and a premiere exercising executive powers.
State governments shall be entitled to at least 50 percent in the proceeds of the utilization and development of the
national wealth including sharing the same with the inhabitants by way of direct benefits.

The proposed federal charter retains the position of the President, who would act as head of state, and introduces the
position of a Prime Minister, who would be the head of the government.

The President shall be elected by direct vote of the people for a term of five years with one re-election, while the Prime
Minister shall be elected by a majority of all the members of the Parliament from among themselves.

The proposed Parliament shall consist of the Federal Assembly as the national legislative department, and the Senate, as
the legislative body representative of the regions.

The bicameral parliament shall be composed of a 300-member Federal Assembly and a 15-member Senate, with each
state electing three senators.

Eighty percent of the members of the Federal Assembly shall be elected by plurality votes with each legislative district
having one seat in the parliament.

The remaining 20 percent of the members of the assembly shall come from federal sectoral parties or organizations
which shall be elected at large. (PNA)

(This story was first published on the Philippine News Agency's website on Jan. 26, 2018.)

What is federalism?

It is a form of government where sovereignty is constitutionally shared between a central governing authority and
constituent political units called states or regions.

In basic terms, it will break the country into autonomous regions with a national government focused only on interests
with nationwide bearing: foreign policy and defense, for example.

The autonomous regions or states, divided further into local government units, will have primary responsibility over
developing their industries, public safety, education, healthcare, transportation, recreation, and culture. These states
will have more power over their finances, development plans, and laws exclusive to ther jurisdiction.

The central government and states can also share certain powers.

How is it different from what we have now?

We presently have a unitary form of government. Most administrative powers and resources are with the national
government based in Metro Manila. It’s Malacañang that decides how much to give local government units. The process
is prone to abuse, with governors and mayors sometimes having to beg Malacañang for projects they believe their
communities need.

How local government units spend their budget has to be approved by the national government.

In federalism, the states will have the power to make these decisions with little or no interference from the national
government.

Examples of federal countries: United States, Canada, Australia, Brazil, India, Malaysia.

PROS

Locals decide for themselves. Regions have their own unique problems, situations, geographic, cultural, social and
economic contexts. Federalism allows them to create solutions to their own problems instead of distant Metro Manila
deciding for them.

The states can establish policies that may not be adopted nationwide. For example, liberal Metro Manila can allow
same-sex marriage which the state of Bangsamoro, predominantly Muslim, would not allow. In the United States, some
states like Colorado and Washington have legalized recreational marijuana even if other states have not.

This makes sense in an archipelago of over 7,000 islands and 28 dominant ethnic groups. For decades, the national
government has been struggling to address the concerns of 79 (now 81) provinces despite challenges posed by
geography and cultural differences.
With national government, and thus power, centered in Metro Manila, it’s no surprise that development in the mega
city has spiralled out of control while other parts of the country are neglected.

More power over funds, resources. Right now, local government units can only collect real estate tax and business
permit fees. In federalism, they can retain more of their income and are required to turn over only a portion to the state
government they fall under.

Thus, local governments and state governments can channel their own funds toward their own development instead of
the bulk of the money going to the national government. They can spend the money on programs and policies they see
fit without waiting for the national government’s go signal.

Promotes specialization. The national and state governments can specialize in different policy domains. With most
administrative powers now with the regional governments, the national government can focus on foreign policy,
defense, and other nationwide concerns, like healthcare and taxation.

States have more autonomy to focus on economic development using their core competencies and industries. The state
of Central Luzon can focus on becoming an agricultural hub. The state of Mimaropa, home to Palawan, can choose to
use eco-tourism as its primary launch pad.

Possible solution to the Mindanao conflict. The creation of the state of Bangsamoro within a federalist system may
address concerns of separatists who crave more autonomy over the administration of Muslim Mindanao.

Decongestion of Metro Manila. Through fiscal autonomy for state governments, federalism will more evenly distribute
the country’s wealth. In 2015, 35% of the national budget went to Metro Manila even if it represents only 14% of the
Philippine population.

Lessens dependence on Metro Manila. When there is political upheaval in Metro Manila, other regions that have
nothing to do with the chain of events are left waiting for the resources that ony the national government can release.
With federalism, regions work independently of Metro Manila for most concerns.

Brings government closer to the people. If detractors say federalism will only make local political dynasties more
powerful, supporters give the argument that, in fact, it will make all local leaders, including those part of political
dynasties, more accountable to their constituents. State governments will no longer have any excuse for delays in
services or projects that, in the present situation, are often blamed on choking bureaucracy in Manila.

Assuming more autonomy for regions leads to economic development, there will be more incentive for Filipinos to live
and work in regions outside Metro Manila. More investors may also decide to put up their businesses there, creating
more jobs and opportunities to attract more people away from the jam-packed mega city.

Encourages competition. With states now more self-reliant and in control of their development, they will judge
themselves relative to how their fellow states are progressing. The competitive spirit will hopefully motivate state
leaders and citizens to level up in terms of quality of life, economic development, progressive policies, and governance.

CONS

Possibly divisive. Healthy competition among states can become alienating – creating rivalries and promoting the
regionalism that some say already challenges the sense of unity in the country. It could enflame hostilities between
ethnic groups in the country like Tagalogs, Cebuanos, Bicolanos, Ilocanos, Tausugs, and Zamboangueños.

Uneven development among states. Some states may not be as ready for autonomy as others. Some states may not be
as rich in natural resources or skilled labor as others. States with good leaders will progress faster while states with
ineffective ones will degrade more than ever because national government will not be there to balance them out.

But in some federal countries, the national government doles out funds to help poorer states. A proposed Equalization
Fund will use a portion of tax from rich states to be given to poorer states.

Confusing overlaps in jurisdiction. Where does the responsibility of state governments end and where does the
responsibility of the national government begin? Unless these are very clearly stated in the amended Constitution,
ambiguities may arise, leading to conflict and confusion. For instance, in times of disaster, what is the division of
responsibilities between state and national governments?

May not satisfy separatists in Mindanao. Separatists are calling for their own country, not just a state that still belongs
to a larger federal Philippines. Federalism may not be enough for them. After all, the conflict continues despite the
creation of the Autonomous Region in Muslim Mindanao.

How the Philippines would look when federal

In some proposals, there will be 10 or 11 autonomous states. Senator Aquilino Pimentel Jr envisioned 11 states plus the
Federal Administrative Region of Metro Manila.

Attempts at federalism in PH

There was an attempt during the administration of President Gloria Macapagal Arroyo. One of her campaign promises
was to reform the 1987 Constitution.

A consultative commission she created recommended federalism as one of the goals of the proposed charter change.
But the attempt failed because of opposition from various sectors who believed Arroyo wanted to use the reform to
extend her term limit.

(Note that shifting to a federal government does not necessarily mean an extension of term limits for the sitting
president. Such an extension would only take place in a shift to a parliamentary government.)

In 2008, Pimentel Jr and Bacolod City Representative Monico Puentevella filed joint resolutions to convene Congress
into a constituent assembly with the goal of amending the constitution to establish a federal form of government. –
Rappler.com