Why Federalism may not

be good for the

Philippines
Federalism for the Philippines is an idea thrown around a lot these
days, given the popularity of Duterte and his staunch support of it.
But do we really know what it means? And is it really what we need?

Xenon Lequin

2K

Many ideas are floating around on the internet from supporters of Duterte
about the merits of federalism for our country. And the principal reason for
their support is that federalism supposedly promotes more equitable
distribution of government revenues under a scheme of "what they collect,
they keep," as compared to our current system, where major tax revenues are

centrally administered at the national level. The current system, they allege, is
biased towards NCR when allocating resources, to the detriment of the other
provinces and regions. To sum up their argument: when taxes are
administered at the "state" level in a federal system, the LGUs
and municipalities will have more funds available to them compared to what
they are getting in the current system.
However, supporters of federalism appear to be missing many points relevant
to any kind of such move. I'm afraid even they themselves are not aware of the
full effects of such a transition and what it would mean for our country. I'm
not even sure if many of them realize what the true definition of federalism is,
aside from vaguely understanding it as "autonomous independent states
under one federal governing body." If we look into the question more closely,
we will find that the issues are more complex than they suppose, and the cause
and effects are not as straightforward as they seem, as there are "hidden"
(hidden only for the less informed) factors that would have to be considered.
In the following items, I seek to expound why I do not support federalism, and
the reasons and factors that led to my stance:
1. Federalism does not necessarily solve the issue of unequal
distribution of government revenues, and may potentially worsen
it.
It is not as if all the revenues in the current system are being swallowed by
NCR and surrounding regions, to the detriment of the remote provinces, as
many federalism supporters will claim. A large part of the national revenues
still go back to the LGUs through a standardized formula as the IRA (internal
revenue allotment). The IRA system is actually a way to redistribute income
from the wealthier communities to the less wealthier ones: for small
municipalities, IRA allocation may finance a greater part of their budget
compared to highly urbanized areas. Because the highly urbanized areas have
greater revenues from other sources, more of their budget can be financed
with these other sources. In the current scheme, it is actually the "generosity"
of the larger cities which contribute to the development of the
smaller communities. If all tax revenues were kept at the point they

originated, we might actually see the wealthier municipalities getting more

income and the poorer ones getting less, resulting in a worsening wealth
concentration problem.
While it is true that some of the budget are still allocated at the national level
(by NEDA, for example, which is headed by the president), it is not as if
the process is wholly arbitrary and inherently biased towards NCR. NEDA has
regional offices, which can propose projects for their regions, for the
consideration of the national government. There may be perceived "biases"
towards the highly metropolitan areas, but this may simply be because these
are the areas where the funds spent could generate higher returns. Obviously,
metropolitan areas have more people and more businesses, and thus need
more infrastructure and support. It should not be surprising for us that many
of the highly visible projects are there. But if the regions can make a good case
for projects on their locations, they should be able to make a proposal for it
and escalate it to the proper local/regional/national agency for prioritization
and inclusion in the budget.
With the above, I believe that the current system is theoretically sound and
overall does not need a drastic revision (such as shift to federalism). If you feel
that your town/province/region is not getting a lot of projects right now, I
don't think it is a problem with the budgeting and income distribution
framework. It is more likely because some official is embezzling the funds for
your town, or the development officials in your region are sleeping on their
jobs. In these cases, it is a problem with the officials; change government
structures and systems all you want; if it is the same corrupt, lazy and
incompetent people running the show, nothing will change.
So, do we need federalism to promote equitable distribution of revenues? It
does not seem so. The current system actually looks good in structure, but
what we urgently need is to implement an effective framework or mechanism
of oversight, accountability and transparency to ensure that our resources are
being used fairly and equitably. Also, the structure of government should be
conducive to transparency and efficiency. Will implementing the federal
structure result in more transparency and efficiency? I think not, as I will
discuss in item 3 below.

2. Overall, Federalism would increase the cost of administration

and government.
Duterte's supporters often speak of federalism, but I honestly don't have the
vaguest idea of how specifically they want to implement federalism in our
country. I have not seen anything that would describe Duterte's vision of
federalism; but, assuming that we will draw from the US as an example, I
believe the key features to identify such a government would be as follows:
a. Each state will have its own executive department which will carry out the
functions of the government such as taxation, administration of basic
services, budgeting, etc.
b. To check on the power of the executive department, each state should have
a legislative department. This department is responsible for drafting the basic
laws of the state, and for checks-and-balance functions such as approving the
state budget drawn up primarily by the executive.
c. I think you know where this is going, but yes, since each state will have its
own state-specific laws, there should be a state-specific judicial department
which is responsible for interpreting the laws developed by the state
legislature.
Whereas previously, the structure of the Philippine government is as follows:
National government > Provincial governments > City/municipality
governments > Barangays
Under federalism, it would now look like the following:
National government > State government > Provincial governments >
City/municipality governments > Barangays
Stating the obvious, the state government needs money to pay for its officials
and its infrastructure. How would the state government get this money? You
got it: more taxes, fees and debt. State taxation is actually also a feature of
federalism as implemented in the US.

It thus seems that proponents of federalism are pushing it supposedly to make

more funds available for their regions and municipalities, but they have failed
to consider the incremental and continuing costs of running this type of
government, and the potential additional burden to citizens in the form of
higher taxes.
3. A larger government is not conducive to transparency and
efficiency
A large and bloated government is not only costly, as discussed above, but can
also be difficult to oversee, unwieldy and inefficient. Our objective in the
Philippines should be to reduce red tape and bureaucracy and streamline the
government, not to bloat it further by adding an additional layer.
Most modern, innovative businesses make a good case for streamlined,
compact organizations. For example, in my current organization, there are
only 6 levels from the bottom to the top. The advantage of this is that decisions
are made faster and more efficiently (lesser approvals going up) and top level
management have a better grasp of what is occurring at all levels, including
the grassroots (better oversight).
In a compact organization, you would need less resources to control the
activities of each of the members, to ensure that each member is working
within established rules or limits (in another analogy to business, smaller
internal audit/operational risk management group). As the size and
complexity of an organization grows, it becomes more difficult to identify and
root out offending members, and accountability also becomes an issue (with
more people, it is harder to identify who is responsible for what). This is
precisely the current state of the Philippines.

To sum up, there is no assurance that LGUs and regions will receive more
funding under a federal system compared to our present system. What is likely
to happen instead is that the revenues of high income communities/regions
will rise further, and those regions who have lower revenue generating

capacity may have their funding reduced. Also, federalism (if implemented in
the way I described above) will impose additional governing costs and
inefficiency, since it adds a new layer of government, and each state will have
its own set of governing bodies and functions independent of other states.
Also, taxes will be imposed at both national and state levels. Finally, the
Philippines should be working towards having a more streamlined and
transparent government, but implementing federalism seems to be a step
backwards on this.
What we need to resolve our fundamental governance problems are measures
that enhance transparency, accountability and efficiency of our government,
and not a mere change in the government structure.

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39 days ago
John Christian
It is true. Federalism is not fit in the country. Elpidio Biado, you did nothing but disavow the democratic principles of
the country. How dare you say to him about your "failed status quo"? Besides, with a K-12 education system, an
EDCA, a soon-to-be national emergency hotline that will make us feel more confused, and a vision for federalism, the
Philippines will soon be a protectorate of the United States. Duterte is Trump, and Mr. Biado, what you said to him is
a total disgrace.

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76 days ago
primerpagunuran
This is, contrary to high claim, just another 'any man in the street' worldview. After reading, wonder what one
acquired in better understanding? Funny piece.

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110 days ago

Elpidio Biado
Palpak nga yang status quo na sinasabi mo. Kampi kampi sa pagnanakaw ang mga nasa itaas. Ang pera habang
maraming dinadaanan, nababawasan. Yung mahirap huwag mo ng kolektahan, yung mayaman hingan at kunin para
ibigay sa mahihirap. KUNG GUSTONG GAWIN MAY PARAAN, KUNG AYAW, MARAMING DAHILAN.

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39 days ago
John Christian
You are a total disgrace of the country! Duterte cares no one but himself, like Trump.

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(edited)117 days ago

El Campeador
I suggest that all states in the federal government should set up a new bank that will favor loans to poorer states with
a fair and affordable interest! A state cooperative development bank maybe! Also richer states should offer jobs to the
people of the poorer states thru a state to state program. The federal gov should implement a law that will
standardize the minimum wage of the richer states! The minimum wage of the rich states should be the same! This
will give people an option of where they want to go to! Mostly people go to metro Manila because it has a high salary
compared to other regions !

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(edited)118 days ago

Bryan Virtudes
I appreciate that you are opening up the discussion about Federalism. But if I may suggest, kindly read the Senate
Joint Resolution No. 10 also known as Joint Resolution to convene the congress into a constituent assembly for the
purpose of revising the constitution to establish a federal system of government. This is the basic federal government
framework Sen. Nene Pimentel introduced in 2008. This is also the framework that PDP Laban follows (Duterte's
group). This way, we can further discuss this on a policy point of view than simple assertions.

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76 days ago
primerpagunuran
Mind posting it here if you acquire the soft copy of the document referenced? Accept my thanks.

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254 days ago

Trajano Cabrales
I will post this comment again, three point response from one of my fellows:
1. Federalism is not solely about equal distribution of revenues. It's about the ability to decide and control the
development of a region without having to rely on the decision of the national government. That a national

government has a say on a regional development is a point of corruption/ineffectiveness. First, it can be used as a
political tool. Second, in theory NEDA personnel could ask for grease money in order for a project to be approved.
Third, NEDA do not simply see the urgency the way locals see it.
2. Federalism probably would increase the cost of government. But if the results will be good then the cost of
government is peanuts compared to what can be gained. For one thing, unitary government has not been good with
us. It even produced a dictator, which is a huge tendency for a unitary government.
I would like to correct the level of government: Federal government > State or Provincial (regions bunched together) >
City/municipality > Barangays
3. State government is more transparent and responsive to local people. They know who their leader is, they know
where he/she's from. The people can demand to their state government with more ease compared to demanding to a
president.
Under a unitary government, transparency and accountability will never succeed for the Philippines. Several decades
of unitary government has proven that. Unitary is despotic by nature and easy to corrupt. And every year it is getting
worse.

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(edited)248 days ago

Xenon Lequin
I agree that regions should be empowered in facilitating development in their area. I agree that this empowerment
entails some form of decentralization; the question is, where do we draw the line between too much decentralization
and too little? Federalism may be very beneficial, under the right circumstances. Is the Philippines under such
circumstances?
I believe that Federalism (if we were to follow the US Model) is too much decentralization than necessary or desirable
for the country, for the following reasons:
1. May worsen the issue of inequitable distribution of resources
2. Cost burden which translates to taxes or debt
3. Inefficiency, since there would be a lot of duplication of duties
4. A federal government may in theory be more responsive to the unique needs of each locality, but given our
country's political atmosphere, there is little assurance that such responsiveness will result to beneficial government
action.
To further explain 4, even if the local/regional levels are empowered, such power may not be used appropriately,
either due to lack of competence or corruption. Local officials indeed are closer to the constituents and able to make

decisions suited to the locality's unique needs, but who's to say whether they are inclined to do so, if they have other
non-aligned, vested interests not compatible to those of the citizens? When officials are corrupt, they are less likely to
act in the best interest of their constituents (principal-agent problem), whatever the government system is.
I guess what I'm trying to say with 4. is that in our case, regardless of how good federalism looks on paper, it's
practical effectiveness may be thwarted by some other fundamental issue that it does not really solve, like corruption.
Corruption/despotism is just as likely in a federal government as in a unitary government. Also, corruption is just as
likely at the local level as at the national level, and as such, avoiding "grease money" at the national level is not a
very compelling reason to make the switch; such incidents can (and does) as easily happen at the local level.
South Korea, Japan and Singapore are examples of unitary governments which are spectacularly successful
(Singapore also came from an "autocratic" background similar to our experience with Marcos). Venezuela and
Argentina are federal systems which fare worse than the Philippines in Transparency International's corruption
perceptions index.
TL;DR - Federalism has its benefits, but is also quite costly to implement. We should implement if the benefits
outweigh the costs. However, it appears that our corrupt political atmosphere, if continued, can thwart a lot of these
benefits; as such, implementing federalism now will not help us a lot.

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111 days ago

ozzyosmena
I think a good compromise would be to keep the unitary form of government but change to parliamentary. I think your
examples of strong unitary countries all have parliamentary systems in place. This achieves the simplicity in
governance, representation and increase in responsiveness desired by the people promoting federalism.

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39 days ago

John Christian
I think a good compromise would be to keep the unitary form of government and remain as is. Any change of form of
government will make the country worse. The Philippines now has a goal: Change is coming by turning back the
clock to imperialism, divisionism, populism, and totalitarianism.

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40 days ago
ron
Trajano
In addition to your positive output and in contrary to those who are against; Federalism is not only about
Decentralization and Decongestion of Imperiam Manila Central Government but also the Devolution of Powers
between Regions and Central Government, and also towards Ethnolinguistic Freedom, Equality and Justice.

Understanding the impact of Federalism

by Andrew James Masigan
July 17, 2016
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As I write this, members of the 17th Congress are working on overdrive to draft the framework for charter change
(Cha-cha). On the forefront of the Cha-cha agenda is shifting the structure of government to Federal form.
A shift to a federal government will affect every Filipino regardless of economic class or province of residence. Its
impact will traverse his economic and social conditions for generations to come.
It is crucial that we all understand the fine nuances of Federalism since we will be voting on it through a general
plebiscite. Our choice must be informed and intelligent, not one based on propaganda and misinformation.
Thus, the objective of this article is to shed light on the pros and cons of federalism and how its structure will affect
us.

First, let me answer the basics question, what is a Federalism Government? A federal government separates regions
into federal states. These federal states have the power to act independently on policies of regional concern. This
includes taxation, issuance of licenses, health and educational programs, economic development plans, infrastructure
programs, etc. The national government, for its part, remains responsible for such matters as national defense and
foreign policy, among other country-wide concerns.
The proposal is that the county be divided into eleven federal states four in Luzon, four in the Visayas and three in
Mindanao. These federal states will have the discretion to adapt whatever system of government best suits them. It
could be the current gubernatorial system, a parliamentary system or a gubernatorial-parliamentary system. The
preference of one region may not necessarily apply to others.
Those who argue in favor of federalism say that given our 80 ethno-linguistic groups, it only makes sense that the
responsibility of national development be disbursed across the regions rather than remain centralized in Manila. Each
region, after all, has peculiar needs and unique conditions.
But the situation is more complicated than that. There are as much disadvantages as there are advantages in
federalism.

Pros and cons of Federalism

First the pros. In a federal government, federal states devise their own solutions based on their situation, culture,
aspirations, preferences and peculiarities. They need not rely on imperial Manilas one-policy-fits-all approach to
problem solving.
Economic development plans will be devolved to the federal states and this allows them to specialize on industries
where they are competitive. As for the national government, it can better concentrate on national issues without being
bogged down by regional concerns.
With the current system, local government units cannot spend without imperial Manilas approval. And when funds
are released to LGUs, they are pressured to consume it in total so as not to reduce next years allocation. This
provides no incentive for local governments to save. Under a federal system, however, regional governments
manage their own funds. This motivates them to exercise frugality.
Regions who have been chronically dependent on the national government for their sustenance will now have to level
up to survive. It will be a sink or swim situation which hopefully, will strengthen the weaker regions.
Federalism encourages experimentation with multiple solutions. Three different regions may have three different
solutions to the same problem with equal or varying results. This enriches the nation with experience and best
practices.
Citizens of federal states will invariably compare themselves to their neighbors in terms of economic development,
per capita income, quality of life, etc. This encourages competition among regions which pushes them to be more
efficient.

Finally, a federal system of government will decongest Metro Manila.

And now, the cons: Political and economic dynasties will be further entrenched in a federal government.
The entire nation will be more ethnocentric, leading to a degradation of national unity. Tagalog will be replaced by
local dialects and this will further diminish our sense of nationhood.
Since the national government will have no say on how each federal state develops, they will do so in an
uncoordinated fashion and at varying paces. The result will be an uneven distribution of wealth among federal states.
This inequity could be a breeding ground for friction. In this light, federalism promotes dissonance rather than unity.
Federalism promotes regional loyalties more than it does national allegiances. Hence, the likelihood of certain regions
rebelling against the national government is heightened. Quebec in Canada and Catalua in Spain are prime
examples of how regionalism can divide a country.
The very nature of federalism necessitates more bureaucrats in both the national and regional levels. More
bureaucrats mean more bureaucracy. This leads to duplicity of functions, inefficiency and opportunities for corruption
Studies have shown that only Central Luzon, Southern Luzon and NCR have gross regional products (GRP) large
enough to be self sufficient. Thus, the greatest blowback of federalism is that eight out of the eleven regions will spiral
deeper into poverty due to their inability to survive without subsidies from Manila.

Con-Ass or Con-Con?
There are two ways to amend the constitution through a constitutional assembly (Con-Ass) or a constitutional
convention (Con-Con). The importance of choosing the correct method cannot be overstated.
I will not mince words, the Con-con is the better option in that it protects the interest of the people from the vested
interests of politicians and big businesses. I recently spoke to AKO Bicol Party-list Representative, Rodel Batucabe,
one of the most prolific congressmen in the House and authority on onstitutional law. We both share the same view
on this.
See, in a Con-Ass, those who draft the changes in the Constitution are the members of congress themselves. It is a
risky affair since the public is precluded from participating in the process. And since the majority of our congressmen
vote accordingly to party lines, personal interest and those of their benefactors, the public will be kept in the dark on
the behind-the-scene horse trade that is bound to happen. We stand the risk of ending up with an amended
Constitution thats equally flawed as the 1987 version.
A Con-Con is more participative given that the populace elect their own constitutional members according to
constituencies. In short, our own representatives, the Con-Con members, draft the constitutional amendments. The
members of Congress have no direct hand in the process.

Batucabe underscores that in the long term, a Con-Con will turn out to be cheaper and more politically correct.
Considering that future generations of Filipinos will operate according to the laws we draft today, the manner by which
we amend the constitution must be credible and well thought out. The Con-Con provides that.

Federal-Presidential/Federal-Parliamentary?
Again, I will not mince words. A Federal-Parliamentary system better serves national interest. I say this despite
Congress favoring a Federal-Presidential system according to the proposal of PDP Laban figurehead, Aquilino
Pimentel Jr., Batucabe and I share the same view.
What is the difference? A Federal-Presidential system offers no change to the current system where the President is
elected through a national election and heads the executive branch. He has no sway on the judicial or legislative
branches except through party-line influence. The United States operates under a Federal-Presidential framework.
A Federal-Parliamentary system, on the other hand, encourages people to vote according to political parties. Here,
the citizens elect their Members of Parliament (their representatives), most often, based on the ideology of the party
they belong to, not on his personality. The party with the most number of elected representatives is deemed the
parliament. The parliament elects their Prime Minister (PM) from among themselves. The PM, in turn, selects the
members of his cabinet (his ministers) from among the members of the parliament.
There are multiple advantages to this system.
First, we do away with expensive and divisive presidential elections. We put an end the vicious cycle of Presidents
resorting to corruption to raise funds and/or recoup their campaign spending.
Moreover, since the members of parliaments selects the PM, they can easily remove him through a vote of noconfidence should he fail to fulfill his mandate. No need for a long drawn out impeachment process.
In addition, since the ministers are selected from the Parliament, no one gets a free ticket to the Cabinet just because
he is a friend of the President or nominated by a political supporter. The ministers all have mandates and are
accountable not only to the PM but to their constituents.
The parliament is a unicameral legislative body. Thus, bills can be made into law faster and cheaper.
Even the poor can run for office so long as he is capable. This is because elections are funded by the party. In a
federal-parliamentary system, we do away with those who win on the back of guns, goons and gold.
A parliamentary system is one where a shadow cabinet exists. A shadow cabinet is the corresponding, non-official
cabinet composed of members of the opposition. Each cabinet minister has a shadow equivalent who is mandated to
scrutinize every policy done by the official minister. The shadow minister may offer alternative policies which can be
adopted if it is deemed superior. In the end, the system allows policies to be better thought out with appropriate
safeguards to protect the interest of the people.

Among the seven wealthiest democracies (the G7 nations), only US and France follow a presidential system. the rest
subscribe to a parliamentary system.
The 17th Congress will surely push for Federalism through a plebiscite. Will I support the move? Only if it is done
through a Con-Con and only if it specifies a federal-parliamentary system.

Read more at http://www.mb.com.ph/understanding-the-impact-of-federalism/#OIm1hHOyKGWuUSSS.99