The Charter Change embodied in Resolution of Both Houses No. 15 is an initiative that has floundered before it could take off.
Its centerpiece agenda on the shift to federalism is a virtual centerfold because it is bare. No less President Duterte’s economic advisers have exposed it as not economically viable.
The undue haste in shifting from the unitary to the federal system of government will further deteriorate the economy. Alacrity could spell disaster.
The President’s chief economist, National Economic Development Authority (NEDA) Director-General Ernesto Pernia, has scored the country’s lack of preparedness for a shift to federalism.
He said majority of our regions are fiscally ill prepared for federalism. He also said that only the National Capital Region, Central Luzon, Southern Tagalog (Calabarzon), and lately Cebu or only four out of the possible 18 federated regions have the political and economic infrastructure that would allow them to adopt federalism.
Secretary Pernia also observed that implementing federalism before we are ready would be detrimental to economic growth.
He warned that federalism might shred the country’s balance sheet. He underscored that “[t]he expenditure will be immense” and estimates that fiscal deficit may balloon to “6% or more.” This, he said, is “really going to wreak havoc in terms of our fiscal situation and we will certainly experience a downgrading in our ratings”. The possibility of a credit rating downgrade was confirmed by debt watcher Moody’s Investors Service.
Moreover, the shift to federalism comes at a price the nation can ill-afford according to Secretary Pernia.
It is not only Secretary Pernia who has voiced his fearful federalism forecast.
Finance Secretary Carlos Dominguez has likewise ventilated his concerns and he said, the transformation could lead to “dire, irreversible economic consequences.”
He echoed Secretary Pernia’s estimates when he underscored that the federal government would sustain a deficit of 6.7%, which may result in a credit rating downgrade that would most certainly lead to higher interest rates. To be able to maintain the Duterte administration’s deficit target of 3.0%, Secretary Dominguez said that, “the federal government will have to cut its expenditure program by P560 billion.”
He quantified this to mean that the national government may have to “lay off 95% of its employees or reduce the funds for the ‘Build, Build, Build’ program by 70%, or a combination of both.”
Even Budget Secretary Benjamin Diokno has joined the chorus by stating that the projected plunge to federalism needs a more “in-depth study”.
Secretary Diokno explained that “the core of federalism is the fiscal side – how do you finance the federal government?”
He said that what is important is to “figure out what functions are going to be federal and what functions are to be local or state.”
If it is not enough that President Duterte’s top economic advisers are mistrustful of the shift to a federal form of government, the great majority of the Filipino people are also clueless about federalism and remain opposed to charter change at this time.
In its March 2018 survey, the SWS documented that only 25% of Filipinos are aware of the proposed adoption of the federal system. This confirms the earlier survey of Pulse Asia that 70% of Filipinos have no knowledge or awareness of the federal form.
If the overwhelming majority of Filipinos are not aware of federalism, do not care to know what federalism is, or do not understand federalism, it is foolhardy for the Duterte administration to embrace federalism with inordinate alacrity.
There is clearly no popular support for federalism. As of June 2018, only 2 out of 10 Filipinos agree that the 1987 Constitution should be revised at this time, according to Pulse Asia. The survey also revealed that 62% of Filipinos do not want the present unitary form of government to be changed to the federal form.
Overhauling our present form of government is an ambitious experiment that has no historical anchorage in the Philippines and could be a perilous misadventure.
The voting process in the Constituent Assembly of Representatives and Senators has not been resolved.
The senators, who are indispensable components of the constituent assembly, are lukewarm to constitutional amendments now.
The passage of Resolution of Both Houses No. 15 is an exercise in futility.
I vote no to a proposition that lacked merits and is doomed for the archives.
EDCEL C. LAGMAN