Fears of federalism fan out in Philippines

Church concerned that shifting from a unitary political system could exacerbate inequality

Ernesto Hilario, Manila

Updated: October 05, 2018 05:25 AM GMT

Then president-elect Rodrigo Duterte gestures as he speaks in Davao City, in the southern island of Mindanao, one day before taking the oath of office on June 27, 2016. During campaigning he vowed to end the domination of 'Imperial Manila' with a radical shift to federalism that he argued was vital to fighting poverty and ending a deadly Muslim separatist insurgency. (Photo by Manman Dejeto/AFP)

What do many economists and bishops in the Philippines have in common?

For one thing, they agree that a proposal by the administration of President Rodrigo Duterte to shift from the current unitary to a federal system of government should be carefully examined before any final decision to proceed is made.

For economists, this is primarily because of the huge costs involved. For clergy, the moral dimension is most important.

One of the election campaign promises of Duterte in 2016 was to change the 1987 constitution in relation to the nation's system of governance.

It apparently appealed to voters: do away with the concentrated control of resources from Imperial Manila and shift responsibilities to the various regions to spread the benefits of economic development, especially to the poor.

But what was initially seen as a walk in the park by fervent federalism advocates is now beginning to look like a minefield.

The National Economic and Development Authority (NEDA), for example, estimates that the shift to federalism would cost a whopping 253.5 billion pesos (US$4.7 billion). This would be on top of the current cost of running the national government.

The authority warned that the proposed federal charter would disrupt economic growth and infrastructure improvement as well as exerting pressure on the nation's budget deficit cap.

NEDA said the incremental cost of federalism would be a minimum of 166.6 billion pesos and a maximum of 253.5 billion pesos, on average.

In the first year of implementation, an additional 10 billion pesos would be spent on building new offices for each of the 18 federated regions.

The federal government would also spend billions more on personnel, maintenance and other operating expenses as well as an equalization fund equivalent to not less than 3 percent of the annual national budget.

NEDA concludes the proposed charter would lead to unquantifiable economic costs and that it would be difficult to ascertain in advance whether a federal structure would work in the Philippines.

Many academics also take a dim view of the federalism proposal. A study by the University of the Philippines School of Economics raises concerns in relation to past international experiences regarding shifts to federal systems, in terms of both income inequality and poverty levels.

The pro-federalism position claims that federalism will cause poverty to fall and the distribution of income to be more equal, said the paper entitled Federalism and Inclusion in Developing Economies.

However, the regression results of the study do not support these claims. On the contrary, federalism strongly predicts greater income inequality in developing countries, it found. Our results also show that federalism strongly predicts higher poverty incidence and severity on average: it does not reduce poverty incidence and severity in developing economies.

The report added: The contemplated shift appears to be a jump from the frying pan to the fire.

The Catholic Church is just as worried. Bishop Broderick Pabillo, the auxiliary bishop of Manila Archdiocese, is among those who believe the push for a federal system requires careful study. We can't be good Christians without being good citizens, he told a recent forum.

Bishop Pabillo said measures enshrined in the charter to safeguard people's rights must not be removed for political reasons.

Last March, on Palm Sunday, four bishops on Negros island in the central Visayas region urged members of their flock to form circles of discernment to discuss the issue.

We insist the voice of the people, and not that of self-serving politicians, be reflected in any constitutional change, said the statement signed by San Carlos Bishop Gerardo Alminaza, Bacolod Bishop Patricio Buzon, Dumaguete Bishop Julito Cortez, and Kabankalan Bishop-elect Louie Galbines.

At the start of 2018, the Catholic Bishops' Conference of the Philippines (CBCP) issued a statement expressing concern as to whether a shift to a federal system would lead to attainment of the common good.

Amid widespread poverty, inequality and violence, any amendment of the fundamental law of the land should follow widespread and public consultations, the CBCP said.

The prelates suggested that if the constitution were to be revised, the process should promote people's dignity and human rights.

Ernesto Hilario is a commentator and editor of several media outfits in Manila.

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