Last January 28, the Kapihan ng Malalayang Lasalyano (KAMALAYAN) hosted a forum focusing on the House of Representatives’ Federalism Bill, also known as Resolution of Both Houses (RBH) 15, and its anticipated effects on the country at the Yuchengco Hall rooms 407 to 409.
Edmund Tayao, a member of the Consultative Committee tasked with reviewing the constitution, and Jerome Cruz from the Ateneo Policy Center of the Ateneo School of Government, served as guests speakers at the event. Tayao’s talk centered on the key points of the Consultative Committee’s federalism proposal and what it hopes to accomplish, while Cruz tackled the economic aspect of a shift to federalism.
Need for federalism
According to Tayao, decentralism is a key strategy used for growth among Southeast Asian nations. Among Cambodia, Indonesia, Philippines, Thailand, and Vietnam, Indonesia has been the fastest growing for the past few decades, and also has the highest local government share of overall expenditures.
Furthermore, although the Philippine economy has been growing at a fast pace, most of that growth benefited only the National Capital Region (NCR), Tayo stressed. At current prices, the average gross domestic product per capita of NCR is P384,116, while the Philippine average is merely P128,857. This inequity, Tayao hoped, would be solved through federalism as it would allow for the redistribution of resources to poorer regions.
Finally, Tayao shared that federalism is a solution to the limitations of local governments when it comes to planning. In Cruz’s presentation, local government revenue raising is roughly six percent of the national government’s, which makes them dependent on government transfers. Federalism transfers power to regional governments by giving them a larger share of all collected taxes.
Political Implications of RBH 15
Bayanihan Federalism, submitted by the Consultative Committee, is a proposed draft of what a federal constitution could look like. However, what came out after three readings under the House of Representatives was instead RBH 15.
According to Cruz, there are three key problems to the House’s measure. First, there was a lack of clarity between the powers shared by the federal states and national government. Second, there was no explanation of tax raising powers. Finally, there were no concrete requirements for forming a federal state, which promotes political dynasties by limiting powers to the Lower House.
Meanwhile, Tayao said that part of the federal constitution’s goal is to limit one region or political dynasty from domineering over the others. To achieve this, Bayanihan Federalism has proposed stronger, more permanent political parties, and limits the ability of relatives to run for public office. Unfortunately, Congress refused to include these provisions in their final draft charter, much to Tayao’s dismay. “We can’t expect them to pass something progressive, especially if it is not going to benefit them,” he stated.
Economic implications of RBH 15
Cruz stated that the change will bring about P2-billion in transition costs. However, this does not count the financial viability of a federal government system. Questions that need to be answered include who will spend what, who will get which tax revenue, and how inter-government transfers will work. On the other hand, as the powers of the federal states and national government have not been clearly defined, there could be a situation wherein the national government has more things to do but with less funds.
Another effect of federalism is the sharing of resources between regional and local governments. Depending on the scenario, Cruz shared that he expects a budget in the range of a P39.6-billion deficit to a P120.4-billion surplus for local governments. The gap, he explained, will be caused by varying assumptions on how much will go to the regional government and how much will end up with the local government.
Should we shift to federalism?
In his reaction speech, Dr. Ardor Torneo of the Jesse M. Robredo Institute of Governance shared that people must first find federalism as a pressing need before it can be implemented. Nevertheless, he cautioned the audience against expecting sudden change as opportunities such as employment will not immediately transfer from NCR to other regions. In the end, how local governments act based on the powers they have depend entirely on their own motives.
