Federalism not a sure bet for PH

AT 114 pages in length, the draft charter intended to replace the 1987 Constitution of the Philippines appears to have been developed to make up for in volume what it lacks in imagination. While it does correct some of the more problematic provisions of the earlier charter, it largely provides a “federal” system in name only;

- tion of the country that on paper

currently is, but may not practically balance power between the regions and the central government.

It is perhaps just as well that the framers of the new charter did not attempt to create something radically different than what has been the country’s norm for the past thirty years, because despite its supposed superiority to other forms of government, federalism has historically not been especially popular or sustainable.

Of the 195 countries in the world currently, there are only 27 that have a federal system, and a couple of those stretch the

is generally considered to be a non-functioning state, while the United Arab Emirates is a collective of absolute monarchies. Among the remaining 25, the oldest apart from the United States (founded in 1789) is the Swiss Confederation, formed in 1848; the newest republic is Nepal, which reorga-

form in 2015.

Contrary to what many have asserted, not all federal systems are created by joining together formerly distinct states or other political entities. Most of them are, it is true, but there are a few no-

others whose longevity remains to be seen like Iraq and Nepal are examples of formerly unitary states being broken up into largely arbitrary federal political divisions. The Philippines’ initiative in that sense is only a bit uncommon, and not at all unique.

Historically, however, federal systems that are built from distinct political and social entities tend to be more successful and durable, and it is probably no coincidence that these are among the strongest nations in the world. The United States began as a loose confederation of separate British colonies, as did Australia

- many, and Austria are based on ancient small states that were at one time almost completely independent; the same is true of

British colony but divided itself along more or less natural lines based on its pre-colonial history. More contrived federal countries – as the Philippines would be, in a pattern similar to the countries in South America – tend to be

- cally and economically stable.

None of the foregoing necessarily suggests that the Philippines’ own federalism experiment will be unsuccessful, but neither does it suggest a likelihood of success; as with any great endeavor, its outcome will depend on its execution. Along those lines, there may be some cause for concern.

Because the draft charter will now undergo a long process of

- visions may be added, deleted, or altered; what is more relevant at this point is the shape of the overall model, particularly in economic terms.

Under the proposed new system, a surprising degree of economic control of the country will be transferred from the central government to the regions – assuming the provisions are not changed – including responsibility for local infrastructure and public works,

- ment, and land use and housing. A significant amount of fiscal control will be transferred as well; the federal government will retain authority over personal and corporate income taxes, customs and tariffs, excise taxes, and the valueadded tax, while most every other conceivable source of revenue will fall within the purview of the regions. Furthermore, the regions collectively will be entitled to 50 percent of the federal government’s tax revenue, and each region will be entitled to 50 percent of the excise tax revenue on mineral resources within its territory.

may be changed, but the basic format will likely remain, and this raises a number of potential

might clash with the regions over things like public utilities; for example, two neighboring regions may wish to agree on interconnecting their local power and water systems, but crossing a regional border automatically would put the projects under federal control. The regions are granted control over economic

which makes sense, but are handicapped by the federal government’s retaining powers over tariffs and customs, competition regulation, and overall national socioeconomic planning. And although the draft charter as written specifically prohibits double taxation, the regions are essentially given carte blanche to devise new sources of revenue if

- sion or law prevents them; in practice, that is likely to cause a great deal of chaos as regional governments, under pressure to fund themselves, test the boundaries of what is permissible and what their markets will bear.

If federalism ultimately succeeds for the Philippines, the credit for it will belong to competent leaders who exercise effective management skills; how likely the emergence of those people is from a political class in which professionalism has never been a tradition is something about which the reader will have to draw his or her own conclusions. The model the draft charter proposes is an improvement over the 1987 Constitution, but that says more about how poorly constructed the earlier charter was than it does about positive features its replacement might have; there are still many unanswered questions, unacknowledged issues, and apparent contradictions that need to be resolved before the new system