Economic managers urged: Improve draft federal charter

A member of the Consultative Committee (Concom) that reviewed the 1987 Constitution yesterday urged the government’s economic managers and lawmakers to put inputs that would improve the draft charter to shift to a federal system.

“We therefore encourage the economic managers to help us improve the draft. In the same way we call on our senators, congressmen and all elected officials to keep the discussions ongoing,” Concom member Julio Teehankee said in a speech during a Conference on Comparative Practices in Fiscal Federalism in Makati City.

Teehankee said comments on the draft charter are welcome to give an opportunity for everyone to be involved in President Duterte’s push for a shift to a federal form of government.

He explained that the draft charter would institute progress in the regions.

“The proposed draft federal constitution encourages the national government to go on a diet and the regions to go on a muscle-building regimen,” Teehankee sa.

He explained that the fiscal administration in the draft constitution embodies fiscal prudence, reasonable sharing of revenues, prioritization of essential federal expenditures and the right sizing of the budget of the federal government.

“Fiscal policy shall be exclusive to the federal government with certain taxation powers given to the regions and there shall be equitable sharing,” Teehankee said.

In an interview with reporters, Concom senior technical officer Wendell Adrian Tamayo said they estimate the additional costs for a shift to federalism to be around P17.565 billion.

“This will account for positions that are created under Article 11 which are the regional governor and regional assemblies, plus the positions created for the regional legislature and the other high courts,” he said.

The National Economic and Development Authority (NEDA) warned that the national government might incur as much as P243.5 billion in additional expenses every year to operate a federal government, which would increase pressure on the country’s fiscal deficit.

Socioeconomic Planning Secretary Ernesto Pernia warned that the shift to a federal system could cost the administration additional expenses amounting to as much as P131 billion in the first year of transition.

Finance Secretary Carlos Dominguez III also said the country’s credit ratings might be downgraded as rating agencies earlier expressed concern that federalism would create uncertainties on the political landscape.

Tamayo said there are continuing discussions with the government’s economic managers on the technical details of the proposed shift to federalism.

Tamayo also downplayed fears that shifting the form of government would result in economic disruption.

“What the Concom did is to ensure that there is minimal disruption in terms of the actual economic performance of our country,” he said.

For his part, Local Government Assistant Secretary and spokesman Jonathan Malaya said that federalism will enable more funds to flow into the regions.

“Federalism is all about equitable sharing of resources and we are hopeful that once we transition to a federal system, we will be able to develop the local economy of the regions leading to national progress,” he said.

Gary Olivar of the PDPLaban Federalism Institute Fellowship said local officials have expressed concerned over what will happen to local government units (LGUs) once the country shifts to a federal system. –