Where angels fear to tread
My worst nightmare is dying from a heart attack without being seen by a doctor. This discouraged me from going back to my hometown where there is no doctor in the health center. But I am no longer afraid. Not since I discovered the presence of full complement of medical staff in every barangay in Valenzuela city, which is next to our town. Although I am not a Valenzuela resident, I am positive that they will not refuse anybody who needs emergency care.
Valenzuela’s efficient public services extend beyond health services. The Pamantasan ng Valenzuela (Valenzuela University) has one of the most modern, student-friendly campuses, with state-of-the-art equipment in its engineering department. The city has built an elementary school in every barangay, a center for special children, a people’s park that is always teeming with people, traffic enforcers who are there to keep order 24/7; fire trucks, ambulance, and so many others. Every time Mayor Rex talks about the city’s resources, jaws drop. The city government is well known for providing families with public services, literally at their doorsteps.
But not every local government can be a Valenzuela. There are basic differences – the presence of business establishments; local leaders who are professional and deeply committed to serve, systems and procedures in tax collection and an efficient and transparent fund disbursement, among the many others. Valenzuela generates more than 92 percent of its revenues from local taxes. Compare this with many LGUs who are entirely dependent on grants and their share from internal revenue taxes (BIR internal revenue allotments.)
And so I ponder how the proposed federalism can provide the solution to problems of inequity, poverty, and the concentration of power in imperial Manila. Its pathway is stated in terms of ideals, goals, and euphemism. There are no details that provide us with confidence on how the shift will take us to heaven. The briefer says:
• States will keep 80% of their revenues and remit only 20% of their revenues to central government. What revenues are meant here? Local taxes are kept entirely by local governments (with a sharing scheme among themselves — provinces, municipalities and barangays. Cities keep all their revenues and give a share to barangays). If what is being referred to is the collection from the income tax, the VAT and excise taxes, 87% of these taxes are collected in the National Capital Region and less than 1% is collected in most of the regions. This is why the dream of local leaders to keep all their revenues and not share anything with the central government is empty and not based on facts. (And if I can be unkind, borne out of ignorance.)
• There will be a 20% equalization fund. And how in heaven’s name will the equalization fund be distributed when government has not even corrected how the internal revenue allotment is distributed? Studies after studies show that the IRA is so inequitable and inefficient. IRA flowed heavily to local governments with more revenues, higher taxable capacity, and more expenditure outlays. It encouraged an amoebic behaviour among local governments, i.e. split themselves to get more from the IRA pie, and created perverse incentives, i.e. the conversion of municipalities into cities; and reporting of ghost people to the census.
Government does not even have an estimate of minimum standards on basic needs. How much in peso terms should an average Filipino receive in terms of health care and education? Without any empirical basis, the equalization fund will be distributed according to discretion, and hardly be equitable.
• The control of the central government over the budget will decrease from 83% to 40%. Will 40% be sufficient to finance national defense, national finance, enforcement of laws, subsidies, and foreign affairs? The last time I looked, these responsibilities accounted for 56% of the budget.
We can go on lamenting, criticizing, and moaning. But in the meantime, the push for federalism continues fuelled by the people’s disenchantment with government and the false hopes that it is a sure way to fight poverty and injustice.
This battle is also ours and we cannot fight with passivity and indifference. Evil triumphs when good men do nothing. We must let our voices be heard and contribute, intelligently, to the discussion.
mguevara@synergeia.org.ph