COMMENTARY

Federalism is not a solution (2)

4

Last of two parts

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Even when the architects of Federalism allow each state to impose income tax on income earned in its territory and collect the VAT on value added to economic goods sold in the state, I anticipate that these three regions will collect more than half of the total tax revenue of Federal Philippines. This is so because the distribution of GDP shown above is highly indicative of the volume of taxable economic activities in each region. As such, it is very likely that post-Federalism, transfers, or more descriptively, subsidies, will have to be made from some states to the others. Additionally, there is still the question of how the central government will get its own share of revenue and what proportion of total revenue that share would be.

This picture of highly disproportional distribution of GDP alone indicates that it is illogical to divide the country into semi-autonomous regions, which I assume will be composed of contiguous provinces. Under such condition, no matter how the tax revenue is divided up among the Central Government and each of the various Philippine states, there will be universal dissatisfaction. The rich states will try to retain as much of what they have earned and will complain if much is taken away from them. The poor states will want to have more and will complain if they get less than what they want. Those are just normal reactions and these problems will fester for a long time as the development of the poor states predictably will take long because they lack resources to begin with and can only stay afloat through subsidies coming from the rich states. Moreover, such subsidies if large in amounts and continue for a long time is not consistent with the idea of Federalism which is for each state to fend for itself. What is worse is that the poor states may get accustomed to such subsidies and, therefore, such dependency defeats the purpose of Federalism. In creating Federalism, we will unwittingly disturb the lying sleeping dogs. Trying to resolve this huge revenue allocation problem may just result in eventual secession by one or more Philippine states or, God forbid, a civil war. I am not trying to exaggerate. But these possible consequent future scenarios should not be ignored.

At the very least, before plunging into Federalism, its advocates must construct a prototype of their concept of Federalism which must include a clear illustration of the money flows. If the prototype indicates that the political subdivision and money flows do not make sense and cannot be reasonably sustained, then obviously we should not embark on that experiment. In the event that the advocates will plunge this country into Federalism without first developing such a prototype, I believe that will be taking a terribly irresponsible, reckless action.

Putting all these analyses together, Federalism is not the solution. If for some reason or another, the advocates persist in putting Federalism in place, I would rather– as the gates would have been opened anyway –advocate dividing the Philippines into two or three independent countries, with a customs union and with or without a common currency. This division should be done in a peaceful and mutually acceptable manner, the way the former Czechoslovakia did it. The probability of success of this scenario for the divided parts is much greater, I believe. As I have said earlier, I believe the idea of Federalism was a consequence of frustration and desperation. My own observation is that this idea is strong in Mindanao and to some extent, in the Bicol region, which regions, for the most parts, are comparatively poor. I empathize with the sentiments of our fellow citizens in these regions. I agree that these places were neglected for many years, but the economic development and poverty problems in these areas can be fixed if we exert strong political will. Federalism, by itself , will not solve these problems.

Our elected leaders must be less selfish
To me, the solutions under the present unitary form of government are easy to find, but our leaders do not want to pick them. We are now in an era of plain talk and I will embrace it. First of all, much of the solutions relate to the mindset of our elected leaders. They have to be less selfish. The prevailing dynastic rule must be stopped. At the moment, the entire country is probably ruled continuously by 100 or so families, making the Philippine state an oligarchy. We have an incestuous condition in our midst and being incestuous, it cannot bring good results. It is always good and desirable to have new faces in the political system on a continuing basis. They provide fresh ideas and bring stronger will. The pork barrel system in whatever form must be eliminated and the money savedchanneled towardsbetter uses, like more allocations to poverty reduction and education. Moreover, such practice only leads to the preservation of the dynasties.

Our leaders must restrain their self-interest when promulgating or amending laws designed to promote a cleaner and better-run government, such as the laws regarding anti-money laundering, bank secrecy, Freedom of Information and the like.

The current leaders must also permit the passage of a law to strengthen political parties by providing effective penalties to those party members who transfer to another party before an election and after being elected to any elective position. In this manner, the political parties may develop into the kind that embrace and stick to their chosen political and economic ideologies so that during elections, the contest also becomes a battle of ideologies. At present, we have a system of perpetuating the self-interest of politicians. Whenever there is a new president, the elected members of the legislature change party affiliation or allegiance to the winning president’s party or group. As a result, we see the same faces who were loyal to the previous president and even to the predecessor of theprevious president becoming immediately supportive of the new president. Why is this so? It is clearly not in pursuit of ideology. It is clearly because of the resulting benefits of adhering to the current power. This kind of situation can never be favorable to long-term political and economic development. This is one of the important reasons why our country’s peers continuously overtake us and may eventually leave us at the lowest rung ofthe ladder in the foreseeable future. Without strong political parties, I do not think we can achieve the desirable level of political development.

Sad to say, Federalism alone cannot solve all the foregoing issues.

The other strong impediment to success is our system (form and structure) of unitary government. We copied it essentially from the system of government of the United States, apparently, at Federal level, and applied it on our unitary form of government. That by itself raises a question as to whether the system we adopted fits Philippine conditions and culture. At the US Federal level, the US Constitution chose to create a President in an adaptation of the role at that time of the British King. As such, it created a system of checks and balances, not only between the presidency and the legislature but also between the two houses of Congress. It created a Federal Senate as an equalizer to the Federal House of Representatives to protect the interest of the smaller states. Each state, irrespective of size, sends two senators to the Federal Senate, while each state sends representatives to the Federal House on the basis of population proportional representation. (As a result, a small state may send two senators and one congressman to the US Congress, while a large state may send two and more than 50, respectively.)

Election becomes a popularity contest
As practiced in the Philippines, the senators, composing a small number, are elected nationwide and the election becomes a popularity contest. After each election, the Senate becomes a club of aspiring presidents. As mentioned earlier, the Philippine Congress, as a whole, has been ineffective in dealing decisively with important issues relating to political development which is a necessary element in the pursuit of economic development. Because the two houses essentially have the same powers, they pass bills independently of each other and many times, for important legislations, the two separate versions bear significant differences which are reconciled by a few legislators who, in effect, become the final deciders. Is this process a fair and transparent way of enacting a law that binds all the citizens?

The Philippine Supreme Court, the equivalent of the US Federal Supreme Court, has become the destination of all losers of practically all cases decided in lower courts. As a result, it takes ages for the final outcome to come out. It appears that the US Federal Supreme Court does not work that way.

We can go on and on. Suffice it to say, the present system of government under our unitary state,in my opinion, does not fit the political and economic developmental needs of the Filipino people and its culture.

Now that our leaders are talking about amending the Constitution, they should seriously consider changing the system of our Government but without subdividing the country into Federal states. I believe that a system that has a strong parliament at the core will be good for us. Under such a parliamentary system, the legislative function is fused with the executive function. This arrangement will result in much quicker focusing on urgent and important matters and much faster approval process and subsequent implementation. This country urgently needs a decisive government working at a fast tempo, especially at this time. To work effectively, such a parliamentary system must be accompanied by a strong party system and by a limitation of the number of qualified political parties during an election contest to minimize the chance of a coalition government.

To prevent abuse, the parliamentary system should provide for the dissolution of the parliament in case of a vote of no confidence on the existing government and for the consequent election of a new parliament. Additionally, a second legislative chamber should be provided, but which should not have equal powers with the parliament. The specifics of the role of the second chamber may take a number of forms, which I will not dwell with at this time, but suffice it to say, the role of this legislative chamber should provide a review of the bills passed by the Parliament under a process by which its opinion is given by the parliament serious consideration and action.

A head of state without executive powers
This parliamentary system should provide for a Head of State, without executive powers, who should be elected nationwide. We need not call this Head of State President. We may call this person a Sultan or a Rajah to portray our pre-Hispanic past. The Head of State will be the symbol of the Filipino nation.

We do not need to reinvent the wheel. There are many references we can use, particularly, among the countries of the present EU,except France (which has a strong presidency), butincluding the UK. We can also look at Japan’s government system. What is important is to choose features of a strong parliamentary system that may effectively work under the present Philippine economic conditions and cultural setting.

To provide a truly fresh start and to inject new thinking, the necessary constitutional change must be done through a constitutional convention with a requirement that the elected delegates shall not include those who were elected to the national and local governmentsduring the last four presidential elections and eight congressional elections. The current and past leaders already had their chance during the last 70 years after independence from the US. They must give way to a new set of concerned citizens to form a new system of government that will forge the economic and political welfare of the current and future generations of the Filipino people.

Let me conclude by citing a comment made by a well-known contemporary political scientist, Francis Fukuyama, in his foreword to the 2006 edition of the book “Political Order in Changing Societies” by Samuel P. Huntington, considered as one of the foremost political scientists of his generation. Fukuyama said…“Huntington is further correct that political development follows its own logic independent of economic development. While there is evidence that long-term economic growth breeds stronger democratic institutions (or, more exactly, makes them less vulnerable to setbacks), this is true only at a relatively high level of per-capita GDP. For poor countries, political order and competent institutions are a precondition for economic growth”. The challenge therefore for the Philippines is to find the right vehicle for developing competent institutions in the fastest way possible. I don’t think that vehicle isFederalism.Federalism at this time will just set us back.

Mr. Punongbayan has been an accountant for almost all his working life.

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4 Comments

  1. Rolando Santos on

    Mr. Punongbayan appears to have a firmer grasp of the situation than the supporters of Federalism who would unwittingly plunge the country into a number of weaker states ripe for the subsequent picking of nearby stronger ones. (Mindanao for Malaysia — so Sabah gets entirely forgotten, Bisayas and Luzon for China — for the “de facto” confirmation of their nine-dash line that right now is all in their much-abused mind. After all, reports say that we were really that stupid to sell three Zambales mountains to the latter with which they used to create an artificial island within our exclusive economic zone.)

  2. It is a political conumdrum and worrisome stance to propose the change and switch of the present form of government from Unitary-presidential to Federalism.

    President Duterte and other advocates of Federalism, like Sen. Pimentel and Speaker Alvarez and members of Congress, will tinker the Constitution by amending it to supplant the current form of government (Unitary/Presidential/Republican)to a Federal government ( Presidential or Parliamentary) WITHOUT even knowing, explaining and studying the mechanisms, workings and political ramifications and societal effects of Federalism as a form of government.

    Just because Duterte had promised a shift to Federalism once elected without explaining how it works and how it be more advantageous than the current system, except him saying that Federalism will give more independence to the Mindanao areas without seceding from the Philippine political sovereignty, thus said to solving the intractable Mindanao Muslim conflicts. This assessment is despite the autonomy given to the AARM which literally works as a federal form as an independent political unit of the central Philippine government, yet did not solve the insurgencies and mistrust of central political leaderships by local officials.
    With Federalism in place, each city or province, as may be politically delineated, will just be managed and governed like AARM political unit, except with more political powers like self-government, budget,taxation, building and maintainance of its own infrastructure, own police force, among other things.
    The voting populace, in case of referendum, is also in a quandary as to how the Federalism works and affects them to intelligently evaluate the pros and cons of this new form of government to give them idea whether or not to choose the new system.
    The people are not politically matured, prepared and conversant, either educationally or informatively, to be governed under this new federal system especially as to processes of self-government. It may give more opportunity the intransigent and power greedy local politicians to create a warlord-like unit of government and family dynasty in every political unit- state, since they will be independent of the Federal Central-National government. Although the Federal government powers control the Armed Forces, Immigration, Foreign policy, Customs , Treasury/Central Bank, Agency that coordinates with each State government, enforcement of federal laws (civil and criminal), each State government is independent and virtually autonomous, free from the Federal National/Central government close control. As such, it canot discipline or terminate or dismiss a State official for bad governance.

    Federalism will be more expensive and costly for the populace as it will call for two of a kind ( Federal and State level) or duplicated body of organization or body like for revenue raising agencies, like two taxations, two police forces, reform of judiciary organizations (Federal and State level) two congressional or law-making assemblies, two audit, civil service and electoral tribunals, etc..
    The Federalism proponents must first thoroughly study the system and its advantages and explain, educate and disseminate them to the people before embarking on amending the Constitution changing the current form of government to Federalism.

    For me the switch to Federalism is premature, costly and opensopportunity for family dynasty, private armies, widespread corruption due to territorial segmentation to different political turfs and possible unmanageability of each created State by the Federal government, and inter-state conflicts and dissensions.
    To me, the present unitary/Prsidential/Republican form is still effective for national governance but must only strengthen the LGU by enacting laws to make them independent and free from control by central government in performing their own infrastructure with central gov’t. supervisions Supervisions and audit by COA.

    Junadan

  3. Silverio Cabellon Jr on

    Points well made. It would be interesting to see a rebuttal from Former Senator Pimentel and Former Chief Justice Puno who support Federalism.