Roadmap needed for federalism shift

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A roadmap aligned with the 2017-2022 Philippine Development Plan (PDP) needs to be crafted if the Duterte administration pushes through with its plan to change the country’s form of government, the National Economic and Development Authority (NEDA) said.

“I hope we would have – a roadmap to prepare us for this change, to ensure that we get the most benefits, to minimize the cost of transition,” the NEDA quoted Undersecretary Rosemarie Edillon as having said during Tuesday’s Philippine Institute of Development Studies (PIDS) policy conference.

The plan should not lose “sight of what we want to achieve — a matatag, maginhawa at panatag na buhay para sa lahat (stable, comfortable and tranquil life for everyone),” Edillon added.

She noted that the PDP, as the country’s development blueprint, was aimed at fostering inclusive growth, a “high-trust” and resilient society and a globally competitive knowledge economy.


Implementation could be an issue, the NEDA indicated, as federalism will lead to “multiple interacting governing units, each with its own preferences and decisions to make.”

“Is it really possible to make it work given our peace and security problems? Our vulnerability to disasters? For the former, we would need a strong and nimble military able to move swiftly from one state to another,” Edillon said.

In emergency situations, resources would have to be pooled to help affected local governments, she noted.
With regard to revenues, Edillon tagged transfer pricing as a major concern.

“Will federalism also result in a ‘race to the bottom’ where states, wanting to attract the most investments, will offer the sweetest package of incentives? Or, the opposite: will states, in a bid to quickly beef up their fiscal resources, impose more regulations, thus increasing the cost of doing business?,” she asked.

Human capital will also be a concern “at the highly technical level of governance for deployment to different states,” Edillon said.

Shifting to federalism, the NEDA official said, will be a “long-term endeavor requiring a sustained commitment.”
She compared skepticism over the proposal to the Philippines’ initial wariness over the Association of Southeast Asian Nations (Asean) Free Trade Area (AFTA).

“But just like the Asean macro-model study that showed that the benefits of the Philippines from the AFTA was close to nil, we proceeded because we knew, deep down, that openness to trade will eventually turn for the good for us,” Edillon said.

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