IS FEDERALISM NECESSARY, BENEFICIAL AND PRACTICABLE?

Is federalism an idea whose time has come? If yes, then nothing can stop it since, as Victor Hugo said,
“More powerful than an invading army is an idea whose time has come.” But if not, then no matter how
this present administration would push for it, it will not see the light of day. Whether or not this project
would succeed depends not only on the balance of forces between those who are advocating it and those
who oppose (which is a political contest) but also and more importantly on the objective condition of
Philippine society and of the state’s governmental apparatus that would set the limits to what each side
can actually do. In other words, federalism can only be realized if the sovereign Filipino people will
support it AND if the resources of the state would allow it.

But recent surveys showed that 67% of Filipinos do not support charter change (1) which is a sine qua
non for the shift to federalism. If a plebiscite would be held at this point in time, majority of the sovereign
Filipino people would reject the proposed change.

And how about the resources of the state? Can the government at present pay for the required costs of
creating an additional layer of bureaucracy (the regional or state bureaucratic institutions) that will
mediate between the local government units and the national or federal government? No less than this
administration’s economic managers have said “no”(2 ) and the Defense Secretary agreed with them
saying that PH is not yet ready for federalism (3).

Given the above facts, it seems that federalism would still have to wait for its proper time. But is this
country really destined to become a federal state? Is there necessity for the shift? Will it benefit the
Filipino people? And is it practicable?

Let us then answer each of these questions.

Is federalism necessary?

Advocates argue that shifting to federalism is necessary because under the present unitary set-up, the local
governments are shortchanged by “Imperial Manila” (the capital city and the seat of power of the central
government) in the distribution of the nation’s income. The term “imperial” is obviously intended to
evoke the unequal relationship the country had to endure for centuries with its former colonizers and to
effect some kind of transference of the resentful emotion of victimhood originally felt toward foreign
imperialists to fellow Filipinos who live in the capital.

Let us clarify: the nation’s wealth refers not only to taxes that accrue to government coffers but also the
total value of goods and services produced each year that becomes the gross domestic product (GDP).
This economic pie is theoretically then sliced and distributed per capita (or per head); but, of course, in
reality, the actual distribution is not equal because not every person gets an equal slice of the pie. The
same is true for collective units like barangays, municipalities, cities, provinces and regions. (4)

According to the administration, it is this inequality that federalism seeks to address (5). The proposed
federal charter drafted by the Constitutional Commission intends to do this by reconfiguring the
governmental set-up and processes, creating 18 regional states to which the federal (or central)
government would share 50% of its income from various taxes. The idea is to decentralize governmental
powers and authority by allowing each of these states to chart their own development and unleash their
potentials.

Advocates cite success stories of developed federal states such as the United States, Canada, Germany,
among others, in order to drive home the idea that federalism could be the solution to our nation’s many
problems.

But will shifting to federalism really solve the problem of underdevelopment and inequality among the
regions?

Let us look at the data. On the supposed decentralization that federalism would bring, the facts do not
seem to bear this out. In a handbook on federalism published by the Ateneo de Manila University Press as
cited by Edilberto C. de Jesus (6), the authors who compared Asian countries that are unitary and federal
states, found out that the unitary states are more decentralized than the federal states. Summarizing the
Handbook’s findings, Prof. de Jesus wrote:

The Philippines, Thailand and Indonesia are unitary states; Malaysia is federated.
The Handbook compares the forces promoting Centralization (C) and
Decentralization (D) in the administration and the politics of these countries. In the
administrative sphere, it assessed the strength of the national agency managing
LGUs, usually the Ministry of the Interior (C), and prior experience with the
devolution of government functions to lower administrative units (D). The political
sphere considered: whether LGU officials are elected (D) or appointed (C); the
strength of local political bosses (C); and the coherence and strength of political
parties (C).
Among the unitary states, the Philippines was the most decentralized, followed by
Indonesia and Thailand. But among the four Asean countries, the most centralized
was Federal Malaysia. The analysis suggests three conclusions. Federalism does
not guarantee decentralization. Decentralization can be achieved within a unitary
state. If decentralization efforts in the Philippines are failing to yield the expected
benefits, it is not because of its unitary political structure.

Likewise, it is important to point out that while countries like the United States, Canada and Germany are
highly developed federal states, others like Somalia, Ethiopia and Nigeria, are underdeveloped despite
their being federal states as well. Obviously, federalism cannot solve the problem of underdevelopment
and poverty because this is an economic problem that requires primarily an economic solution such as
industrialization and agrarian reform.

In addition, the goals of decentralization, devolution and local autonomy have already been enshrined in
the1987 Constitution and given legislative expression in the Local Government Code (LGC) of 1991. The
latter has a provision requiring periodic revisiting every five years for the purpose of fine tuning its
contents. So if the issue is the sharing of national revenue, then all it would take is to revisit the LGC in
order to determine which parts need improvement. There is no necessity for federalism since all this can
be done under the present unitary set-up.
Is federalism beneficial?

Who stands to benefit from a shift to federalism? The masses or the politicians? As discussed above,
poverty and economic backwardness are the country’s primary problem victimizing majority of Filipinos;
if federalism can solve this problem, then it would benefit the people suffering from poverty. But since
federalism merely reconfigures the governmental set-up, it does not directly benefit the people wallowing
in poverty. It is a different story, however, if we talk about the local politicians and bureaucrats: they
would directly benefit from the shift to federalism since they would occupy government positions
traditionally reserved for national officials of the unitary state with a bigger share of revenue.
Furthermore, if anti-dynasty provisions are not included in the federal charter, then all the more the
traditional politicians with dynasties stand to benefit from federalism.

Federalism is also touted as the only hope for the underdeveloped provinces at the periphery. But as a
former NEDA Secretary and economist said (7), given the disparity of our regions in terms of resources,
population and development, the shift to federalism would benefit the already developed and resource
rich regions more than the peripheral regions because the former would be keeping their bigger income
instead of sharing part of it with the latter.

As it is today under the unitary government, the more developed and resource rich regions attract
investments and enjoy a higher level of economic progress compared to less developed peripheral
regions; but the former share a portion of its income to the state thru taxes and the latter enjoy the
infrastructure development and social services that the unitary government provides although they are
also taxed by the state. Resource poor and underdeveloped peripheral provinces and regions benefit more
from the present unitary form of government than they would under federalism. In the words of Habito:
“Will turning the regions into federal states narrow these disparities? Federalism advocates tell our regions
that they will “get to keep what is yours,” as if forgetting that the wide disparities I’ve described precisely
make it essential that well-endowed regions share their bounty with the lesser-endowed ones. It seems
wishful thinking to expect that, once given greater autonomy, the haves among our regions would more
willingly give up what they have to share it with the have-nots.”

Is federalism practicable?

No less than the economic managers of the present administration have sounded the alarm that the
federalism project might become a “fiscal nightmare” for the government because of its financial costs.
According to the National Economic Development Authority (NEDA), shifting to federalism would cost
government P 243 billion every year to fund the daily operations of government (8). As it is today under
the present unitary government set-up where there are only two levels of government bureaucracy (the
national and local government) the state can hardly even fill up plantilla positions in the bureaucracy due
to its financial constraints, what more if we add a third layer of government bureaucracy (the federal
states)? Can the government afford to staff the new positions in the three branches of government of each
of the 18 new states?

If decentralization, devolution, and local autonomy are the goals of the movement for federalism, then it
would be more sensible and practical if we use the already existing means to achieve those goals under
the present Constitution and through the Local Government Code because this would be more cost-
effective and practicable than the proposed shift to federalism.

In a nutshell, the proposed change of government system from the present unitary form to a federal
presidential set-up is unnecessary; it benefits only the traditional politicians and the already resource rich
and developed regions; it is costly and impractical.

1 http://www.gmanetwork.com/news/news/nation/660584/majority-of-filipinos-still-oppose-federalism-
pulse-asia/story/

2 https://newsinfo.inquirer.net/1019366/economic-managers-cite-risks-of-federalism

3 https://news.mb.com.ph/2018/08/10/lorenzana-ph-not-yet-ready-for-federalism/

4 https://news.abs-cbn.com/focus/07/10/18/unpacking-the-federalism-gambit-whats-in-it-for-citizens

5 https://newsinfo.inquirer.net/1004039/roque-federalism-is-dutertes-solution-to-growth-inequalities

6 http://opinion.inquirer.net/110054/federalism-answer-whats-question

7 https://opinion.inquirer.net/114914/the-state-of-our-region

8 https://businessmirror.com.ph/federalism-price-tag-higher-at-p243-billion/