Escolar Documentos
Profissional Documentos
Cultura Documentos
In Partial Fulfillment
Of the Requirement for the Subject
PA 613 Studies in Public Administration
Submitted to:
DR. AMANTE A. MOOG
By:
MARY ANN E. ANTENOR
July 2018
FEDERALISM: A NEW VENTURE TO LOCAL AUTONOMY
INTRODUCTION
Honestly, I’ve never been a fan of Mayor Duterte even before the Election
Day happened. The main reason for this was that, his way of speaking has
bothered me during the time of his campaigns from all over the country. I
wouldn’t want to have a President who frankly speaks whatever he wants to
without considering whom he was talking to and what he is talking about.
Despite everything that has been, the majority has chosen him to lead the
Philippines for 6 years. Even though it’s not what I wanted I learned to look on
the brighter side of his propagandas.
What is Federalism?
But, still, the main reason for such advocacy is to distribute equal power. It
has nothing to do with political dynasties because the people, still, have the right
and freedom to choose whoever they want to elect in the long run. Above all
these, there will always be an unfixed issue with that of the Moros who want to
have a separate nation instead of an autonomy. Federalism may not be an
enough solution for this and will still need a further concession between the
government and the Moros. But, on the positive side, the federal type of
government will still provide a gap for the building of differences wherein the
Moros can develop and promote their own culture.
Rodrigo Duterte, being the President for 6 years, would continue to push
his advocacy of having a federal type of government. There’s nothing we can do
about it whether we want it or not. However, this political transformation will
surely end the deeply rooted unitary government done by the early
administrations. The change that everyone wants is nearly coming.
Concern 1: Are we ready for Federalism?
Since ancient time, the Philippines have always adopted a unitary form of
government where administrative powers are merely delegated to local
government units. A sudden change in the system of government without any
prior study, analysis, or assessment will lead to detrimental effects. The unitary
form of government is the only structure that we- our government leaders
included- have ever known, and a thoughtless shift to federalism will lead to
disaster. It will be a case of the blind leading the blind. In the midst of ignorance,
the country will go on aimlessly, and eventually fall into a pit. In truth, the one-
size-fits-all policy has no place in the government. There is no such thing as a
perfect system or form of government that is seamlessly compatible with all
countries. The correct of a particular system must always be evaluated on a case
to case basis. Just because federalism works for the United States for instance,
does not mean it will work wonders when adopted by the Philippines. At the end
of the day, no matter how perfect the system of government will remain corrupt,
inefficient, dishonest, and immoral- nothing will ever change.
Fiscal Administration
The readiness of the people in adopting the entirely new form of government
Federalism has a strong appeal for communities that desire to unite for
limited purposes while retaining a large measure of autonomy. The proposals for
world government have been framed in terms of federal principles. The appeal is
particularly strong among the nascent states of Asia and Africa, many of which
contain communities differing in religion, language, tribal origin and economic
interest.
Unitary System
Local and national disputes are also less frequent. Since the national
government is the ultimate governing body, local government units cannot enact
their own laws that could duplicate services or undermine laws in effect. Much
like a father with his family, it is the central government’s house, so its rules must
be followed. The unitary system is not without skeletons in its closet. One huge
problem with this structure is that the central agency cannot tackle local
problems head on. This is a problem since upon being carried out by the local
governments, specific needs are easily overlooked in the smaller case analysis.
Like a stressed, overloaded brain of the human body, the higher government is
not able to specifically address many local issues as it tries to balance its many
other responsibilities.
Federalism
The federal type of governance has many advantages (Walker, 1999). One
of these is the right of choice and exit by the citizens. A federation citizen has
greater freedom of choosing and moving to a state that he or she considers
satisfactory. In a sense, movement by citizens in-between states is an act of
“voting with their feet,” allowing people to “compare different political systems in
the same country.”
INSIGHTS
The system is often blamed for the many inefficiencies and problems faced
by the nation today. There have been numerous pleas for changing the way the
government is set up, mostly for reasons such as welfare and development. We
pit the Philippines’ current government setup against that of its major political
influence, the United States – the federal system.
CONCLUSION
Though the federal system offers many attractive and highly applicable
advantages, its benefits are only realizable when properly implemented.
Those who are advocating for federalism are basically critical of our
present government because the effect according to them is that resources are
not properly allocated and therefore the classic example is the Mindanao
situation. Resources there are very rich and yet it is not as develop as the other
parts of the country. The theory is that if powers are decentralized and the
resources will be better allocated, then we will have more even distributions of
these resources and opportunities and everything. What will be entailed to
change the system is a constitutional amendment. But the question, is the
Philippines ready? Those who are advocates of federalism like the incoming
President Rodrigo Duterte, his theory is that this system of government was
introduce to us by the Americans. The Philippine Constitution, our current
constitution, traces its origin back in 1930’s and before that. According to them, it
is kind of strange that while the Americans were introduce the system of
government to us, they did not introduce the system to us the form of
government that they found useful and effective in their own country. The theory
is that Why did the Americans do these? Because Americans were interested in
harnessing the resources of the Philippines such that if they had introduced a
decentralized form of government, it would even more difficult for them to
exploit the resources. For example, if they want to exploit the mining resources in
Northern Philippines, they have to deal with a government there, meaning a
federal government there in terms of local decentralized government and in the
same way for each country. So, in theory, Americans did these for their own
convenience.
If you follow that theory, it is not the question of readiness but the
question of what is appropriate under the Philippine circumstances because
readiness is a function of leadership. We are a country that needs entirely good
governance and strong leadership. Whether it is in the present form of
government or the federal form of government, we need good leaders and good
governance until and unless you have those elements, anything can happen. If it
will be determined that the federal government is more appropriate is not the
question of readiness but the mechanism for amending the constitution to put in
place. I am fascinated with the previous comment that it can be done in 6
months. We must go through on the details whether it is realistic or not. It always
boils down into the question of political will once you put that in place. And of
course transitory provisions should establish depending on how they craft the
amendments. In this sense, there are adjustments in the structure locally.
RECOMMENDATION
Some says that federalism is worth a try but others say it is not. But if it
helps to protect and maintain diversities that are valued highly by the constituent
peoples, then its serves as a valid and useful purpose.
Lacorte, G. (2015). “Duterte to Poe: Study pa more on federal and feudal states”.
Inquirer Mindanao, Retrieved:http://newsinfo.inquirer.net/728122/duterte-
to-poe-study-pa-more-on-federal-and-feudal-states#ixzz4AONGwaiH
INTRODUCTION
The situation is ripe for the rise of another populist leader, this time, much
more bold than the others, with seemingly no basic understanding of
international diplomacy. His words spark both caution and fear, from domestic
opposition as well as international observers; I can already say that his legacy will
be a controversial one.
His war on drugs is ruthless and precise, calling to attention the way the
country’s judicial systems have failed the ordinary Filipino. His attempt at
addressing the country’s infrastructure by allocating billions of pesos to build,
build, build, calls to attention the mismanagement of the preceding
administrations. His international diplomatic antics call to mind the failure of
Filipino diplomats to engage a better deal with its neighbors. His desire for a
federalist parliamentary Philippine republic calls to attention the Manila-centered
politics, on which every huge decision is made for millions of Filipinos.
ISSUES
Duterte’s build, build, build agenda comes into the picture, hoping to
bridge the gap in economic policies of past administrations. Under his
administration, the Southeast Asian country is experiencing an infrastructure
boom unseen since the time of strongman former President Ferdinand Marcos.
THE CONCERN
Both the Arroyo and Aquino administrations were also overly dependent
on private-public-partnership (PPP) schemes with local conglomerates, which
lacked proper competencies.
To support the new modality, Duterte has normalized relations with China,
which has offered $7.3 billion in infrastructure investments, and Japan, which has
been a leading investor in the Philippines for decades.
Duterte also passed a new tax reform package, which is expected to raise
sufficient revenues to fund infrastructure spending. According to Mr. Chua, up to
70% of newly-raised revenues (estimated to raise P786 billion over the next 5
years) are earmarked for supporting the “build, build, build” campaign.
“The seriousness and dedication with which the government has taken this
BBB program is really commendable,” said Richard Bolt, ADB Country Director for
the Philippines. “ADB is committed to boosting the Philippines’ capacity in
preparing these projects and managing the risks to help ensure Filipinos across
the archipelago benefit from the country’s strong growth.”
INSIGHTS
Another thing, we all know that the primary contributing factor to the fast
growth is the large spending by the government. The government should invest a
lot of projects that lead to the development of the country’s economy. And I
think it should be greatly invested in infrastructure. But then, it is also improtant
to consider the growth of those who are at the grassroots of the society.
CONCLUSION
RECOMMENDATION
REFERENCES:
Marquez, R. (2017). Making “Build, Build, Build” Work in the Philippines. Asian
Development Bank (ADB). Retrieved from:
https://www.adb.org/news/features/making-build-build-build-work-
philippines
TRAIN LAW: TAX REFORM FOR ACCELERATION AND INCLUSION ACT
INTRODUCTION
Essentially, TRAIN lowers personal income tax, simplifies the estate and
donor’s tax, and expands the value-added tax (VAT) range. On the other hand, it
increases excise taxes on fuel, mineral products, vehicles, and cigarettes. It also
imposes new taxes on sugar-sweetened beverages and cosmetic procedures.
Revenues collected from TRAIN will fund the government’s infrastructure and
socio-economic programs.
What does this mean to an ordinary employee like me? Is it good or bad
news? According to the government, the benefits of tax reform will outweigh the
effect of price hikes resulting from the higher excise taxes. That remains to be
seen. For now, I’ll be hopeful and look at the good effects of this new law on my
personal finances.
Pros
Since the time you received your first-ever salary, you’ve been dreading to
check your payslips. It really hurts to see huge taxes being deducted from your
hard-earned money.
Now, you can heave a sigh of relief because if your gross monthly salary is
PHP 21,000 or less, you will no longer be taxed.
Under the TRAIN law, those with an annual taxable income of PHP 250,000
are exempted from income tax payment. Around 83% of taxpayers in the
Philippines will benefit from the tax exemption, as reported by the Department of
Finance (DOF).
The income tax rate for Pinoys earning above PHP 250,000 per year will be
20% to 35% from 2018 to 2022 and 15% to 35% from 2023 and beyond.
Before the tax reform implementation, those with over PHP 250,000 to
PHP 500,000 annual income had to pay 30% tax. Those earning over PHP 500,000
had a tax rate of 32%.
A lower income tax means higher take-home pay for 99% of Pinoy
taxpayers. This also means additional disposable income that you can use to
manage your finances better, like investing your money, buying a life insurance,
and paying off your credit card debt.
According to the DOF, the new law will lessen the tax burden of the poor
and the middle class, passing it on to the higher-income earners who comprise
0.1% of taxpayers in the Philippines. Those earning more than PHP 8 million
annually will pay a higher maximum tax rate of 35% (previously at 32%).
From PHP 82,000, the tax exemption ceiling for 13th month pay and other
bonuses is now at PHP 90,000. Especially those with total bonuses (including 13th
month pay) of over PHP 82,000 can have more money to spend and save during
the Christmas holidays.
Computing the estate tax and donor’s tax used to be very complicated
with different rates. In the old tax code, the estate tax rates ranged from 5% to
32%, and the donor’s tax ranged from 2% to 30%. Under the new tax reform law,
the estate and donor’s tax will have a single, fixed rate of 6%.
For all other tax types, tax compliance is now simpler and easier. Here are the
notable changes to the tax filing and payment process under the TRAIN law:
Optional flat 8% tax rate on gross sales or receipts not more than PHP 3
million (for self-employed professionals and small businesses) that can be
filed and paid annually or quarterly instead of monthly or bi-monthly
payments of business and income taxes
Filing of tax return for final withholding tax to be done quarterly rather
than monthly
Filing of VAT Return and tax payment to be done quarterly rather than
monthly from 2023 onwards
TRAIN raises the VAT threshold from PHP 1,919,500 to PHP 3 million.
Goods and services sold by small and micro businesses such as sari-sari stores
(with total annual sales within or below the VAT threshold) are exempt from VAT.
This means no tax is passed on to buyers, lowering the prices they have to pay
when buying from these businesses.
The new law also expands VAT exemption for certain people and products,
including the following:
Senior citizens
Persons with disability
Raw food/agricultural products
Tourism businesses
Medicines for diabetes, high cholesterol, and hypertension (from 2019
onwards)
Health and education
Renewable energy (zero-rating)
Homeowner fees (e.g., association dues, membership fees, etc.)
BPO companies within special economic zones
Most Filipino netizens view the passage and implementation of the Tax
Reform for Acceleration and Inclusion (TRAIN) law in negative light, a recent
study by Research and Tech Lab (RTL) showed.
The study conducted from January to February this year, digital research
firm RTL found that out of 861 recorded sentiments online regarding the TRAIN
Law, 94.08 percent of the engagements considered not helpful at all for the
country. The top three social media sentiments read by the research analytics
group say that the TRAIN law is more of a burden to the Filipinos, it is anti-poor,
and most netizens are generally dismayed by the overall impact of the said law.
The TRAIN was signed into law by President Rodrigo Duterte on December
19, 2017, effectively lowering the personal income tax rates and expanding the
value-added tax (VAT) base starting January 2018.
Other top reasons that TRAIN law is a “No” for most of the online public is
that they claim that it is only beneficial to government officials while it is unfair to
minimum wage earners.
In the same statement, the DOF said it has yet to collate data on the net
amount of additional revenues raised from the measures put in place by the
TRAIN law. But according to the RTL study, the increase in take-home pay is
actually useless because of the increased price of some necessities. As a result of
higher excise tax rates, prices of liquefied petroleum gas (LPG) will go up P1 per
liter, diesel by P2.50 per liter, and gasoline by P2.65 per liter. The study also
revealed that majority of Filipinos is worried about the burden that the newly
imposed tax plan will bring unto the country, especially for the working class. As
seen in their social media responses, Filipinos are now vigilant more than ever in
seeing the country grow and the online universe became the top tool in
expressing their thoughts and feelings.
INSIGHTS
As per my readings, the current tax system has three main problems: There
are too many exemptions; rates are stagnant and unresponsive to new economic
realities; and bank secrecy laws prevent government from accurately assessing
the revenue base of its citizens, especially the wealthy ones. The TRAIN reform
package aims to address all these issues by reducing exemptions, creating a more
dynamic and updated tax rates across the income continuum, and mitigate bank
secrecy. Crucially, it could help increase our current tax effort by streamlining the
tax system and reducing loopholes and room for regulatory capture of
corruption.
CONCLUSION
While there are supporters of the TRAIN Act who admit that there are
considerable hikes in the taxes imposed on many consumer goods and similar
products, majority of those who opposed argue otherwise. They contend that the
reduction in income tax is rendered meaningless by the tremendous increase in
the taxes to be imposed on consumer goods, prime commodities, medicines,
electricity, and fuel. In particular, the prices of gasoline and fuel products are
expected to increase by three to four pesos per liter.
Since the additional tax will increase the selling price of every consumer
product, the twelve percent value added tax (VAT) currently imposed on every
sale of consumer products will be computed against a higher selling price, which
will necessarily mean a larger VAT on the sale of what are already very expensive
prime commodities to begin with.
Critics of the TRAIN Act lament that the new tax legislation not only
increased the taxes on prime commodities, but also reduced the tax on the
importation of luxury vehicles. The rationale for this manifestly pro-rich provision
of the TRAIN Act is a mystery.
The critics maintain that it is easy for politicians to defend the TRAIN Act
because politicians wallow in power, wealth, and privilege. More specifically,
politicians have generous expense accounts by which practically everything they
purchase, such as groceries, airline tickets, and automobile fuel, are paid for by
the taxpaying public. In other words, it’s easy for members of Congress to
impose higher taxes on basic commodities since they are hardly affected by such
tax hikes. It is also pointed out that the TRAIN Act comes at a bad time because
many government officials have been wasting public funds.
RECOMMENDATION
The tax reform law may not be perfect, but it does provide a lot of benefits
to the low and middle-income classes. More money in your pocket, though,
doesn’t mean you should upgrade your lifestyle, too.
Avecilla, R. (2018). Pros and cons of TRAIN. The Manila Standard. Retrieved
from: http://www.manilastandard.net/opinion/columns/hail-to-the-chair-
by-victor-avecilla/256378/pros-and-cons-of-train.html
Cordova, C. (2018). TRAIN Law pros and cons: Inflation rate just temporary,
assures DOF. Retrieved from: https://www.technochops.com/train-law-
pros-and-cons-inflation-rate-just-temporary-assures-dof/10699/
http://news.abs-cbn.com/business/01/01/18/good-effects-of-tax-reform-will-
outweigh-price-hikes-palace-says