Wednesday August 15, 2018

Palace to continue pushing federalism

DESPITE the Philippine economic managers' warning about possible fiscal risks under the proposed federal system of government, the Duterte administration would continue pushing for a constitutional change, Malacañang said Thursday, August 9.

Presidential Spokesperson Harry Jr. said President Rodrigo Duterte's Cabinet members were all "100 percent" supportive of federalism.

Roque made the assurance after Duterte's economic managers warned that the shift to a federal form of government could pose adverse implications on the country's finances.

"There's 100 percent agreement that we are pushing for federalism," the Palace official told a press conference.

"Federalism remains a priority of the President and we need to address obviously even the financial aspects of the constitutional change towards federalism," he added.

At a Senate hearing held Wednesday, August 8, Socioeconomic Planning Secretary Ernesto Pernia raised concern that the proposed federal system would be costly for the government and may impede the momentum in the country's economic growth.

Also on Wednesday, Finance Secretary Carlos Dominguez III stressed that the country's current investment grade credit rating status will "go to hell" under the proposed federal set-up.

Roque allayed the two Cabinet members' concerns, noting that the proposed shift to federalism would not cause a "bloated" budget.

He stressed there would be no financial risks, since the current national bureaucracy's funds will have to be reallocated as they have to devolve services to regional governments under the federal system.

"I know there is an honest difference of opinions even amongst Cabinet members here. My point of view is there doesn't have to be a deficit because there shouldn't be additional budget required for federalism. It's a matter of working within a given budget and transferring funds from one pocket to another," he said.

"So my view is it does not have to result in a bloated budget, which may result in a higher interest rate, if we make sure that the transition will not result in additional expenses," he added.

Duterte has repeatedly declared his intent to amend the 1987 Constitution to pave the way for the proposed federal system of government, in a bid to address the country's wealth gaps among the regions.

The draft federal constitution drafted by Consultative Committee seeks to give a share of not less than 50 percent of all national taxes to the 18 federated regions.

Roque said the shift to federalism remains "doable," stressing that the government only needs to look for solutions to ensure that the country will not experience "the downside of the change of the government, as envisioned by the economic managers."

The Palace official was confident that the country's economic managers would not oppose the shift to federalism, as he believed that they merely want to "find answers to unanswered questions."

"The President, you know, as principal of all the alter egos of the President, has said that he is pushing for federalism. So it is incumbent upon the alter egos to find ways and means now to make that happen," Roque said.

"What they were objecting to is because they have unanswered questions on the existing proposals made by the Consultative Committee. So let's find answers. But if there will be no answers, it is incumbent upon the alter egos of the President to make what the President wants to happen [in] reality." (SunStar Philippines)