DURING the last presidential election, the shift to federalism was an incredibly popular campaign promise. Many people, especially those living in provinces, found the prospect of having more control over budgets and policies in their states attractive. However, the popularity has dropped considerably with recent and more detailed discussions on federalism taking place in the highest levels of government.
According to a poll by Pulse Asia, two in every three Filipinos are against amending the present Constitution. While it is easy to dismiss the fears of these people, they may have rational reasons to be wary of any changes to the 1987 Constitution.
The incentive of any sitting government, regardless of party affiliation, is to consolidate their power. As a sitting party, you want to expand your power and extend your stay in office. This may seem very far-fetched, but this has happened in many instances in the past.
In Peru, Alberto Fujimori pushed for constitutional reform during his term. After what would have been his only allowable term in the old Constitution, the new Constitution allowed him to get elected for a second term in 1999 and even run for a third term. In Venezuela, Hugo Chavez was elected in 1998. In 1999, a new Constitution was passed that allowed him to skirt the term limit and extend his stay in power to six years and then eventually abolish all term limits. This is the risk you bear when you allow the winning players to write the rules of the game.
Moreover, it is unclear if there genuinely is a lack of other options that may be easier to apply and less costly. The biggest problem most people seem to have with the current government is not structural, but policy-based.
The biggest issue that proponents of federalism discuss is the 60-40 percent tax revenue-sharing model between the central government and the local governments. Given that this policy is not constitutionally enshrined, it can easily be changed to a 50-50 percent or even 40-60 percent model of tax revenue sharing through passing a law in Congress. One can say in response that these reforms will never pass in Congress because of the incentive of senators and Lower House members to protect their own power.
The problem is that these legislators will be the same ones drafting and passing any new Constitution. It is unlikely that their incentives will change. In fact, it may be worse with the shift to federalism. Ineffective laws can be reversed or struck down by the Supreme Court, but it is not as easy to build the political capital and institutional capacity to change a faulty Constitution, especially after it was just recently changed.
Beyond that, federalism isn’t a cure-all system. It may end up creating as many problems as it tries to solve. Even though provinces will get more of their own tax revenues, the costs they incur may outweigh that. As a state, they will have to expand the budget for the state legislature, expand the judicial system, design their own education system, and many more concerns.
More importantly, many regions are much poorer than others. With limited tax revenue, it is unclear how they will fund all these things required to operate as a state or a federal region. This means that the consequences of federalism may be counter to the goal of inclusive growth. These are all risks we have to calculate when participating in public debate on the matter.
The jump straight into the alternative of federalism is swinging the pendulum too far to the other side. There are middle-ground solutions that have yet to be explored. These are middle-ground solutions that are far easier to correct, should we have erred in our application of them. These are middle-ground solutions that may not cost an estimate of P50 billion to implement yearly. Things like revising laws on tax revenue sharing or even revising the Local Government Code.
The current system does have a number of flaws. It does leave behind provinces away from the National Capital Region, but it would be irresponsible to accept federalism wholesale as the immediate remedy. JLN