AN OFFICIAL of the Charter Change Consultative Committee (ConCom) said businesses in the country should be clarified with the sector’s gains in the shift to federalism.
ConCom Subcommittee on Economic Reform Chairman Arthur Aguilar said big businesses, especially in Manila, are still apprehensive about the proposed federalism because they do not yet know the country’s fiscal structure under a federal form of government.
Aguilar was the speaker on Philippine Constitution Review: Proposals Affecting Economy and the Federated Regions during the 27th Visayas Area Business Conference and Expo in Bacolod City on Friday.
“The present budget of about P1.3 trillion is already ascribed to the regions. The amount would still be the same,” he said, adding that “the only difference is it will be given directly to the regional governments without Manila having to plan and execute the amount.”
This scheme is seen to shift the focus of development from Metro Manila and Calabarzon to other regions in the country.
“We have to bring back development to the provinces,” he said. “Each of the regions will create their own programs to spur investment and development.”
The ConCom continues to bring discussions on federalism to the grassroots to solicit concerns especially from the business sector.
“Federalism is aimed at increasing the investments, livelihood and employment in the regions. It is supposed to increase investments in the regions,” he stressed.
Under a federal form of government, 50 percent of the proceeds from value added tax (VAT), income tax, excise tax and customs duties will go to the regions while all other taxes will be collected by the federal government.
The formula for sharing therefore is that two-thirds will go to the federal government while one-third representing four taxes will go to the regions.
However, Aguilar said that he still needs to schedule a working session with the National Economic Development Authority (Neda) and the Department of Finance (DOF) as the formula is still not clear with both agencies.