Understanding the Impact of Federalism


here’s an  article from manila bulletin correspondent, Andrew James Masigan, an economist, political analyst, and businessman.   He is a 20-year veteran in the hospitality and tourism industry.

Understanding the Impact of Federalism

As I write this, members of the 17th Congress are working on overdrive to draft the framework for charter change (Cha-cha). On the forefront of the Cha-cha agenda is shifting the structure of government to Federal form.

A shift to a federal government will affect every Filipino regardless of economic class or province of residence. Its impact will traverse his economic and social conditions for generations to come.

It is crucial that we all understand the fine nuances of Federalism since we will be voting on it through a general plebiscite. Our choice must be informed and intelligent, not one based on propaganda and misinformation.

Thus, the objective of this article is to shed light on the pros and cons of federalism and how its structure will affect us.

First, let me answer the basics question, what is a Federalism Government? A federal government separates regions into federal states. These federal states have the power to act independently on policies of regional concern. This includes taxation, issuance of licenses, health and educational programs, economic development plans, infrastructure programs, etc. The national government, for its part, remains responsible for such matters as national defense and foreign policy, among other country-wide concerns.

The proposal is that the county be divided into eleven federal states – four in Luzon, four in the Visayas and three in Mindanao. These federal states will have the discretion to adapt whatever system of government best suits them. It could be the current gubernatorial system, a parliamentary system or a gubernatorial-parliamentary system. The preference of one region may not necessarily apply to others.

Those who argue in favor of federalism say that given our 80 ethno-linguistic groups, it only makes sense that the responsibility of national development be disbursed across the regions rather than remain centralized in Manila. Each region, after all, has peculiar needs and unique conditions.

But the situation is more complicated than that. There are as much disadvantages as there are advantages in federalism.

Pros and cons of Federalism

First the pros. In a federal government, federal states devise their own solutions based on their situation, culture, aspirations, preferences and peculiarities. They need not rely on imperial Manila’s one-policy-fits-all approach to problem solving.

Economic development plans will be devolved to the federal states and this allows them to specialize on industries where they are competitive. As for the national government, it can better concentrate on national issues without being bogged down by regional concerns.

With the current system, local government units cannot spend without imperial Manila’s approval. And when funds are released to LGUs, they are pressured to consume it in total so as not to reduce next year’s allocation. This provides no incentive for local governments to save. Under a federal system, however, regional governments manage their own funds. This motivates them to exercise frugality.

Regions who have been chronically dependent on the national government for their sustenance will now have to level up to survive. It will be a sink or swim situation which hopefully, will strengthen the weaker regions.

Federalism encourages experimentation with multiple solutions. Three different regions may have three different solutions to the same problem with equal or varying results. This enriches the nation with experience and best practices.

Citizens of federal states will invariably compare themselves to their neighbors in terms of economic development, per capita income, quality of life, etc. This encourages competition among regions which pushes them to be more efficient.

Finally, a federal system of government will decongest Metro Manila.

And now, the cons: Political and economic dynasties will be further entrenched in a federal government.

The entire nation will be more ethnocentric, leading to a degradation of national unity. Tagalog will be replaced by local dialects and this will further diminish our sense of nationhood.

Since the national government will have no say on how each federal state develops, they will do so in an uncoordinated fashion and at varying paces. The result will be an uneven distribution of wealth among federal states. This inequity could be a breeding ground for friction. In this light, federalism promotes dissonance rather than unity.

Federalism promotes regional loyalties more than it does national allegiances. Hence, the likelihood of certain regions rebelling against the national government is heightened. Quebec in Canada and Cataluña in Spain are prime examples of how regionalism can divide a country.

The very nature of federalism necessitates more bureaucrats in both the national and regional levels. More bureaucrats mean more bureaucracy. This leads to duplicity of functions, inefficiency and opportunities for corruption

Studies have shown that only Central Luzon, Southern Luzon and NCR have gross regional products (GRP) large enough to be self sufficient. Thus, the greatest blowback of federalism is that eight out of the eleven regions will spiral deeper into poverty due to their inability to survive without subsidies from Manila.


Con-Ass or Con-Con?

There are two ways to amend the constitution – through a constitutional assembly (Con-Ass) or a constitutional convention (Con-Con). The importance of choosing the correct method cannot be overstated.

I will not mince words, the Con-con is the better option in that it protects the interest of the people from the vested interests of politicians and big businesses. I recently spoke to AKO Bicol Party-list Representative, Rodel Batucabe, one of the most prolific congressmen in the House and authority on onstitutional law. We both share the same view on this.

See, in a Con-Ass, those who draft the changes in the Constitution are the members of congress themselves. It is a risky affair since the public is precluded from participating in the process. And since the majority of our congressmen vote accordingly to party lines, personal interest and those of their benefactors, the public will be kept in the dark on the behind-the-scene horse trade that is bound to happen. We stand the risk of ending up with an amended Constitution that’s equally flawed as the 1987 version.

A Con-Con is more participative given that the populace elect their own constitutional members according to constituencies. In short, our own representatives, the Con-Con members, draft the constitutional amendments. The members of Congress have no direct hand in the process.

Batucabe underscores that in the long term, a Con-Con will turn out to be cheaper and more politically correct. Considering that future generations of Filipinos will operate according to the laws we draft today, the manner by which we amend the constitution must be credible and well thought out. The Con-Con provides that.



Again, I will not mince words. A Federal-Parliamentary system better serves national interest. I say this despite Congress favoring a Federal-Presidential system according to the proposal of PDP Laban figurehead, Aquilino Pimentel Jr., Batucabe and I share the same view.

What is the difference? A Federal-Presidential system offers no change to the current system where the President is elected through a national election and heads the executive branch. He has no sway on the judicial or legislative branches except through party-line influence. The United States operates under a Federal-Presidential framework.

A Federal-Parliamentary system, on the other hand, encourages people to vote according to political parties. Here, the citizens elect their Members of Parliament (their representatives), most often, based on the ideology of the party they belong to, not on his personality. The party with the most number of elected representatives is deemed “the parliament”. The parliament elects their Prime Minister (PM) from among themselves. The PM, in turn, selects the members of his cabinet (his ministers) from among the members of the parliament.

There are multiple advantages to this system.

First, we do away with expensive and divisive presidential elections. We put an end the vicious cycle of Presidents resorting to corruption to raise funds and/or recoup their campaign spending.

Moreover, since the members of parliaments selects the PM, they can easily remove him through a vote of no-confidence should he fail to fulfill his mandate. No need for a long drawn out impeachment process.

In addition, since the ministers are selected from the Parliament, no one gets a free ticket to the Cabinet just because he is a friend of the President or nominated by a political supporter. The ministers all have mandates and are accountable not only to the PM but to their constituents.

The parliament is a unicameral legislative body. Thus, bills can be made into law faster and cheaper.

Even the poor can run for office so long as he is capable. This is because elections are funded by the party. In a federal-parliamentary system, we do away with those who win on the back of guns, goons and gold.

A parliamentary system is one where a “shadow cabinet” exists. A shadow cabinet is the corresponding, non-official cabinet composed of members of the opposition. Each cabinet minister has a shadow equivalent who is mandated to scrutinize every policy done by the official minister. The shadow minister may offer alternative policies which can be adopted if it is deemed superior. In the end, the system allows policies to be better thought out with appropriate safeguards to protect the interest of the people.

Among the seven wealthiest democracies (the G7 nations), only US and France follow a presidential system. the rest subscribe to a parliamentary system.

The 17th Congress will surely push for Federalism through a plebiscite. Will I support the move? Only if it is done through a Con-Con and  only if it  specifies a federal-parliamentary system.

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Robert G. Sarmiento Properties
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