Economic managers to meet on economic impact of federal shift

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MOST of the country’s 17 regions remain heavily dependent on annual doleouts from national taxes.

ECONOMIC MANAGERS of President Rodrigo R. Duterte will meet this week to assess economic implications of the planned shift to a federal system of government in order to come up with a uniform position on this issue.

National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon told reporters that members of the economic team will meet on Wednesday to exchange views and assessments on the proposed federal charter drafted by the Consultative Committee to Review the 1987 Constitution.

Ms. Edillon said this will be the first meeting of the economic cluster to discuss federalism, adding that NEDA has its own study on the economic impact of the proposed shift in the form of government.

“That’s the reason why we (economic cluster) are meeting. I have not seen their position papers,” Ms. Edillon said on Friday, referring to others like the Department of Finance and the Department of Budget and Management.

“What we can do is really inform them what our assumptions are. Our (NEDA) estimates are actually conservative,” she added.

“About the draft, there was already a memo given out by the OP (Office of the President) requesting all agencies to comment. In our case, we started working on the draft as soon as we received it.”




The NEDA got a copy of the draft charter on July 12 and has come up with its own position paper on it.

Socioeconomic Planning Secretary Ernesto M. Pernia, who heads NEDA as director-general, had warned that the sudden shift to a federal form of government could ruin the country’s fiscal health and slow the Duterte administration’s infrastructure drive. Among others, most of the country’s 17 regions — which rely heavily on yearly doleouts from national taxes — are not ready to take on bigger government responsibilities.

Finance Secretary Carlos G. Dominguez III has also warned that a federal form could be a “nightmare” for the Philippine economy given drastic changes in revenue-sharing between national and local governments. He also flagged “irreversible economic consequences” such as a bigger budget deficit that could spark credit rating downgrades, and massive job cuts in government.

Ms. Edillon said other matters likely to be tackled on Wednesday include updates on the rice tariffication bill pending in Congress as well as progress on the Foreign Investment Negative List, which the NEDA said has been awaiting Mr. Duterte’s approval for several months now. — Melissa Luz T. Lopez

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