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Gatchalian files resolution on evaluating federalism’s economic implications

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Sherwin T. Gatchalian
SENATE committee on economic affairs chairman Senator Sherwin T. Gatchalian -- SENATE PRIB

Senator Sherwin T. Gatchalian has filed a resolution urging his colleagues to look into the economic implications of the proposed shift to a federal system of government.

Filed on Aug. 7, the Senate Resolution No. 823 directs the appropriate Senate committee to conduct an inquiry, in aid of legislation, to evaluate the economic implications of a shift to a federal system of government including, but not limited to, the attendant economic risks and opportunities, the implications to regional economic growth, the additional fiscal costs of the shift to federalism, and the effects on investments due to emerging issues on the imposition of additional taxes.

Mr. Gatchalian’s resolution also seeks to evaluate the administration of incentives in a federal system and its repercussions on the ease of doing business.

In his resolution, Mr. Gatchalian noted that Socio Economic Planning Secretary Ernesto M. Pernia has warned that “the regions in the country are not ready for the system, that the momentum of infrastructure improvement in the regions is going to be disrupted, and that the shift to federalism will entail immense expenditures, which may increase the fiscal deficit to GDP (gross domestic product) ratio….”

In a text message to reporters on Friday, Mr. Gatchalian explained that “the shift to federalism will radically alter the structure of national and local governments.”

He added that it will “create uncertainties in economy and doing business.” — Arjay L. Balinbin