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Federalism: What’s the rush?

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Andrew J. Masigan-125

Numbers Don’t Lie

Federalism: What’s the rush?

I chanced upon Mocha Uson’s video on Facebook where she and co-host, a certain Drew Olivar, performed a lewd dance supposedly meant to educate our people about federalism.

They thought it was amusing. It was not — it made people sick to their stomach. It raised questions about the methods of the Presidential Communications Operations Office (PCOO) and their motivations.

Uson’ s latest caper is in fact a backhanded insult to the Filipino people — and her actions reflect on the PCOO itself. It shows that the PCOO deems the “masses” too stupid to understand a straightforward discussion.

Sometime last year, I spoke to Secretary Martin Andanar and inquired why Uson was chosen to be the mouthpiece of the administration. Andanar told me that apart from rewarding her for her fierce loyalty to the President, she also spoke the language of the “masses.” She was effective communicator in her chosen platform, no matter how guttural the style of communication may be.

This is where the problem lies.

The PCOO is more concerned about pushing its agenda rather than genuinely educating the people. It will stop at nothing to sell its propaganda — even if it dumbs down the Filipino people in the process, even if it intentionally distorts the issue or provides erroneous data, even if it intentionally frames the issues in such a way that it instigates a war between the red and the yellows, thereby dividing the nation.

Responsible governments would go about its information campaign in a different way. They would provide the public with the information they need to form an intelligent opinion on the matter. This includes its pros and cons, risk and rewards, costs and benefits.

The people deserve nothing less.

Federalism, after all, will cause sweeping changes in the very fabric of Filipino life — from the way we are governed, to our economic future, to the way we interact with each other to the way our culture evolves. It will be change that transcends multiple generations.

According to an SWS survey last June, only 37% of Filipinos support federalism. The PCOO must be so desperate to sell the idea that it is willing to bypass the facts and simply dance its way to approval.

MOTIVATION BEHIND FEDERALISM
Why is the Palace so intent on making the shift from a unitary government to a federal one?

It is no secret that President Duterte has an axe to grind against “Imperial Manila.” He has expressed his disdain over the capital on numerous occasions. At the heart of his spite is the fact that Metro Manila receives the lion’s share of national taxes.

See, in our unitary system, local governments are bound to remit some 60% of their tax collections to the national government. This includes income taxes, real estate taxes, donor’s taxes, corporate taxes, value-added taxes, excise taxes, documentary stamp taxes, etc.

Under a federal system, these remittances will be reduced to 30% or lower.

With the taxes collected, the national government redistributes the funds back to the local governments according to the stipulations of the general appropriation act (GAA). Has the distribution been equitable? Let the numbers speak for themselves.

Data from the Philippine Statistics Authority show that between the years of 2015 to 2017, Luzon received 73.2% of the budget, the Visayas received 14.4% while Mindanao was appropriated 12.4%.

On the surface, it would appear that indeed, Luzon (and Metro Manila) gets the lion’s share. But we must look at it in context. The ratios in which the national budget is distributed is in fact consistent with population density. As of the 2016 census, 55% of the population reside in Luzon, 20% in the Visayas and 25% in Mindanao.

It should also be noted that the bulk of funds attributed to Luzon are used to finance services that benefit the entire nation. This includes maintaining the armed forces, foreign service, national irrigation and agricultural programs, land reform, investment & tourism promotions, education, health care and social services, the justice system and many others. More importantly, it includes the sizeable budget allotment to the office of the President.

The economic output of Metro Manila comprises 38% of gross domestic product (GDP) while the entire Luzon accounts for 72% of GDP. The Visayas contributes 13% and Mindanao contributes 15%. As the most populous and productive region, it is only fair that Luzon be supported with the development funds it needs to help subsidize the regions unable to support themselves.

‘IMPERIAL MANILA’
I take exception to the misleading moniker, “Imperial Manila.” First of all, there is nothing “imperial” about Manila. No king resides here. “Imperial Manila” is in fact a metaphor for the executive branch, the Supreme Court, the House of Representatives and the Senate — all of which dictate policies that affect all our 17 regions and all of which happen to be based in Manila. Hence, “Imperial Manila” does not refer to the capital, it refers to the national government.

Let us make this clear because Manila, the city and her people, are not the enemy of the provinces. If there is anyone to blame for the “inequitable” distribution of development funds, it is the national government, including the congressmen and senators whom the provincial voters elect.

To refer to Manila as the enemy further divides our already fragmented nation. Again, it should not be forgotten that Manila, by virtue of its vibrant economy, is the hand that subsidizes impoverished regions.

NO RUSH
No doubt, federalism will yield many benefits to the regions. Apart from reducing its tax contributions to the national government and having the power to tax its constituents more, federalism empowers local governments to be the master of their own fates. It allows them to tailor-fit their laws to what is meaningful to them. It weans them from their over-dependence on the national government. It encourages them to be fiscally responsible while promoting specialization of industries based on their demographic and geographic advantages. It encourages experimentation with multiple solutions for the same problem, thereby enriching the nation in experience and best practices.

Certainly, it is something worth pursuing. But we must prepare for it. Government must first arm underdeveloped regions like Mimaropa, the Bicol Region, Caraga and the Zamboanga Peninsula with adequate infrastructure so their industries can develop and thrive.

Without it, they will not have enough revenues to sustain themselves.

Remember, under a federal framework, the regions must fund their own administrative and development expenses.

They will have to build and maintain their own infrastructure, schools, universities, hospitals and mass housing; they would have to finance their own land reform and agriculture programs including expensive irrigation; they will have to create and maintain their own justice system; their own regional security and police force; They will have to invest in their own electrification, waste disposal, water supply and sewerage systems, among many others.

Statistics show that only five regions are capable of autonomy at this time. They are: Calabarzon, Central Luzon, Central Visayas, the Davao Region and NCR. The rest generate revenues too minuscule to support themselves, even with a greater share of national taxes collected within their borders.

The stakes are high.

If government does not give our underdeveloped regions the infrastructure and time they need to develop, federalism will consign them to further poverty.

This is why federalism cannot be taken lightly.

This is why it cannot be rushed.

 

Andrew J. Masigan is an economist





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