The folly of federalism redux

President Rodrigo Duterte’s top legislative agenda is the federalism of the Philippines. Actually, federalism was not the idea of Duterte, two of our national heroes, Emilio Aguinaldo and Apolinario Mabini, were the first to suggest dividing the Philippine Islands into three federal states: Luzon, Visayas, and Mindanao.

More than a half century later, former president of the University of the Philippines Dr. Jose Abueva proposed and argued that a federal form of government was necessary to more efficiently cater to the needs of the country despite its diversity.

He said that the primary goals of a constitutional amendment is to increase decentralization, greater local power and access to resources most especially among regions outside Metro Manila which has long been dubbed as rather imperial. Aside from Abueva, senator Aquilino Pimentel Jr. was a prominent supporter of federalism who had advocated federalism since 2001. He saw the proposed system as a key component in alleviating the Mindanao crisis and appeasing Moro insurgents. He argued that federalism will also hasten economic development since resource and financial mobilization is upon each states’ or provinces’ discretion without significant constraint from the central government.

[Source: Wikipedia]
During the presidential elections of 2004, president Gloria Macapagal Arroyo campaigned for constitutional reforms. After winning the elections, she created the Consultative Commission, headed by Dr. Abueva. The task of the commission was “to propose the necessary revisions on the 1987 Constitution that included a shift to a unicameral parliamentary form of government, decentralization of national government, and empowering local governments by a transition to a parliamentary-federal government system.” i
The proponents of charter change, while agreeing on a parliamentary system, are divided between the supporters of Federalism and those that decry Federalism as an unworkable political system. Instead, the anti-federalist group is pushing for the adoption of a unitary parliamentary system.

Today, President Duterte is pushing hard to change the government to a federal system using the model similar to the one proposed by Abueva in 2004. He has been pressuring the House of Representatives to pass legislation to effect a charter change. Well, it doesn’t seem as easy as it sounds.

While a unitary government – the central government — has all the power, federalism would seem to be more democratic. But don’t be fooled by it. There are lots of variables and unknowns before the House could responsibly fashion the necessary amendments to fit the fundamental tenets of a Philippine democratic system as enshrined in the 1987 Constitution.

Allow me to share excerpt from my column, “The Folly of Federalism,” which I wrote in October 2005. I said, “To get a pretty good ‘feel’ of how Federalism works, let’s look at Australia. In 1901, Australia adopted the Federal Parliament and government with the six States giving up some of their powers, but remaining independent. The Australian Constitution states, ‘The legislative power of the commonwealth shall be vested in a Federal Parliament.’ In addition, the constitution gives a range of powers and responsibilities to the Federal Parliament. Powers not identified in the constitution reside with the States. Each of the six States has its own constitution, parliament and government.

“But there is a lot of overlapping between the Australian Federal and the State governments. A history of competition between the Federal government and the State governments exists. Since the Federal government controls tax collection, it has established its dominance in the political system. The States became dependent on Federal financial assistance. [www.AustralianPolitics.com]

“In terms of tax collections, the website says, the Federal government gets 70-80% of all tax revenues. The Federal government then divides the expenditure of the tax revenues between the Federal and State governments. This created ongoing financial negotiations — and haggling — between the Federal government and the States.

“There are advantages and disadvantages of Australian Federalism. However, the disadvantages far outweigh the advantages, some of which are: duplication of government; overlapping or conflicting policies in different parts of the country; State education systems with differing curricula and grading methods; financial inequality which leads to unhealthy competition and rivalry between the States; neglect in important areas of, to cite a few, public policy and public transportation; and over-government. The website claims, ‘It is often argued that a nation of 19 million people cannot afford to have 15 houses of parliament, plus hundreds of local governments.’

“According to a study conducted by the University of Sydney, the question was asked: ‘Has Federalism outlived its usefulness in Australia?’ The study concluded: ‘It is obvious that the advantages no longer exist and the advantages are overweighed by the numerous disadvantages. It is truly time for Australia to make major reforms for it to remain an effective government process.’ “

Federalism for the Philippines

Given the advantages and disadvantages of Australian-style Federalism, it begs the question: Should the Philippines pursue a Federal system of government?

In my opinion, Federalism for the Philippines is a folly. Let’s look at some numbers. Its Gross Domestic Product (GDP) was worth $292.45 billion in 2015 and the GDP per capita was $7,725 (ranked 118) compared to Australia’s GDP per capita of $48,899 (ranked 17), the Philippines would not be able to afford the cost of Federalism.

First of all, most of the big industries and manpower resources are concentrated in Metro Manila and its surrounding provinces, Cebu City, Davao City and a few other places. Provinces that are agricultural-based would be hard-pressed to collect taxes to maintain their government structure, which would consist of a legislative body, judicial system, education system, health professionals, law enforcement, social services and several other agencies. After the Federal government has taken its bigger share of the tax revenues, the amount left for the regional governments would not be enough to sustain their existence.

ARMM and CAR

In 1989, the law creating the Autonomous Region in Muslim Mindanao (ARMM) was passed. It was composed of the provinces of Basilan, Lanao del Sur, Maguindanao, Sulu, and Tawi-Tawi and the cities of Marawi and Lamitan. The political intent was to satisfy the aspirations of the Bangsamoro people for self-rule and self-determination. It was created to address the “Moro problem.” But instead of solving the “Moro problem,” ARMM divided Bangsamoro into several factions run by regional warlords.

In 1997, the Philippines passed a law creating the Cordillera Autonomous Region (CAR), which states: “The Cordillera Autonomous Region is a territorial and political subdivision administered by the Regional Autonomous Government consisting of the regional government and local government units under the general supervision of the President of the Republic of the Philippines.”

On paper, ARMM and CAR are ideally suited to address the “needs” of the Bangsamoro people and the cultural minorities in the Cordillera region, comprised Abra, Apayao, Benguet, Fugal, Kalinga, and Mountain Province. However, ARMM and CAR do not have the financial independence or the ability to create revenue-generating industry. As a result they become pauper entities that depend on the central government for all the things they need to function as “autonomous” regions.

Some people argue that a Federal government is the only way to give freedom and independence to the Filipinos. In today’s globalized economy, what is freedom and independence? In my opinion, freedom is “financial freedom” and independence is “financial independence.” Real freedom and real independence can only be achieved with wealth and the ability to compete in the global market. If we free the Filipinos into creating their own country without financial freedom, then they will become slaves of their own country.