Federalism: The path to hell

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Filipinos are not only “not” ready for the country’s proposed shift to Federalism, which form of government President Duterte and his House of Representatives appear to be desperately pushing, but also that Federalism may bankrupt the nation and worse, keep at least seven generations of Filipinos in hock.

If pro-Federalism politicians, most of whom do not understand what Federalism entails and why the country cannot afford it, but who give Federalism the thumbs up, then these same politicians should listen to Duterte’s finance and economic officials, who know exactly how Federalism can destroy this government and even lead this country into the path of perdition.

Finance Secretary Carlos Dominguez, during Wednesday’s Senate finance committee hearing on the proposed shift to Federalism, clearly said that the country’s investment grade credit ratings, which make it cheaper for the country to borrow money, will “go to hell” if the proposed shift to Federalism proceeds.

Under the provisions on the financial side, these call for a 50-percent share of the regions from the national government’s revenue collections and which the finance chief stressed that the government may incur “a very large” budget deficit.

The proposed shift will also prove to be too costly for the government and may disrupt the economy’s growth momentum, Socioeconomic Planning Secretary Ernesto Pernia told the committee scrutinizing the government’s proposed P3.757-trillion budget for 2019.

Of course it will, given the fact that under a federal system, some 13-18 “autonomous” states are to be created with the federal government reportedly subsidizing these states with 50 percent taken from the federal government. Add too the special “autonomous” Bangsamoro government that will be getting under the Bangsamoro Organic Law (BOL)—believe it or not—and extra 5 percent of the national budget, which is already nearing P4 trillion. As if that was not filled with the law’s benevolence and generosity toward a Muslim tribe that for decades has also killed too many Filipino soldiers and even innocent Christians, the same BOL law is claimed to grant 75 percent of whatever the Bangsamoro “nation” has by way of revenues and more, with the national government getting merely 25 percent.

There are even more freebies for the Moro Islamic Liberation Front leaders who will naturally be in control of the transition government and beyond, for sure. More to the point, the MILF will be operating under a parliamentary system, with even a prime minister elected by parliament.

Gee, the country will have two top heads of government under a current unitary system: an MILF chieftain for prime minister, and a president of all of the Philippines as head of government, except for the Bangsamoro nation. Do we send our ambassador to the Bangsamoro state? At least, it will certainly look like an independent state.

Let’s hope the Supreme Court thumbs down this BOL as it certainly appears to be unconstitutional, besides which, a Bangsamoro government may prove to be too costly for the Filipino nation, just as the proposed federal system for the Filipinos will be too costly and will probably, as the Finance chief said, lead us to hell.

The Puno Consultative Committee (ConCom) Duterte appointed has come up with a draft federal Constitution which the President has submitted to Congress and which the House of Representatives intends to railroad but which the Senate intends to kill at the Senate level.

Dominguez said he was “very confused” with the fiscal provisions of the draft federal Constitution and added that the build, build, build program of the President and his administration will definitely be derailed and the investment grade credit ratings the country currently enjoys will go to hell, when Sen. Ralph Recto asked the question of Dominquez on the future of credit ratings under Federalism.

“And when the credit rating goes to hell, what happens to the Philippines?” Recto asked some more.

“Everybody pays higher interest rates” of up to 600 basis points, or about 6 percent, Dominguez answered.

Dominguez also told the senators that during recent discussions, the major credit rating agencies expressed concern about the proposed shift to Federalism which they considered an “uncertainty” and a “political risk.”

Dominquez stressed the confusion stemming from fiscal matters, saying: “I sat with a member of the consultative committee and discussed how they see the national debt will be paid, as well as military, foreign affairs … they said, ‘Oh no, don’t worry about that. The split will be done after national expenses,’” Dominguez said.

“I said, ‘No, it’s not in the draft.’ How can we compute the costs? We don’t know what the final road maps are going to look like. I had a long discussion with them and I left more confused than when we started,” he said.

If the finance and economic chiefs find the ConCom’s federal draft confusing, what more for the Filipino people, who don’t even know what Federalism entails?
And that really is hell.

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