Economic team backs Fed but wants talks

The economic team said it is not against the shift to a federal system of government but it wants a dialogue with members of the Consultative Committee (ConCom) that drafted the federal charter.

Finance Secretary Carlos Dominguez III said in a statement while the economic team is not against Federalism, it has the responsibility to point out the ambiguous and unclear provisions in the proposed draft charter.

He added economic managers worry over the possible repercussions of provisions in the proposed Constitution “that could result in dire, irreversible economic consequences.”

Dominguez maintained the draft Federal Constitution contains ambiguous provisions on the allocation of expenditures for the would-be federated government and regions which underscore the urgency of opening more discussions of the document.

“We welcome a discussion on the draft so that it is clear and unambiguous. We do not want the revenue assignment and the expenditure assignment to be misunderstood, as what happened in the recent case involving the Internal Revenue Allotment (of the local government units),” Dominguez said in a statement.

ConCom member Prof. Edmund Tayao said members of the body are willing to meet Cabinet secretaries to explain the proposed draft federal charter.

Tayao said the ConCom had a meeting after Dominguez told senators during the 2019 budget hearing that he would “absolutely vote against” the particular draft.

The ConCom member expressed optimism that the view of economic managers who are opposing the draft federal charter will change after the planned dialogue.

“We’re confident that while the draft is definitely not perfect, it’s not like we simply guessed what’s best and what we can write in the provisions,” said Tayao on television.

According to Tayao, the ConCom had asked for inputs from economic managers “since day 1” and even invited them during the meetings but they only sent their top “lieutenants.”

“Let’s say, for the sake of argument, that they have been lukewarm to the idea of Federalism, they could have readily informed us earlier when we were consulting with them that they’re not in favor of Federalism,” Tayao said.

As for the call of ConCom member Ranhilio Aquino for Mr. Duterte to fire him and Socioeconomic Planning Secretary Ernesto Pernia for stating their views, Dominguez said while “we respect the opinion of Fr. Aquino, we believe that such attitude would not enrich the level of discourse on the proposed Constitution.”

Dominguez pointed out the draft charter “has no provision on expenditure assignment.”

“What it has are provisions on taxation powers and revenue assignment in which the federated regions shall be given a 50 percent share in income, excise, value added taxes and customs duties,” Dominguez said.

The draft constitution also enumerated the exclusive powers of the federal government and the federated regions but is silent on the funding source for the exercise of such powers, he said.

“As we pointed out earlier, we never stated that we are against Federalism. Rather, with respect to the fiscal provisions of the proposed Constitution, there are ambiguous provisions on revenue assignment and there are no provisions on expenditure assignment,” the finance chief said.