MANILA — The shift to a federal form of government is like moving into a new home, according to the Consultative Committee that developed the draft federalism charter.
Consultative Committee (ConCom) member Professor Edmund Tayao likened the shift to living in a new house that requires additional expenses at the start but generally improves the stature and condition of its occupants.
“Just because you have additional expense when changing the form of government doesn’t mean that additional expense will be there forever. Additional costs in federalizing the country is an investment that would boost the country’s economic activity later on,” Tayao said.
Tayao, one of the resource persons at a Department of the Interior and Local Government (DILG)-organized media forum in Tacloban City, was reacting to criticisms from the economic managers who claimed that federalism will wreck the nation’s budget and derail the economy.
Tayao said Ethiopia and Kenya have performed well economically since they federalized.
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Ethiopia was introduced to a federal system in 1995 and has since successfully lifted its local output, measured as the gross domestic product (GDP), to 10.2 percent in 2017 when it shifted to federalism, an improvement from only 3.2 percent in 2014 when it was still essentially a dictatorship.
Kenya’s economy, on the other hand, significantly improved in 2010 when it federalized, but reported a slowdown in 2017 because of a drought. Thereafter, growth recovered and stabilized.
In the same vein, Tayao said economic activity in the regions should improve when they are given the power and funds to implement projects and programs for development.
But while the revenue share of the regions will increase under federalism, regional and local governments have the responsibility in the allocation of its funds.
“Federalism will give you lots of money but only because it will give you lots of function,” Tayao said.
He added that federalism is an opportunity the Philippines must take advantage of to make the economic development of the regions comparable to that of Metro Manila.
