Press Release
July 17, 2018

Hontiveros on Duterte's federalism:

"Is it even economically feasible?"

This was the question raised by Akbayan Senator Risa Hontiveros on Tuesday regarding the Duterte administration's plan to shift to federalism under its proposed Federal Charter.

"Aside from the massive democratic deficit President Duterte's version of federalism suffers from, I am worried that his federalist vision is not even economically viable and practical in the first place. Instead of redistributing wealth and dispersing economic development to the regions, President Duterte's federalism might only make the regions poorer and their economies weaker," Hontiveros said.

"Ang pederalismo ni Pangulong Duterte ay hindi lamang salat sa demokrasya, sablay pa sa ekonomiya. It is severely lacking in democracy and a burden to the economy," Hontiveros added.

The opposition Senator said that based on the Readiness Index for Sustained Economies Under Federalism (RISE-UP), which assess the provinces' readiness for federalism, the initial results across the proposed 16 federated regions showed that only 5 of the regions were relatively more ready, 2 were neutral, and 9 were relatively less ready.

"Did the government take this into consideration in the drafting of the Federal Charter? Were the country's economic managers consulted? Has the economic cost of federalism been studied alongside the impact of inflation and the current state of the economy?" Hontiveros asked.

It was reported that economists are wary of the sudden shift to federalism. Budget Secretary Ben Diokno warned that it could easily double the government's budget deficit from around 3% to 6%. Meanwhile, Socioeconomic Planning Secretary Ernesto Pernia was lukewarm to implementing federalism in the Philippines since many regions may be ill-prepared to stand on their own feet.

Hontiveros also raised a recent Supreme Court ruling which said that the internal revenue allotments (IRA) of local government units (LGUs) should include all national taxes. "How do we interface this decision with the proposal to federate? And if we want to empower the regions and narrow the economic gap between the center and the periphery, what does federalism offer that the SC decision and legislative amendments to the Local Government code do not?" she queried further.

Hontiveros called on the Duterte government not to railroad the country's shift to federalism, saying that there are a lot of important questions and issues that need to be deliberated and addressed.

"It's bad enough that the Duterte government is planning to employ undemocratic processes such as a Senate-less constituent assembly to change our constitution; now, the citizens must also contend with the bad economics of President Duterte's federalism. The only federal set-up worth supporting is one in which accountabilities are clear and decentralized and government institutions and economic development are made more accessible and brought closer to citizens. Unfortunately, this is not the President's federalism," Hontiveros concluded.

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