Dominguez warns unclear federalism proposal would scare investors

Ralf Rivas
Dominguez warns unclear federalism proposal would scare investors
Finance Secretary Carlos Dominguez III says foreigners 'will not invest' if the rules under federalism are not clear

MANILA, Philippines – Finance Secretary Carlos Dominguez III warned lawmakers that foreign investors would flee if they are not given a clearer picture of how the economy and its features would look like under a federal system of government.

He said foreign investors “will not invest” if the rules are not clear.

“I am not against federalism…. We need more clarity. We cannot go into the public and say there’s very little clarity on the fiscal provisions,” Dominguez said in a forum on Wednesday, August 15.

For example, Dominguez said, the mechanism of paying for national expenses and debt must be clear under the new constitution.

He also wants lawmakers to explain how they intend to fund national agencies, personnel, and the military under federalism. (READ: [ANALYSIS] Why Duterte’s federalism endangers government’s finances)

At least 7 major business groups in the country back the economic managers’ stance on the matter.

Senate President Pro-Tempore Ralph Recto said economic managers must not be shut out as “the cost of federalism is front and center of the issue.”

Dominguez and Socioeconomic Planning Secretary Ernesto Pernia drew the ire of Consultative Committee member Father Ranhilio Aquino for their statements against federalism.

Dominguez previously called the draft charter “confusing” and said he is not in favor of it at this time. Pernia warned the shift to federalism would “wreak havoc” on the economy.

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.