[OPINION] Con-Com draft will not create a federal government

Joel Rocamora

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[OPINION] Con-Com draft will not create a federal government
Federal states will still be dependent on fiscal transfers from the national government. Without fiscal autonomy there is no real local autonomy.


No offense meant to the honorable members of the Consultative Committee (Con-Com), but their draft does not create a federal system. It would give lots more money to the federal regions but control over the bulk of revenue would remain with the central government.

Local governments would remain dependent on the national government. Far from strengthening local government units in relation to the central government, the main goal of a federal system, it strengthens the national government, in particular the office of the president.

A lot of initial commentary on the Con-Com draft has focused on “term extension”, on the draft’s implications for President Rodrigo Duterte. Statements by Con-Com member July Teehankee and the Con-Com spokesperson immediately raised concerns about term extension for the president.

Responding to fears about term extension, the President requested the Con-Com to rush a new version of the Transitory Provisions (Art.XXII). This seamless set of provisions would seem to answer all fears about term extension, especially for President Duterte. In fact, it will serve several political goals of the President: he can run and likely win as “transition president” and control the transition process. He can prevent the passage of sections prohibiting him from running in 2022.

By calling for the election of a “Transition President and Vice President” he neutralizes Vice President Leni Robredo. Duterte has said he cannot resign because he does not want an “incompetent” Vice President Leni Robredo to become president.

Since the Vice President is unlikely to cooperate by resigning, the new constitution will have to write her out of office, what UP Professor Gene Pilapil calls “impeachment by new constitution”. In theory, if these “Transitory Provisions” are approved in a plebiscite, Vice President Robredo would have no choice but to comply.

There is reason to doubt that it would come to this. This is an obvious tactic to disarm Cha-Cha opponents who focus on “term extension”. A major component of Duterte’s populist script is that he’s not really interested in the presidency. Before a final draft is approved, Duterte can easily change his mind the same way he did in 2016, when he kept denying than he would run for president until the last minute.

Fiscal federalism

At the heart of a shift from a unitary to a federal system is the redistribution of resources from central to local governments. The Con-Com draft seems generous to the regions. Art. XIII, Section 3 says: “The Federated Regions shall be given a share of not less than fifty percent (50%) of all the collected taxes on income, excise, VAT, and customs duties, which shall be equally divided among them and automatically released.”

To illustrate the scheme, [Con-Com spokesperson] Ding Generoso used as an example the P2 trillion in taxes collected nationwide in 2017. If this base figure was used, P1 trillion, or half of it, would go to the regions. With 18 regions, this means each region will get P60 billion each.

There is supposed to be an “Equalization Fund” to help lagging regions achieve financial viability and economic sustainability. This fund should be at least 3% of the General Appropriations Act. Finally, additional taxing powers are supposed to be given to the federal regions. (Art XIII, Sec.2) 

Ever optimistic, Generoso says additional taxing powers should generate P2 billion-P5 billion for each region depending on the population and economic growth of that region. There are a number of problems with this proposal, not least unclarity and more importantly, political feasibility.

We simulated how these proposals would affect the fiscal situation of the 18 regions and the federal government, using 2017 numbers and came out with amazing results. The usual surplus regions, NCR, Region III, Region IVA would become deficit regions. All other regions except for ARMM would end up with surpluses.

Sounds like it’s exactly what we want out of a federal system! In fact, it is not politically feasible. This is not likely to be approved given the widespread disparity between the regions.

The population of the Cordillera Administrative Region (CAR), for example, is 1,722, 006 while CALABARZON has 14,414,774 people, but they will receive the same allocation.

In 2016, the IRA of Calabarzon was P47.3 billion, that of CAR P13.2 billion; Calabarzon would get an additional P13B, CAR P47 billion! 

The National Capital Region (NCR) deficit would be an unsustainable P158,536,308 billion which would force NCR to either borrow massively or cut back on services and infrastructure. The deficit of the federal government would balloon to P540,322,144 billion.

Federal Regions Total Deficit (Deficit as % of Revenue)
TOTAL 192,536,308  15.7%
NCR (158,905,011) -172.2%
Region I 12,296,813 17.9%
CAR 32,520,857 49.8%
Region II 14,976,623 22.3%
Region III (20,039,789) -24.4%
Region IVA (21,905,675) -23.4%
Region IVB 20,545,515 31.4%
Region V 6,753,991 10.1%
Region VI 1,770,178  2.5%
Region VII 85,659  0.1%
Region VIII 7,410,099  11.1%
Region IX 11,582,032  17.5%
Region X 7,549,709  10.5%
Region XI 17,725,341  24.9%
Region XII 9,265,747  13.9%
CARAGA 27,870,803  42.2%
ARMM (120,257,196) -184.9%


Total Expenditure of Federal Gov’t  1,803,364,701
Equalization Fund 55,774,166
Added Bureaucratic Cost (Manasan, 2017) 60,000,000
New Total Expenditure of Federal Gov’t 1,919,138,867
New Deficit of Federal Gov’t (540,322,144)
Deficit as % of Revenues -39.2%


While substantial additional resources are to be given to local government units, the main sources of tax revenue, income and corporate taxes and VAT, will remain with the central government. There is unclarity about exactly what taxing powers are to be given to federal regions.

These issues will presumably be clarified in the course of Cha-Cha discussions, but what is problematic is that the overwhelming bulk of taxes will still be collected by the national government. Federal states will still be dependent on fiscal transfers from the national government. Without fiscal autonomy there is no real local autonomy. This, in a situation where other powers of the president are to be strengthened.

Stronger central government

The main argument for placing the redistribution of power between the local and central government in a constitution is that it is more difficult to change a constitution than to pass legislation. The Con-Com draft, however, provides for impermanence.

Art. XI, Sec.1 says: Congress may, by law, create, abolish, merge and divide the Regions and determine their constituent political subdivisions, subject to the ratification by the people in a referendum held for the purpose in the political subdivisions affected.”

Even more problematic is that the Con-Com draft places the power to control the implementation of the shift to a federal system in the hands of bodies smaller than the national legislature. As Congressman Edsel Lagman points out, the problem with the transition proposed in the Con-Com draft is “that unlike in the 1935, 1973, and 1987 Constitutions, where the transitory provisions were self-implementing and the mode of transition categorically spelled out, Con-Com’s draft federal Constitution empowers Duterte to chair a transition commission whose members shall be appointed by him.”

It’s not just the creation of powerful commissions that is problematic, the President himself becomes all powerful. To start with, the Con-Com decision to move away from the PDP proposal for a presidential-parliamentary system and to retain the existing presidential system maintains the political system’s presidential focus.

A mixed presidential-parliamentary system would have diluted presidential power because the president would have to share power with a prime minister. Combined with the Con-Com proposals for strengthening political parties it would have significantly strengthened the democratization process.

The most worrisome strengthening of the presidency is the addition of “lawless violence” as a ground for the declaration of martial law (Art. 8, Sec.18). The main proponent, Con-Com member, retired General Ferdinand Bocobo, said that an NPA attack could be considered sufficient basis for declaring military rule.

“Yes, yes, kasi (because) it will be classified as terrorism. Because we consider the New People’s Army as terrorists.” The modifier “widespread” was removed because it was decided that it was unnecessary.

I want to make it clear that I am not opposed to the whole Con-Com draft. I am happy with its proposals on political parties. I fully support the proposal for 40% of the national assembly being elected by proportional representation, elected nationally.

I support the draft’s anti-dynasty provisions even as I doubt that the House of Representatives will approve. There are many other provisions in the draft that if followed would significantly reform our politics. Unfortunately, unless the lawyers of the administration can quo warranto the Senate on the “joint or separate voting” issue, I seriously doubt that the Cha-Cha train can get out of the station. – Rappler.com

(Part 2: [OPINION] Cha-Cha train is stuck at the station)

Joel Rocamora is a political analyst and a seasoned civil society leader. An activist-scholar, he finished his PhD in Politics, Asian Studies, and International Relations in Cornell University, and had been the head of the Institute for Popular Democracy, the Transnational Institute, the Akbayan Citizens’ Action Party, and member to a number of non-governmental organizations. 


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