Posts Tagged ‘federalism’

Philippines: New Draft Constitution Crafted To Remove Vice President from Line of Succession — Again starts talk of Duterte’s health

October 9, 2018

The camp of Vice President Leni Robredo questioned the proposed draft federal charter, which removes the vice president from the line of succession in the transition government.

“The election protest filed by former Senator Bongbong Marcos as ground for ousting VP Leni is clearly frivolous if not outright ridiculous,” lawyer Romulo Macalintal said. The draft federal constitution at the House of Representatives removes Vice President Leni Robredo from the line of succession in the transition government.

STAR/Joven Cagande

The draft charter that House Speaker Gloria Macapagal Arroyo and 21 other lawmakers authored puts Senate President Tito Sotto as next in line should President Rodrigo Duterte be unable to lead the transition government.

The Arroyo-led proposal, which is different from the draft constitution submitted by President Rodrigo Duterte’s Consultative Committee, removes the vice president from the line of succession in the transition government.

The STAR/Geremy Pintolo

Section 4, Article XVII of the House draft federal constitution states, “In case a vacancy by reason of removal, resignation, permanent incapacity or death of the incumbent President, the incumbent Senate President shall act as President until a President shall have been chosen and qualified.”

Romulo Macalintal, Robredo’s legal counsel, said the proposal was a mere “political calisthenics” based on the reason of Rep. Vicente Veloso (Leyte).

Veloso, chair of the House Committee on Constitutional Amendments, said this proposal was made to prevent “instability” that comes with the election protest against Robredo.

Former Sen. Ferdinand “Bongbong” Marcos Jr. filed the poll protest against Robredo after he lost by 263,473 votes in the 2016 national elections.

“The election protest filed by former Senator Bongbong Marcos as [a] ground for ousting VP Leni is clearly frivolous if not outright ridiculous,” Macalintal said.

“Since when did a pending election protest be the basis of succession to the highest position of the land?” he added.

Macalintal stressed that Veloso’s reasoning has no visible means of any legal or factual support.

Questions on Duterte’s health

Robredo’s lawyer raised questions on why Duterte’s allies appear to be implying that the president would not be able to perform his duties while Malacañang has been insisting that he is healthy.

“If he is sick, succession should not be the topic of discussion but prayers for his health,” Macalintal said.

The vice president’s lawyer said the Senate and the House would not even have enough time to make a final draft of the proposed shift to federalism.

Image result for Duterte, photos

President Duterte

“The Senate and the House could not even resolve how they would vote, whether jointly or separately. There is still the need to submit the proposed charter for people’s ratification and the process would involve substantial time and public funds which will never be achieved till the next presidential polls in 2022,” the lawyer said.

Macalintal expressed confidence that the proposal to remove Robredo in the transition government would never happen.

A report of the House panel dated October 2 showed that Arroyo’s draft charter has been recommended without amendment to the plenary.

The draft also lifts the term limits for members of Congress and made no mention of anti-dynasty provisions.

Read more at https://www.philstar.com/headlines/2018/10/09/1858607/robredo-camp-hits-draft-charters-ridiculous-basis-omitting-vp-line-succession#AAKZ4WGe93B6ll1G.99

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Senators reject Arroyo’s draft constitution
Gaea Katreena Cabico (philstar.com) – October 9, 2018 – 3:54pm

MANILA, Philippines — The draft federal charter of House Speaker Gloria Macapagal-Arroyo will not thrive as time is running out under the 17th Congress, senators said Tuesday.

The Arroyo-led proposal, which is different from the draft constitution submitted by President Rodrigo Duterte’s Consultative Committee, removes the vice president from the line of succession in the transition government.

It also aims to keep a presidential form of government while empowering Congress to create federal states and keep a Senate where members are elected at large, instead of by region.

Senate President Vicente Sotto III and Minority Leader Franklin Drilon said there is simply no time to tackle charter change.

“We don’t have time to even talk about it. We don’t even know if I’m still Senate president by then,” Sotto said.

The Senate is scheduled to go on break from October 13 to November 11 and again from December 15 to January 13 in 2019. Congress still has to deliberate on and approve the General Appropriations Bill for 2019.

Drilon reiterated that the House draft federal charter will be “dead on arrival” in the Senate.

“We are still awaiting the report of the committee whether or not the recommendation is to amend the Constitution and if it is through a constitutional assembly, before we consider the substance of the proposal. There is simply no time. Kaya pagdating dito wala na kaming panahon in order to look at it,” he said.

Instead of discussing charter change, the Congress should instead focus on the problems of soaring inflation, lack of jobs and rising criminality, the Senate minority leader said.

Minority senators hit exclusion of VP in line of succession

Drilon and Sen. Risa Hontiveros also thumbed the provision, which excludes Vice President Leni Robredo in the presidential line of succession. It, instead, puts Sotto as next in line should President Rodrigo Duterte be unable to lead the transition government.

“If they want stability, then the more that we should follow the well-defined succession to the Office of the President in charge in case the president is unable to lead the transition government,” Drilon said.

Hontiveros called the draft charter of the House “not only absurd and unjustifiable, it is also colossal, shameless affront to long-established, recognized and practiced democratic processes.”

The opposition lawmaker said she is confident that the majority of senators, including Sotto, will not support the move.

“[I am confident that the majority of my fellow senators] will see it for what it is: an attempt not just to coopt, but to weaponize, the Senate in aid of their agenda. It must not see the light of day in the Senate,” she said.

Read more at https://www.philstar.com/headlines/2018/10/09/1858624/senators-reject-arroyos-draft-constitution#isFbECl0rfFJm1ri.99

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Corrupt election system charge made in the Philippines — “A nation led mostly by thieves and cheats”

September 29, 2018

The Philippine election system is flawed and produces mostly dishonest and selfish government leaders. It is flawed not only in the sense that the counting of votes is conducive to rampant manipulation. Our present system also essentially requires every candidate to spend an unreasonably huge amount of money for the campaign.

Thus, first in the mind of newly elected politicians is how to recover those election expenses. After recovering the “investments” through the illicit and immoral use of their newly acquired power, they work to similarly generate funds for the next elections. By this time, they would have lost all their scruples. Once they have saved enough to ensure reelection, stealing would have become a habit. They then go on to acquire more and more, in order to continuously satisfy a luxurious lifestyle that, by then, has become part of their social and political status.

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Candidates for President of the Philippines in 2016. Corrupt leadership?

Since almost all of our political leaders go through this route of political spending, cheating and stealing, we continuously suffer from corrupt leadership. After all, what can we expect of a nation led mostly by thieves and cheats?

As most of our politicians are irreversibly corrupt, they are rich only in rhetoric and promises but utterly poor in delivery. Worst, there is no longer a government institution we can trust. Even the Supreme Court, for good reason, is now widely perceived to have been corrupted by power and money. Clearly, our present system has miserably failed our people. If we allow our present political leaders to continue with their merry but corrupt ways they will bring us to the gutter. That is, if we are not yet there.

Our nation does not lack competent and honest men, but because we have a corrupt election system, we find it impossible to elect even a few good men.

It is, therefore, only through a direct exercise of our sovereign right as a people that we can break the chains that tie us to a flawed and destructive political system—by instituting an interim government through extraconstitutional measure. Such an initiative is legitimate, and it is our only remaining road to freedom. As the Supreme Court ruled in 1987 when it decided on the legitimacy of the Cory administration, “it is an inherent right of the people to cast out their rulers, change their policy or effect radical reforms in their system of government or institution by force or a general uprising when the legal and constitutional methods of making change have proved inadequate or are so obstructed as to be available.”

It is treason not to do anything about our country’s continuing journey to destruction.

GUILLERMO G. CUNANAN, gerrycunanan@gmail.com

TAGS: electoral systemleadershipopinionPhilippinespolitics

Read more: https://opinion.inquirer.net/116373/leaders-flawed-corrupt#ixzz5SSooFF7I
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Philippine Gov’t sidelines federalism efforts to focus on addressing inflation, economy

September 27, 2018
President Rodrigo Duterte’s proposed plan to shift to a federal form of government would be set aside for now as the government veers its full attention on taming the soaring prices
By:  – Reporter / @DJEsguerraINQ
 / 01:54 PM September 27, 2018

Presidential spokesperson Harry Roque. INQUIRER file photo / JOAN BONDOC

President Rodrigo Duterte’s proposed plan to shift to a federal form of government would be set aside for now as the government veers its full attention on taming the soaring prices  of commodities, Malacañang said on Thursday.

Presidential Spokesperson Harry Roque said the administration opted to prioritize addressing inflation right now, noting that a lot of work is still needed for the government’s federalism push.

“Right now the foremost priority of the administration is fighting inflation. So everything is sidelined now… Even the administration acknowledges na mas importanteng harapin ‘yung issue na malapit sa sikmura ng taumbayan [It is much important to address the issues that are closer to the stomach of the people],” Roque said in a Palace briefing.

“Bagama’t hindi po natin inaabandona ang pederalismo, darating tayo d’yan. Pero alam po natin na kinakailangan pa ng mas maraming diskusyon, mas marami pang pag-aaral at mas marami pang dissemination na dapat gawin para sa pederalismo,” he added.

(Although we are not abandoning federalism, we will arrive there. But we all know that it needs a lot of discussion, more study and dissemination needed for federalism.)

Roque made the statement after Charter change landed at the bottom of Filipinos’ concerns, according to a survey from Pulse Asia. Inflation, meanwhile, was ranked as the most pressing issue the government should address immediately.

READ: Survey: 63% of Filipinos want gov’t to address rising costs of commodities

The Palace official noted that the Duterte administration is determined in addressing inflation citing the four orders recently signed by the President, which seek to ease the importation and release of agricultural products in the market.

“Kinikilala po namin ang problema sa pagtaas ng presyo, pero ang aming assurance po ay hindi po natutulog sa pansitan ang ating Presidente… last Tuesday sinabi ko po ‘yung apat na issuance ng Presidente para labanan po itong pagtaas ng presyo ng mga bilihin,” Roque said.

(We are acknowledging the problem in the rising cost of commodities, but what we assure you is that the President is not sleeping on the job… last Tuesday I mentioned the four issuances of the President to address the rising of prices.)

Roque said the government is optimistic that the effects of this efforts will be felt.

READ: Duterte paves way for importing agri goods

However, Roque noted that once Congress finished its budget deliberations next month, it can discuss the proposed Charter change.

“Matapos ang budget [hearing] pwedeng mapag-usapan muli ang pederalismo… [After the budget hearing we can again talk about federalism]. Right now ang Kongreso po ay talagang nagmamadali para maipasa ‘yung budget by October 8 which is ‘yung self-imposed deadline,” he said. /jpv

Read more: https://newsinfo.inquirer.net/1036898/govt-sidelines-federalism-efforts-to-focus-on-addressing-inflation-palace#ixzz5SHfup7U5
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Philippines: President Duterte weakening politically and physically

August 28, 2018

In recent weeks, the Duterte presidency has considerably weakened; equally important, it has been seen to grow considerably weaker. This is not to say that the President is losing his grip on power; only that, at an entirely premature time, rival sources of power have asserted themselves, and a popular president no longer looks completely in control or invincible.

It is already congealed conventional wisdom to point to former president Gloria Arroyo’s dramatic ascent to the speakership of the House of Representatives, and the brutal efficiency of the ouster of Pantaleon Alvarez, as the beginning of a new phase, which the President himself candidly referred to as a lame-duck period.

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But perhaps the real start of this new period was May 21, when Sen. Tito Sotto replaced Sen. Koko Pimentel as Senate president.

My understanding is that, like Arroyo, Sotto is an independent power, and the center of an influential power bloc, in his own chamber. While genuine allies of the President, both Arroyo and Sotto do not really need the President’s blessing to win the leadership of their peers. In contrast, both Pimentel and especially Alvarez needed the presidential imprimatur; without it, they could not have hoped to be Senate president or speaker.

So the replacement of Pimentel and Alvarez does not only mean the end of an all-Mindanao leaders’ summit at the top of the governmental pyramid; it also represents the end of a period of dependency on the President’s power, charisma or attention.

I wish to be clear: I do not mean to suggest that Sotto or even Arroyo are poised to oppose President Duterte, or that they do not now enjoy the President’s support. Far from it. But because these leaders have their own bases of power independent of the President’s, they are in a much stronger position to define the actual shape of the President’s political and legislative agenda. The Duterte administration’s fatal fixation on extreme measures such as the reimposition of the death penalty and the lowering of the age of criminal liability, for instance, will need to be recalibrated in the face of Speaker Arroyo’s longstanding objections.

And when Arroyo’s lieutenants questioned the policy wisdom of the proposed new cash-based budget, the administration was initially flummoxed. Without his meaning to, presidential spokesperson Harry Roque hinted at the panic in the Palace. “We’d like to think that they continue to be important allies of the President, but apparently, the change of leadership has also brought in a different kind of relationship. How else do you explain Congress refusing to act on the President’s budget?” he asked.

Roque, who abandoned his principles and joined the administration because of the way it controlled and distributed power, could not even begin to think of the issue in terms of a policy difference. It was either the President got his way, or it’s “a different kind of relationship.”

At the same time as the President was weakening politically, he was also—and very transparently—weakening physically. He already went missing for extended periods in June last year; this year, he has admitted to being in constant pain, and his face has turned unusually dark. If this were truly nothing, there would have been no need to lie to the public about his condition. And yet here was Roque giving voice, again, to the panic in the Palace. “Maybe he’s not wearing powder. The President normally wears powder. Maybe it was just a photo taken of him without powder. I don’t see anything extraordinarily different [in] the President’s face,” he said.

When the full history of Dutertismo is written, this absurd, ridiculous, completely unbelievable assertion may be seen as the beginning of the end of the Duterte myth—the time when the President’s gospel of political will met its outer limit. Not that wearing facial powder is necessarily unmanly, although this is exactly the sort of thing one would hear from the President’s kind of people; the issue is that Duterte is supposed to be the genuine article, not needing fuss or artifice. And to hide what may be a medical condition through the supposed use of makeup: This is not the conduct of the archetypal Malakas.

The President has since taken his own characteristic tack in explaining the darkening: He says he “likes to roam in the mountains”—a barb aimed at communist founder Joma Sison. But the dust from Roque’s powdery statement hasn’t settled yet. At the same time, the other limits of Dutertismo—on the use of political porn, for instance, or on “federalism” as a platform for change—have also been reached. The space for the exercise of political will has greatly narrowed.

On Twitter: @jnery_newsstand. E-mail: jnery@inquirer.com.ph

Read more: http://opinion.inquirer.net/115673/du30s-facial-powder-limits-political-will#ixzz5PTfbpHIW
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Philippines: Why Duterte’s federalism endangers government’s finances

August 15, 2018

Unless we first fix existing regional economic disparities, Bayanihan Federalism will only leave more poor regions behind

More and more groups are opposing President Rodrigo Duterte’s push for federalism via charter change, otherwise known as Bayanihan Federalism.

Rather surprisingly, a lot of the pushback is coming from Duterte’s own cadre of economic managers.

Last week Finance Secretary Sonny Dominguez said he would “absolutely” vote against the draft constitution, which could end up as a “fiscal nightmare.” Earlier, Socioeconomic Planning Secretary Ernesto Pernia said the draft constitution could “wreak havoc” on the economy.

While this strong dissent – uncharacteristic of the economic managers – has drawn the ire of some Duterte supporters, it has also drawn support from many business groups.

In this article we examine the burgeoning fiscal and economic critique of Bayanihan Federalism.

Not only does it endanger the government’s finances, it is also completely needless. By simply revamping the Local Government Code (LGC), we can empower the regions without assuming all the risks that accompany charter change.

In short, the costs of adopting Bayanihan Federalism seem to outweigh the benefits.

1) It doesn’t ensure regional self-governance.

True federalism entails regional self-governance. The regional governments are supposed to enjoy substantial independence and autonomy vis-à-vis the central or federal government.

But in Bayanihan Federalism, regional self-governance is very weakly established, if at all. By and large, it still props up a top-down relationship between the central and regional governments.

To wit, Article II, Sec. 27 of the draft constitution provides that the “Federal Republic shall promote the autonomy of local government units.”

But merely promoting autonomy is a far cry from ensuring self-governance. This is why many experts say that Bayanihan Federalism is not truly federalism, but just another exercise in decentralization.

2) It fails to define the division of labor between federal and regional governments.

Bayanihan Federalism also fails to delineate the duties and responsibilities of the federal and regional governments.

To be sure, Art. XII, Section 2 lists down the exclusive responsibilities of the regional governments, which now include socioeconomic development planning, economic zones, the justice system, and indigenous people’s rights and welfare.

But at the same time, the draft constitution removes from LGUs some of their current responsibilities, such as natural resource management services, environmental services, and – most crucially – social welfare and health services. Why take away these essential local functions?

More importantly, the draft constitution is deafeningly silent about the powers to be shared between the federal and regional governments, as well as between the regional governments and the LGUs.

Failing to define such division of labor has 3 likely effects:

  • it could lead to duplication or underprovision of services by both federal and regional governments.
  • it could weaken the accountability of public officials, since people won’t know whom exactly to blame for lousy delivery of services.
  • it makes self-governance all but impossible.

3) It’s unclear how the federal and regional governments will share their tax powers.

Each subnational government’s tax powers should be proportional to the scale and scope of its activities (“finance follows function”).

But if we don’t know how precisely the federal and regional governments will coexist, how can we possibly assign their respective tax powers?

For instance, in the draft constitution, the federal government levies taxes and fees except those collected by the regional governments such as the real property tax, estate tax, donor’s tax, franchise tax, road user’s tax, etc.

But at the same time, Art. XIII, Sec. 3 explicitly says that, “No double taxation shall be allowed.”

If so, shall the right of provinces and cities to levy real property taxes, amusement taxes, and franchise taxes – as currently stipulated by the LGC – be clipped?

The draft constitution says nothing about this crucial nuance.

4) It doesn’t remove the regional governments’ dependence on the federal government.

Bayanihan Federalism aims to “empower the regions.” Yet the draft constitution fails to untether the regional governments from the central government.

In fact, Art. XIII, Sec. 4 provides that the regional governments shall be given no less than half of all income taxes, excise taxes, the value-added tax, and customs duties collected by the federal government.

This is even larger than LGUs’ current 40% share under their Internal Revenue Allotment (IRA). If we want the regions to be more self-sustaining, why automatically give half of national taxes to them?

Granted, regional governments will not always have the money they need, especially for big-ticket projects like infrastructure. Sometimes, they might have to borrow from credit and capital markets.

But Bayanihan Federalism fails to mention anything about subnational borrowing.

5) It could worsen regional economic inequality.

Bayanihan Federalism also provides that half of all national revenues are to be “equally divided” among the regional governments.

This means that poorer regions (say, ARMM) will receive the same amount of resources as richer regions (say, Calabarzon), even if the former doubtlessly need more support than the latter.

Such equal sharing scheme could only worsen rather than abate existing regional inequalities.

Moreover, even if we grant the regional governments full autonomy to tax, poorer regions will still yield lower revenues than richer regions.

Unless we first fix existing regional economic disparities, Bayanihan Federalism will only leave more poor regions behind.

6) It could make poorer regions more dependent on the federal government.

Bayanihan Federalism could also make regional governments more reliant on the central government than ever before.

Aside from partaking of half of all national revenues, regional governments can also tap into a new Equalization Fund: a pot of money, no less than 3% of the General Appropriations Act, which will help poor regions “achieve financial viability and economic sustainability.”

To be sure, equalization funds are present in other countries as well – like Canada, Australia, and Germany – but for a wholly different purpose: to ensure that citizens across the regions could enjoy roughly the same provision of public services given the taxes they pay.

Many studies also find that such transfers could remove poor regional governments’ motivation to harness their own economic potential. Instead of promoting productivity and innovation in their own jurisdictions, poorer regions may grow complacent and rely on regular dole-outs from richer regions.

Figure 1 shows that richer regions today – like NCR, Calabarzon, and Central Luzon – already tend to have a higher share of their revenues coming from local sources.

Figure 1.

To avoid dependency, guidelines for redistribution should be made clear at the outset. But Bayanihan Federalism falls short of explaining the mechanics of its Equalization Fund.

As pointed out by the Department of Finance, it’s also unclear whether the Equalization Fund will emanate from the revenues of the federal or regional governments.

7) It could significantly increase the budget deficit.

Finally, Bayanihan Federalism could endanger the government’s coffers.

Just last month, the Supreme Court ruled that all LGUs are entitled to a “just share” of 40% of all national taxes (not just those collected by the BIR).

This decision perfectly illustrates why we don’t need to undergo charter change just to give more funds to the regions. However, it could easily double the government’s budget deficit (or revenue shortfall) from around 3% to 6% of GDP.

Similarly, Bayanihan Federalism – which allocates an even larger share to the regional governments – could imperil the government’s budget.

Secretary Dominguez warned the deficit might reach as high as 6.7%, or more than double the 3% sustainable target. To avoid this, he said the national government may have to cut spending by P560 billion, lay off 95% of its employees, hold back the Build, Build, Build by 70%, or suffer a combination of these effects.

A ballooning deficit could also downgrade our international credit ratings and bump up interest rates to as much as 6% (interest rates will “go to hell,” said Dominguez).

All these will raise the cost of borrowing, stifle economic activity, and drag down the country’s growth.

Devil in the details

We haven’t even talked about the direct costs of federalism via charter change, which ranges anywhere from P60 billion to P130 billion per year.

But this is the least of our worries. For a document supposed to be the bedrock of our future system of government, Bayanihan Federalism is extremely ambiguous and sparse in details.

Not only is the draft constitution silent on many of the fiscal and economic provisions that are supposed to engine it, but its avowed goal of “empowering the regions” could also be achieved under the current constitution without resorting to charter change.

Of course, Congress might ignore Bayanihan Federalism altogether and come up with its own draft.

But if Bayanihan Federalism has any sway at all, is it any wonder why the economic managers are so deeply worried about Duterte’s push for federalism? – Rappler.com

The author is a PhD candidate at the UP School of Economics. His views are independent of the views of his affiliations. Thanks to Dr Chat Manasan of PIDS for sharing her slides in the June Senate hearing on charter change. For more on the topic, see her 2017 paper. Follow JC on Twitter: @jcpunongbayan.

https://www.rappler.com/thought-leaders/209588-reasons-duterte-bayanihan-federalism-endangers-government-finances

Philippines: Draft federal Constitution “ambiguous and unclear” — Huge negative economic consequence

August 10, 2018
DOF chief: Call to sack econ managers won’t enrich federalism discourse
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Ian Nicolas Cigaral (philstar.com) – August 10, 2018 – 11:10am

‘We never stated that we are against federalism’

MANILA, Philippines — Finance Secretary Carlos Dominguez III on Friday maintained that the draft federal Constitution crafted by a consultative committee, or Concom, has “ambiguous and unclear” provisions on revenue and spending assignment.

That was after a charter reviewer urged President Rodrigo Duterte to fire Dominguez and the government’s chief economist for warning against the potential fiscal risks of the proposed shift to federalism.

In hundreds of hours of speeches, Duterte has boldly declared the Philippines must overhaul the 1987 Constitution and shift to a federal system of government to address the country’s widening wealth gap and empower regional governments.

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The president last month approved the draft federal constitution. The members of the Concom, whom Duterte appointed, proposed that federated regions be given a share of not less than 50 percent of all national taxes.

But in a recent television interview, Socioeconomic Planning Secretary Ernesto Pernia stressed that while federalism could unlock economic benefits, it could also spell disaster for some regions not prepared for such a transition and “wreak havoc” on the country’s balance sheet.

Meanwhile, Dominguez told lawmakers earlier this week that while the economic team has no official position yet regarding federalism, the revamp can end up to be a “fiscal nightmare” if not managed correctly.

“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,” Dominguez said in a statement.

“There are, likewise, principles on revenue sharing that do not appear to be well studied,” he added.

Dominguez then responded to remarks made by committee member and San Beda Graduate School of Law Dean Father Ranhilio Aquino, who called on Duterte to sack him and Pernia for their criticisms on the draft federal charter.

“We respect the opinion of Father Aquino, but we believe that such attitude would not enrich the level of discourse on the proposed Constitution,” the finance chief said.

“It is our duty and responsibility to point these out and engage in a healthy, level-headed discussion, especially when the possible repercussions could result in dire, irreversible economic consequences,” he added.

Malacañang on Thursday said Duterte remains committed to the cause of federalism.

Last month, international debt watcher Moody’s Investors Service cautioned that federalism could present downside risks to the country’s institutional and fiscal profile.

Dominguez, meanwhile, said based on the fiscal provisions of the draft federal Constitution, the federal government would incur a deficit of 6.7 percent and may result to a credit rating downgrade for the Philippines, which currently enjoys an investment-grade rating.

A lower credit rating would lead to higher interest rates.

To avoid any negative economic consequence and maintain the current deficit target of 3 percent, Dominguez said “the Federal government will have to cut its expenditure program by P560 billion.”

“This means the national government may have to lay off 95 percent of its employees, or reduce the funds for the ‘Build Build Build’ program by 70 percent, or a combination of both,” he said.

Read more at https://www.philstar.com/headlines/2018/08/10/1841363/dof-chief-call-sack-econ-managers-wont-enrich-federalism-discourse#T2c2pputwl9Kv7R3.99

Philippines: Cabinet officials who don’t agree with federalism could be fired — Freedom of expression does not apply to Cabinet officials

August 10, 2018
Fiscal risks of federal form of government discussed but may be shut down by Duterte government

(philstar.com) – August 9, 2018 – 9:28pm

Socioeconomic Planning Secretary Ernesto Pernia and Finance Secretary Sonny Dominguez during a budget hearing for 2019 at Congress on July 31, 2018.

The STAR/Michael Varcas

MANILA, Philippines — A member of the Consultative Committee tasked to draft a new constitution called on President Rodrigo Duterte to fire Finance Secretary Carlos Dominguez III and Socioeconomic Planning Secretary Ernesto Pernia over negative statements about the proposed shift to federalism.

“[I]f [Duterte] favors federalism let him sack Dominguez and Pernia or command them to keep their traps shut. Freedom of expression does not apply to Cabinet officials in respect to policy,” Con-Com member and San Beda Graduate School of Law Dean Father Ranhilio Aquino said in a Facebook post on Thursday.

Aquino made the statement after the two economic managers raised concern over the potential fiscal risks that might accompany the proposed change in form of government.

Dominguez said he was left confused by the draft charter and would not vote in favor of its ratification. Pernia, on the other hand, said federalism could spell disaster for regions that are unprepared for such a transition and “wreak havoc” on the country’s balance sheet.

The Con-Com member also raised the question of whether Duterte himself still supports federalism given two of his Cabinet members’ vocal stance against it.

“The way things are going, Dominguez and Pernia may merely be paving the way for a subsequent Presidential announcement that ‘I have been advised by my economists that federalism is as bad for our national health as smoking is to a person,'” Aquino said.

“Enough of double-talk. If the President is now cool to federalism let him give the order to abandon the federalist ship. Then all of us fools who wrote the draft and defended it with all our might will know that we have been taken for a ride — for a very expensive ride — but we shall at least have the chance to abandon ship before it is scuttled!”

Malacañang, however, said on Thursday that Duterte remains committed to the cause of federalism.

“Ang unang mensaheng nakuha ko po kay presidente ay naninindigan pa rin sa pederalismo. Sinabi nga po niya sa akin na sa aking press briefing sabihin na talagang committed siya para isulong iyong pederalismo na sinangguni ng Consultative Committee,” presidential spokesperson Harry Roque said in an interview over dzRH.

Read more at https://www.philstar.com/headlines/2018/08/09/1841167/sack-pernia-dominguez-if-you-favor-federalism-con-com-member-asks-duterte#CTMPSBxjGQqGtJdK.99

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Philippine lawmakers say entertainment won’t work in the explanation of important issues such as federalism — Seem to scold Mocha

August 6, 2018

Antics and entertainment won’t work in the explanation of important issues such as federalism, senators said, as they hit Communication Assistant Secretary Mocha Uson for her video discussing the matter.

(Credit: MOCHA USON BLOG / MANILA BULLETIN)

(Photo courtesy of MOCHA USON BLOG / MANILA BULLETIN FILE PHOTO)

More senators have expressed disapproval Monday over the viral video clip of Uson and another blogger who danced a lewd jingle in their discussion of the proposed shift to a federal form of government.

Senate President Vicente Sotto III believes that federalism should not be taken lightly.

“You know me, I sometimes take some things lightly. Serious issues, high-falluting like that, can’t be taken jokingly or lightly. Perhaps if you are going to do it privately, it would be okay. But nothing is private in the internet, right? Nothing is private in the internet, therefore it could not add to the information campaign of the government,” Sotto told reporters when asked about the video.

“One thing is certain: theatrical techniques could not work for such an issue of federalism,” he added.

Sotto said federalism is not something to be joked about, admitting himself that he has yet to fully understand federalism despite studying for long hours the propositions for federalism, including the draft federal charter of the Consultative Committee (Con-Com).

In a separate text message, Sotto said Uson’s video was “not effective.” “That is not the way to disseminate information,” he noted.

While he refused to comment on Uson’s involvement in the administration’s information campaign for federalism, Sotto urged the Presidential Communications and Operations Office (PCOO) to hire more credible personalities to explain the subject.

“I suggest to the PCOO, if they are really interested in a full information dissemination drive, they should get personalities who are more academic, and they would know how to explain what federalism is all about. Because…it’s not that easy to understand, so it will not be easy to explain in one or two minutes. That is not the way to do,” he said.

Senate President Pro Tempore Recto took a swipe at the government communications official, who sarcastically described Uson as the “perfect endorser” for federalism.

“She’s the perfect endorser for federalism. She symbolizes those in favor of federalism,” Recto said in a text message.

Sen. Francis Escudero, meanwhile, took to Twitter his comment against Uson’s video.

“It is a desperate attempt to attract attention by intentionally offending our sense of propriety! It is downright vulgar and has no place in the public discourse on such an important issue as THEIR proposed shift to federalism & charter change!” he said.

For Sen. Panfilo Lacson, Uson aggravated the Senate’s supposed stand of the proposed charter change and federalism, saying it could be “thrown far away.”

“Without Mocha Uson, federalism is already dead and awaiting cremation at the Senate. With Mocha Uson, the ashes should be thrown far, far away from the Philippines’ 7,107 beautiful islands,” Lacson also tweeted.

Sen. Francis Pangilinan, for his part, called on PCOO Secretary Martin Andanar to explain on the “indecency and disrespect” committed by his men.

“Dapat magpaliwanag si Sec. Andanar sa mga kalaswaan at kababuyan na nangyayari sa kanyang tanggapan na ginagawa ng mga tauhan niya gamit ang pondo, oras, at kagamitan ng gobyerno,” he said.

With Uson’s new blunder, Sen. Grace Poe said the PCOO, in addition, should also justify the proposed P100-million increase in its 2019 budget.

“The PCOO must justify its budget increase. What are the deliverables? Are memes and blogs also hit by inflationary spikes? Is the cost of feeding the nation with government information adversely affected by TRAIN, too? Will the PCOO be hiring campaigners to explain federalism?” she asked.

“The obliterated amount from some agencies will hit hard the people, who badly need social services. What will sustain them are education, affordable food, health services and social assistance, not gaffes and reckless communication campaigns,” she added.

Sen. Joseph Victor Ejercito said the video was done “in bad taste.” “I hope it doesn’t happen again,” he added.

Earlier, Sen. Aquilino Pimentel hit Uson for what he described as a “bullshit” manner of explaining federalism to the public.

In an interview Monday afternoon, Pimentel said Uson should take a leave from advocating federalism and study first.

“Continue to be an ASec of the PCOO, continue to take advantage of your blog, but do not, in the meantime, involve yourself in promoting federalism until you have studied very well. Aral muna,” he told Uson.

“[The PCOO should] review its press release that it’s naming ASec. Mocha as a spokesperson for federalism, review il a’yon. Withdraw, choose another one,” Pimentel said, echoing Sotto.

Uson earned anew the ire of netizens due to a segment of her “online game show” with blogger Andrew Olivar on federalism.

On their “Good News Game Show,” the two introduced federalism with Olivar chanting, “I-pepe, i-pepe, i-dede, i-dede… ipederalismo!” with a lewd choreography.

Uson, in her defense, clarified that the video was shot before she was tapped by the Con-Com and Department of Interior and Local Government (DILG) to help in the government’s information drive on federalism.

https://news.mb.com.ph/2018/08/06/entertainment-not-for-federalism-senators-tell-mocha/

Philippines: Change to Federalism Has Staggering Price Tag — “Is this just treasury robbery?”

July 31, 2018

It’s a “a disaster… (considering) the duplication of all expenses at all levels.”

How much will the proposed shift to federalism cost? Estimates by experts vary, but they all agree on one thing: It will be huge.

The creation of a federal government will cost some P55 billion that would have “to come from the pockets of taxpayers,” Dr. Rosario Manasan of the Philippine Institute for Development Studies told a recent Senate hearing on the issue. The amount would go to the salaries of regional governors and vice governors, additional senators per region, additional members of the judiciary and their staff, as well as the operating expenses for the gargantuan new bureaucracy that would result from the creation of 16 plus two federal states.

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Under the federalism model proposed by the consultative committee convened by President Duterte, the Senate would have two senators per federal unit, or 36 senators from the current 24. The House of Representatives would expand from the current 250 members to 400.

Among the pluses advocates have cited for this shift in government is that regions would be given more “power of the purse” and greater control over projects they can implement, with each federated state enjoying “a more autonomous and responsive fiscal system.” The federal model, its proponents argue, will narrow the long-standing inequalities across regions of the country, especially the dominance of “imperial Manila” or “imperial Luzon.”

But experts have rung alarm bells over the cost of such a radical overhaul of government, led by the country’s chief economic manager himself, Socioeconomic Planning Secretary Ernesto Pernia, who warned that federalism could disrupt the Duterte administration’s infrastructure projects and “wreak havoc” on the country’s economy.

Presidential spokesperson Harry Roque belatedly tried to finesse the crisscrossing messaging from the Palace with a bald statement insisting that the shift “would have no adverse effect on the Philippine economy.”

Another person apparently aghast at the projected price tag is Marcos-era finance chief and former prime minister Cesar Virata. Federalism advocates, he said, “should consider that the cost of having a duplicate government” may reach more than P800 billion.

And, while federal states may have more in terms of revenue collections, only the National Capital Region, Calabarzon, Central Luzon and Central Visayas have the capacity to sustain their operations, Virata noted. The other federal regions will continue to be dependent on the national government.

Former chief justice Hilario Davide Jr., a framer of the 1987 Constitution, debunked the argument that federalism would give provinces a more equitable revenue stream from the national government by pointing out that a recent Supreme Court ruling had actually made moot the need to decentralize fiscal resources. The Court’s decision that the “just share” of LGUs’ internal revenue allotment must come from all national taxes—among them collections from import duties and other levies by the Bureau of Customs, and not only from national internal revenue taxes such as those collected by the Bureau of Internal Revenue—should help remedy the supposed problem of LGUs ending up with a pittance of the national budget.

Bernardo Villegas, long dubbed the “prophet of boom” for his consistently upbeat views on the Philippine economy, is gravely downbeat about the federal project, describing it as “a disaster… (considering) the duplication of all expenses at all levels.”

The staggering billions mentioned are only the projected expenses for the inevitable expansion of government. The campaign to win over a skeptical public—62 percent of Filipinos are against the shift, while 69 percent have “little or no knowledge” about federalism, according to surveys—entails additional cost. The Duterte administration said it will set aside P90 million for a nationwide awareness caravan to get more Filipinos aboard the federalism train.

Is it all worth it—to dangerously deplete the treasury to fund the pipe dream of a viable federal Philippines?

 / 05:09 AM July 31, 2018

Read more: http://opinion.inquirer.net/115012/staggering-price-tag#ixzz5Mp0aT5QH
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Philippines: Economic data shows red flags

July 30, 2018

If you torture data long enough, it will confess to anything,” British economist Ronald Coase once said. The current state of the local economy, for example, is such that it offers a wealth of empirical data to buttress the arguments of anyone in the political spectrum—hardliners, pundits and social media trolls alike. Depending on which side of the political fence one is on, information can easily be picked out, and picked apart, to ascribe credit or blame to whichever presidential administration one supports or opposes.

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On the issue of foreign investments in the Philippines, several quarters have expressed alarm over the flight of capital that appears to have been happening in recent months. In particular, the Philippines’ balance of payments, which represents the aggregate net value of the country’s transactions with the rest of the world for goods and services, now stands at a deficit of $3.26 billion in the first half of the year. With only six months’ worth of transactions having been tallied, the Philippine economy has already spent more than twice what the central bank was expecting for the entire 2018.

Malacañang critics also like to highlight the 58-percent drop in investment pledges in the first four months of 2018, as reported by the Philippine Economic Zone Authority (Peza), as evidence that things are looking south for the country. Both dollar outflows and the decline in pledges are also seen as worrisome indicators.

But there may be equally compelling data in the other direction. Consider the country’s foreign direct investments: During the first full year of the Duterte administration, foreign direct investments hit an all-time high of $10 billion. These long-term investments continued to surge during the first fourth months of the year, rising by 24 percent over last year’s figures.

Lobbing credit or blame for political one-upmanship is, of course, a much less useful exercise than actually taking stock of all these diverse, sometimes contradictory, information and using them to formulate or push for policies that will improve the lives of Filipinos, many of whom have no use for technical economic talk in their daily grind to make ends meet and put food on the table.

Is the Palace doing enough, for instance, to mitigate the inflationary spike, which the Duterte administration’s economic managers had said was “unexpected” but which is now generating mounting anxiety across much of the public? According to a Social Weather Stations (SWS) survey last June, 48 percent of Filipino families rated themselves as poor in the second quarter of 2018, a six-point jump from the number in March. That translates to around 11.1 million families. “The SRPTs (self-rated poverty threshold) for Mindanao, Balance Luzon and Metro Manila are at record-highs,” SWS said.

Is the administration doing enough as well to address other possible red flags in the economy? If the dollar spending can’t be helped, are policymakers implementing measures that will help the country earn more dollars by improving the competitiveness of the export sector?

As for the investment downturn, the government can draw in more investments by making sure that policies are stable and transparent; what’s the Philippines’ score again in that regard? Peza pledges should improve under such an environment. Public and private stakeholders, too, must be enjoined to work together to ensure that the economy continues to grow, and thus remains a good bet for investments.

While most foreign observers foresee continued growth for the Philippine economy, these early warning signs—inflation, depressed investment pledges, dollar outflows—appear to point at problems that need to be addressed urgently to stave off the possibility of bigger crises.

But there is one other, more unpredictable, element at play: politics. Echoing the concerns of many independent economists and thinkers, Moody’s Investors Service recently warned that the administration’s planned shift to federalism will be a “downside risk” to the economy. It added that “the Philippine president’s contentious policies on law and order over the past two years as well as other political controversies may have a negative impact on the Philippines’ attractiveness to financial and physical asset investors.”

In other words, if the country doesn’t look out, politics, in the end, may yet again prove to be the economy’s undoing.

http://opinion.inquirer.net/114990/downside-risk
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Peace and Freedom Note: Our man in the Philippines says, “Chinese tourists just won’t come here. Too much crime and violence. We were hoping for more Chinese money by now…”

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