FEDERAL PHILIPPINES is an advocacy forum to promote structural change in the Philippines to address the over-centralization of power and development and pave the way for countryside development, autonomy and equity.

“Federalism is based on ‘dual sovereignty’ of the Federation and the States…. In the Federal Republic every Estado is an autonomous regional component of the Federal Republic.”
-oOo-
As I have written in one of my previous articles, the first priority in an honest-to-goodness Charter Change (Cha-Cha) thru a Constitutional Convention (Con-Con) is the shift from highly centralized Unitary System to a highly decentralized Federal System. The main reason, for this is to dismantle “Manila Imperialism” and achieve more effective and efficient governance. When we adopt a Federal System, we must carefully divide the Philippines into several autonomous States. The question then is: “How many States will compose a federalized Philippines?”
In the book of Dr. Jose V. Abueva titled, “Charter Change for Good Governance” published by the Citizens’ Movement for a Federal Philippines (CMFP), eleven States has been proposed. These are:
  1. Bangsamoro (ARMM) with 5 provinces;
  2. Davao Region and Central Mindanao with 8 provinces;
  3. Western and Northern Mindanao with 12 provinces;
  4. Central-Eastern Visayas with 10 provinces;
  5. Western Visayas and Palawan with 7 provinces;
  6. Bicol with 7 provinces;
  7. Southern Luzon with 8 provinces;
  8. Metro Manila (NCR) with 6 provinces;
  9. Central Luzon with 7 provinces;
  10. Cordillera (CAR) with 6 provinces; andNorthern Luzon with 9 provinces;

The criteria adopted in this proposed division are:

  1. Economic Viability
  2. Contiguousness; and
  3. Culture

The writer, on the other hand, recommends a “Two-Step Determination of Autonomous States” to ENSURE economic viabilities of these States with Minimum of financial “risk” for both the Federal / National government and State governments.

Here is my proposed initial or first eight States:

  1. Bangsamoro (ARMM) with 5 provinces;
  2. Davao Region and Central Mindanao with 8 provinces;
  3. Western and Northern Mindanao with 12 provinces;
  4. Visayas and Palawan with 17 provinces;
  5. Bicol and Southern Luzon with 15 provinces;
  6. Metro Manila (NCR) with 13 cities and 4 adjacent municipalities;
  7. Central Luzon with 7 provinces; and
  8. Cordillera and Northern Luzon with 15 provinces

Yes, the criteria of Economic Viability and Contiguousness are initially given more importance.

After 15-20 years, the Second Step will take place. This means that Congress or the New Parliament will mandatorily review these eight States and see if there will be a need to divide one or more of these States into a maximum 9to avoid gerrymandering) of two. Of course, the same three criteria mentioned earlier will guide said review. No need for another Cha-Cha to do this for Congress or the New Parliament Constitution.

This “Two Steps” approach will end once and for all questions about economic viability of some States. This also shows that if we really desire for a Federal Republic of the Philippines in the earliest time, WE CAN DO IT ONE CHA-CHA. No more of this “grassroots/constituent-initiated transition” as proposed by the controversial Consultative Commission (Con-Com) which is actually a design to delay the adoption of a Federal System in the country. No more of this two Cha-Chas before a federal system is finally adopted. Of course sufficient time must be allocated in this regard. No undue rush on Cha-Cha thru Con-Con.

We are aware that some smaller areas would like to become – immediately as autonomous States such as Palawan, Cebu, SoCSarGen (South Cotabato, Saranggani and General Santos), etc. To be honest, such position somehow presents some serious negative reactions especially from anti-federal people which use this argument that some federalists are creating their own “fiefdoms.” That is why we appeal to these federalists to “sober up” a little and support our “Two Steps” strategy. Those places I mentioned can later on pursue this matter after we gained more experience and improved the country’s economic standing in implementing the federal system. How about it guys?

The powers appropriately vested in the autonomous State government must be clearly specified in its State Constitution. These are:

  1. Education
  2. Health
  3. Infrastructure and Public Works
  4. Agriculture
  5. Industry
  6. Police
  7. State Judicial System
  8. Communication and Transportation
  9. Custom and Taxation
  10. Others

The autonomous State will have this local government set-up:

Autonomous State

Local Government Units as before:

  1. Provinces / Chartered Cities
  2. Component Cities / Municipalities
  3. Barangays

By SYLVIA OKINLAY-PARAGUYA, Chairperson, MINCODE

WE ARE for a federal form of government. This commitment has been enshrined in our advocacy since we converged in 1991 as the broadest and largest grouping of cooperatives, people's organizations, non-government organizations and non-government individuals. It is within the context of political parity and economic equity—the twin goals of genuine people's development-- that firmed up our commitment for a federal republic of the Philippines. The interrelatedness of political stability and economic empowerment are clearly manifested as we assist and work with the communities in the six regions, as well as in the 25 provinces in Mindanao. Such relationship can also be gleaned from the national development perspective: between Mindanao and the central government in Manila.

Federalism as a Peace Option
Our collective quest for peace is anchored on the results of the talks between the government and the Moro Islamic Liberation Front, between the government and National Democratic Front, and between the government and the Revolutionary Proletariat Movement in Mindanao. While we remain optimistic on the mainstream peace process, greater people's participation in the peace talks must also take place.

One of the most important developments contributing to the shift in the world political paradigm from a centralized government to federalism has been the demonstrated utility of federal arrangements in peace-making. In a world well advanced in its movement toward federalism as the new paradigm for interstate and intergroup relations, we must expect it also to offer considerable promise for peace-making. As federalists, we work hard to find ever better ways to utilize and apply federalism to the cause of peace.

There is a certain justification for this seeming truth in that "federal" is a loaded term, one that, more than simply describing arrangements and institutions, has to do with serious principles, real attitudes, binding relationships, specific expectations with regard to mutual trust, in short, the will to federate. Even if the discussion of federalist political culture is relatively not new on the political science agenda, the sense that federalism can only succeed where such political culture exists sufficiently also figures into this equation. Even less expressed is the expectation that federalism has at least one of its major roots in the idea of federal liberty, that is to say, liberty to do that which is mutually agreed upon in the founding compact or its subsequent constitutional modifications. Without federal liberty as an accepted principle neither freedom nor responsibility can develop properly.

One of the ways to overcome the deficiency seems to be by widening the sphere to be encompassed by the solution. This is necessary for federal peace-making to take place, in some cases from the very first. For example, efforts to bring together two separate units are inevitably problematic not only because it is easy for every issue to turn into a zero-sum game with one side winning and the other losing, but it also is difficult to transform develop or transform issues into ones in which both sides win. It is true that in some cases when both sides are losing sufficiently, widening the sphere helps them come together to control their losses.

No matter what form federalism takes, how federal institutions are designed, and what federal principles are emphasized, it is generally clear by now that where there is a positive attitude toward federalism and a will to build a federal system, where the political society involved rests on sufficient trust, sufficiently widespread to allow the many leaps of faith that must be taken to make federalism work, where political culture is either favorable or at least open to federal arrangements, where all of this leads to a wider understanding of liberty as federal liberty, then federalism has a good chance of succeeding when used for peace-making. It may have almost as good a chance if most of those elements are present and some chance even if one or two of them is. But it seems quite clear that without any, the chances of success are extremely limited.

Federalism and the Right to Self-Determination
Asserting and reclaiming their self-determination is essential among Lumad and Bangsamoro peoples.

The Lumad peoples have persistently expressed their own preference for self-determination, having seen that their absorption into the unitary political system has brought about the establishment and solidification of a threat to their very own existence and the integrity of their distinct cultures.

The Bangsamoro have their own distinct identity and vested interest that must be respected and cannot be satisfied by a continued subscription to political uniformity. With the Autonomous Region in Muslim Mindanao, the central government has allowed, albeit grudgingly, a departure from the stranglehold of central authority. The passage of the Local Government Code in 1991 further chips away powers from central authority; the local government units from the regional autonomy to the barangay are able to exercise greater self-determination.

The right to decide and choose that is best for one's self is a sacred right that cannot be taken away from any individual and citizen. Those deprived of this right are also unable to fulfill their aspirations for the future.

Under a federal set up, greater powers will be devolved to the local citizenry, making grassroots participation more meaningful and broaden the powers of the citizens over the state.

Self-determination comes in many forms. In the political sphere, it comes in the form of semi-independent units. In the Philippines: sitio, barangay, municipality, province, regional autonomy, nation. Self-determination grows with increased political autonomy or the ability to stand on one's own feet. In the political history of the world, greatest autonomy to political units is experienced by the states of a federal state.
The more obvious advantage is greater power-sharing between the national or federal government and the state/local government. Since the states will have their own legislatures, real decision-making is brought closer home to the people. This is the immediate consequence of the political re-structuring. But, in fact, the citizens can push further to ensure that in the federal constitution and the state laws, greater people participation in the decision-making process is institutionalized.

Federalism and Diversity
This year's Human Development Report of the United Nations Development Programme highlights cultural diversity. At our end, we also delight in UNDP's 2004 report because that has been our general advocacy for Mindanao: that we promote respect and understanding among the diverse and unique groups of people whether they are Lumad, Bangsamoro or Christian settlers.

Diversity and development might seem to sit oddly together. But they are intimately linked, and the report seeks to show that they are not related in the way many people assume. The UNDP's press release says unambiguously that “there is no evidence that cultural diversity slows development”, and dismisses the idea that there has to be a trade-off between respecting diversity and sustaining peace. In countries like the Philippines, and in regions such as Mindanao, there is enough to argue that indeed diversity plays an important role in development given the composition of the ethnic groups: 13 ethnolinguistic groups representing the Bangsamoro people, 18 ethnolinguistic groupings of the Lumad, and the settlers who are Ilonggo, Ilocano, Cebuano, Boholanon, and so on.

The not too obvious but significant advantage of federalism is its ability to address the demands of a pluralistic society, meaning one that has a mixture of populations of diverse cultures and ethnolinguistic identities. This is nowhere more pronounced than in Mindanao, with its Moro population of about 4 million and the Lumads numbering about 2 million, altogether making about 40% of the total Mindanao population.
It is noted that only in a federal structure of government it is possible to “properly and correctly rule such a society in such a manner as to accommodate the distinctiveness of each nationality while orchestrating them all towards the common national goal which comprehends their diversities.”

Federalism and Fiscal Management
Although there is a need to establish correlation, it has been noted that the most of the politically stable and economically advanced countries in the world follow a federal set-up. These include Germany, the United States of America, Canada, Australia, Brazil, Mexico, Austria, Argentina, and closer to home, India and Malaysia.

It is interesting to note that seven of the top twelve countries in the world in terms of per capita income in 1997 were federal, while six of the top 12 in gross domestic product were likewise federal, while six of the top 12 in gross domestic product were likewise federal.

Assuming that we are under a federal structure, would the economic crisis faced by the nation today be isolated in Manila only? It is definitely possible.

Decentralized fiscal systems offer more potential for improved macroeconomic governance than do centralized fiscal systems, because they require greater clarity about the roles of various players and decision-makers and-to ensure fair play-greater transparency in rules governing interactions.

Challenges of globalization usher in fiscal reforms in developing countries. Among federalist countries, the following are noticeable:

Monetary policy is best entrusted to an independent central bank with a mandate for price stability.
Fiscal rules accompanied by “gatekeeper” intergovernmental councils or committees provide a useful framework for fiscal discipline and coordination of fiscal policy.
The integrity and independence of the financial sector contribute to fiscal prudence in the public sector.
To ensure fiscal discipline, government at all levels must be made to face the financial consequences of their decisions.
Societal norms and consensus about the roles of various levels of government and limits to their authority are vital to the success of decentralized decision-making which can happen only under a federal structure.
Tax decentralization is a prerequisite for sub-national access to market credits.
Higher-level institutional assistance may be needed to finance local capital projects.
An internal common market is best preserved by constitutional guarantees.
Intergovernmental transfers in developing countries undermine fiscal discipline and accountability while building transfer dependencies that cause a slow economic strangulation of fiscally disadvantaged regions.
Periodic review of jurisdictional assignments is essential to realign responsibilities with changing economic and political realities.
Finally, and contrary to a common misconception, decentralized fiscal systems offer more potential for improved macroeconomic governance than do centralized fiscal systems.

The New Hope for Mindanao and the Philippines
Indeed the federal system is worth looking into as a more ideal set-up for Mindanao and the Philippines. More importantly, it is one system that may be able to effectively address the current and peculiar situation of Mindanao not only as a victim of neglect but also as a unique island-region that harbor three peoples of diverse backgrounds, customs, culture, traditions, and social systems. More specifically, it is a political option that may help prevent a stalemate that can lead to another Mindanao war.

Clearly, what Mindanao needs is unity in diversity—not integration, not assimilation-or at least harmony in diversity. Admittedly, a federal system is friendlier to this idea than the unitary and centralized system that we have.

Sources:
1. MINCODE Development Agenda: A Socio-Cultural and Political Approach to Mindanao Peace and Development. 2003.
2. B.R. Rodil. Suitability of the Federal System in Mindanao. Undated.
3. Rey Magno Teves. A Federal Republic of the Philippines. Undated.
4. Rey Magno Teves. Impasse Breaker: An Islamic State Within a Federal Philippines? Intersect. Intersect. September 1999.

by Antonio R. Santos, Sr.

Just recently, the President of the Philippines called for the expediency to amend the 1987 Constitution. In the eyes of our President, it is high time that we should be sensible of our country’s malady, and, therefore, undertake the necessity of some speedy and powerful remedy. We in the Mindanao business community think that no other alternative is more compelling.

It can be recalled that on September 2004, the pro-active Mindanao business community, through the Mindanao Business Council (MBC), presented the Mindanao Action Agenda to Her Excellency Gloria Macapagal-Arroyo during the 13th Mindanao Business Conference (MinBizCon). As an expression of support to the present administration, we have collectively committed to the quest for the private sector’s important role in the pursuit for just, equitable, and lasting peace in the island.

One of the private sector commitments under the Mindanao Action Agenda is the shift to a federal form of government. To help achieve this goal, the MBC and the local chambers of commerce together with Kusog Mindanaw as the lead non-government organization, commit to pursue local empowerment under a federal set-up through the establishment of the multi-sectoral Mindanao Coalition of Cities for Transparent and Accountable Governance.

There is certainly a great economic force behind this advocacy. Regional disparities with respect to population size, per capita income, administrative capacity and social needs, do not allow for simple solutions. And so it is important thresh out the issues affecting regional development in the context of the proposed reform to a federal state.

Investments and Federalism
In the first place, the new system should give due consideration to sustainable and equitable socio-economic development through the promotion of inter-state and intra-regional cooperation. Thus, policies on trade and investment will be re-evaluated and planned according to the region’s capacity to produce as well as the demand in the local, national and/or international market.

For the business sector, this means an increased concentration on local industries, diversified quality products and greater trade benefits from regional policies. Consequently, businessmen will have a more conducive and competitive business environment and investors will be able to make investment decisions over the longer-term. A well-grounded model country that dashed for economic growth is Malaysia. The success of the Malaysian Government is partly because of diversification of its manufacturing base, diversification of its export markets, and strengthening of its industrial capabilities. In particular, Ipoh, which is in the heart of the tin mining region and close to the rice bowl sections of West Malaysia, is served by trading firms specializing in mining and rice farming equipment and supplies. Businesses specializing in mining and rice farming equipment and supplies and trading centers having countryside marketing facilities are also a significant source of revenue for the locality.

Taxation and Federalism
In the second place, a federal form of government results in greater autonomy to revise taxation policies. Since local governments are semi-autonomous entities within the state framework, review of rates is faster and more reflective of the cost of services that a particular region provides. And even though tax rates in general are linked to a broader political process, a federal system would devise and take into consideration the fairer calculation of rates beneficial to all parties involved within the region. The right of the federal government to levy taxes shall, as Hamilton puts it, “contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without the end proposed—that is, an extension of the revenue.” Following the politico-economic by Brennan and Buchanan (Brennan, Geoffrey And James M. Buchanan (1977): Towards a Tax Constitution for Leviathan. Journal of Public Economics 8: 255-273) federalism leads to lower tax burden. The mobile factors that are capital and labor render a mobile tax base in the federal states. This induces the positive force of taxes that matches local situations. Practically, a federal system in relation to taxation translates to savings for investment, which drives economic growth and prosperity.

Simplified Bureaucracy
Lastly, the decentralized decision making structure provides greater proximity to the people and forces the governments to be more responsive to its citizens' (the business sector’s) preferences. Economic development is achieved through inter-sectoral dialogue and equitable distribution of wealth that render significant improvements in local infrastructure. There would be more access to local resources, e.g. developing better privileges to local contractors for infrastructure projects.
Also, a direct impact of a strong link between the government and the business sector opens broad spectrum of business support services in an effort to achieve a consolidated approach when representing the viewpoint of private enterprise in its relations with the government. This would allow the development of small businesses to be competitive with large businesses in any industry. Through direct involvement and community action, we see rapid development and the proliferation of our interests.
With these advantages it can hardly be supposed that the adverse position would have an equal chance for a favorable issue.

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