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Former Chief Justices discuss Federalism’s impact on economy, governance


In a business forum hosted by global real estate services company Colliers International, entitled, “FEDERALISM TO PH: Yes or No”, two former Chief Justices, Hilario Davide and Reynato Puno engaged in a discussion on federalism, its impact on governance and the economy. Hosted by ABS-CBN News Channel (ANC) anchor Karen Davila, the forum was attended by over 160 top-level business executives.

Puno: Federalism key to turning around Asia’s failing democracy

Puno, who also heads the Consultative Committee tasked with drafting the Constitution for a Federalist Philippines, stressed the importance of a decentralized form of government. According to Puno, there is an overconcentration of powers in the national government, with the current political structure being too Metro Manila-centric. Puno noted that this has resulted in Metro Manila wallowing in prosperity while other regions are suffering in poverty. According to the former chief magistrate, the main goal of the Consultative Committee’s draft constitution is to break the overconcentration of powers in the national government, which can only be achieved if the Philippines shifts from unitarianism to federalism. Puno believes that the solution is federalism because its essence is delegation and equitable distribution of powers of government. He stressed that the Philippines has become a failing democracy due to the current political structure and this shouldn’t be, as the Philippines was the first democracy in Asia.

Davide: Shift to federalism a “plunge to death, leap to hell”, could lead to “bureaucrazy”

Meanwhile, Davide refuted Puno’s statements, stressing that a shift to federalism is “a lethal experiment, a fatal leap, a plunge to death, a leap to hell.” Davide noted that the transition period will result in greater debt for the country as more than P250 billion will be required during the first year of transition alone. The amount is similar to the cost projected by the National Economic and Development Authority (NEDA). He stressed that a shift in the country’s political structure could result in a  “bureaucrazy”, with the shift only bloating bureaucratic institutions and processes, and rendering the entire system more vulnerable to abuse. According to Davide, the shift is also expected to demand greater allocation for infrastructure as additional buildings will be needed to house the new agencies that will be created under a new political system.

Taxation remains a contentious issue

According to Davide, the proposed draft constitution will only lead to a double taxation scheme.  Puno refuted this, noting that the draft constitution will not allow for double taxation, and that a section was devoted to address this specific issue (Article XIII – Section 3).

Another point of contention for business was raised by Davide when he mentioned that the proposed draft will place the business sector at the mercy of politicians with vested interest. However, Puno stressed that a federal form of government is expected to curtail the dominance of monopolies and oligopolies that captured even the regulatory agencies.

Colliers’ knowledge sessions key to accelerating success

 “We at Colliers International are serious in our role of helping our clients grow their business through knowledge sessions such as the federalism forum,” said Dom Fredrick Andaya, Colliers’ director for office services. “We understand that business success hinges not just on the application of business processes but also on building our knowledge of the business environment. This is our brand of service: to think differently, share great ideas and offer thoughtful and innovative solutions that help our clients accelerate their success.”