Position Paper (FEDERALISM)

The proposal to adopt the federal system of government is not a recent phenomenon in the
country. For several decades, political parties have included federalist agenda in its party
platforms. The Partido Demokratikong Pilipino Lakas ng Bayan (PDP Laban) has been taking
the lead in advocating for federalism consistent with its thrust for freedom, justice and peace
and a prospective solution to the lingering multi-cultural dilemmas in the country. Several
seminars and conferences have been organized to discuss the concepts and principles behind
federalism. The concept of a federal government for the Philippines was first suggested by José
Rizal. He outlined his vision of federalist governance on his essay Filipinas dentro de cien
años ("The Philippines a Century Hence") that was published by the Barcelona-based
propaganda paper La Solidaridad in 1889. In 1899, Filipino revolutionaries Emilio
Aguinaldo and Apolinario Mabini also suggested dividing the islands into three federal states.
One of the first proponents of federalism in the Philippines in the 21st century is professor Jose
Abueva from the University of the Philippines who argued that a federal form of government is
necessary to more efficiently cater to the needs of the country despite its diversity. The primary
goals of a constitutional amendment is to increase decentralization, greater local power and
access to resources most especially among regions outside Metro Manila which has long been
dubbed as rather imperial. Aside from Abueva, senator Aquilino Pimentel Jr. was a prominent
supporter of federalism who, beginning in 2001, advocated for federalism. He saw the proposed
system as a key component in alleviating the Mindanao crisis and appeasing Moro insurgents.
According to Pimentel, even though federalism was never intended to appease any followers of
any specific ideology of religion, it will also hasten economic development, since resource and
financial mobilization is upon each state's or province's discretion without significant constraint
from the central government.
However, in 2009, after Senate and House resolutions supporting charter change were
released, an estimated 13,000 to 15,000 people gathered in Makati to protest against these
executive department-deriving proposals for constitutional reform. This was due to speculations
that Philippine president Gloria Macapagal Arroyo would use such amendments to extend her
hold in office. In addition, Pulse Asia published in the same year their survey regarding public
support for the proposed charter change; the survey reported that four out of ten Filipino adults,
or 42% of all respondents, opposed the amendment, with 25% still undecided and 33% in favor.
Pulse Asia furthered that from 2006 to 2009 there was no significant change of sentiment
against the charter change proposal, although indecision increased by 6%. In late 2014, then-
Davao City mayor Rodrigo Duterte launched a nationwide campaign calling for a charter change
for federalism. During his visit to Cebu City in October of the same year, Duterte stated that
federalism will facilitate better delivery of services to the people. He also saw the current system
as "antiquated" where distribution of public funds is disproportionately biased towards Metro
Manila. Aside from the economic aspect, federalism is also seen as the best means to address
problems in Mindanao which suffers the most from ethno-religious conflicts. Duterte added that
the current unitary form of government has not worked well given the ethnic diversity in the
country. In spite of initially rejecting several calls for his candidacy for the 2016 presidential
elections, he cited his organizational reforms if he were to become president. Parallel to his
campaign for federalism, Duterte planned to privatize tax collection and abolish the Congress to
make way for a unicameral legislature, contrary to the originally proposed Joint Resolution No.
10.
Movements for federalism further intensified from when the draft of the Bangsamoro Basic
Law was submitted by Philippine president Benigno Aquino III to the 16th Congress on
September 10, 2014. From approval, this law establishes the Bangsamoro as an autonomous
region with its own parliamentary government and police force. Approval of the Bangsamoro
structure would provide federalism proponents and supporters added confidence to clamor for
the national government to enact reforms towards a more decentralized system for the rest of
the country. In May 2016, President-elect Rodrigo Duterte stated that a plebiscite on the
proposed replacement of the unitary state with a federal one will be held in two years.[15] On
December 7, 2016, Duterte signed Executive Order No. 10 creating a consultative committee to
review the 1987 Constitution. Consistent with its commitment of leading a proactive local
government, the League of Cities of the Philippines (League) is keen to explore on how and
what federalism can do to the local government units. The League has been very receptive to
the ideas and propositions presented during national discourse, while not doing away with its
duty to examine whether the same bring the greater good to the local government units and the
country as a whole. To accommodate the proposal to shift our system from unitary to federal,
there must be a fundamental change in the 1987 Constitution. This paper articulates the view of
the League on the universal concept of federalism taking into consideration a number of
proposals in the Philippine context, and how a federal form of government works on local
governments. The paper focuses on the General Provisions on Local Government provided for
in Article X of the Constitution. Moreover, the discussion shall fine-tune with new developments
of the federalism campaign. DISCUSSION The Federal System of Government Federalism is a
system of government under which governmental powers are assigned or shared between the
federal (national) government and the state (regional and local) governments.1 1 Local
Development Foundation (2002). Primer on Federalism. Page | 2 I. Local Government Units
under a Federal System The basic feature of a federal government is the division of powers
between a strong national government and smaller local governments, as opposed to a unitary
government which vests the supreme power to the central government with a few delegated
powers given to the subnational government. Despite the passage of the 1991 Local
Government Code which provides for the shared and devolved powers between the national
and the local governments, the system of government in the Philippines is highly centralized
and unitary. The shift to federal form of government will either make or break the local
government units. It has direct impact to the local government units in almost all aspects from
governance to cultural. The proposals to group together local government units either into
eleven (11) federal states out of the existing Administrative Regions2 or into the three (3)
federal states out of the island groups- Luzon, Visayas and Mindanao3 , will determine our fate
as one nation. Taking into consideration not only the geographical composition of the
Philippines but more importantly its ethnic and cultural diversity, as well as each local
government’s economic and resource viability, federalism may facilitate development and
progress across the country.

Federalism grants genuine local autonomy to the local government units While local autonomy
is guaranteed under the present Constitution, it is still Congress that decides how it is enforced.
Local autonomy is granted to the local government units through the enactment by Congress of
the local government code. The institution of a more responsive and accountable local
government structure is though decentralization. Essentially, the powers remain with the
national government, only allocating certain powers and responsibilities to the local
governments subject to the guidelines and limitations as Congress may provide. 2 Proposal of
Sen. Aquilino “Nene” Pimentel Jr. Federalizing the Philippines. 3 Proposal of Dr. Gaudioso
Sosmena. Primer on Federalism. Page | 3 Under the federal system, powers granted to the
local governments will be derived directly from the Constitution. The powers cannot be changed,
modified, altered or repealed through mere legislation. Federalism addresses divisiveness
brought about by cultural differences; promotes regional specialization Filipinos in various
provinces, cities and municipalities have different aspirations, ethnicity and follow different
cultures. These differences are most of the time overlooked resulting to the crafting of policies
which only cater to the majority. With federalism, the regional government can formulate policies
giving due consideration to local needs, tastes and opinions. Hence, the rights of the minorities
are duly protected. Federalism empowers the regions. Notwithstanding the presence of too
many cultural melting pots, contest of domination lessens because federalism makes it easier
for regional interaction. Regions become more focused on what it can do based on competence
and capability. This results in local governments to explore different approaches to bring
reforms in any area of public domain, be it education or social services. Federalism leads to
optimum utilization of and more control over local resources In the present unitary form of
government, functions and responsibilities are only devolved to the local government units as
embodied in the Local Government Code. Notwithstanding the local government units’ power to
create sources of revenue granted by the local government code, the same shall be in
accordance with national policies and guidelines as Congress may provide. As a result, local
resources may not be of full effective use. In federalism, there is a division of roles between the
central and the regional governments. As proposed, the central government will concentrate
more on international affairs and national defense, while the regional governments will focus on
catering to the local needs such as basic services. Page | 4 Hence, the local government units
will make it to the best of its ability to harness and utilize its resources to greater use. Based on
the proposal4 , national government shall get twenty percent (20%) of the taxes and revenues
collected, while eighty percent (80%) shall be given to the regional government. Of the 80% to
the regions, thirty percent (30%) shall remain with the regional government while the seventy
percent (70%) shall be divided to the local government units. Given that, the local governments
have the power to spend its money on programs and policies it deems fit for its development
without waiting for the approval of the national government. Federalism provides solution to the
long-standing conflict in Mindanao The proposal to create a Bangsamoro state within the federal
government may address the concerns of separatists demanding autonomy over the
administration of Muslim Mindanao. Inherent to a federal system is the ownership of identity of
each state, while the central government respects each of the sociocultural diversity. This will
mean that the people in the Muslim region shall be more empowered to decide matters peculiar
to the region itself.

Federalism ensures liberty for the moros to handle their own affairs, while not doing away with
the powers of the federal government granted by one Constitution. It is proposed that each
region shall have its own set of senators. It follows that when a Bangsamoro region is created
within the federal government, our Muslim brothers and sisters shall be well-represented and
shall have equal stake in the federal government. II. Constitutional Revision The League is in
the position that there must be a fundamental change to the Constitution, rather than piecemeal
amendments, in order to accommodate the proposals for the shift to federal form of
government. In the present unitary set-up, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it. The policy of local autonomy
granted by the Constitution to the local government units are necessarily confined within and
limited to the extent allowed by the central government. 4 Proposed Federal Constitution. House
Resolution No. 08. Page | 5 That being so, principles behind the unitary form of government
such as the centralization of powers and the uniformity of laws shall cease to operate once the
country shifts to federalism. To this effect, the constitutional provisions on local government
provided in Article 10 will be substantially revised. The League believes that there is no exact
model of federalism that is suited in the Philippines considering our geographical setup, cultural
diversity, political dynamics and bureaucratic practices. The local government units will be
largely affected by the change in the system since its powers and functions will not spring from
national Congress unlike in the present setup where Congress, through the enactment of a law,
prescribes local affairs. Now in federal system, Constitution reflects how the local government
units under the regional state will operate. Federal Government exercises powers, authority and
responsibility of the national government in the Republic of the Philippines Under the proposed
federal system, the Republic of the Philippines will operate under one Constitution. The federal
government will exercise authority and responsibility over national powers and functions in the
executive, judiciary and legislative. It shall have jurisdiction to implement and execute laws of
national application. Laws legislated by the federal assembly or the parliament are considered
as federal laws applicable to the entire federal republic unless otherwise limited by regional
legislation enacted in the exercise of the exclusive legislative powers granted to the regional
state under the Constitution. Regional government exercises the powers and functions
necessary for the governance and development of the region and the local government units As
proposed, there will be powers and responsibilities of the central government that will be
transferred to the regional government while others will be shared. This is consistent with
devolution and local autonomy, the very essence of the federalism. Page | 6 The powers of the
regional government emanate from the Constitution. It shall have exclusive legislative powers
applicable within its territorial jurisdiction over social welfare and development, waste
management, irrigation, water and sewerage, among others. In terms of the fiscal policy, the
regional government shall have the power to formulate on the creation of its sources of
revenues and levy taxes, fees and charges subject to the limits provided by the Constitution.
The 1991 Local Government Code shall be repealed The 1987 Constitution provides for
Congress to enact a local government code instituted through a system of decentralization. The
Code provides for the powers, responsibilities and resources of the local government units. In
the federal system of government, the principles which operate behind the Local Government
Code become irrelevant since the powers and responsibilities of the regional states and the
local government units shall emanate from the Constitution. Regional states shall have its own
laws that will govern the local government units within its jurisdiction. The territorial and political
subdivisions of the Republic of the Philippines are the regions, provinces, cities, municipalities
and barangays The primary political and territorial unit of the Republic of the Philippines is the
federal government. The federal government shall be sovereign over the entirety of the Republic
and shall exercise the same without interference from foreign or outside source. The regional
states shall be the sovereign within its own territorial jurisdiction and shall exercise
independence when dealing with its own affairs. The regional states shall be autonomous, equal
and sovereign. The sovereignty emanates from the Constitution and the federal laws. The
regional states shall enact and implement their own laws under the general supervision of the
federal government. Such supervision is only up to the extent of seeing to it that the laws are
faithfully executed. Page | 7 Regions shall have the bigger share of the revenues collected from
resources within its jurisdiction; just share from the national taxes It is proposed that taxes
collected within the territorial jurisdiction of each region shall be retained and accrued to the
regional government. The regional government shall give a certain percentage to the federal
government. The League subscribes to the proposal that eighty percent (80%) shall be retained
by the regional government while twenty percent (20%) will be given to the federal government.
As opposed to the present set-up where the central government released to the local
governments its fair share in the revenues collected, the regional governments will now have
control over the taxes and revenues collected from the resources utilized within its jurisdiction.
Subject to the laws of each regional state, the regions shall allot a portion of the collection to the
local governments within the jurisdiction. Subsequently, the eighty percent (80%) retained to the
regional government will be further divided for distribution to the local government units. Eighty
percent (80%) will be distributed among the local government units while retaining the 20%
thereof. It is proposed that each regional state will formulate its own laws as to the utilization of
the taxes and revenues collected, in accordance with the principles laid down by the
Constitution. Each regional state will share and equalize among themselves as determined by
the laws enacted by the Parliament or the Federal Assembly It is proposed that the federal
government shall establish an equalization fund, the terms of which shall be determined by the
parliament or federal assembly. The purpose of establishing the equalization fund is to level the
playing field between and among the regional states. A portion of the fund will come from the
share of the federal government in the taxes and revenues allotted by the regional states while
another portion will come from the contribution of the more capable and richer states or local
government units. Page | 8 Likewise, to be entitled of the fund will depend on the needs of the
local government unit as such will be provided for by federal or regional laws. Each regional
state shall have a unicameral legislature to be known as Regional Council composed of
representatives from each province Each political and administrative unit will elect a
representative to the regional state legislature. Such official is the same as the present governor
of a province. The same will still be elected by the people at large. However, the nature of the
position will shift from being a local chief executive into a representative of the people to the
council. These representatives will sit in the Regional Council. The regional council acts as the
administrative, advisory and legislative body of the regional state. The regional council will have
the authority to legislate on areas that are not exclusively reserved to the federal congress such
as health, agriculture, land use and development, public works and infrastructures, among
others. III. Challenges on the Shift to Federal System The Philippines’ shift to federalism is
envisioned to bring about growth and economic development. The division of the Philippines
into different federal states can be challenging considering that there is a fiscal divide and
income disparity between and among our local government units. While the principles of
equalization and revenue sharing may be adhered to in order to address the problems on
regional wealth differences and imbalance, the challenge still remains on its ability to handle
fiscal transfers with limited intervention from the central government or the region granting
revenue transfer. Local government units shift from dependence on allotments to genuine fiscal
autonomy Page | 9 At present, the local government units have limited power to generate its
own resources. Thus, there is dependence on the allotments released by the national
government to fund its operations. With the shift to federal system, local governments are
expected to act entrepreneurial and exercise audacity in developing their communities. The
challenge is on the localities with limited resources and capabilities, as well as the inabilities of
its institutions to cope up with the demands of fiscal autonomy. In this kind of set-up, local
governments are expected to rely on its own with very little intervention from the central
government, or none at all. Accountability and Discipline rest in the regional and local
governments The envisioned effect of federalism is the swift development across the country.
However, this can be achieved when we have functional and effective regional and local
governments. The local government units must be capable to improve and deliver services to
the people in order for federalism to succeed. Federalized government is highly decentralized.
National government is only left with powers and functions that are national in scope, while local
affairs such as budgeting and resource allocation are reserved to the local leaders. Thus, it is
imperative to explore reconsiderations on tax assignments, fiscal distribution and other shared
powers in order to raise higher the standards for discipline and accountability