Alvarez: Federalism can solve regional disparities

FILE: House Speaker Pantaleon Alvarez (PPD/Toto Lozano)

MANILA — House Speaker Pantaleon Alvarez on Tuesday assured that the regional development gap in the country could be narrowed under a federal setup with the rich regions aiding poor regions until they become competitive.

Alvarez made this remark in response to concerns that poor regions who were heavily dependent on the national government “might lag behind” under a federal form of government.

According to a Department of Finance report presented during a House constitutional amendments committee hearing, 11 out of the country’s 14 regions are heavily dependent on their Internal Revenue Allotment (IRA).

Alvarez said wealthier regions and economically distressed regions could be clustered together as a state.

“May formula kasi doon, yung mga regions na talagang mahirap pwede natin ‘yang isama doon sa region ng mayaman para kaya silang buhatin nu’ng region na yun (There’s a formula for that. The poorer regions could be grouped with wealthier regions that could help lift them up),” Alvarez said in an ambush interview.

“Tulungan lang (We just help each other out),” he added.

Alvarez also raised the proposal of creating a “special equalization fund” by the federal government, in which the high-earning states subsidize the poor ones.

“Sa ibang bansa like Malaysia, may tinatawag silang special equalization fund para doon sa halimbawa nahihirapan yung isang region sinu-subsidize nila hanggang makabangon talaga (In other countries like Malaysia, they have a special equalization fund to aid troubled regions through subsidy until they could stand on their own),” Alvarez said.

Under the federal system, Alvarez said the states would get 80 to 85 percent of their revenues while the remaining would be remitted to the national government.

“Tingin ko wala nang IRA yan, dahil 80-85 percent nung income mo maiiwan na sa iyo. Sobra-sobra na yung kung i-compute mo sa IRA mo yan, ‘di ba? (I think the IRA would be scrapped. 80-85 percent of your income is yours. That’s more than the IRA you receive, right?),” Alvarez said.

Alvarez added that the development potential of the country’s regions would “unravel” under a federal system.

“Nakikita ko, every region in this country may mga potential, ang laki (I can see that every region in this country has a huge potential),” he said.

Alvarez said federalism would allow the regions to flourish using their strategic advantages in natural resources.

Alvarez added that the system would further create job opportunities and allow the regions to manage their own economy and to chart their own destiny, he added.