Roque contradicts Pernia: Federalism won’t adversely affect PH economy

“The shift to federalism, we reiterate, would have no adverse effect on the Philippine economy,” Presidential Spokesperson Harry Roque, Jr. said in a statement. (File photo) (YANCY LIM/PRESIDENTIAL PHOTO)

Malacañang on Wednesday, July 18, clarified that the country’s shift from unitary to a federal form of government would not adversely affect the growth of the Philippine economy.

“The shift to federalism, we reiterate, would have no adverse effect on the Philippine economy,” Presidential Spokesperson Harry Roque, Jr. said in a statement.

The Palace official was responding to the assertion of Ernesto Pernia, chief of the National Economic and Development Authority (NEDA), who said that the Philippines’ economic growth may be disrupted if the government rushed its shift to a federal system.

[READ: Pernia says PH economy may not be ready for federalism]

In an interview with One News’s “The Chiefs” on Monday, July 16, Pernia said, “It’s unlikely that the regions will be ready [for federalism] and our concern, my concern is that we are moving now to connect the region, to bring the lagging regions into the mainstream economy and that momentum of infrastructure improvement in the regions is going to be disrupted.”

If the country pushes its shift to federalism, Pernia noted that the Philippines’ expenditure will be “immense” as he estimated that the fiscal deficit of the country’s gross domestic product (GDP) may jump to six percent or more. This is beyond the deficit cap set by the inter-agency Development Budget Coordination Committee (DBCC) which was only at 3.2 percent for 2019.

“That’s really going to wreak havoc in terms of our fiscal situation and we will certainly experience a downgrading in our ratings,” the top economic manager said.

Roque, however, explained that the budget would remain the same as national projects would be financed by the internal revenue allotment (IRA) of local government units.

These projects, he said, include maintenance of barangay roads and bridges, water supply services, barangay health centers and daycare centers, solid waste disposal system of municipalities, among others.

“The role of the national government would be to continue to implement Build, Build, Build projects and would hence be concentrated on policymaking,” Roque added.

Since his campaign in 2016, President Rodrigo Duterte has been pushing for federalism, which he believed would help solve many problems plaguing the country.

A Pulse Asia survey earlier revealed that 62 percent of Filipinos reject the shift to a federal system, with 34 percent of Filipinos opposing federalism now and in the future and 28 percent being against it at resent but also open to it in the future.

[READ: Majority of Filipinos against Cha-cha now, federalism – Pulse Asia]