Palace encourages healthy discourse on federalism

FILE: Presidential Spokesperson Harry Roque. (TOTO LOZANO/PRESIDENTIAL PHOTO)

MANILA — Malacañang on Saturday said healthy discussions regarding the draft federal constitution are always encouraged, amid concerns of President Rodrigo R. Duterte’s economic managers that there may be “ambiguous provisions” on the allocation of expenditures under federalism.

“As we have said, we encourage a healthy discussion regarding the draft federal Constitution,” Presidential Spokesperson Harry Roque said in a press statement.

Roque said comments coming from Duterte’s economic managers, particularly Department of Finance (DOF) Secretary Carlos Dominguez III and National Economic Development Authority (NEDA) Secretary Ernesto Pernia, could always contribute to the discourse on federalism.

“The opinion of the President’s economic managers is one of the myriad voices that would contribute to a higher level of discourse on the proposed federal charter,” he added.

Dominguez earlier sought for clarification on revenue and expenditure assignment, but insisted that the economic team was not against federalism. He also expressed concern on who would shoulder national debt.

Pernia, for his part, also warned that federalism could drain government finances and disrupt the infrastructure program.

Roque, however, repeatedly assured that the shift to federalism will have no adverse effect to the economy and the government would still be able to implement infrastructure projects under the “Build, Build, Build” program.

The Consultative Committee (ConCom), which drafted the federal constitution, also allayed fears of Duterte’s economic managers, noting that “the fiscal administration is quite clear in the draft Constitution.”

ConCom spokesperson Ding Generoso said under the ConCom’s draft federal charter, the federal (national) government retains the taxation power, except for selected taxes and fees wherein the collection of which will be transferred to the regional governments.

He added that sharing of the collections from top four sources of revenues shall be 50 percent for the federal government and 50 percent for the regional governments.

Moreover, he said internal revenue allotment will no longer be a concern of the federal government since the power to distribute the shares of local government units (LGUs) will belong to the regional government.

The corresponding amount is part of the one trillion pesos that correspond to the 50 percent share of the regions in the top four revenue sources, he added.

Generoso, meanwhile, said national debt will fall under the concern of the federal government.

“The budgets allotted for debt service, national defense, foreign affairs are untouched and remain intact with the federal government under the draft charter,” Generoso said.

Moreover, he said Congress will have the power to appropriate the budgets for these federal concerns.

“The BSP (Bangko Sentral ng Pilipinas) is the single agency responsible for monetary policies, which is an exclusive power of the federal government, thus if it ever needs additional capital, the federal government will provide for it,” Generoso said.

Generoso said much of the functions and duties of the regional offices of the different departments will be transferred to the regional governments.

This means there will be a corresponding reduction in the regional budgets of the different departments, he added.