Federalism Will Bring Us to the Dogs

By MORTZ C. ORTIGOZA

In case it will be favorably acted, will the Federal Constitution bring this impoverished and rambunctious country to Nirvana instead of hell as based on the poor financial capacity of the country and the downgrades it awaits with credit watchdogs?

According to the Consultative Committee that hammered the draft constitution, the sharing of wealth that primordially be taken from the taxes of the Filipinos and businessmen would be at least 50 percent to the Federal Government (FG) and 50 percent to the 18 Regional Federal Governments (RFG).

The additional burden to the coffer of the new bureaucracy will be between P44 billion to P72 billion for 17 Regions (not 18 Regions) under Federalism, according to Rosario Manasan, senior research fellow of the Philippine Institute for Development Studies (PIDS).

Is this the way to inflict more burdens to the already hapless Filipinos in these regions?

 Department of Finance Secretary Carlos Dominguez III told the senators on a budget hearing that if Federalism will be shoved in the throat of the Filipinos, this country “will go to hell” not with “will go to the dogs” as an idiom usually used by writers ha ha ha !

 What with the P120 billion deficits yearly needed by those handicapped regions to attain the physical and financial need of Federalism.

It means rich regions like Metro Manila, Calabarzon, and Region 3 could easily remunerate them, paid the construction of their offices, and can even have surplus as they collect more taxes in their burgeoning areas.

Poor regions like Zamboanga Sibuagay, Autonomous Region in Muslim Mindanao (ARMM), Eastern Visayas, and others would squirm in finding funds because of the dearth of businesses in the places where the taxes collected they use for those expenses.

He lamented that when he saw the draft federal Constitution he found that it was silent on the national government’s multi-trillion pesos debt.

In the next year our total public debt obligation to our creditors abroad, as provided by the Department of Budget & Management, will be almost P400 million.

 Failure to pay it entails sanctions from other countries where they will not buy our exports, freeze our wealth in their places, and blacklist the Philippine government and its people as financial borrowers.

With a deficit of P120 billion to fund those offices and personnel, our country will be obliged to borrow abroad but has to face the consequences of 6.7% inflation according to Dominguez.

Consumer prices in the Philippines were up 5.7 percent in July, the fastest inflation rate in at least five years, the Philippine Statistics Authority cited.

Our credit lines abroad will go haywire after credit watchdogs Moody’s Investors Service, Fitch Ratings and S&P Global Ratings downgrade our borrowing worthiness.

The economic manager of President Duterte said the country’s investment-grade credit ratings, which makes it cheaper for the country to borrow money, may “go to hell” while interest rates could rise by up to 6 percent under the “very confusing” fiscal provisions of the draft federal Constitution.

 Filipinos' corporations that run banks and conglomerates in the country are punished to pay more interest on their debt abroad.

Many of them will forego their expansion while other will require their banking affiliates in the country to spike the interest to debtors where many would become discourage to borrow and invest the fund here.

The Federation thing becomes a nightmare as more unemployed Filipinos could not find jobs because of the lethargic number of investors who pour their monies in the country.

                                          FEDERALISM’S BOONDOGGLE

This profligacy called Federation will slowdown and aggravate the economy.

Without a clear solution to avoid this conundrum, the harbinger of boom like Consultative Committee member former Chief Justice Ricardo Puno, who did not know economics in his television interview, will instead bring us to doom, son of a gun!

For the meantime, we Filipinos should instead vigorously shake up our Senators who procrastinate on the revision of the Public Service Acts after the House of Representatives approved it last year.

The new PSA, the real deal, could draw more investors, generates more employment to our people where roughly 7.2 million were jobless last December 2017 (Social Weather Station) and creates more taxes to make this country “great” like Thailand, Taiwan, and Singapore that, mind you, are not Federal but unitary-parliamentary, unitary-semi presidential , and unitary-parliamentary, respectively.

So what are you talking Federalism as the silver bullet to take us off from being a pariah?

Those Asian countries economic vitality ensued not because they chopped their country into regions, just like what the pro federalism wanted it, but they use common sense, Holly Molly, to improve their business atmosphere how to induce more investors especially foreigners who are the spark plugs of their dizzying economic growth.

Many of these Regional Federal Governments can do too a 100 percent business atmosphere as come-on to investors.

But my pose: Why change the 1987 Constitution when Congress can revise the PSA and even change the present set-up of 60-40 taxes sharing as dictated by the Local Government Code in favor of the provinces, cities, and towns so they can have more monies for infrastructure build up?

As what our brothers and sisters in Mindanao clamored.

(Wait for my next column: Why resort to Federalism when Congress can amend the Local Government Code)

Federalism is not only risky but a waste of money if one’s target is to boost the economy of this country.

We have the necessary tools to do it as what I mentioned recently.

Let’s shake up our senators. Why are they delaying the PSA?

Is it because it’s election time and they need the aircraft and countless millions if not billions of pesos of these corporations that have been an oligopoly and became a fixture at the Forbes Global 2000 List of richest corporations in the world at the expense of the Filipino bloods?HesusMariaHusef!

(You can read my selected columns at http://mortzortigoza.blogspot.com and articles at Pangasinan News Aro. You can send comments too at totomortz@yahoo.com)