PCCI head airs economic concern over federalism shift

MANILA, Philippines — The head of the Philippine Chamber of Commerce and Industries (PCCI) has urged the government to keep its eyes on the pressing issues of the economy amid uncertainties on the proposed shift to a federal form of government.

In an interview with the program The Chiefs aired on One News, PCCI president George Barcelon said businessmen are “not against federalism per se” but urged the government to exercise due diligence in enacting Charter change.

He said the government has to address first a “firm economic base” that attracts investors and grows industries to have money to run the shift to federalism. 

“My point is, we’ve got pressing issues. We have to have our eyes on the ball, on the economy,” he added.

He noted that the Duterte administration’s economic managers have brought up some key issues on federalism that have yet to be addressed.

Former finance minister and prime minister Cesar Virata said that he is concerned that only about four regions can be self-sustaining once the shift to federalism pushes through. 

Virata recalled that he recommended that there be only three states if the government wants to experiment with federalism. 

Barcelon also raised concerns on where to get managerial talent for the public sector for each of the branches of government per state. 

“More consultation is needed wherein as of now we feel that this has been given a broad brush stroke that has given people high hopes as if we jump into this, things would work out. We feel that it may be too early to say that,” the PCCI executive said. 

Virata also said that former speaker Feliciano Belmonte and Sen. Franklin Drilon’s economic charter change proposal is a “doable” alternative. 

Members of the consultative committee (Concom) that President Duterte formed to draft the proposed federal constitution will meet with the government’s economic managers to discuss fiscal issues related to the shift to federalism.

In a meeting with members of the Rotary Club of Manila yesterday, Concom chair and former chief justice Reynato Puno said that the panel would meet with the economic managers “to compare our prospective numbers.”

“I have no doubt that we can arrive at a fiscal formula that is best for the country and that is best for the people,” he added.

Puno noted that the Concom would like to address the “misgiving of some economic managers,” saying “their belief that the fiscal formula which is embedded in the draft federal constitution can’t be improved.”

Finance Secretary  Carlos Dominguez III earlier warned that the shift to federalism could lead to a “fiscal nightmare” if not managed properly.

Socioeconomic Planning Secretary Ernesto Pernia said such move could raise fiscal deficit up to six percent of the country’s gross domestic product, which might lead to downgrading in the country’s credit ratings. – With Ghio Ong