Federal shift to cost P20 billion —DILG official

MANILA, Philippines — A shift to a federal system of government could incur for the country an additional cost of P20 billion, an official of the Department of the Interior and Local Government (DILG) said.

Jonathan Malaya, DILG spokesperson, said their computation pegs the shift to only around P20 billion – a figure higher by more than P6 billion compared to the consultative committee (Concom)’s estimate of only P13.54 billion, but lower than the estimate of up to P253 billion cited by Socioeconomic Planning Secretary Ernesto Pernia last week.

“The way we see it, economic managers do not oppose a shift to federalism. They support federalism but would want to focus on preparing the economic fundamentals for federalism to be fully implemented. This includes infrastructure and real dispersed regional development,” he pointed out.

Malaya said the DILG appreciates that people are now coming forward to share their thoughts on the draft model. 

“And we are actually encouraging these conversations because, at the end of the day, it is the Filipino people who will decide what is best for the country,” he added, giving assurance that consultations and technical discussions with economic managers would continue so they could be united in the push for federalism.

“We are a government united behind the desire of the President for real change that includes structural reform, thus creating a government and a society that is more able to serve the needs of all our peoples,” he stressed.

So far, the government has conducted federalism roadshows in Dumaguete, Cebu, Baguio, Legazpi, Davao and Tacloban cities. The DILG also opened its online Pederalismo platforms where the public can send their questions and feedback on the Concom’s proposed charter.

Meanwhile, Budget Secretary Benjamin Diokno said the country’s transition to federalism should not take 15 years as recommended by the National Economic and Development Authority (NEDA).

“Fifteen years is too long to have a change in government... I disagree with the projection. If it takes that long, it won’t happen anymore. It is only the President who is very keen on federalism,” Diokno told reporters.

Earlier, NEDA said the shift to federalism should be carried out in five phases over a 15-year period to prevent disruption to the country’s economic growth. It also warned that the transition could cost the government as much as P243.5 billion every year due to the implementation of the proposed Equalization Fund and the need to put up additional offices in the federated regions.

NEDA undersecretary Rosemarie Edillon said the country’s deficit ratio could balloon to 6.4 percent of the gross domestic product (GDP) as a result of fiscal pressures such as the additional expenses to run the system and the sharing of revenues between the federal government and the regions.

But Diokno questioned the assumption that shifting to federalism would necessarily translate to higher spending, arguing that this would depend on the structure of the new government, particularly in the regions, and the number of positions and manpower needed.

He added that an increase in fiscal deficit could be curbed by implementing budget cuts. He maintained that the government is not willing to compromise the deficit ceiling, which is currently equivalent to three percent of GDP.

The budget cuts, he pointed out, usually refer to projects.

However, despite this, Diokno said projects that are not funded in the General Appropriations Act could still be implemented through public-private partnership. – With Mary Grace Padin