SOME of the biggest business groups in the country supported the call of Philippine economic managers for legislators to weigh the costs and risks of federalism as Congress studies the proposed charter drafted by the Malacañang-backed Consultative Committee (Con-com).
They are concerned about the “ambiguous provisions” in the draft charter on the division of revenues and expenditures between the federal and regional governments.
“Reports indicate an alarming cost to the would-be multilevel government under a federal system,” the groups said in a statement.
Among those that signed the statement were the Employers’ Confederation of the Philippines, Philippine Chamber of Commerce and Industry, Makati Business Club, Management Association of the Philippines, Philippine Exporters Confederation, Financial Executives Institute of the Philippines, and the Cebu Business Club.
Preliminary estimates on the cost of federalism range from P72 billion to P130 billion while the fiscal deficit could reach 6.7 percent of the gross domestic product, or way above the 3-percent target seen as sustainable by economic managers, they said.
“We worry about the dire consequences that such fiscal imbalance could have on the economy and the flagship Build, Build, Build program of the current administration,” the business groups said.
Last week Finance secretary Carlos Dominguez said he would “absolutely” vote against the draft federal charter because it did not address important issues about the economy and could not be subjected to financial analysis.
Budget secretary Benjamin Diokno also said the draft charter had “so many issues,” including national debt payment.
Socioeconomic Planning Secretary Ernesto Pernia, meanwhile, was quoted in cable news channel One News in July warning of the possible damage the shift to federalism could inflict on the country’s fiscal position.
A member of the Con-com called on President Rodrigo Duterte to “sack Dominguez and Pernia or command them to keep their traps shut” after their comments on federalism.
Federalism remains a priority, Malacañang has said.
Meanwhile the business groups said they support a more detailed analysis of the fiscal impact of federalism that will serve as basis for deliberations in Congress.
“We encourage full, open and dispassionate dialogues on this proposed shift in form of government, keeping in mind its long-term impacts on future generations of Filipinos,” the groups said. (ABS-CBN News)
