How does Federalism work? Will it work in the Philippines?

Of all the most important systemic and fundamental constitutional reforms that must be implemented in order to improve the Philippines, Federalism is the reform that has the most solid support among most ordinary Filipinos. Particularly in the Visayas-Mindanao and even in the Solid North, Bicol, and Muslim Mindanao regions, Federalism is widely appreciated and understood even by ordinary plebeians and proletarians to be of utmost urgency in order to fix the Philippines.

Sadly, there are members of the Philippine Elite who tend to be stubborn and uninformed. They are articulate and eloquent so they are able to pretend to be “in-the-know” by obfuscating the issues with their sophistry and casuistry and are dangerously able to convince other people to become just as ignorant and as anti-reform as they are. For instance, the Monsods – Christian and Winnie Monsod – have repeatedly over the years continued to keep mouthing a lie that some people have unfortunately mistaken to be true. This lie is that “Federalism will empower Warlords and Political Dynasties.”


Give us a break, Monsods!

Feudalism is what empowers Warlords and Political Dynasties! Not Federalism!

And Feudalism results from having a lousy economic system that favors only a small narrow elite to the detriment of the majority of the people in society who remain poor and economically disadvantaged because the economic system does not create enough opportunities for upward socio-economic mobility. The current pro-oligarch 1987 Constitution and its anti-FDI restrictions which keep job-creating foreign investors and international companies out is largely to blame for why jobs are so scarce, poor and unemployed Filipinos are the norm, why comfortable Filipinos are so few, and why most ordinary Filipinos need to work abroad as OFW’s just to be able to earn decent wages for them to live decent lives. Warlords and Dynasties emerge when so many people are poor and only a few people usually from the same family are rich enough to run for office. Warlordism happens when most people are so poor that they are forced to ask assistance from the rich warlords in exchange for services and allegiance.

In short, Warlords and Dynasties are an economic issue, not a political one.

Do you know how autonomy works? Within the context of parents and kids, it works like this… If you want to be more “independent and autonomous” and retain your own earnings and do whatever you want, then you leave your parents’ home and you cannot ask allowances from them anymore. If you remain dependent on your parents, then you have to follow their rules. You cannot do whatever you want.

Check out this analogy:


Under Federalism, regions will be forced to sink or swim. Warlord-types and political dynasties will no longer have the ability to pass the buck to the national government and blame it for why their region is poor. Under Federalism, a region will remain poor if its leaders are lousy and unable to set up pro-business economic policies that will create more than enough employment opportunities and economic opportunities for the people. “Warlords” will not be able to rely on monetary subsidies from the national government because Federalism will force them to be “on their own” in terms of their economic management. There will no longer be a mega-pork barrel like the PDAF under Federalism.

All that the national government (to be referred to under Federalism as “the federal government”) will directly handle is National Defense, National Law Enforcement, Foreign Affairs and National Diplomacy, the National Judiciary (Supreme Court), Minting Money and Coinage, Currency Management, and a few national regulations and coordination of a few other issues such as Education, Food and Drug certification and other similar issues at the national level.

Bringing in businesses, attracting investors – local and foreign, however, will be handled by the region-states. The direct implementation of Education policies will also be handled by the region-states. Essentially, the regions will be given the necessary powers to be able to handle all these concerns by themselves according to how they best see fit. A region may decide that they prefer to emphasize English language proficiency over that of Tagalog, partly because they don’t really use Tagalog as their local language and that English is more advantageous to them economically and in dealing with tourists. Whatever that is, a region may do what it thinks is best in terms of making them much more competitive economically.

So in a nutshell, here’s how Federalism works:
Federalism will allow the achievement-oriented regions who choose good leaders to set up really good economic policies that will attract lots and lots of investors to come to their region. More investors and businesses coming in means more jobs for the people. This means more people earning salaries, which means more people paying income taxes. More companies in the region also means more corporate taxes. More income taxes + more corporate taxes, plus more consumption taxes when people spend means more tax revenue for the regional government, which means more funds for the government for improving the infrastructure, improving the salaries of government workers to have quality people and greater efficiency, improving education, improving schools, school equipment, teachers’ salaries, etc. The region will become rich. The leaders of the region can also decide on paying decent official salaries for themselves to avoid needing to go through the corruption “kick-back” route. Overall, the well-run region develops and people in that region live better lives.
The lousy regions with lousy leaders will be left behind — temporarily — because the lousy leaders make lousy economic policies and no new businesses and investors come in and economic activity is weak, tax collection is low, there are no infrastructure projects, etc, the people of those left-behind regions will complain “why are these other regions doing very well and prospering while we are stagnating?”
Then the people will observe that the progressive regions have good leaders and good pro-business policies, etc… They will demand these from their leaders and the leaders who do not comply will be voted out and replaced.  Or perhaps the people and the businesses will leave and transfer to the more progressive regions. In fact, regions will compete against each other to attract the best and brightest Filipinos to come and resettle in their areas. Their first order of business is to try to attract their own people who left for Metro Manila lego ago when opportunities were scarce. With Federalism, the different region-states will do their best to attract their own people to return to their hometowns, bringing skills, know-how, and money to invest and live there, and contribute to the local economy.
Under Federalism, regions will no longer receive dole-outs and subsidies from the national government so the lousy politicians will have nothing to steal and enrich themselves when the people (taxpayers) and companies/business leave and transfer to better regions as a result of their mismanagement. (This is the trade-off of the regions not sending most of their money to the national government and retaining most of their own earnings within their region.)
Ultimately the inter-regional competition forces the leaders and in the regions to shape up and learn the best practices of the best regions. If there are regions that are doing well, other regions will emulate the best practices that the successful regions are doing.
The leaders cannot be sitting pretty because they will no longer receive PDAF/pork barrel and other subsidies from the national government under Federalism. Under Federalism, the regions themselves must generate the income that they will use to fund their own operational costs.
Now this needs to be emphasized:
Federalism cannot be done alone as a single “reform.” There are two other reforms that need to accompany it in order for it to work properly.
Firstly, for Federalism to work well in the Philippines we need to allow foreign investors to easily come in. No more idiotic 60/40 and other nationally-defined restrictions in the Constitution. Delete them all!
Remove them from the Constitution, remove them from national legislation.
Let the federalized regions determine by themselves if they want to restrict FDI from coming in.
Chances are very high that the best-run regions will be very open to foreign direct investors. The ones who are serious about job creation will allow FDI to freely flow in and thus will zoom up economically, while the ones run by idiots will try to restrict FDI and they will end up stagnating and staying poor. The disparity will be glaring and the people in the poorer regions will complain: “Why can the other regions succeed? Why are our leaders so incapable of making the right economic choices?” And then they get them booted out and replaced.
Ultimately, good leaders will emerge even in the poorer regions later on. The people from the poorer regions will not tolerate mediocrity after getting so fed up with mediocrity and seeing that other regions are able to improve.
It’s just like why we Overseas Filipino Workers generally tend to be pro-reform. We are exposed to other countries. Especially those of us who work in Singapore and Malaysia. We see with our own eyes countries that are in the same climate-zone, countries that have people that are not too different from ourselves, countries that back in the 1950’s were poor just like the Philippines – in fact we had a lot more going for us back then…
We have seen that it is possible for these other countries to succeed and move up and we ask “What’s keeping the Philippines from progressing?” We observe, we learn. We see that they have set up systems that work and have set up policies that are pro-business and meritocratic. No, they aren’t perfect societies, but they are clearly much more successful than we are. So we demand these reforms. This is why we OFW’s overwhelmingly voted for President-elect Duterte. We saw that he was the only candidate who was pushing for the same things that made all these other countries successful. We OFW’s overwhelmingly rejected the representatives of the lousy status quo.
Which brings me to the next point… If we need to boot out lousy leaders quickly and reward good leaders, how do we do that?
That’s why the second reform in support of Federalism requires that we put parliamentary systems in place!
At the National (Federal level) and at the Regional/State level.
Yes, at the state/region level they will need to have “mini-parliaments” just like in all Federal-Parliamentary countries. Canada’s provinces have provincial parliaments. Australia’s and Malaysia’s states have state assemblies. All are run as normal parliamentary systems where they also have no confidence votes and the ability for parties to instantly boot out non-performing top leaders.
In such a situation, if a region-state has lousy leadership, then the people can lobby their local state representatives for each state-district to replace the Chief Minister/Premier of the state/region. Or they can lobby them to call for new elections.

Whatever happens, with parliamentary systems set up at the state/regional level, the citizens of each region/state can more easily punish lousy leaders and reward good leaders with a continuation in office.

(It is also true that Parliamentary Systems are – ceteris paribus – less prone to corruption.)

And at the local levels, towns/municipalities/cities, there should be a shift to the parliamentary-like “Council-Manager System” which is much more responsive and accountable. It’s a mini-version of the parliamentary system at the local level.

(Click here to watch the documentary on the Council-Manager System)

We need more and more people to understand why Federalism is important and why (a) removing the 60/40 and all other anti-FDI restrictions and (b) using parliamentary systems at ALL levels is the way to go.


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