Creative Commons Attribution 4.0 International (CC BY 4.0) 2018 Institute for Leadership, Empowerment, and Democracy (iLEAD)

The Institute of Empowerment The Institute for Leadership, Empowerment, and Democracy, Inc. is a non-stock, non-profit think tank consultancy and resource center that focuses on strategic policy work to strengthen democratic institutions.

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Some rights reserved. Published on February 12, 2018.

This paper is a report for the Round Table Discussion on federalism held on December 13, 2017. All views expressed in the discussion by resource persons, participants, and moderators do not imply endorsement nor necessarily reflect the views of the Institute or its Board of Trustees.

This work is available under the Creative Attributions 4.0 license (CC BY 4.0) https:// creativecommons.org/licenses/by/4.0/. By using the content of this publication, you agree to be bound by the terms of this license. Discussion Paper: Is Federalism the Answer to Sectoral Questions?

Institute for Leadership, Empowerment, and Democracy With support from Friedrich Naumann Foundation 13 December 2017 Quezon City

Forum Documentation prepared by Czarina Medina-Guce, M.A. Valeene Salanga Ana Martha Galindes Robert Sanders

Institute for Leadership, Empowerment, and Democracy Website: www.ilead.ph Facebook: Institute for Leadership, Empowerment, and Democracy Twitter: twitter.com/iLEAD_PH Email: [email protected]

TABLE OF CONTENTS

Introduction ...... 1

I. Overview ...... 3

II. Discussion ...... 4

A. Federalism vs. Charter Change ...... 5 B. Process, timeline, and purpose ...... 6 C. Fiscal viability of regions and economic impact ...... 7 D. Political dynasty and corruption ...... 9 E. Citizens participation and social justice ...... 9

III. Recommendations and Alternative Tracks ...... 11

Synthesis ...... 13 INTRODUCTION

In December 2016, half a year into his term, President Rodrigo Duterte signed Executive Order No. 101, which created a 25-man consultative committee to revisit the 1987 Constitution. Though it is yet to convene, as of this writing, 19 out of 25 of the review body’s members have already been appointed. Concurrently, conversations on Charter change (Cha-cha) have been prioritized by Congress, manifested by resolutions to form either a Constituent Assembly (Con-Ass) or a Constitutional Convention (Con-Con) filed in both Houses. In this light, political figures and advocates have been open with their expectations. The emergent timeline currently pegs May 2019 as the target period for federalism polls, with the possibility of being included as a ballot item in the midterm elections2.

As of writing in February 2018, there exist two main proposals for amending the constitution: the (1) PDP-Laban version and (2) Resolution of Both Houses 008 (RBH008). Fully-drafted and already filed in the House of Representatives, both charters provide for a change in government structure from unitary to federal. A subcommittee from the same House also drafted some salient features of a proposed Constitution, after its review of Articles VI, VII and X of the 1987 Constitution.

Several government and non-government groups have been involved in the Cha-cha conversation throughout the country. The Department of the Interior and Local Government (DILG) has been conducting multiple nationwide orientations through barangay assemblies, and has recently been tasked to lead the campaign for federalism by President Duterte himself. PDP-Laban, the President’s party, has also held similar fora all over the Philippines, while

1 Executive Order No. 10 “Creating a Consultative Committee to Review the 1987 Constitution”. Access at: http://www.officialga- zette.gov.ph/downloads/2016/12dec/20161207-EO-10-RRD.pdf

2 “2019 polls to proceed, may include federalism plebiscite: Speaker” (ABS-CBN News, January 22, 2018) Access at: http://news. abs-cbn.com/news/01/22/18/2019-polls-to-proceed-may-include-federalism-plebiscite-speaker 1 its Federalism Institute recently launched a book3 presenting its model for the Philippines. Likewise, various private and political organizations, think tanks, and academic institutions have organized similar events on the proposed reform.

Frequent as they may be, these discussions have always dealt with federalism in broad strokes, which are focused on the benefits of the proposed further decentralization of powers and resources4. This big-picture approach barely seems to leave an impression. As shown by a March 2017 Pulse Asia survey, “charter change” ranks low at 3% in the list of Filipinos’ urgent national concerns5.

Feedback from civil society shows that there is a need for more grounded and specific conversations that explain federalism in the language of day-to- day. Quality-of-life questions, such as, “Will federalism solve our traffic crisis?” and, “Will housing and education be more accessible?” have to be asked and addressed, in order for citizens to make well-informed choices. Though the questions seem to be indirect to the questions of federalism and constitutional change itself, it is necessary to provide a venue for the real questions to be addressed to bring the conversations to the level that makes an impact to the realities of the ordinary citizens.

It is with this premise that the Institute for Leadership, Empowerment, and Democracy (iLEAD), with the support of the Friedrich Naumann Foundation (FNF) and in partnership with the Ateneo Policy Center, conducted a Round Table Discussion (RTD) on December 13, 2018, guided by questions from sectors, communities, and citizens. Prior to the RTD, intimate sessions were held among issue experts to consolidate their works and studies related to the Chacha- Federalism proposals.

This report aims to capture the insights that were generated during the discussion and inform succeeding conversations on the issue.

3 January 2018. The Quest for a Federal Republic: The PDP-Laban Model of Philippine Federalism 1.0. PDP-Laban Federalism Institute.

4 Ibid. See also: PDP Laban Model of Federalism at http://ncpag.upd.edu.ph/wp-content/uploads/2017/05/PDP-Labans-Mod- el-of-Federalism-April-2017-2.pdf

5 March 2017 Nationwide Survey on National Urgent Concerns and the Performance Ratings of the Duterte Administration. Pulse Asia Research, Inc. Access at: http://www.pulseasia.ph/march-2017-nationwide-survey-on-national-urgent-concerns-and-the-per- formance-ratings-of-the-duterte-administration 2 I. Overview

The RTD was conducted on December 13, 2017 in Quezon City to provide a platform for an informal discussion based on questions from sectors, communities, and citizens. The RTD was attended by 80 representatives from civil society organizations, academic institutions, local government units, and the press. iLEAD Executive Director Czarina Medina-Guce moderated the discussion between the audience and a panel of issue experts in Q&A format.

PANEL OF ISSUE EXPERTS

Prof. Ronald Mendoza Prof. Mendoza, currently dean of the Ateneo School of Government (ASOG), is an economist and development professional with an extensive background in interna- tional development policy and international cooperation. He co-authored “Debate on Federal Philippines: A Citizen’s Handbook” published by Ateneo University Press, and “An Empirical Analysis of Political Dynasties in the 15th Philippine Congress” published by Asian Institute of Management Policy Center.

Atty. Michael Henry Yusingco Atty. Yusingco is a practicing lawyer, published author, and legislative and policy consultant. He is a lecturer in the University of Asia and the Pacific School of Law and Governance, non-resident research fellow at the Ateneo School of Government, and author of the book “Rethinking the Bangsamoro Perspective.”

Prof. Edna Co Prof. Co is the director of the University of the Philippines-Center for Integrative and Development Studies (CIDS). She is a professor of public administration with spe- cializations on campaign finance, citizenship, democracy and governance, electoral administration and reforms, organization studies, policy and advocacy, and public administration education. She served as dean for the University of the Philippines National College of Public Administration & Governance from 2010 to 2013

The RTD was envisioned as an opportunity to link evidences and expert analyses to grounded and practical concerns of Filipinos. Prior to the discussion, iLEAD gathered preliminary insights from the public, with respondents coming from various groups and sectors. The gathered questions were clustered in six (6) categories — on the process of the shift to federal form of government, poverty and economic growth, taxes and finance, peace and security, defense, corruption and bureaucracy, and social services and citizen participation (See Annex A for the summary of the gathered questions). Hence, it was designed to respond to queries on how proposed changes to the Constitution affect the worries of citizens, and if can be addressed by the proposed reform.

3 II. Discussion

The conversation opened with preliminary remarks on the objectives and rationale of the RTD, anchored on key problems that sectors and stakeholders foresee. The summary of questions gathered pre-RTD were presented, and members of the panel initially were asked to give their take on the issues.

Prof. Mendoza brought up that in current dialogues, perhaps the strongest case for federalism is the concept of Imperial Manila. As the argument goes, the current unitary and centralized form of government naturally tends to focus all resources to its seat of power. Because all heads of government are found in Manila, it follows that a large chunk of its most comprehensive services are to be situated there as well. This then also affects the behavior of the private sector, who flock to “global cities” and commercial centers for the ease of doing business. While all other regions of the country contribute to financing the government, Manila enjoys a disproportionately large amount of funds, while the rest struggle with development. Further aggravating the problem are national policies mismatched with local needs.

The proponents of federalism have framed the conversation in such a way that the drastic decentralization of government powers will break Imperial Manila’s monopoly on development, enabling other regions to fulfill their economic potentials and grow. Shifting to federalism was said to cause an overall improvement in the quality of life, with promises of new infrastructure, employment, stable livelihood, and peace.

Atty. Yusingco, however, pointed out that federalism is not a fixed and unchangeable idea, and presenting it as a silver bullet to all the country’s problems is wrong. He noted that the framing of further talks on federalism should be based on the design or model that the government will introduce or endorse. He explained that there are two major proposals being considered at the moment:

1. RBH 008, by: Aurelio Gonzales, Jr. and Eugene Michael De Vera. The joint resolution moves for both houses to convene as Constituent Assembly and the revision of the 1987 Constitution to shift to a federal form of government.

2. PDP Laban Proposed Amendments to the 1987 Constitution of the Republic of the Philippines. This proposal is forwarded by political think tank, PDP-Laban Federalism Institute moving to abandon the current unitary system and shift to a federal system of government.

4 These proposals aim to constitute a direction for genuine devolution of powers and resources to local governments and actors, carried out at a pace that develops institutional capacities, and professionalizes roles and performance systems. Some of the suggested changes are listed as follows:

• Shift from a unitary form of government to a federal form of government with the President as the Head of State, the Prime Minister as the Head of Government, and the Federal Legislature composed of the Federal Assembly and the Senate.

• Creation of States and changes in the economic provisions, empowering regions to draft their respective development plans. In this set-up, States retain 80% of their total revenue, while 20% is remitted to the Federal (national) Government.

• Change in the country’s constitutional division, as both Federal Government and the Regional Governments are given sovereignty and autonomy. Regional, local self-rule and self-reliance in governance are emphasized, while espousing the principle of subsidiarity.

• Inclusion of political dynasty regulation provisions that will ban relatives up to second degree of consanguinity or affinity from running for or holding positions within the same jurisdiction.

Other proposals and iterations of the provisions are expected to emerge as the Cha-cha talks continue in Congress.

A. Federalism vs. Charter Change

Atty. Yusingco emphasized that the goal of federalism is to decentralize the powers of the government. Charter Change, on the other hand, is a broader discussion of institutionalizing reforms within the Constitution, possibly beyond federalism. He said that distinguishing between the two thoughts should be clearly established as the nation moves forward in perusing the proposals.

The session highlighted the importance of this distinction. Prof. Edna Co signified her concern that amending the Constitution might introduce wide-range reforms, which will depend on the political mood of lawmakers. She testified to the lack of clear and concrete limitations set by Congress in reviewing the Constitution. She further stressed that Cha-cha is a risk that opens up the possibility of good provisions, which people are currently benefiting from, being amended out of the Constitution.

A recent study by the Philippine Institute for Development Studies (PIDS) found that federalism entails the “establishment of bigger middle-level governments that are capable of absorbing more powers devolved from the national government”6. Should Cha-cha proceed, it was agreed upon that the proposed charters should reflect such

6 Miral, R. (2017) Federalism: Prospects for the Philippines. 5 findings; to facilitate a balanced distribution of resources and powers between the national and subnational governments.

Focusing on the PDP-Laban Proposal7, Atty. Yusingco pointed out that while the document claims to institute federalization, most of its provisions on devolution of powers and resources are not self-executory. He said that it is a mere reiteration of the current decentralized system, but changes the government into a semi-presidential/ parliamentary-presidential hybrid system, which has an unclear link to the federalist agenda.

B. Process, timeline, and purpose

Prof. Mendoza explained that, though counter-intuitive, the purpose of federalism is actually to strengthen and unite a country by addressing inequalities. He noted that there is a lack of trust and participatory governance in the exercise of reform, which is why federalism is being packaged as a solution to a failing system.

Picking up on this point, Prof. Co reiterated the long-standing position of the Center for Integrative and Development Studies: that changing the form of government will not solve poverty and economic concerns. She insisted that the current Constitution should not be subjected to “surgery” because essential democratic provisions— such as mandatory participation of non-government organizations in government processes, human rights, and social justice—might be lost or diluted.

“Constitutional change is not a response to our problem on poverty and unevenness of development across the regions. If we change our Constitution, we will open the surgery of the Constitution, in which there is a possibility to lose those that are considered good provisions which we have struggled hard to achieve (in building a) democratic government.” - Prof. Edna Co

Atty. Yusingco also noted that there is no straight answer to the question of when a new Constitution might be ratified. He said that the House of Representatives, through the Committee on Constitutional Amendments Chairperson Roger Mercado, was to begin deliberating on federalism options by January 2018. As of writing of this report, there are talks that the House of Representatives intend to ratify a new Constitution in the first quarter of 2018, which will be followed by a plebiscite in May 2018 coinciding with the barangay elections8.

7 PDP Laban Proposed Constitution of the Federal Republic of the Philippines, http://iag.org.ph/index.php/news/1506-read-pdp-la- ban-proposed-constitution-of-the-federal-republic-of-the-philippines

8 No elections in 2019? Anything is possible - Speaker (ABS-CBN News, December 2017) 6 Prof. Co cited the case of Switzerland, where instead of “federalism,” thinkers call it “federalization” as a reflection of it being a process. Delving into this model, she said that the proposed changes did not happen over six years, under a single president. The benefits that the Swiss reap from the reforms (i.e. strong local governments, empowered communities and citizens) are a product of years of studies translated into careful refinement of governance and political structure.

Following through, a member of the agrarian reform group KAISAHAN indicated that the exercise of Constitutional amendment should be more participatory, given the complexities of changing the government’s form. He said that the process should not be expedited, as most of the changes should require broader discussions and citizen participation. This was supported by a participant from the province of Leyte, who signified his support for federalism but expressed his concern on the process and the limited space that Constitutional amendment may provide for the people.

Atty. Yusingco responded by underlining the importance of the plebiscite, in which people will decide whether to approve or reject the proposal. He noted that the plebiscite is vital, as it constitutes the final and approving step in this whole process. Prof. Co suggested tapping their respective congressmen as direct representatives in Congress to concretize into lobbying the participants’ concerns.

C. Fiscal viability of regions and economic impact

A participant from Negros Occidental said that through the years, majority of the projects of the national government were concentrated in central or capital areas, leaving only about 20% to local governments. Moreover, he expressed his concern over the lobbying practices of pro-federalists. He recounted being told that federalism will bring prosperity across the regions, with a massive expansion of airports and shipping ports. He was also told that federalism would bring an end to Imperial Manila. He then noted that these claims have a good chance of convincing poor and marginalized locals. This was seconded by another participant from Negros, who proceeded to question the readiness of regions for federalism, as well as its impact on their lives.

7 On related existing analyses on the issue, PIDS9 research fellow and professor Rosario Manasan cautioned that federalizing the country without a strong fiscal equalization formula could worsen regional inequality. She noted that the risk is high given that the initial condition is bad to start with. For federalism to work, equalization transfers to other states or regions are required to offset differences in revenue-raising capacity or public service cost. She estimated the additional fiscal burden of adding another layer of bureaucracy to be around PHP 30 billion to PHP 59 billion annually, depending on number of states, size of legislative body at state government level, and size of second chamber. A further study by Joel Rocamora, former Secretary of the National Anti-Poverty Commission, found that a total of PhP1.18 trillion will be needed for a federalist Philippines to maintain thirteen states, assuming they are equivalent to the administrative regions, and PhP2.4 trillion for the federal government. Given sharp inequality of regional economic activity, even if new taxing powers will be given to federal states, he asserted that only three regions are financially viable: National Capital Region (NCR), Central Luzon, and Calabarzon. Only these three regions can generate enough revenue to support its expanded share of services. End of the game, we will only recreate the current system where the central government subsidizes most of the regions. Numbers aside, analysts consistently affirm that shifting to a federal form of government will require tremendous time and resources.10

Prof. Mendoza remarked that the agglomeration of investments and spending in Manila is somewhat self-reinforcing because it is the locus of all line agencies and main industries. Though he conceded that a historical pattern partially explains Manila- centrism, he said that it would be more useful to evaluate whether there has been success in reducing the inequality gap among engines of growth for the last 20 years; and if federalism will correct or improve this. He reminded everyone of the danger that federalism will only facilitate more control for political dynasties, which will only aggravate socio-economic problems.11 He said that while projections are positive for well governed areas, badly governed areas will get poorer.

“May dalawang grupo ng mga probinsya at region — yung mga well governed ang asenso ay potentially mas mabilis, yung mga poorly governed, maaaring hindi magbago o mag-regress pa nang mas lalo. Mas lalo pang hindi uunlad dahil sila ay badly governed pag hindi corrected yun, baka mas lumubog pa sila ng mas grabe. So there would be more inequality. (There will be two groups of provinces and regions — those well governed and poorly governed. Those well governed provinces will rapidly progress while those poorly governed will regress even more. So there would be more inequality.)” - Prof Ronald Mendoza

9 Development Policy Research Month, Analysts Warn Shift To Federalism Could Worsen Regional Inequality

10 Duterte’s Federalism Project: Can it still be Saved? By Rocamora, J. (2017)

11 Emphasized in Dynasties Thrive under Decentralization in the Philippines by Mendoza, R. and Banaag M. (2017)

8 Prof. Mendoza further noted that there are existing initiatives that are successful in improving governance. There are innovations such as the Department of Interior and Local Government’s Seal of Good Local Governance12, which is an opportunity to detect and correct governance mistakes of local governments. He echoed the earlier point of Prof. Co — the main risk of federalism, as a whole-system reform, lies in the endangerment of good practices, policies, and programs that are currently working well for the country. The challenge for reformists lies in correcting the deep-seated political and economic inequality that continues to divide the country. Unless these are adequately addressed, merely applying a new governance system—even one as ambitious as a federal set-up—on top of existing inequities, risks producing very little change or worse, producing more harm.

Atty. Yusingco asserted that the set of questions reflect misconceptions on federalism. The question that the people should be asking is, “How will the quality of living of Filipinos be improved through federalism?”. He then encouraged the participants to examine proposals because it is only through this that our questions will be answered correctly.

“The questions we should be asking is, ‘paano ba giginhawa ang buhay ko sa pamamaraan nang federalism? Ano sa pederalismo ang makakatulong sa akin, ang tutulong doon sa mga mahihirap na rehiyon?’ (How will my life be improved through federalism? What is in federalism that will help me and the poor regions?) Federalism is not a fixed and unchangeable idea. Federalism is a matter of design based on the current proposals. We should be asking the promoters of federalism what is in their design.” - Atty. Michael Henry Yusingco

D. Political dynasties and corruption

Atty. Yusingo pointed out that the PDP-Laban proposal holds good provisions on political dynasties. The proposal improves measures on the challenge of proliferation of political clans by raising the bar up to second degree of consanguinity. This was stated as a response to the query of a representative from the Council of Asian Liberals and Democrats (CALD) on the guarantee of provisions or measures to address or block dynasties from existing in the current proposals.

12 Piloted in 2010, the Seal of Good Housekeeping assesses local government operations in terms of financial housekeeping in compliance with Commission on Audit (COA)’s accounting and auditing standards and the Department of the Interior and Local Government (DILG)’s Full Disclosure Policy. This was scaled up in 2014 as the Department expanded its criteria forming the Seal of Good Local Governance (SGLG). The Seal was awarded to 306 LGUs in 2016 and 448 in 2017. 9 Prof. Mendoza, who conducted several studies on the country’s political dynasties13, indicated evidence that the growth of fat dynasties is associated with deeper poverty. This was found to be most prevalent in the provincial periphery, where warlordism and traditional politics continues to thrive. He said that the expansion of dynasties is projected to deepen under federalism. As he strongly emphasized, this should be addressed first, else we will just subject the country to a transition that will not make much of a difference with respect to governance.

Tackling more on the frame of politics and governance, Atty. Yusingco drew attention to the PDP-Laban model’s proposal of a semi-presidential/parliamentary-presidential hybrid system, displaying an unclear link to the federalist agenda. He noted that it will, in contrary, create a bigger imperial Manila and a more complicated centralized government. He also pointed out that the proposal lacks transitory provisions, rendering governance ambiguous for the changeover period.

E. Citizen participation and social justice

The discussions revealed issues on citizen participation and how sectors worry about their response to the proposed changes.

A participant raised concerns on social justice and agrarian reform, asserting that there have been reports of social justice provisions being removed from the Constitution, and instead be transferred to the level of regional and local governments. This, he said, is a concern, because the successes in lobbying from the agrarian reform groups have been historically achieved through mobilizations and campaigns to the national government. If the powers of decision-making on social justice and agrarian reform issues will be transferred to regional governments, then the marginalized farmers and fishermen would be largely unprepared to disaggregate efforts across the many States.

13 Emphasized in Dynasties Thrive under Decentralization in the Philippines by Mendoza, R. and Banaag M. 10 This concern was reiterated by a participant from the farming community who talked about citizens’ exercise of their freedoms of expression and assembly. He said that altering government layers would entail a new set of method of demonstrations, rallies, and lobbying. This turned out to be a shared concern among people’s organizations. A legislative staff from the House of Representatives followed this up with a question on the implications of the proposed reforms to democratic institutions and practices.

A representative from the Caucus of Development NGO Networks (CODE-NGO) followed through with an inquiry on the scope and applicability of laws and programs in relation to the broad concerns of farmers, IPs, urban poor, and other sectors. After which, a participant from Negros Occidental pointed out the trend of polarization between supporters and critics of the administration. This, he said, will hinder the nation to reach a healthy consensus on the debates, especially in time of the plebiscite.

A Women and Gender Institute (WAGI) representative brought up issues for women, underlining a recommendation that the new Constitution should introduce gender provisions to allow national and subnational policies to conform to international laws; and to mandate focus on special measures concerning the sector.

Atty. Yusingco asserted that these concerns are more fitting as legislative debates and may not be necessarily answered under the federalism discussions. The two proposals, he said, do not touch social justice provisions that much. Citizens can exercise their rights under whatever setups, unitary or federal. This can only be changed if provisions on human rights and social justice will be removed in the new Constitution. He further clarified that both proposals imply not much of a change to the Constitution to some degree, and the proposal actually added improvements on the said areas.

11 For Prof. Mendoza, citizen empowerment follows deeper nuances. Empowered citizenry can be manifested by the citizens contesting traditional politicians. He said that with the current landscape, only three regions in the country have vibrant middle class that account for almost 60% of the country’s GDP. It is in these areas, mostly urban and with arising middle class, where new and young leaders usually emerge.

III. Recommendations and Alternative Tracks

In the pursuit of questions and concerns from the public, recommendations and alternative routes, in lieu of the proposals to amend the Charter have also been generated. Seen as long-shot democratic reforms, advocates maintain that the introduction of the mentioned legislative measures can make progress, albeit incremental, towards full socio-economic growth. These alternative tracks include:

• Review and strengthen the Local Government Code (LGC). As the landmark law that has redefined and shaped the LGUs of today, it is only fitting for it to be reviewed and amended following twenty-seven years after its enactment. The federalism promise of more resources for LGUs can be alternatively realized through the Code, which sets the national-local revenue sharing scheme of the country. This will specifically target reforms on Internal Revenue Allotment (IRA) and other resource transfers as well as on devolved functions to the LGUs.

• Institutionalization of progressive reforms. As it has been emphasized in various discussions, it is vital that we do not just enhance the systems but our leaders, as well. Reforms geared towards effective and corrupt-free leadership, such as the enactment of the Political Parties Reform Act and Anti-Political Dynasty Act, among others, should be in place.

Prof. Co also presented a study she co-wrote with colleagues from the University of the Philippines as an alternative proposal to federalism. The “Natural Region as Fundamental Framework for Restructuring and Governance Reform”14 advocates for identifying common natural resources as basis for delineating boundaries. The current configuration of the country’s boundaries has led to an uneven level of development across the country in terms of each region’s access to rich natural and economic resources. This responds to the challenges that some regions are poor by virtue of their geographic location.

14 Natural Region as Fundamental Framework for Restructuring and Governance Reform by Co, E., Regunay, J., Gomez, K.M., & Gamboa, M.A. 12 Their study is aimed at looking into the sustainability of resources and vulnerability to natural disasters as guide and criteria to which we delineate regions and provinces. By delineating boundaries based on access to and common features of natural resources, it will allow local governments opportunity to take advantage of and use these natural resource for development and growth. The delineation of boundaries and the understanding of natural resources thereat allows for proper planning of the demands needed to development and exploit the area. This approach assumes the end goals of poverty reduction, even territorial development, and empowered local players.

Their study proposes a set of guiding principles in creating these subregions: inclusiveness, participation, sustainability of development, solidarity between and among territories, accountability, and capacity for self-rule; and (2) guiding approaches such as hub and spokes, amalgamation of territories, and cooperation/complementarity or having an inter-connection/cooperation among developed and strong areas and underdeveloped and weaker areas.

For the initial proof of concept of this framework, Prof. Co and her team studied the Western Mindanao as a case study. They’ve chosen Western Mindanao area because of its shared natural resources as an island economy as well as the common ethnicity, language, and historico-cultural traditions. Moreover, the area has one of highest poverty incidence in the country and there’s an opportunity for Western Mindanao to be development corridor due to its strategic location and porous borders.

As an island economy, it is only logical that the region should have programs aimed at developing experts and leaders in the marine industry and yet the highest number of enrollee is in the area of education and training with number of enrollees in courses on agriculture, forestry, and fisheries is almost the same with the number of enrollees in courses on information, engineering, and technology. And yet, in the course of Dr. Co and her team’s study, in terms of industry potential, the Western Mindanao region holds comparative advantage in products that are available region-wide and in various stages of industrial production such as marine and fish products and seaweeds processing. By developing technical expertise and capability and as supported with adequate local policy that are apt for the exploitation of these natural resources, this can yield economic gains that is supportive of development growth.

13 Synthesis

The experts represent different stances in the Cha-cha-Federalism discourse. Edna Co affirms her opposition of changing the Charter because: (1) it is not the solution to address the challenges that the country is facing; and (2) the manner and processes of engagement of the government is questionable. Prof. Ronald Mendoza and Atty. Michael Yusingco both raised red flags and conditions but are still committing to engage in the process. This seems to be the same pattern in the broader national debate, as well. Joey Lina, a former local government official, senator, and Secretary of the Interior and Local Government, opposes the shift as he believes that the 1987 Constitution already reflects the principles of local autonomy and decentralization.15 Former Chief Justice Reynato Puno, a federalism advocate, favors a hybrid constitutional commission, composed of both elected and appointed delegates, over con-ass relative to the process of amending the Charter.16 Another former Chief Justice, Hilario Davide, believes that there is no need to amend or revise the Constitution, citing the 1987 Constitution as the ‘best’ for Filipinos.17 The spectrum is clearer with these set of well-structured positions.

But what about the stakeholders? Zeroing in on sectoral questions, it can be discerned that people are still struggling to locate themselves in the spectrum as reflected by the subset of sectors that we have engaged in the RTD. The wide range of questions that were raised affirms the need to link the federalism conversations to practical questions and how it will impact the everyday lives of Filipinos. While the initiative has been carried in many discussion platforms, there is a significant gap to connect the proposals to grounded and real concerns of the citizens.

15 Natural Federalism is already in 1987 Constitution; no need to change it (Manila Bulletin, 2018) by Lina, J. 16 Puno: Opting for Con-ass over Con-con because it’s cheap is a ‘cheap argument’ (Inquirer.Net, 2018) by Roxas, P. A. 17 Davide: 1987 Constitution best for PHL; shift to federalism a ‘plunge to death’ (GMA News Online 2018) by Alvarez, K. C. 14 The discussions should be broadened to take these concerns into account as the citizens build on their discernment. Moreover, the discussions need to be nuanced to both evidence and practical concerns, contrary to what may be seen as ‘promotional’ sessions on possible gains from federalism. As evidenced in the feedback from the RTD participants, the citizen sectors have firm concerns about Cha-cha and federalism. The challenge to advocates, whether they are supportive or opposing, is to make clear the real implications of the proposals to the people.

Reaching a sound resolve in this national debate would take both a platform for engagement and well-informed decision makers. Looking at it through a supply- demand framework, the government must provide spaces for participation and consultation with the citizens while the citizens must have enough capacities to make well-informed decisions. Overall, there is a need for a structured argument that will allow the citizens to firm up their positions.

The Institute for Leadership, Empowerment, and Democracy will springboard from these discussions and engage sectors more in succeeding roundtables and fora, to contribute to sound and informed decisions following the progress of the Cha-cha and Federalism debates.

15 ANNEX A. QUESTIONS FROM SECTORS AND COMMUNITIES

As part of the preparation for the RTD, iLEAD circulated an online document to sectors and community leaders gathering any and all questions they have regarding federalism. Below are the list of questions gathered divided into key themes:

On the process of shift to federalism: • Mamadaliin ba ng Gobyernong ito ang pagpapasatupad ng Federalism? (Is the government rushing the implementation of Federalism?) • What form will the proposed federalism take? Why are we breaking apart one country? Will Charter Change only address the shift in federal form of government? • Do any of the proposals indicate how much funding is needed and where will this be sourced? Will the country sustain significant spending for the shift? What are the implications and fiscal burden?

On poverty and economic growth: • How will federalism address imbalance of economic activity in each region? Won’t NCR progress further while the others remain stagnant? Are we ready, in terms of financial viability of the provinces/regions? How will Federalism ensure that the poorest regions do not get poorer and rich regions get richer? • Mas giginhawa ba ang buhay namin kung maging federalized ang Pilipinas? (Will federalism improve our standard of living?)

On taxes: • Kung iba-iba ang taxation law kada regional government, ibig ba nung sabihin iba iba din ang tax na babayaran ng mga businessman? (If the taxation law will be different in every regional government, will it mean that a businessman will have to pay different taxes?) If I am a businessman, will I be required to pay taxes to both the national government and the LGU? • Tataas ba ang tax namin (regular employees) kung may taxing powers ang regional at LGU? (Will the taxes of regular employees increase if the regional government’ and LGU will have taxing powers?) • Who controls and sets taxes for goods and services?

On corruption: • Matatanggal ba ang corruption sa gobyerno sa federalism? (Will corruption in the government be eradicated under federalism?) • Mapapalitan ba ang mga political dynasties sa aming LGU? (Will the political dynasties in LGU be replaced?) Will federalism propagate or incubate political dynasties? Wouldn’t a federal system further concentrate power in the hands a few political and economic elites? • Who has the power to audit government officials? If audit functions will be devolved to LGUs, how do we ensure that the institution and the individual auditors are protected from potential threats from powerful political personages who might be threatened by their work? • How will Cha-cha limit the influence of rent-seekers and politicians with conflicts of interest issues from abusing their current positions and networks to prevent true reforms from happening

16 On bureaucracy: • Dadami ba ang bilang ng mga kawani ng gobyerno? Sino ang magpapasweldo sa mga kawani? Local o national? Pag local, papaano kung kulang ang pondo? Me salary standardization ba sa Federal Form of government? (Will the number of employees in the government increase? Who will pay the salary of the employees, will it be the local or national [government]? If it will be the local government, what if the funds for the employees salaries is not enough? Will there be salary standardization in the Federal form of government?) • Kanino naka report ang mga regional director ng DPWH, DSWD, DEPED,PNP? • Mababago ba ang termino ng mga public officials? Tatanggalin ba ang term limits? (Will the term limit of the public officials change? Or will the term limits be removed?) • What will be the structure of the judiciary? What will be the effect in processing hrv cases? How will the bill of rights (& other provisions on human rights) expand in accordance with international obligations?

On social services and sectoral participation: • How will Federalism empower non-state actors to participate in governance? • Paano popondohan ang mga serbisyo? Sinong gagastos? (How will the social services be funded? Who will fund it?) • How about regulations, who will set standards, and who will have the power to monitor (in mining at environment, education, health, housing, and land zoning)? • Magkakaroon ba ng mas maayos access sa basic services (sa mining, health, education, housing)? (Will there be better access to basic services (in mining, health, education, housing)?) • Magiging mas mura ba ang housing, education? (Will housing and education be more affordable?) • How will IP welfare be protected?Will there still be a central, federal agency to attend to IP concerns? Or will the responsibility be left to each state?

On peace and security, defense: • How will the function of defense of regional and national borders be divided between LGUs and national government? How do we guard against the rise of armed groups that are loyal to local politicians, versus the Constitution? • Is shifting to fed the only solution to the issues in Mindanao? Will federalism and the accommodation of the Bangsamoro Basic Law actually address the lasting peace in Mindanao and economic growth within the Bangsamoro territory?

On finance: • How will federalism affect prices and trade between different regions? • Pwede bang mangutang sa foreign institutions ang mga Federal states (group)? Sino ang mag re-regulate? (Are Federal states (group) allowed to borrow money from foreign institutions? Who will regulate the foreign borrowing?) • Who will control our currency and who directs our financial/economic strategies?

17 ANNEX B. LIST OF ATTENDING GROUPS AND ORGANIZATIONS

• Alyansa Tigil Mina • Asian Center of Education Research and Training for Innovation • Ateneo de Manila University - School of Government • Bantay Kita • Caucus of Development NGO Networks • Council of Asian Liberals and Democrats • Friedrich Naumann Foundation Philippines • House of Representatives • Institute for Philippine Cooperative and Social Enterprise Development • IPD-FM Federation • KAISAHAN Negros Occidental • KAISAHAN Leyte • Kaya Natin! Movement • Kilos Maralita • Miriam College - Women and Gender Institute • National Citizens’ Movement for Free Elections (NAMFREL) • Office of the Vice President • PAKISAMA • University of the Philippines • Urban Poor Associates • Voice Philippines, Hivos People Unlimited

18 ACKNOWLEDGEMENTS

The Institute for Leadership, Empowerment, and Democracy would like to acknowledge the following institutions and individuals for the support and assistance they have extended to the project:

Wolfgang Heinez and Pauline Sanchez of the Friedrich Naumann Foundation Philippines Jayvy Gamboa and Ivyrose Baysic of the Ateneo de Manila University Rachel Kay Perez, Research Assistant Jessebelle Taroy-Morales, Administrative Assistant Mikhail Quijano, Layout Artist 19