Business Matters

The Cha-cha train

Former chief justice Hilario Davide, Neda Director General Ernesto Pernia and prominent economist Bernardo Villegas have all expressed strong reservations about our nation’s march toward federalism.  Business organizations have also expressed concern, citing important issues that deserve closer investigation and scrutiny. The Philippine academic community, meanwhile, in an impressive display of unity, opposes the rush to amend our Constitution, stressing instead the need for evidence-based debate and discussion and a process that allows dissenting voices to be adequately heard. And the most recent surveys show that only 37 percent of our people support the shift to federalism, while 64 percent are against Charter change.

With important sectors expressing deep concern, why then are we seeing what appears to be a steamroller effort to rush Charter change and the shift to federalism?


Indeed, a shift to federalism must be based on convincing advantages over our current system. Not only are those advantages not evident, but what I see, in fact, are inherent weaknesses.

The most glaring weakness I see is that it will strengthen and perpetuate political dynasties. With significant political powers and resources devolved to regions and local government units, reigning political kingpins and warlords will be further empowered and become increasingly invulnerable, and the system of political dynasties perpetually entrenched. Even consultative committee chair Reynato Puno concedes that, without genuine effective safeguards against political dynasties, we should not shift to federalism.


My second major concern is that, under the envisioned federal system, our already inefficient and bloated government bureaucracy will further grow, leading to heightened inefficiency and immense additional cost. Between the central national government and provincial and local governments will now be inserted a massive layer of regional government entities that will exist parallel to the executive, legislative and judicial institutions of the central government.

The cost of this additional layer of government is estimated to be about P50-70 billion a year! Neda Secretary Pernia correctly observes that this will wreak havoc on our fiscal situation.

A third vital concern is that, except perhaps for the National Capital Region, Calabarzon, Central Luzon, Central Visayas and the Davao region, most regions cannot hope to be economically self-sufficient in the foreseeable future. Conceptually, I would think that a federal system makes most sense when the component states are able to operate self-sufficiently—if not immediately, at least in the foreseeable future. A condition of long-term dependency on the central government would negate whatever benefits they may hope to derive from federalism.

While this can theoretically be addressed by enhancing the taxation powers of the regions and LGUs, not many LGU leaders are sufficiently mature and adequately trained and prepared for such a responsibility. This reality argues for more deliberate and extended periods of preparation prior to the possible establishment of a federal system.

Amid all these valid concerns come voices from Congress who bullheadedly insist that the shift to federalism is so urgent that next year’s elections should be canceled to give way to the enactment of a new constitution. So what gives?

The obvious conclusion, political observers say, is that federalism is not the main objective.  The real aim is to justify Charter change now while the administration’s popularity is high. The goal is not inclusive development or improved governance, but simply perpetuation of power.

The strategy is a shift to a parliamentary system, and the insertion of “Transitory Provisions” where near absolute powers will be vested in the transition leader, with no enforceable term limits to restrain him (or her). Yes, the Marcos playbook is back.


Fortunately, we are hearing voices from the Senate, from academic and religious leaders, from economists and business organizations, from civil society and, most importantly, from a large majority of the Filipino people as manifested consistently in surveys, all expressing opposition to Charter change now. Yet some determined politicians persist with their devious games and play deaf to our people’s wishes.

One morning many of us still remember, we woke up to realize that our cherished democracy had been stolen. To prevent another such nightmare, we must unite against Cha-cha now.

Ramon R. del Rosario Jr. ([email protected]) is a trustee of the Makati Business Club.


Business Matters is a Makati Business Club project to share the views of key leaders in the business community. The ideas do not necessarily reflect MBC’s position.

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TAGS: charter change, Constitution, Davide, Pernia
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