Crossroads (Toward Philippine economic and social progress)
Philippine Star, 10 August 2016

The political blockbuster for our republic is the proposal to create a federal state to change the government from the eight-decade old unitary presidential structure into a federal system.

This requires the rewriting of the political constitution in its relevant parts. The process is already starting.

Process of constitutional change. The new legislative leaders of the 17th Congress – Speaker Pantaleon Alvarez and Senate President Aquilino Pimentel III – are already on the offensive, explaining the government’s plan for the constitutional amendment.

President Rodrigo Duterte has given the go-signal to pursue the amendment through the use of a constitutional assembly rather than through a constitutional convention of elected delegates.

The former method converts the memberships of Congress and the Senate into an assembly for the purpose of amending the Constitution. If properly pursued, this will finish the work sooner, also doing away with the huge expense of an elected constitutional convention.

To assure that the desired changes are implemented, the president might opt to appoint a small commission of experts and wise persons who would compose the drafting committee of the new Constitution.

The draft constitution then would be the basis of discussion and finalization by the Constitutional Assembly. Once the final draft is agreed upon, a people’s plebiscite would be held to adopt or reject the revised constitution.

The government understands that a serious public information campaign is needed on the nature and necessity of the constitutional change. Such an effort would be essential before the plebiscite is held.

Priority issues of the planned constitutional change. President Duterte has expressed the preference for a constitution in which the nation’s leader is a popularly elected president with executive powers within the framework of a system that also allows a parliamentary government.

Also, it is expected that the president’s program to remove or reduce the restrictive economic provisions in the existing constitution would be included in the constitutional change. This will remove impediments to larger participation of foreign direct investments in the economy.

With respect to the adoption of the federal system, two priority issues require immediate and important attention: (1) the number of states that will compose the federal republic; and (2) the specific functions of government that will be delineated, divided or shared between the federal government and the member states.

The remaining discussion focuses on the issue of number of states, leaving for later the treatment of the second issue.

The number of self-governing states and rules of commerce among them. Ours is that of a single nation (a unitary state) that would have to break up into component parts to form the self-governing states into a federal union.

This is a tough task to do especially since our accumulated experience of 80 years of independence has operated under a centralized government.

It is highly desirable that the new self governing state has a capacity for growth and survival. An important characteristic in the relations among the new states created is that all states are on an equal footing, where no commercial barriers exist between them (except those due to distance, or transport costs).

Also, capital and labor in each state must be able to move freely across states. In short, among themselves, the states have free trade in goods and in resources.

Many member states in the federation. Speaker Alvarez has indicated that the principle of viability of each member state is important. He also suggests that to begin with, it might be desirable to break up the country into around12 member states to form the federal government.

No doubt, this suggestion stems from the country’s experience with more than 40 years of “regionalization” since the mid-1970s. Such regionalization was a helpful device to improve coordination within a centralized, unitary state.

As the first director-general of NEDA of that era, I helped to form the regional offices and many of the Regional Development Councils. Such efforts pursued since then have helped improve regional development planning and also create economic data monitoring and accounting standards as basis for regional reports.

Even so, having 12 new self-governing states would not make as much economic sense if we are trying to create a set of stronger states within a federation. The logic of state creation demands a different strategy.

The large number of regional development areas today was helpful in improving regional growth and coordination within a unitary state.

However, to create economically strong and potentially clicking self-governing states, it would be well to follow stricter criteria for creating the new political entities.

Size, geography, and potential synergy as criteria for state formation. In starting to break up this unitary state to create effectively functioning self-governing states, greater consideration would rest on the size of the new state, its geographic characteristics, and the potentials for creating economic synergy within the other component regions.

For instance, larger size of land and the contiguity of the land territory would be favorable to integrated planning and coordination within the new state. One major criterion then should be geographic conditions and the natural affinity of the regional parts, in addition to income potential. Contiguous geography makes for more effective economic coordination programs and development projects. Therefore, they promote greater economic potential.

The four state federation: Luzon, Visayas, Mindanao, Bangsa Moro. It makes more sense then to think of the Philippines as being made up of grouping three states: Luzon, Visayas and Mindanao. This is the old Luz-Vi-Minda model. The fourth part, the Bangsa Moro region, is carved out of Mindanao for historic, cultural and political reasons.

Both Luzon and Mindanao are contiguous large islands, and if broken into parts that belong to separate self-governing states would add to the coordination problems within the whole nation.

In each of these two big islands, the potential is there toward integrating transport, communications and logistical support for growth. The presence of different ethnic groups are forces that could be utilized for healthy competition and cultural diversity, not necessarily dissension.

These two big islands, respectively, can help bring economic growth to the smaller islands that are part of their respective dominion.

Sandwiched by Luzon and Mindanao, the Visayas is an island chain consisting of Cebu-Panay-Negros-Bohol-Leyte-Samar. Based on their past developments and the synergy of their immense potentials, they can develop further through specialization based on their comparative economic strengths.

In each of these three big, viable groupings of regions, new political and economic history could be written as new states comprising the whole nation