Budget Secretary Benjamin Diokno PHOTO BY EARVIN PERIAS
Budget Secretary Benjamin E. Diokno on Tuesday joined a growing list of Cabinet members expressing hesitance to take a plunge into the planned shift to a federal form of government, saying it needed deeper study.
鈥淣ow that it鈥檚 the major issue of the day, I will suggest to the economic managers that we should come up with an in-depth study,鈥� Diokno said at the Meet Inquirer multimedia forum.
鈥淚鈥檝e been teaching fiscal federalism for many years,鈥� he said.
鈥淭he core of federalism is the fiscal side鈥攈ow do you finance the federal government?鈥� he added.
鈥淭he important thing is, first of all, let鈥檚 figure out what functions are going to be federal and what functions are to be local or state,鈥� Diokno said.
鈥淥nly then can you determine financing, [as] financing follows the functions,鈥� he added.
Diokno said the way the proposed new Charter was drafted was 鈥渘ot clear.鈥�
鈥淭hat鈥檚 our problem: It鈥檚 not clear,鈥� he said.
Draft lacking
Diokno said that although he wanted the economy opened up, the draft Charter prepared by the constitutional commission 鈥渄oes not do that.鈥�
鈥淚 want to open up education, I want to open up mass media, open up competition 鈥� all these public services, open them up,鈥� he said.
He said it would be key to a useful debate on federalism if there was a study 鈥渓ooking at various scenarios.鈥�
鈥淔or example, who鈥檚 going to take care of our public debt?鈥� he said.
Would states share the debt burden or would the federal government shoulder it alone?
鈥淲hat functions are we going to assign to the states?鈥� he said.
鈥淲e can鈥檛 just adopt a system of government without knowing the implications,鈥� Diokno said.
鈥淗ealthy and rigorous discussion is healthy for democracy,鈥� he said.
鈥淚鈥檓 for further study,鈥� which can be done in three months, he added.
The Department of Finance had warned that the shift to a federal form of government could bloat the budget deficit to P1.2 trillion.
6.7-percent deficit
Gil S. Beltran, finance undersecretary and chief economist, said the deficit would reach 6.7 percent of gross domestic product, the biggest ever.
After local business chambers urged Congress to go slow on federalism, more groups have followed suit.
In a joint statement on Tuesday, 19 mostly business groups expressed concern over the consequences of shifting to federalism.
The 19 organizations were Alyansa Agrikultura, Asia Pacific Real Estate Association, Bankers Association of the Philippines, Foundation for Economic Freedom, Institute of Corporate Directors, Investment House Association of the Philippines, Judicial Reform Initiative, National Real Estate Association, Organizations of Socialized Housing Developers of the Philippines, People Management Association of the Philippines, Philippine Constructors Association, Philippine Institute of Certified Public Accountants, Philippine Women鈥檚 Economic Network, Semiconductor and Electronics Industries in the Philippines Inc., Shareholders鈥� Association of the Philippines, Subdivision and Housing Developers Association, Tax Management Association of the Philippines, UP School of Economics Alumni Association, and Women鈥檚 Business Council Philippines.
Monumental shift
鈥淏oth the private and public sectors cannot be perceived as lacking in resolve on the fiscal front, seeing how financial markets are so sensitive,鈥� said the groups in a joint statement.
鈥淔or this reason, many other organizations join the seven large business organizations in calling for legislators to weigh carefully the costs and risks associated with the proposed monumental shift to a federal system of government,鈥� the statement said. 鈥擶ith a report from Roy Stephen C. Canivel