August 1, 2005 
(STAR) BIZLINKS By Rey Gamboa - Given the perceived general unhappiness of Filipinos over how the incumbent President had used or abused – depending on which side of the political fence you are – the current Constitution to keep herself in power, there is now a proliferation of ideas on how to introduce changes for better government.

Credit for bringing up the constitutional change formula goes to former President Fidel V. Ramos. Having failed to convince Filipinos to support his charter change proposal before his term ended in 1998, the astute general found a new opportunity to resurrect his proposal with the embattled GMA presidency. This time around, he may succeed.

Mrs. Arroyo, in her recent State of the Nation Address, urged her Congress to support a shift to a parliamentary form of government. Though well received by the lower legislature and many local government representatives, the Senate appears to be lukewarm on the idea. Lure Of More Power For Local Politicians While Congress may seem headed for a deadlock, the key at this point in time is the growing restlessness at the local levels and the itch to push further the powers that were vested on barrios, municipalities, cities, and provinces by the enactment of the 1991 Local Government Code.

Yes, Virginia, federalism is certainly the favorite talk of the day.

Hand-in-hand with reforming Congress into a single body that would elect a Prime Minister to administer day-to-day governance is the geographical realignment of the Philippines into distinct states that would have additional powers – and funds – to govern themselves.

A rebellion of sorts supporting federal statehood is bolstered by the call of several powerful political personalities. Leading the pack are governors from the Visayas, Ilocos Norte, and certain parts of Mindanao – who have all uttered some form of disgruntlement over what they call as disruptive politics played in "Imperial Manila."

Who’s Going To Pay For The Sovereign Debts?

While proponents of federalism gush about the benefits of moving into statehood, the biggest question that should be tackled at this early stage is what to do with the almost P4 trillion in sovereign debts. This has grown over the decades in a vicious cycle of never-ending borrowings to raise money for interest and principal payments.

When we talk about devolution of power to local governments, the matter of money and its sources understandably crops up. We all know that money is power. Under a federal set-up, there will be a lot of discussions on just how much of revenue collections will be decentralized.

The National Government’s current revenue flow, without doubt, will be affected. Once the smaller republics are established, they would likely claim for a bigger share of the largess in proportion to their newly acquired powers and responsibilities.

Payment for interest and principal debt consumes nearly 90 percent of government revenues each year. One cannot expect the local governments to agree to retain only 10 percent of the revenue that are generated by their constituents.

It would be easy for local governments to snub collection notices for debts that they can readily argue as not their responsibility. They had, after all, not been directly involved in how these debts accumulated.

Milking The Sovereign Assets

There are alternatives of course. The National Government can still sell or privatize national assets. Given the Philippines’ poor track record with privatization, though, this option does not hold much promise.

Another option is to channel all profits of government-owned and controlled corporations to paying the sovereign debts since some of these have been solely servicing the expenses of the Office of the President. Except that the GOCCs, even at their best and sincerest efforts, may not collectively muster enough funds to pay for the National Government’s obligations.

In fact, half of the sovereign liabilities are due to the problematic GOCCs, foremost of which, is the National Power Corp., which has more than P1 trillion in outstanding debts.

Will Costly Change Solve Root Problems?

Don’t forget that there is an administrative cost to changing the Constitution, which could add up to a sizeable amount. When the federal states are established, there will be the new expenses the least of which is the setting up of new offices. Some of the offices that become redundant or obsolete could exist for a long time and continue spending public resources even when they have outlived their existence.

Especially in the provinces, the local republic may want to keep them to make their constituents happy. But then the fundamental concern remains. It will still be about corruption, inefficiency, and the weak implementation of systems and laws. Will federalism truly address all these problems that are at the forefront of national politics?

In a federal structure, the National Government conceptually retains responsibility only on areas of national proportion such as defense and foreign relations. Most of the remaining tasks like education, health care, infrastructure rollout, and others are considered the purview of the smaller republics.

Bureaucracy could just be as problematic with local governments, if not more. Corruption could likely be as rampant. One can imagine the suddenly empowered local bureaucrats having a heyday, flexing the power and clout that they suddenly will find in their hands.

Intuitively, smaller republics should be more efficient. But then again, there are models, fresh in the mind of some people, like Pasay and Caloocan that have showed how badly local governments can mismanage their affairs.

There is no doubt that our system is in need of change, but a transformation must be one that will truly improve the system and reverse the decay. Change for change’s sake or for perpetuating power may prove to be just as bad as the perceived weakened republic we now find ourselves living in.

Electoral Process Breeds Unwanted Dynasties

Many object to the political dynasty being perpetuated by local politicians. But apparently there are exceptions to the negative view about keeping political control within the family. And the Marikina situation seems to be one of these exceptions.

In the eyes of many, Bayani and Marides Fernando have started a political dynasty in Marikina. But it seems the people of Marikina are getting good results from the couple’s combined 12 years of tenure.

But many other cities, municipalities and provinces where political positions are being monopolized by one family are not as lucky. Inefficiency and corruption, for instance, are carried on by the family member who takes over. Hence, there is a growing clamor to ban immediate family members of an elected official to run for the same office.

However, disqualifying a candidate who has the skill and capability to perform merely because he or she is related to the elected official who is vacating the position is not the solution for poor or corrupt governance. A credible and efficient electoral process where the people can freely express their choice is the answer.

And this is the root cause of the various cases of poor governance both locally and nationally. The voice of the people expressed in an electoral process is apparently being subverted and manipulated through the use of power, coercion and corruption. And the true choices of the electorate do not always emerge.

The saddest part of all is that the Filipino people have learned to accept the various forms of election cheating and anomalies with a shrug of the shoulder. They have grown cynical about the entire electoral process.

This is where the greatest vulnerability of Philippine democracy lies. To bring back credibility to the damaged electoral process is no doubt a daunting task, but it has to be urgently undertaken if we want to give our democratic way of life a chance.

Reported by: Sol Jose Vanzi

All rights reserved