Philippines: Economic managers to meet on economic impact of federal shift

  • Economic managers of President Rodrigo R. Duterte will meet this week to assess economic implications of the planned shift to a federal system of government in order to come up with a uniform position on this issue.
  • National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon told reporters that members of the economic team will meet on 29 Aug 18 to exchange views and assessments on the proposed federal charter drafted by the Consultative Committee to Review the 1987 Constitution.
  • Ms. Edillon said this will be the first meeting of the economic cluster to discuss federalism, adding that NEDA has its own study on the economic impact of the proposed shift in the form of government.
  • The NEDA got a copy of the draft charter on 12 Jul 18 and has come up with its own position paper on it.
  • Socioeconomic Planning Secretary Ernesto M. Pernia, who heads NEDA as director-general, had warned that the sudden shift to a federal form of government could ruin the country’s fiscal health and slow the Duterte administration’s infrastructure drive. Among others, most of the country’s 17 regions – which rely heavily on yearly dole outs from national taxes – are not ready to take on bigger government responsibilities.
  • Finance Secretary Carlos G. Dominguez III has also warned that a federal form could be a “nightmare” for the Philippine economy given drastic changes in revenue-sharing between national and local governments. He also flagged “irreversible economic consequences” such as a bigger budget deficit that could spark credit rating downgrades, and massive job cuts in government.
  • Ms. Edillon said other matters likely to be tackled on 29 Aug 18 include updates on the rice tariffication bill pending in Congress as well as progress on the Foreign Investment Negative List, which the NEDA said has been awaiting Mr. Duterte’s approval for several months now.

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