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Tuesday, December 27, 2016

IS #FEDERALISM GOOD FOR THE #PHILIPPINES?


This question needs to be further qualified. Good for what? Good for who?
We also need to understand what the push for federalism aims to solve.
As a political solution to break the centralized decision making (akin to the politburo of communist states) – it is a step in the right direction. However, it is not enough. If one were to view this from the perspective of empowering people, why limit the decision making to federal states? Why not bring it down to the level of city states? Or down to the level of individuals instead?
The experience of anarchy in Somalia and medieval Iceland has shown that abolishing the state (unitary or federal) has not led to a breakdown in society nor has it led to the curtailment of goods, services, and conveniences of modern day living.
The scholarly study of Benjamin Powell showed that the removal of rulers (President, Congressmen, etc) has not led to a decline in the standard of living in Somalia. In fact, stateless Somalia has standards of living that are comparable (if not better) to its sub-Saharan neighbors that have a state.
As an economic solution that aims to address the inequalities in the Philippines, the push for federalism is a marginal solution at best and totally irrelevant to the bigger picture. An economic challenge needs an economic solution. Federalism simply transfers the political decision making to the region-state but does not address the protectionist provisions embedded in the Philippine constitution. These provisions notably the 60/40 are not addressed by federalism.
All these region states will still be operating under the defective 60/40 protectionist provisions. We can therefore conclude that the same economic outcomes as that which plagued the unitary Philippine state will be present in the region states. The duopoly and oligopoly will still be present. In other words, despite federalism the following are still going to happen:
  • The mass media will still be controlled by ABS-CBN and GMA 7 because the constitution does not allow any foreign ownership of mass media
  • The energy industry will still be controlled by MERALCO, Aboitiz and the different energy companies which have interlocking directorates. For instance, Davao Light owned by the Aboitiz group has MERALCO shares. The Visayas Electric Company bought out by the Aboitiz group also has MERALCO shares. This same phenomenon can be observed in all electric utilities operating in the Philippines. This oligopoly has led to the Philippines having the highest electric power rates in Asia – a situation that makes the Philippines a non-contender for manufacturing industries that use a lot of electricity.
  • Globe and PLDT/Smart will not have any foreign owned competitors as these are co-opted into forming joint ventures with Globe or PLDT – a situation that has led to the Philippines having the highest telecom and Internet rates in Asia.
As a public relations ploy, the push for federalism is an effective way to project to the public that something is being done. It also is an effective smokescreen to distract the public’s attention to the failed drug war policy and the outrage caused by extra-judicial killings. In other words, the federalism push is a safety valve to preempt a seething social volcano.
What the public does not understand is that the “something being done” called federalism, does not address the heart of the issue – the economy.

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