Con-com answers Pernia: Federalism will lead to growth, not havoc on economy

The Consultative Committee (Con-com) that drafted the proposal for a federal constitution has taken exception to what it called the chief economic planner's "misplaced" assessment that a shift to a federal system of government will hurt the country's fiscal health.

On the contrary, the transition to federalism will "lead to greater and a more balanced growth over the medium- and long-term after the system is put in place," Con-com spokesman Ding Generoso said in a statement.

Generoso issued the statement after Socioeconomic Planning Secretary Ernesto Pernia warned that financing a federal government setup may raise the fiscal deficit to 6 percent of the country's gross domestic product.

"That’s really going to wreak havoc in terms of our fiscal situation and we will certainly experience a downgrading in our ratings," said Pernia, head of the National Economic and Development Authority, on One News Channel.

But Generoso said there was "no basis" for Pernia's fear because the transition will gradually take place in a "smooth, orderly, effective and efficient" manner.

His position backs that of Malacañang, which maintained, through presidential spokesperson Harry Roque Jr., that a shift to federalism "would have no adverse effect" on the economy.

Citing the Con-com's proposal, Generoso said a federal transition commission will formulate a "comprehensive transition plan" which will cover the economy, as well as rules and mechanisms for the transfer of powers, functions, resources, offices, programs, and projects.

It would encompass the setting up of institutions such as the regional governments and the Federal Intergovernmental Commission, and the revision or amendment of laws such as the Revenue Code, the Local Government Code, the Election Code, and the Administrative Code to conform to the new Charter, he said.

The shift would take place "once everything is in place," Generoso said.

"Once the system becomes fully operational, the regions will be fully equipped to function as constituent units of the Federal Republic—politically, administratively, and most of all economically," he claimed.

"As empowered “economic units” of the national economy, they will be able to grow and contribute more to the national economy—expectedly in the medium-term onwards." — Nicole-Anne C. Lagrimas/RSJ, GMA News