The Makati Business Club and more concerned organizations are calling on all sectors to be solid behind the economic managers’ call for fiscal prudence, more dialogues and a well-considered approach in the shift to the federal form of government.
In a statement, the group said private and public sectors could not be perceived as lacking in resolve on the fiscal front, seeing how financial markets in other parts of the globe were so sensitive.
The group said several organizations had joined the seven large business organizations in calling for legislators to weigh carefully the costs and risks associated with the proposed shift to a federal system of government.
The latest groups consist of the organizations 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’s Economic Network, Semiconductor and Electronics Industries in the Philippines, Inc., Shareholders’ Association of the Philippines, Subdivision and Housing Developers Association, Tax Management Association of the Philippines, UP School of Economics Alumni Association and Women’s Business Council Philippines.
On Aug. 12, seven large business groups, the Cebu Business Club, the Employers Confederation of the Philippines, the Financial Executives Institute of the Philippines, the Makati Business Club, the Management Association of the Philippines, the Philippine Chamber of Commerce & Industry and the Philippine Exporters Confederation Inc. urged the legislators in a joint statement to consider the implications of the shift to federalism on the country’s finances.
The groups cited reports indicating an alarming cost to the would-be multi-level government under a federal system.
Preliminary estimates range from P72 billion of the Philippine Institute for Development Studies to P130 billion of the National Economic and Development Authority.
The fiscal deficit is estimated to reach 6.7 percent of the gross domestic product, which is way beyond the sustainable 3 percent target of the fiscal managers, an internationally recognized prudential limit.
The groups worry about the dire consequences that such fiscal imbalance could have on the economy and the flagship Build Build Build program of the Duterte administration.
“We, too, believe in the need to adhere to the public finance principle ‘funds follow function’. Accordingly, we echo the concerns of fiscal and economic experts about the ambiguous provisions on the division of revenue and expenditure responsibilities between the proposed federal government and its federated regions,” the groups said in a statement.
The groups commended the Neda, the economic managers in the Department of Finance, the Department of Budget and Management, the Bangko Sentral ng Pilipinas, as well as the researchers in the PIDS for their transparency in openly sharing their analysis and airing their concerns to the public.
The groups supported and joined their call for a more detailed analysis of the fiscal impact of federalism to serve as basis for the deliberations in Congress.
“We encourage full, open and dispassionate dialogues on this proposed shift in the form of government, keeping in mind its long-term impacts on future generations of Filipinos,” the groups said.
“As always, the business community stands ready to work with our political and economic leaders to bring about a sustained and inclusive economic growth in the country.”