I write this eighth of my series of columns on the proposed constitution. As in every column, this is a constructive attempt to engage the country on the new constitution that has been endorsed by President Duterte to Congress for its deliberation if and when the House of Representatives and Senate, through separate resolutions, convert into a constituent assembly. I consider the text provided by the consultative committee (Con-Com) as a first draft—for discussion, debate, and revision as the process progresses.
The Con-Com chairman and members, many of whom I know and have the highest respect for, should not take my columns and in fact all critiques of their product personally. They should not be defensive and instead welcome comments. And if given the chance, they should revise their draft.
I do this as a constitutional law professor in eight law schools from Luzon to Mindanao (including two graduate law schools and the Philippine Judicial Academy), as a constitutional law and public management scholar who has published in many local and international publications, as a Filipino citizen, a Mindanawon, and yes as a long-time advocate of federalism and local government autonomy.
In that spirit, let me be as clear as pure water: The draft constitution is bad for local governments and their autonomy. It threatens their existence, in fact, and most likely will reverse the gains achieved in our mixed experience of the Local Government Code. Indeed, if the Con-Com draft is adopted, local governments could be completely destroyed and its status, role, powers, and revenue powers subjected to the whims of untested Federated Regional Governments.
This is a very strange and disturbing observation to make. I assume that Chief Justice Reynato Puno and other members of the consultative committee did not mean it to be this way, but as a constitutional law professor and expert interpreting the text they have proposed and after reading through the consultative committee draft several times (at least 20 times, and continuing to do so very week as it is required reading for the five constitutional law courses I currently teach), I have come to the conclusions in the preceding paragraph.
This is a strange thing to say because I count among the Con-Com some of the strongest advocates of local autonomy—among them former senator Aquilino Pimentel, universally recognized as the father of the Local Government Code of 1981 and professor Edmund Tayao, long time head of the Local Government Development Foundation.
It is also disturbing because one of the reasons for the shift to federalism is to get the government closer to the people, to shift decision making to the unit of government that is most proximate to the issues to be decided, and this is usually the local government.
For sure, the draft constitution pays lip service to local government autonomy by providing in Article 2, Section 27 as a state policy that “The Federal Republic shall promote the autonomy of local government units in line with the principle of subsidiarity and in accord with federalism.” But that’s where it ends.
Except for one mention of local governments, in Article XIX, Section 9, where the Federated Region is mandated to respond to natural or man-made disasters and calamities through its local government units, there is no other mention of such units, except in the context of their being under the Federated Region. Thus, Article 11, Section 18 provides that, “The Regional Governor shall have the following powers and duties: a) To head the government of the region and exercise general supervision over its component local governments, while Article XII, Section 2 states, “Within their regional territory, the Federated Region shall have exclusive power over: (i) Local government units.
Unlike the 1973 and 1987 Constitutions, there is no specific article for local governments. This is a big, in fact a fatal, omission. Without such a section specifying which are our local government units (provinces, cities, municipalities, and barangays), their powers and limitations, and their relationship to the Federal Government and the Federated Regions, the very existence of these local government units and certainly their status, powers, and functions are endangered.
It should also be noted that Article XII lays down the rules on exclusive powers, thus:
Article XII, Section 3: Powers which are given to the exclusion of other political authorities are exclusive powers. Exclusive powers are given to the Federal Government and the Federated Regions.
Article XII, Section 4: Powers not exclusively given to either the Federal Government or to the Federated Regions are shared powers. They fall within the relative competencies of the Federal Government and the Regional Government and can be exercised jointly or separately. In case of dispute or conflict in their exercise, the federal power shall prevail.
Article XII, Section 5: Powers which are not exclusively given to the Federal Government or to the Federated Regions nor shared by them and not prohibited by the Constitution are reserved powers. Reserved powers shall be vested in the Federal Government.
Since the Federated Regions have exclusive power over local government units, it can in fact decide by itself which units can continue to exist and what powers and functions those units will have. The 1991 Local Government Code can be repealed by each region and replaced with whatever it wants without guidance from and limitations imposed by the Federal constitution except the principle of subsidiarity earlier cited.
On taxes and revenue sharing, Article XIII of the draft constitution provides:
Section 1. The Federal Government shall have the power to levy and collect all taxes, duties, fees, charges, and other impositions except the power to tax granted to the Federated Regions.
Section 2. The Federated Regions shall have the power to levy and collect the following taxes, licenses and fees: (a) Real Property Tax; (b) Estate Tax;(c) Donor’s Tax; (d) Documentary Stamp Tax; (e) Professional Tax; (f) Franchise Tax; (g) Games and Amusement Tax; (h) Environmental Tax, Pollution Tax, and similar taxes;(i) Road Users Tax; (j) Vehicle Registration Fees; (k) Transport Franchise Fees; and (l) Local taxes and other taxes which may be granted by federal law.
Section 4. The Federated Regions shall be given a share of not less than fifty percent (50 percent) of all the collected income taxes, excise taxes, value-added tax, and customs duties, which shall be equally divided among them and automatically released.
Section 5. There shall be an Equalization Fund which shall not be less than three percent (3 percent) of the annual General Appropriations Act. The Fund shall be distributed based on the needs of each region, with priority to those that require support to achieve financial viability and economic sustainability as determined by the Federal Intergovernmental Commission.
These provisions mean that local governments, under the draft constitution, have no constitutionally authorized means to raise revenue and no constitutionally guaranteed share of government revenue. They will share in the 50 percent allocated to the regions but that would be entirely up to the regional legislatures.
For sure, all local government units, under the proposed constitution, will see its share of the Internal Revenue Allocation shrink substantially from what its currently receiving. Those gaps would not be addressed by the Federal Government which will also lose significant revenue nor by the miserly equalization fund.
In sum, the Federal design adopted by the consultative committee threatens the autonomy and even existence of local governments. Substantial changes must be made, including the restoration of an Article on Local Governments similar to the current Article X of the 1987 Constitution that would guarantee the status, role, powers and functions, and revenue powers and share of local governments as well as define its relationship with the Federal and Federated Regional Governments.
Without changes, every governor, mayor, and local legislator should oppose the adoption of the proposed constitution. A yes vote would be institutional suicide by constitutional revision.
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