By Julius N. Leonen, August 8 2018; Philippine Daily Inquirer

Image Credit to Philippine Daily Inquirer

The Consultative Committee (Con-com) on Wednesday allayed the fears of Finance Secretary Carlos Dominguez that a “fiscal nightmare” may escalate under a federal form of government.

Dominguez raised the issue during a hearing before the Senate committee on finance as he asked who would pay for the national debt, for the military, for the Department of Foreign Affairs (DFA) and the Bangko Sentral ng Pilipinas (BSP).

But Con-com spokesman Ding Generoso said that “fiscal administration is quite clear in the draft (federal) Constitution.”

“The Federal (national) government basically retains the taxation power, except for selected taxes and fees the collection of which will be transferred to the regional governments,” Generoso said in a statement.

“Who will pay for the national debt, military, DFA, Bangko Sentral? By definition of exclusive powers that belong to the federal government, these will all be concerns of the federal government,” he said.

READ: Finance chief rejects federalism, for now

Generoso noted that sharing of the collections from revenues under the federal Constitution would be 50 percent for the federal government and 50 percent for the regional governments.

“A little over one trillion will go to the federated regions—the taxes and fees that they will collect and the equal share in the top four revenue sources,” Generoso explained.

“The federal government will have more than two trillion left in its coffers, which will cover for the cost of its operations, including the budgets for national defense, foreign affairs and debt service,” he said.

Generoso said that the budget allotted for the DFA, BSP and the military can be allocated by the federal government since they are “untouched and remain intact with the federal government under the draft charter.”

“Congress continues to have the power to appropriate the budgets for these concerns—which are all federal,” the Con-com spokesman said.

“The BSP is the single agency responsible for monetary policies, which is an exclusive power of the federal government, thus if it ever needs additional capital, the federal government will provide for it,” he said.

Likewise, the Con-com spokesman assured that internal revenue allotment under federalism “will no longer be a concern of the federal government.”

“The power to distribute the shares of the LGUs will belong to the regional government,” Generoso said.

“The corresponding amount is part of the one trillion pesos that correspond to the 50 percent share of the regions in the top four revenue sources,” he explained. /je