Finance Secretary Carlos Dominguez III has called on the Congress to tread carefully and learn from the Philippine experience in the devolution of the national government’s health and agriculture functions to the local government units (LGUs) in crafting a basic law for the Bangsamoro Autonomous Region.
Dominguez said at a recent hearing in the House of Representatives that the Bangsamoro Basic Law (BBL) should “be open to changes” to allow Bangsamoro autonomy “to evolve by abandoning its mistakes and strengthening its positive aspects.”
“We recommend that lawmakers should look at past experiences in devolving certain basic services to learn from them and take into consideration these lessons when crafting the BBL,” said Dominguez at the joint public hearing on the BBL led by the House committee on local government.
Local government committee chairman Rep. Pedro Acharon chaired this joint hearing conducted with the House committee on Muslim affairs and the Special House committee on peace, reconciliation and unity.
“Devolving power is a process. It requires some hard thinking. It requires time to build capacities, grow institutions and evolve appropriate civic cultures. When it comes to reinventing the institutions of governance, haste may sometimes make waste,” Dominguez said.
Dominguez, who was invited to the hearing as a resource person on the crafting of the BBL, said treading carefully on implementing the BBL and being open to changes as the system evolves “is much better than having a rigid system with a lot of gray areas.”
He said the end goal of devolution or autonomy should be “to bring economic development to the people of the area covered by this arrangement.”
“Let us make sure that the law enacted for the purpose of establishing a Bangsamoro entity is designed precisely to make economic progress more feasible for its defined area,” Dominguez said.
Based on 2016 data, the Autonomous Region of Muslim Mindanao (ARMM) had the lowest Gross National Income among the country’s regions. The per capita Gross Regional Domestic Product in the National Capital Region (NCR) was the country’s highest at ₱431,783 and that of ARMM was the lowest at only ₱27,345 in current prices.
In 2016, the NCR’s economy grew by 7.5 percent, while the ARMM’s expanded by only 0.3 percent in real terms.
ARMM’s per-capita GRDP was a measly six percent of NCR’s, according to Dominguez.
“Reinvigorating the economy in the autonomous region is necessary to ensure the success of the BBL,” Dominguez said.
Dominguez recalled that when he was secretary of the Department of Agriculture, he and Health Secretary Alfredo Bengzon had strongly opposed the devolution of the functions of their respective departments under the Local Government Code (LGC), and while they lost the debate, the country’s experience has shown that this move had hardly improved the public health status in the regions and failed to boost agricultural production.
“I hope that mixed outcomes of our experience with devolution will enlighten discussion on the Bangsamoro Basic Law. The first lesson, I suppose, is that it does take time to evolve new institutions of local governance into place,” he said.
He told lawmakers that “we need time to build capacity for the autonomous region. Time is necessary to build the credibility at governance, win a suitable credit rating and demonstrate a capacity for exercising fiscal discipline.”
The finance chief had said during an earlier Senate hearing on the BBL that he fully agrees with the suggestion of former Supreme Court Associate Justice Adolf Azcuna that the federal system should be piloted first in areas that are already cut out for this kind of government setup rather than rush at doing it nationally, to determine “what mistakes are made before we do it on a national scale.”
Dominguez had advised senators to take into account the end goal of attaining economic self-sufficiency and sustainable development for the proposed Bangsamoro region to ensure fiscal autonomy and lasting peace in crafting the BBL.
He said that like the rest of the country, the fundamental requirements of sustained growth such as hard infrastructure, new communications technologies and efficient administrative systems should also apply in the creation of the Bangsamoro autonomous region.
Any proposed funding scheme for the Bangsamoro region should be “programmatic, transparent, performance-based and phased” to conform with the criteria of modern governance and win broad public support for the BBL, Dominguez noted.
Dominguez said fiscal provisions in the BBL, which, for instance, allow the Bangsamoro government to issue bonds along with other revenue-generating measures, would not succeed unless the autonomous region first achieves fiscal discipline.
“Surely, the envisioned autonomous regional entity cannot borrow money at cheaper rates than the national government. Our national government has enjoyed improved credit ratings because, for over three decades, we exercised fiscal discipline even if this required absorbing political costs,” said Dominguez when he reiterated this point during the House hearing.
“For the same reasons, the envisioned autonomous regional government could not float bonds at spreads tighter than if the national government floated these. If the autonomous region could not finance itself at better terms than the national government, how will it support itself?” Dominguez stressed.
He expressed his full support for the formation of a Bangsamoro Autonomous Region, which, he said, would enable the achievement of a more substantial autonomy arrangement that meets the expectation of the Islamic community in Mindanao” and is “a major step towards achieving sustainable prosperity for all communities in Mindanao.”
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