Last August 29, 2018, the Department of Budget and Management (DBM) presented to the Economic Development Cluster (EDC) and the Consultative Committee its fiscal concerns with regard to the draft Federal Charter.

         The DBM supports the shift “from the present system [of governance] to [a] federal form of government…” in principle. However, the agency also asserts its mandate to promote the sound, efficient, and effective management and utilization of government resources.

Currently, the draft charter does not have a provision on budgeting, accounting, and internal auditing. As such, the DBM recommends to vest such power to the Federal Government in order to synchronize the budgeting processes and priorities between the Federal Government and the Federated Regions, among other issues.

In addition, there is a need to further strengthen the proposed draft charter, particularly on the fiscal aspect of the proposed Federal Government and Federated Regions. To address this, economic managers will come up with projections simulating the budgetary impact of the shift to federalism. These projections shall be based on different scenarios in the assignment of expenditure and revenue functions between the Federal Government and Federated Regions.

The DBM, similarly, proposes a review of the bureaucracies of the federal government and of the federated regions to lower overhead costs given the increase in the number of senators, congressmen, and judges as mandated by the draft charter (Art. VI, Secs. 2 & 5(a)). Such increase would require more technical support staff. In fact, for the proposed increase in Senate staff alone, personnel services would cost an additional P281 million.

In line with this, a review of staff size and salaries under the draft charter’s Art. X-B, Sec. 9, is recommended in order to promote a “uniform and reasonable” standardization for both the Federal Government and the Federated Regions.

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