WE ARE for a federal form of government. This commitment has been enshrined in our advocacy since we converged in 1991 as the broadest and largest grouping of cooperatives, people’s organizations, non-government organizations and non-government individuals. It is within the context of political parity and economic equity—the twin goals of genuine people’s development-- that firmed up our commitment for a federal republic of the Philippines. The interrelatedness of political stability and economic empowerment are clearly manifested as we assist and work with the communities in the six regions, as well as in the 25 provinces in Mindanao. Such relationship can also be gleaned from the national development perspective: between Mindanao and the central government in Manila.

Federalism as a Peace Option

Our collective quest for peace is anchored on the results of the talks between the government and the Moro Islamic Liberation Front, between the government and National Democratic Front, and between the government and the Revolutionary Proletariat Movement in Mindanao. While we remain optimistic on the mainstream peace process, greater people’s participation in the peace talks must also take place.

One of the most important developments contributing to the shift in the world political paradigm from a centralized government to federalism has been the demonstrated utility of federal arrangements in peace-making. In a world well advanced in its movement toward federalism as the new paradigm for interstate and intergroup relations, we must expect it also to offer considerable promise for peace-making. As federalists, we work hard to find ever better ways to utilize and apply federalism to the cause of peace. There is a certain justification for this seeming truth in that "federal" is a loaded term, one that, more than simply describing arrangements and institutions, has to do with serious principles, real attitudes, binding relationships, specific expectations with regard to mutual trust, in short, the will to federate. Even if the discussion of federalist political culture is relatively not new on the political science agenda, the sense that federalism can only succeed where such political culture exists sufficiently also figures into this equation. Even less expressed is the expectation that federalism has at least one of its major roots in the idea of federal liberty, that is to say, liberty to do that which is mutually agreed upon in the founding compact or its subsequent constitutional modifications. Without federal liberty as an accepted principle neither freedom nor responsibility can develop properly.

One of the ways to overcome the deficiency seems to be by widening the sphere to be encompassed by the solution. This is necessary for federal peace-making to take place, in some cases from the very first. For example, efforts to bring together two separate units are inevitably problematic not only because it is easy for every issue to turn into a zero-sum game with one side winning and the other losing, but it also is difficult to transform develop or transform issues into ones in which both sides win. It is true that in some cases when both sides are losing sufficiently, widening the sphere helps them come together to control their losses. No matter what form federalism takes, how federal institutions are designed, and what federal principles are emphasized, it is generally clear by now that where there is a positive attitude toward federalism and a will to build a federal system, where the political society involved rests on sufficient trust, sufficiently widespread to allow the many leaps of faith that must be taken to make federalism work, where political culture is either favorable or at least open to federal arrangements, where all of this leads to a wider understanding of liberty as federal liberty, then federalism has a good chance of succeeding when used for peace-making. It may have almost as good a chance if most of those elements are present and some chance even if one or two of them is. But it seems quite clear that without any, the chances of success are extremely limited.

Federalism and the Right to Self-Determination

Asserting and reclaiming their self-determination is essential among Lumad and Bangsamoro peoples. The Lumad peoples have persistently expressed their own preference for self-determination, having seen that their absorption into the unitary political system has brought about the establishment and solidification of a threat to their very own existence and the integrity of their distinct cultures. The Bangsamoro have their own distinct identity and vested interest that must be respected and cannot be satisfied by a continued subscription to political uniformity. With the Autonomous Region in Muslim Mindanao, the central government has allowed, albeit grudgingly, a departure from the stranglehold of central authority. The passage of the Local Government Code in 1991 further chips away powers from central authority; the local government units from the regional autonomy to the barangay are able to exercise greater self-determination. The right to decide and choose that is best for one’s self is a sacred right that cannot be taken away from any individual and citizen. Those deprived of this right are also unable to fulfill their aspirations for the future.

Under a federal set up, greater powers will be devolved to the local citizenry, making grassroots participation more meaningful and broaden the powers of the citizens over the state. Self-determination comes in many forms. In the political sphere, it comes in the form of semi-independent units. In the Philippines: sitio, barangay, municipality, province, regional autonomy, nation. Self-determination grows with increased political autonomy or the ability to stand on one’s own feet. In the political history of the world, greatest autonomy to political units is experienced by the states of a federal state. The more obvious advantage is greater power-sharing between the national or federal government and the state/local government. Since the states will have their own legislatures, real decision-making is brought closer home to the people. This is the immediate consequence of the political re-structuring. But, in fact, the citizens can push further to ensure that in the federal constitution and the state laws, greater people participation in the decision-making process is institutionalized.

Federalism and Diversity

This year’s Human Development Report of the United Nations Development Programme highlights cultural diversity. At our end, we also delight in UNDP’s 2004 report because that has been our general advocacy for Mindanao: that we promote respect and understanding among the diverse and unique groups of people whether they are Lumad, Bangsamoro or Christian settlers. Diversity and development might seem to sit oddly together. But they are intimately linked, and the report seeks to show that they are not related in the way many people assume. The UNDP’s press release says unambiguously that “there is no evidence that cultural diversity slows development”, and dismisses the idea that there has to be a trade-off between respecting diversity and sustaining peace. In countries like the Philippines, and in regions such as Mindanao, there is enough to argue that indeed diversity plays an important role in development given the composition of the ethnic groups: 13 ethnolinguistic groups representing the Bangsamoro people, 18 ethnolinguistic groupings of the Lumad, and the settlers who are Ilonggo, Ilocano, Cebuano, Boholanon, and so on. The not too obvious but significant advantage of federalism is its ability to address the demands of a pluralistic society, meaning one that has a mixture of populations of diverse cultures and ethnolinguistic identities. This is nowhere more pronounced than in Mindanao, with its Moro population of about 4 million and the Lumads numbering about 2 million, altogether making about 40% of the total Mindanao population. It is noted that only in a federal structure of government it is possible to “properly and correctly rule such a society in such a manner as to accommodate the distinctiveness of each nationality while orchestrating them all towards the common national goal which comprehends their diversities.”

Federalism and Fiscal Management

Although there is a need to establish correlation, it has been noted that the most of the politically stable and economically advanced countries in the world follow a federal set-up. These include Germany, the United States of America, Canada, Australia, Brazil, Mexico, Austria, Argentina, and closer to home, India and Malaysia. It is interesting to note that seven of the top twelve countries in the world in terms of per capita income in 1997 were federal, while six of the top 12 in gross domestic product were likewise federal, while six of the top 12 in gross domestic product were likewise federal. Assuming that we are under a federal structure, would the economic crisis faced by the nation today be isolated in Manila only? It is definitely possible. Decentralized fiscal systems offer more potential for improved macroeconomic governance than do centralized fiscal systems, because they require greater clarity about the roles of various players and decision-makers and-to ensure fair play-greater transparency in rules governing interactions. Challenges of globalization usher in fiscal reforms in developing countries. Among federalist countries, the following are noticeable:

• Monetary policy is best entrusted to an independent central bank with a mandate for price stability.
• Fiscal rules accompanied by “gatekeeper” intergovernmental councils or committees provide a useful framework for fiscal discipline and coordination of fiscal policy.
• The integrity and independence of the financial sector contribute to fiscal prudence in the public sector.
• To ensure fiscal discipline, government at all levels must be made to face the financial consequences of their decisions.
• Societal norms and consensus about the roles of various levels of government and limits to their authority are vital to the success of decentralized decision-making which can happen only under a federal structure.
• Tax decentralization is a prerequisite for sub-national access to market credits.
• Higher-level institutional assistance may be needed to finance local capital projects.
• An internal common market is best preserved by constitutional guarantees.
• Intergovernmental transfers in developing countries undermine fiscal discipline and accountability while building transfer dependencies that cause a slow economic strangulation of fiscally disadvantaged regions.
• Periodic review of jurisdictional assignments is essential to realign responsibilities with changing economic and political realities.
• Finally, and contrary to a common misconception, decentralized fiscal systems offer more potential for improved macroeconomic governance than do centralized fiscal systems.

The New Hope for Mindanao and the Philippines

Indeed the federal system is worth looking into as a more ideal set-up for Mindanao and the Philippines. More importantly, it is one system that may be able to effectively address the current and peculiar situation of Mindanao not only as a victim of neglect but also as a unique island-region that harbor three peoples of diverse backgrounds, customs, culture, traditions, and social systems. More specifically, it is a political option that may help prevent a stalemate that can lead to another Mindanao war. Clearly, what Mindanao needs is unity in diversity—not integration, not assimilation-or at least harmony in diversity. Admittedly, a federal system is friendlier to this idea than the unitary and centralized system that we have.