Egalitarian: The economic model in Philippine Federalism

There is the need to propose a market design that fits in the proposed federal model for the Philippines. Under the unitary setup, the Philippine economy is known to be booty capitalism with chronic regulatory capture where control of market and politics rests in the hands of the oligarch.

Booty capitalism is a country’s situation where the government is weak and fragile while the private sector (oligarch) is strong, and advances their private interests using the instruments of the government. For example, it is easy to control the prices in the market by sending a bizarre signal that there is a shortage of supply by fluctuating the retailers’ price or by reducing the volume through increased inventory. In effect, prices will shoot up although there is an apparent volume of products from end-to-end of the market system.
Federalizing the country means shifting away from the booty capitalism model, disband monopoly and oligopoly in the markets, and establish a free market with a better purchasing power of the buyers and effective, productive capacities of the suppliers.
The country has to move away from the current economic design to fully ensure that federalism in the country will work. On this, it is espoused that the Philippine federalism must also bring to the people economic opportunities and benefits denied to them in a unitary setup.
There are three basic economic models: free market, planned economy, and the social market economy. The free market dictates that the volume of goods and the prices in the market are results of the agreement between the buyers and sellers. This is good if both, the sellers and buyers are equally informed and are provided with similar information for which strength of the other is just canceled out by the ability of the other. However, in this country, information rests in the hands of the few thereby creating sizable market power, with just a single tweak of information; profit becomes a windfall at the expense of the people queuing for a limited kilo of NFA rice. The free market economy employs the capitalist intention. Capitalism in not wrong, it becomes wrong if the institutions of the country are weak to lose ability in enforcing the laws and policies. I could remember a merchant’s proverb of “chaos is an opportunity for profit”.
On the other hand, a planned may not include all work altogether. The government has no business of an enterprise. It will eat the whole of the enterprises; it will devour the market. The planned economy dictates the market and plans out how to produce and even who consumes the goods. Although, pretty surely everyone will be employed in this market design, yet people might lose their creativity if forced to do the job forced upon them.
But there is an economic system which allows for “equality of access to opportunities and equity of outcomes.” This is the principle enshroud in the social market economy. This market system strongly protects the welfare of its people to the degree that each will exercise their autonomy and creativity while encouraging market competition through enterprise development, property rights, and business incentives. The government strongly intervenes in favor of the weak and the poor to make them effective market participants. Come to think, if the 25 million people in Mindanao, the whole of it will buy and exercise power in the market. Buy goods according to the ability of their improved pockets, and sell according to the productive capacities of their land, within income exhibiting stronger purchasing power, then we can just say, mao na jud ni!

Posted in Opinion