According to Pernia, the economic state of the Philippines will affected if there will be a change from Democratic to Federalism. He also said that the “cost for expenditures are higher than before and the estimated fiscal deficit to the GDP (Gross Domestic Product) ratio of our country can easily jump to maybe 6% or more than 6% and this will create a wreak havoc in the fiscal situation,” Pernia said in an interview.
“The amount of expenses will downgrade the country`s credit ratings,” he added.
“We really have to do our homework first in terms of preparing well for the country, for the economy,” he said (2018).
Pernia was very concern on the effects that Federalism may bring to the Philippine economy and this could make the Philippines suffer to its consequences.
According to Rivas, the inter-agency Development Budget Coordination Committee (CDBB) already set the estimated deficit cap for the year 2019 at 3.2% of the country`s GDP. There are other economists who already expressed their concerns towards the shifting of the government system of the Philippines.
The country will also experience hyperinflation according to University of Asia and the Pacific senior economists Victor Abola and Bernardo Villegas (2018).
We can really see the effects of Federalism in the Philippine economy and further research is required before jumping from Democracy to Federalism.