Duterte’s Barter Initiative For Mindanao Offers a Glimpse of The Advantages of Federalism

Philippine President Rodrigo Duterte has just signed Executive Order No. 64 which creates the Mindanao Barter Council (MBC). The MBC will oversee and regulate legal transactions and commerce in a localised barter economy as opposed to the traditional cash economy. For a region of The Philippines like Mindanao that has been economically underdeveloped for decades, barter offers locals an opportunity to trade their way out of poverty while the legal mechanisms of the MBC will help to deter traders away from the black market.

By offering new legal protections and regulations to a traditional form of trading in underdeveloped regions, Duterte is empowering a region in so far as a legal barter system will help to reflect the economic needs and cultural characteristics of Mindanao at a time when many are still on edge due to the recently ended Daesh (ISIS) aligned siege of the city of Marawi.

As a native of Davao, Duterte understands Mindanao’s unique needs and aspirations more intimately than his predecessors. Duterte also understands that at a time when global inflationary trends among emerging markets as well as the rising global price of Brent Crude are making basic foodstuffs more expensive for the poor, a barter system within Mindanao can relieve local pressures. Likewise, an international system of barter between Mindanao and regions of neighbouring states with rough economic parity will now allow for the crucial trade of surplus goods between multinational regions on a barter model. This is especially important as certain nations with a surplus of goods and commodities may feel that the cash economy undervalues such goods and as a result will be more inclined to trade them with Mindanao on a mutually agreed and sustainable barter model.

This win-win model is one that in a federal Philippines could be a rule rather than an exception. As The Philippines is a highly populated country with a non-contiguous geography, the economic and sociological differences between regions is more pronounced than in a smaller state or in a state with a more linear contiguous geography. Because the economic schism between Manila and the poorest parts of the country is particularly wide, federalism can help to empower regions to develop both internal economic systems that suit immediate developmental needs while also allowing for the consecration of a legal framework wherein places like Mindanao can have a barter free trade agreement with for example the Malaysian regions of north Borneo or the cash rich Sultanate of Brunei.

The special “barter ports” established by Duterte’s executive order will further help to streamline this process where similar regions in friendly ASEAN nations will be able to trade locally valuable goods on a barter model. Duterte’s foresight regarding local economic needs however remains the exception rather than the rule in terms of the existing political class. It is difficult to imagine any other major national political figure in The Philippines taking the care to develop such a system which is why constitutional reforms to create a federal-parliamentary democracy are urgent.

A federal republican model can help regional parliaments to develop, implement and regulate their own micro-economies and inter-regional economies while such a system also will allow wealthy regions of the country to develop more advanced traditional cash based free trading agreements with international partners of The Philippines within the framework of a system that balances local empowerment alongside cooperation with Manila on a win-win basis.

Duterte’s new economic model for Mindanao represents the beginning of what could be special barter/free trade zones throughout the country that could be more easily created if the regions themselves had legal autonomy over such matters.

One of the mistakes made when analysing Duterte is to think that because he works tirelessly for the benefit of all the Filipino people, that a successor under the present broken political system would do the same. The fact of the matter is that Duterte is the rarest of individuals who has taken upon his shoulders what under a more functional system would be tasks administered by multiple individuals both in Manila ant throughout other cities and regions in The Philippines.

In order for Duterte’s reforms to continue and expand over the course of the decades, a new political system must be developed in order to assure that “Duterteism” outlasts the single term that the current system allows the President to have. Below is Euarsia Future’s full report on why federal-parliamentary reforms are necessary in order for The Philippines to make the most of Duterte’s historic presidency.

What do you call a political system where the incredibly popular head of state and political leader is constantly in a tug-of-war with hostile opposition parties in Congress, the Senate and where he has to contend with a Vice President openly undermining his every move? The answer is that one should call such a system, corrupt, undemocratic and totally broken.

Broken politics in The Philippines

The situation described above is the situation in The Philippines today, where those who are endlessly less popular than the directly elected President are able to combine otherwise disparate forces in order to openly sabotage the President’s political program and all in the name of narrow minded personal and factional gain. In fairness, the in-built potential for political hostility between a directly elected President, separately directly elected Vice President and an elected Congress and Senate is to avoid a concentration of power in the hands of one person or faction. But while such ideals work well on paper, they never work well in the real world and this is before one discusses the corrupt election of the current Vice President of The Philippines.

When a politician of any kind is elected, he or she is elected to deliver on political promises. But in The Philippines, a system has developed which has allowed for such a popular politician to fail through no personal fault but due to a faulty system.

Allowing Duterte the mandate he has earned the hard way

Of course, many will correctly say that President Rodrigo Duterte has already accomplished more in just under two years than most of his predecessors were able to due in a single six year term. This is true, but this is mainly because of Duterte persisting in staying 10 steps ahead of his opponents and moreover in Duterte’s use of public speeches to introduce new policies directly to the people rather than introduce them in fraught closed door meetings with obstructionist politicians.

Such obstruction is especially dangerous in a developing country that has the potential to be the next so-called ‘Asian tiger’ if Duterte’s vision of a revitalised economy is fully realised. Of course great progress has been made in respect of Duterte’s infrastructural expansion program ‘Build, Build, Build‘, as well as his tax reforms, labour reforms, increase in pay to professional teachers, his joint initiatives with China in the South China Sea and his transformation of the country into the world’s number one investment destination.

But while all of these major accomplishments have been the result of political struggle, one ought to imagine how much more Duterte could accomplish if instead of a political struggle he was able to get his policies passed in a simple process where a majority of lawmakers received their own power due to their support of the political leader rather than because of their opposition to him.

Such a system would be possible if The Philippines embraced Duterte’s reforms to federalise the country while combining this with a unicameral federal parliament where it would be impossible for the head of government not to have a majority backing of a would be parliamentary assembly.

In such a system a leader stand and falls by his day-to-day, week-to-week popularity as determined by a singular election for competing visions for the country. Such a system is far more effective than a system where deadlock is a built in feature of governance. How can one expect to push through necessary reforms when half of the time, politicians are pushing against one another?

How it could work 

While through most of its history, the Philippines has been governed through a strong presidential system, in 1978 and 1984, elections for a Batasang Pambansa (National Assembly) were held during a time when President Marcos experimented with a hybrid parliamentary system that was established in the 1973 Constitutional Referendum. In 1987, the country formally switched back to a strong presidential system on a model not dissimilar to that of the United States.

There are many options for a contemporary parliamentary system in The Philippines. Naturally, the debate should be held based on what objectively is the most democratically representative, politically efficient and cost effective political system.

The following is my personal proposal for how a new parliamentary system could operate, run elections and govern the Philippines.


Throughout the world, the most common way of electing members of a national parliament is either through a party-list proportional representational system or through a first past the post system. In a party-list proportional representation, voters select from a list of parties and which ever party gets the most votes, gets the most number of members of parliament after the election. This system is designed to give all parties, including small parties, a proportional share of seats in a national parliament.

By contrast, in a first past the post system, each party selects a single candidate for a constituency/district and people vote for an individual candidate and his or her party at the same time.

Here’s how each system would look in The Philippines:

a. Party-list proportional representational

Sarah lives in Metro Manila and on election day votes for PDP–Laban. Assuming most people in the country vote like Sarah, it means that PDP-Laban will send the greatest number of party members to parliament. Sarah’s neighbour Maria votes for the Liberal Party. Assuming the second largest group of Filipino voters are like Sarah, it means that the Liberals will send the second highest amount of party members to the new parliament.

b. First past the post 

Sergio lives in Davao city zone A (large cities usually have more than one zone in first past the post systems). Sergio supports PDP–Laban and in his area, PDP–Laban’s candidate for member of parliament is Rodrigo Roa Duterte. Therefore, Sergio checks the box that says ‘Rodirgo Roa Duterte, candidate for PDP–Laban’.

Weighing the options 

Most parliamentary systems, particularly the more modern ones, tend to use a form of party-list proportional representation. However, during the most recent election for Russia’s parliament, the State Duma, officials decided to allow some areas to vote in a first past the post system while the majority of Duma deputies (members) were elected via party-list proportional representation.

In a federal Philippines, the most effective way to vote for a member of parliament would be for all localities to vote on the basis of a party list whose members will be determined via proportional representation, while additionally, each federal unit of the country will have a set number of single candidates who will be voted for on a first past the post basis.

In such a system, Sarah who lives in the would-be federal district of Metro Manila will cast one vote for the party of her choice (PDP-Laban, Liberal, Nacionalista etc), while also voting for a given number of candidates for her federal district, for example, three representatives who will be unique to Manila. Here she can vote for candidates all from the same party, or three candidates she personally likes from different parties. This also allows independent candidates a chance to enter parliament.

Such a system will guarantee that a healthy mix of party popularity combined with that of stand-out individuals at a federal level, will help to comprise a balanced yet diverse make-up of a parliament.

Parliamentary composition

In a party list proportional representational system, the parties get to choose which representatives will be the first to enter a parliament. Traditionally this means that party leaders and would-be cabinet ministers get the first seats available, while further seats are allocated to the younger and less experienced candidates. In reality, this means that if a party gets few votes, its leader and senior party figures will enter parliament while other junior members will have to wait and hope that their party gets more votes at the next election. By contrast, a highly popular party could see both the party leadership and a large number of younger candidates win seats.

Whichever party wins the most votes will get to form a government. This means that the winning party’s leader will become the Prime Minister/Head of Government. The Prime Minister can then choose which fellow party members of parliament should take on important cabinet positions including Secretary of Foreign Affairs, Secretary of Finance, etc. If the winning party gets less than 50% of parliamentary seats, the party will likely have to form a coalition government with one, two or even three other parties in order to form a government.

Unlike in a presidential system where cabinet members can be appointed from anyone in the nation, in most parliamentary systems, cabinet members must first be elected to parliament, something which is quite easy in the party-list system, as would be cabinet members are put towards the top of the party list. For example, if a party leader wants a certain individual to be his Secretary of Foreign Affairs, the party leader will simply put such an individual high on the party-list. This insures that all national officials have to face the electorate, while all parties with a serious chance of governing will be able to get their top officials into the parliament.

Term of a parliament 

The lengths of most parliaments range from 4 to 7 years. For The Philippines, based on the current term length of the office of President, new elections for a parliament should be held once every six years. However, in a parliamentary system, if a government becomes unpopular, it can be voted out by a majority of members of parliament. This is called a ‘vote of no confidence’.  Votes of no confidence are especially common when the ruling party is part of a coalition.


In order to make The Philippines even more democratic than many other parliamentary systems, major issues should be decided via referendum. Such a system has been most successful in Switzerland. Here, while the parliament debates and votes on many new laws and regulations, for major issues, the people have a direct say.

It is crucial that in such a parliamentary system, it is written into constitutional law that all such referendum votes are legally binding, meaning that parliament can not vote to overturn the will of the people as expressed in a referendum.

To make things even more democratic, if enough citizens sign a petition asking for a referendum on holding new elections before the end of a six year parliamentary term, they should be able to hold a nationwide referendum asking if they want new elections sooner. This allows the public to hold their own votes of no confidence, should a government become highly unpopular.


The Supreme Court in many parliamentary systems, is able to hold parliament to account, were parliamentarians to vote through measures which violate the constitution. Such a system tends to work effectively throughout many nations.

A President 

In parliamentary republics, there are typically weak Presidents whose role is generally ceremonial. To save costs, all members of parliament should also be eligible to run for president. Therefore, one could have parliamentary elections and presidential elections on the same day. For example, in a parliamentary system, Rodrigo Duterte could stand as the leader of his party, while also running for the less important role of President. If his party wins the parliamentary election and he personally wins the presidential election, he will hold both titles. If he were to win the parliamentary election but lost the presidency, he would still hold the most power, but could not be referred to as President when travelling abroad. Likewise, if he won the Presidency but his party did not come out on top in the parliamentary vote, his role would be limited to a ceremonial position while the Prime Minister would be the country’s most important political leader.


A unicameral parliament is among the most efficient and most democratic ways to run a modern government. Such a system has clear advantages over the convoluted and often adversarial system in place today. This is of course, just one proposal, there are other varieties of parliamentary system as well as other original ideas that can and should be debated before The Philippines embarks on a positive road to political change.

At present, the system in The Philippines is broken and the only fix is to totally overhaul it and replace it with the kind of system that has been so successful in Singapore, a country itself shaped by a strong and visionary leader who like Duterte refused to compromise with those who did not have the best interests of the country in mind. That man was of course Lee Kuan Yew. Duterte deserves the change to consolidate his popularity in the kind of political system that allowed Lee to transform Singapore from a swamp to an economic leader.

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