This study aspires to shed light on the proposed shift to a federal system of government in the Philippines if it will indeed foster further development to the local government units (LGUs) to be independent and self-reliant communities. The three federalism proposals were compared in the aspect of fiscal transfer from the National Government to the Local Government Units namely, the Concom proposal, Pimentel proposal, and the CMFP proposal. The fiscal transfer design of these three proposals were tested and compared as to its viability and how it will impact the income generation of the LGUs. The result of the study showed that the Pimentel proposal would significantly increase the income of the LGUs that would be translated to higher spending capabilities to support the delivery of basic services to its constituents. However, it would also mean an increase in the dependence of the LGUs from national support. Moreover, Local Chief Executives expressed their doubts as to the necessity to shift to a federal form of government due to identified factors.

fiscal transfer

local government

federal system of government

fiscal decentralization