A federal Philippines means that a measure of the chief executive’s power — like the control of tax revenues, designation of official languages — is devolved to the regions and provinces to allow them the freedom to effectively administer themselves under the ultimate power of the central government. The regions and provinces are now organized into federal states, ideally created by ethnic lines and families or what are called ethnic states.

The diversity of Philippine culture, as well as economic reasons like the existence of potentially excellent ports (which usually become the center of progress), demands that there be 22 ethnic states. The Philippines will retain its presidential executive and bicameral congress; no shift to a national parliamentary system is necessary. However, the ethnic states have the discretion over their system of government, and may choose to adapt a different kind.

Politically an ethnic state may be a unitary state, which is a plain conurbation of towns and cities; they may also be a state composed of provinces, with the capital being a state territory, much like Manila in the regional sense; or a state with a province or two as substates. The forms of state government possible are:
  1. the current gubernatorial system, where a governor is elected by popular vote,
  2. a parliamentary system, where towns and cities elect representatives instead of mayors, and these representatives in turn elect the 'chief minister' as it was called by the MILF,
  3. a gubernatorial-parliamentary system, applicable in federal states with substates: for example, the State of Tagalog elects a governor by statewide popular vote, but its province, Marinduque, elects their own chief minister at the same time,
  4. A revival of the old rajahnate system in the democratic form, similar to parliamentary system only that the chief minister is called rajah and the mayors, who now convene into a parliament, are called datus. This is better applied in homogenous states and provinces. In states with provinces or substates, the rajah is ideally elected by the province or substate only, with a governor chosen by popular vote of the entire state.