In the Philippines, federalism has always been offered as an option for institutionalizing autonomy of subnational units. We at National College of Public Administration and Governance have always argued that, as far as the Philippine politico-administrative context, federalism is a logical option to consider as a next step after the decentralization process that began 15 years ago. Certain elements in theory and practice support this claim, but federalism is a far more complex governmental structure than a mere progression from a decentralized setup. Federalism approximates greater self-rule for sub-national units and an opportunity to accommodate cultural diversity that has always characterized Philippine society. This article explains the similarities and links between federalism and decentralization as well as other key aspects of federalism that make it different from the other.