YAD 2009 ABI Higher Ed Tech Paper

8/7/2019 YAD 2009 ABI Higher Ed Tech Paper

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Securing Financing for MDGs Amidst Economic Challenges

2009 Alternative Budget Initiative56

EQUAL STANDARDS FOREQUAL OPPORTUNITIES1

FRAMEWORK FOR A QUALITY,ACCESSIBLE, AND RELEVANTPUBLICHIGHER EDUCATIONSYSTEM2

What is Higher Education to Us

The Youth Against Debt (YAD) defines education as a process each individual must embrace to beable to realize her/his actual or innate potential towards full human development. It is a fundamentalfunction or a route for people to become productive members of a particular society. It is often

associated with formal education or what many call as university education. However, the concept ofeducation is primarily more than that.

In reality, education is a combination of diverging experiences gained from different fields of learningand interactions. It is the learning and unlearning of knowledge, skills and morals/ethics provided byformal school education and the construction of understanding facilitated by everyday experiencewhich is often called as informal learning.

For us, the traditional role of higher education is to segment an existing homogenous labor pool,already capacitated by an effective basic and secondary education system, into specialized labor poolsperforming distinct highly technical tasks oriented towards national development needs, both ineconomic and social terms. The education system should thus be seen as a continuum from basic

(primary and secondary) education which already equips the populace the basic skills for production,to higher (tertiary) education which elevates social technical competency as investment for furtherdevelopment of the instruments of production.

The responsibility of investing in higher education, therefore, is delegated to social entities directlyaccountable to national development, which is both a function of an overall governmentindustrialization strategy and existing labor market demand. Thus, both the government and privatesector alike have a stake in investing for a quality and relevant higher education system.

Philippine Education

However, Philippine education is far from this. Our current educational system is characterized as:

Lacking a clear national development policy. A national development policy is very crucial indetermining the role and position of the education sector in the whole schema of socialproduction. This is especially true for higher education, given that we (wrongly) assign to it thefunction of training our labor sector.

1 Prepared by the Youth Against Debt (YAD), a coalition of student and youth organizations.2 With long excerpts from YAD and Freedom from Debt Coalitions (FDC) the Neglected Generation:Education Spending in the Philippines, June 2008


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2009 Alternative Budget Initiative 57

Governed by the policy of trifocalization3. The current education paradigm treats vocational-technical education for basic production as extrinsically separate and independent of basic andhigher education. This trichotomy may have been caused by the difference of the three levels interms of cost. For example, basic education is supposedly universally free, and there is an optionlater whether to pursue vocational-technical education or a much more expensive higher

education.

Maybe as a social reaction to the emerging problems of this education framework, there is a trendtowards tying vocational-technical education with higher education. College courses beingoffered gradually begin to reflect the technical needs of the booming industries, such ashealthcare and ICT (Information Communication Technology). There had also been proposals tocreate college programs that are modularized to include technical education, so one receives atechnical education diploma sometime along the middle of the college program.

Basic (primary and secondary) education is unable to capacitate the labor pool to a level ofcompetence apt for specialized training due to lack of government and private investment for aquality education system.

Due to this incapacity, the populace had been conditioned to view primary and secondaryschooling only as preparations for college, thus resulting in the relegation of much of the tertiaryeducation to skills training.

In this case, we have higher education system only serving to bridge the gap between thetechnical skills of the existing workforce (produced by secondary education) and the demands ofthe labor market.

Because of the service-oriented nature of labor demand, and the current framework of highereducation only as a bridge between the basic education institutions and the labor market, privatesector investment in higher education only serves to offer training for service industries.

Labor demand remains to be services-oriented, particularly because private sector investment inhigher education is focused solely on existing labor market demand (characterized by the growthof the services industry) and not on a specific industrialization strategy.

The government is currently supporting a labor-exportation policy, primarily compelled by lowinternal employment rate and themacroeconomic value of foreigncurrency remittances of OverseasFilipino Workers (OFW). Thus, localskills-training is almost alwaysinfluenced by current global labor

demand.

Trends in the higher education system

There is a continuing increase in the costof private higher education, causing a

3 Quoting Commission on Higher Educations (CHED) policy.

Figure 8. Average Net Increases of Students per HEI


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mass departure of college students from private college universities to state universities and colleges(SUCs) due to the inability of many students to afford unregulated private higher education. Thiswould not be a problem if SUCs can absorb the said students.

However, the meager budget provided by the government cannot simply capacitate our SUCs toabsorb the college entrants. SUCs are thus forced to pass on the cost to the students. For example, the

UP System hiked tuition by as high as 300% in 2007.

Proof of this fact, during the formal opening of classes last June of this year, Divina Pasumbal, publicinformation chief of Polytechnic University of the Philippines (PUP) public said more and morestudents from private schools were transferring to PUP because of its low tuition. However, PUPcould only accommodate 8,000 students per year.

Figure 9. SUC Budget per College Entrant

Students thus, not being able to afford any school at all, have nowhere to go. This slows down netgrowth of college students resulting to less and less people enrolling in college. If continued, thistrend will result in decreasing supply of skilled labor, which will inevitably take its toll on oureconomy.

Clearly, there is a lack of effective government investment on higher education both in terms ofbudgetary allocation and governance support, as manifested by the sheer volume of students thatcannot afford tertiary education and the quality of students produced by our HEIs.

However, this was aggravated by the incongruent increase in the number of SUCs in the last decade,contrary to government policy of a moratorium on the creation of SUCs as proposed by the

Presidential Commission on Education Reforms. The practice of building more negligible SUCsrather than strengthening existing ones opened higher public education to the dictates of patronagepolitics. These SUCs are not created to provide for the quantitative or qualitative needs of theeducation sector but primarily to increase the rapport and political esteem of local governmentofficials to their constituents.

The direct result is a decreasing per-unit budget allocation to public higher education, compromisingthe absorptive capacity of the public HEIs. Thus, there is commonly a trade-off between absorption ofstudents and the quality of education offered.

SUC Budget per College Entrant

0

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1995-1996

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This prompts the existing SUCs to conduct cost-recovery (e.g. user fees, community financing, costsharing) as a survival strategy. It is compelled to devolve to the students an increasing part of itsfinancial and operational burdens such as increased tuition and other miscellaneous fees.

The immediate corollary consequence of this is a staggering decline in the enrollment growth rate ofSUCs. Since students are not able to afford private higher education, the overall annual percentage

growth in enrollment is drastically slowing down. Due to lack of enrollees and resources, we endedup with SUCs that are very small by international standards.

Figure 10. Historical Enrolment Levels

Source: CHED Data

As a consequence, we have a public higher education system suffering not only from a lack ofresource input but also from a defective governance framework.

Vision for a Strong Higher Education System

The Youth Against Debt (YAD) believes in quality, relevant, accessible education on all levels, witheach level designed not only to be preparatory for the next, but also, by itself, already contributive tolarger social development goals.

Following our three-level education system, the best design would be a primary or elementary leveldevoted to the learning of basic skills, knowledge and values, with the secondary level alreadypreparing graduates for productive work so that those who wish to engage in the production processwould already be equipped with the necessary skills.

Like in developed countries, the tertiary level in the Philippines should thus be geared to those who

would wish to either devote themselves to the production of new ideas and knowledge or train thosewho would handle more sophisticated technical jobs. In order to accomplish that, we need a strongpublic higher education system which:

Provides and maintains equal quality standards for all students. There must be a certain level ofvariance between schools in terms of specific curriculum which should be determined byeducators in consultation with the communities that the school services. The school must beintimately linked to the environment it operates in.

-4.00%

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12.00%

1995-

1996

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1997

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1998*

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year

enrollmentinpercent


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Reflects and contributes to a national development plan. In the context of labor marketglobalization, this necessitates the reorientation of the labor supply produced by the new highereducation system by establishing a strong return-of-service program. HEIs should be gearedtowards national agro-industrial development and local community empowerment.

Can absorb the entire demand for higher education on the absence of private higher educationinstitutions (this restores the public sector role as the main provider of higher education, withprivate sector effort acting only as an ancillary and support system). Thus, our SUCs must bemade able to compete with private ones in terms of quality and relevance.

Policy Reforms

Such vision of a strong, relevant and sustainable public higher tertiary education can only be realizedif the government, in the immediate will implement the following policies:

1. There must be moratorium on tuition and other fee increase in SUCs. So as not to compromise thefiscal standing of SUCs about to increase its tuition and other fees, economic relief equal to theprojected increase should be provided by the State upon justification of immediate and substantial

need.

2. The following policy changes must made:a. Republic Act 7722 or the Higher Education Act of 1994 must be amended so as to increase

the power of CHED in regulating and stabilizing tuition and other school fees. Theamendment must include the power to impose fee increase cap and the power to prosecute inincidents of violation.

b. Section 42 of Batas Pambansa 232 or the Education Act of 1982, which allows privateschools to determine the rate of its school fees without regulation, must be amendedfollowing the Supreme Court ruling in 153 SCRA 622 (Philippine Consumers Foundation

vs. Secretary of Education, Culture, and Sports) which states that the power to regulate schoolfees devolves to the education departments

3. The institution of Multi-sectoral School Fee Boards must be mandated in all private and publicHEIs. These boards, which are to be composed of an equal number of representatives from theadministration, academic and non-academic personnel, parents/guardians, students and alumniassociation, shall study, conduct consultation and thereafter recommend on tuition and otherschool fee adjustments.

4. Concurrent with the strengthening of pre-basic (e.g. Early Childhood Care and Development orECCD) and basic education (primary and secondary) using the Education for All (EFA)framework, technical training should gradually be infused to secondary education through

establishing greater coordination with TESDA and DepEd, instead of relegating the task oftechnical training to higher education.


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To guide the transition towards a strong developmental higher education system, the followingproposals are suggested:

1. SUCs must be subjected to a periodic review, which will ascertain:a. Effectively performing SUCs, based on a certain benchmark pegged on international

standards;b. For non-performing SUCs, how much performance was a function of resource input (to

determine potentially performing SUCs); andc. Best academic and management practices, which will be documented and used as a resource

by all SUCs.

2. SUCs which are performing or will potentially perform when given more resources must becapacitated to a degree which will enable it to absorb the demand for the relatively non-performing SUCs in specific territories. Local and national development demands shall beconsidered when expanding.

a. In this modified outcome-based financing, both the potential and actual outcomes areassessed.

b. These performing SUCs are in essence competing with these SUCs for students, whichgradually weeds out non-performing SUCs without compromising the capacity to acceptentrants and to offer those entrants quality education.

3. Regionalized return-of-service programs must be strengthened so as to gradually increase highereducations social return.

Financing Higher Education

There is no question that public higher education system needs to undergo radical reforms both interms of framework and governance. However, this should go hand-in-hand with higher levels of

government support, in terms of budgetary allocation, policy support, and governance assistance.

Sad to say, education spending in the Philippines is negligible and are nowhere near widely-acceptedinternational standards concerning education expenditures. One such standard is the standardformulated by the United Nations Educational, Scientific and Cultural Organization (UNESCO).

In 1996, the International Commission of Education in the Twenty First Century4, headed by formerEuropean Commission President Jacques Delors, submitted a report entitled Learning: the Treasurefrom Within to the UNESCO. The report among others resulted in the adoption of the UnitedNations of the Delors Benchmark for education where notably over a hundred countries including thePhilippines willfully assented.

The report recommended 6% of the Gross National Product to education. This percentage range isnow referred to as the UNESCO Delors benchmark for education.

However, that standard is not being followed in the Philippines. From the time the Delors standardwas widely accepted as an international point of reference, education spending in our country aspercentage of the GNP hovered no more than 3.8%.

4 The commission was itself an offshoot of the general conference held in November 1991 tasked to convenean international commission to reflect on education and learning for the twenty-first century'.


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This wouldnt be much of a dilemma if the trend of our governments spending on education wasgeared towards the fulfillment of the standard like that of other developing countries.

Table 26. Education Spending vis--vis GNP, 1996-2007

Year GNP6% of

GNP

Education

Spending

Delors

Gap

Education Spending

as % of GNP

1996 2,261,339 135,680 74,682 60,998 3.30%

1997 2,522,884 151,373 94,954 56,419 3.76%

1998 2,815,259 168,916 106,850 62,066 3.80%

1999 3,136,170 188,170 110,614 77,556 3.53%

2000 3,496,863 209,812 116,827 92,985 3.34%

2001 3,876,603 232,596 121,498 111,08 3.13%

2002 4,223,326 253,400 125,395 128,005 2.97%

2003 4,631,479 277,889 128,995 148,894 2.79%

2004 5,248,064 314,884 128,789 186,095 2.45%2005 5,885,050 353,103 131,217 221,886 2.23%

2006 6,570,310 394,219 144,226 249,992 2.20%

2007 7,274,660 436,480 164,103 272,377 2.26%

*As computed by the Freedom from Debt Coalition

Yet the trend is nowhere positive. In reality, there is a decreasing and sustained drift towards stateindifference concerning the education of our people. From 3.8% in 1998 during the time of Estrada,education expenditure as proportion of the total national income dipped to 2.26% in 2007 underPresident Arroyo.

In fact, for 2009, the Philippine government proposes an education budget representing 2.14% of

GNP a far cry from the 6 percent international benchmark. This is much lower than this year (2008)which is 2.19% only of the total national income.

Even some countries that were not able to achieve education spending 6% of their GNP were bettereducation financiers than us. Namibia, Oman, Iran, all posted education expenditures at 4% of theirtotal national income in 2002 compared to our 2.97% showing during the same year.

Proposed 2009 Alternative Budget for SUCs

For FY 2009, ABI proposes an increase in the budget of SUCs, particularly 29 centers of excellenceidentified by the CHED. The proposed increase will be in the form of augmenting the budget forcapital outlay (CO) and provision of additional subsidy for students.

The proposed increase in CO is computed taking into consideration each SUCs student population.The per capita CO budget as for FY 2009 is computed and compared with the average per capita COfor all SUCs. For those SUCs which have less per capita CO budget than the national average, it isproposed that their CO budgets be increased in the amount of the shortfall between their NEP budgetand the average to equalize the CO spending for these centers of excellence. Table 27 details therelevant variables and the computation of the proposed increases for each of the identified SUCs.


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Table 27. Details of Proposed Increase in Capital Outlay of SUCs for 2009

Region Institution

Student

Population

(2006-2007)

Adjusted

NEP 2009

CO

Expense

('000)

CO /

capita

Proposed

CO per

capita

increase

Proposed

Additional

CO ('000)

I Mariano Marcos StateUniversity 9,232 3,012 326.26 52.25 482.36

IPangasinan StateUniversity 10,622 3,012 283.56 94.94 1,008.49

II Cagayan State University13,150 3,012 229.05 149.46 1,965.35

IIIsabela State University Cabagan 17,293 3,012 174.17 204.33 3,533.50

III Bulacan State University17,501 3,012 172.10 206.40 3,612.23

IIICentral Luzon StateUniversity 8,114 3,012 371.21 7.30 59.19

III Tarlac State University11,100 3,012 271.35 107.15 1,189.41

IVA Cavite State University12,163 3,012 247.64 130.87 1,591.76

IVB Palawan State University15,870 3,012 189.79 188.71 2,994.88

IVBWestern PhilippinesUniversity 4,681 3,012 643.45 - -

V Bicol University11,946 3,012 252.13 126.37 1,509.63

VI Capiz State University9,100 3,012 330.99 47.52 432.40

VIWest Visayas StateUniversity 14,486 3,012 207.92 170.58 2,471.03

VIII Eastern Visayas StateUniversity 7,653 4,512 589.57 - -

VIII Leyte Normal University6,001 3,012 501.92 - -

VIII Samar State University3,402 3,012 885.36 - -

VIIISouthern Leyte StateUniversity 4,177 3,413 817.09 - -

IXWestern Mindanao StateUniversity 8,940 3,012 336.91 41.59 371.84

IXZamboanga State Collegeof Marine Science andTech. 2,530 3,012

1,190.51 - -

X Central MindanaoUniversity 5,384 3,012 559.44 - -

XMindanao PolytechnicState College 6,369 3,012 472.92 - -

XMindanao StateUniversity - IliganInstitute of Tech. 10,471 3,012 287.65 90.85 951.33

XIUniversity ofSoutheastern Philippines 10,281 3,012 292.97 85.54 879.42


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Region Institution

Student

Population

(2006-2007)

Adjusted

NEP 2009

CO

Expense

('000)

CO /

capita

Proposed

CO per

capita

increase

Proposed

Additional

CO ('000)

XIIMindanao StateUniversity 29,715 11,065 372.37 6.13 182.29

XII University of SouthernMindanao 12,325 3,012 244.38 134.12 1,653.08

NCRPhilippine NormalUniversity 13,273 3,012 226.93 151.58 2,011.94

NCRPolytechnic University ofthe Philippines 50,016 3,012 60.22 318.28 15,919.33

NCRTechnological Universityof the Philippines 18,090 3,012 166.50 212.00 3,835.17

CAR Benguet State University11,062 3,012 272.28 106.22 1,175.03

TOTAL47,829.67

In addition to the proposed increase in CO budget, ABI proposes the provision of subsidy to coverrelief for SUC students in light of the increasing prices which include education-related expensessuch as daily transportation expenses going to and from the campus, spending for meals while inschool, costs of textbooks and other school supplies. In computing the proposed increase, internally-generated income by these SUCs has been used as a basis. Table 28 provides the amounts ofinternally-generated income by SUCs from tuition fees and other income collected from students.Using this combined income as base, it is proposed that an amount equivalent to 20 percent beprovided for under their respective budgets for next year to be used as subsidy to students. Thisshould defray the cost of education to shield the students from any pressures from the SUCs toincrease their collections from the students arising from inflation and the limited budgetary supportthey have been receiving from the national government.

Table 28. Details of Proposed Increase for Student Subsidy

Internally - Generated Income

('000)

InstitutionTuition

Fees

Other Income

Collected from

Students

Proposed

increased Subsidy

to Cover Relief

('000)

Mariano Marcos StateUniversity 45,192 26,010 14,240.40

Pangasinan State University21,000 27,208 9,641.60

Cagayan State University79,000 - 15,800.00

Isabela State University Cabagan 72,789 4,896 15,537.00

Bulacan State University185,000 - 37,000.00

Central Luzon StateUniversity 65,000 - 13,000.00

Tarlac State University 60,154 57,946 23,620.00


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Internally - Generated Income

('000)

InstitutionTuition

Fees

Other Income

Collected from

Students

Proposed

increased Subsidy

to Cover Relief

('000)

Cavite State University 68,989 70,690 27,935.80

Palawan State University52,777 60,149 22,585.20

Western PhilippinesUniversity 23,520 7,596 6,223.20

Bicol University103,100 6,415 21,903.00

Capiz State University39,542 43,088 16,526.00

West Visayas State University81,858 27,257 21,823.00

Eastern Visayas StateUniversity 34,500 17,959 10,491.80

Leyte Normal University11,139 10,494 4,326.60

Samar State University10,000 22,075 6,415.00

Southern Leyte StateUniversity 27,130 12,912 8,008.40

Western Mindanao StateUniversity 35,966 131,385 33,470.20

Zamboanga State College ofMarine Science and Tech. 4,750 500 1,050.00

Central Mindanao University13,997 26,416 8,082.60

Mindanao Polytechnic StateCollege 93,573 31,612 25,037.00

Mindanao State University -Iligan Institute of Tech. 36,219 19,430 11,129.80

University of SoutheasternPhilippines 46,631 30,180 15,362.20

Mindanao State University31,297 15,270 9,313.40

University of SouthernMindanao 180,000 - 36,000.00

Philippine Normal University49,202 5,383 10,917.00

Polytechnic University of the

Philippines 52,166 42,110 18,855.20Technological University ofthe Philippines 62,665 88,292 30,191.40

Benguet State University54,606 17,458 14,412.80

TOTAL488,898.60


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Table 29 shows the combined proposed increases in CO and student subsidy for SUCs. The totalproposed increase for the identified SUCs is P536.728 million.

Table 29. Consolidated Alternative Budget for SUCs

NEP 2009Proposed

CO

Increase

ProposedStudent

Subsidy

TotalProposed

Increase

Region Institution

(In '000 pesos)

IMariano Marcos StateUniversity 400,507 482 14,240 14,723

I Pangasinan State University220,079 1,008 9,642 10,650

II Cagayan State University285,236 1,965 15,800 17,765

IIIsabela State University -

Cabagan 360,057 3,533 15,537 19,070

III Bulacan State University175,101 3,612 37,000 40,612

III Central Luzon State University257,171 59 13,000 13,059

III Tarlac State University121,444 1,189 23,620 24,809

IVA Cavite State University187,824 1,592 27,936 29,528

IVB Palawan State University145,494 2,995 22,585 25,580

IVB Western Philippines University96,587 - 6,223 6,223

V Bicol University369,044 1,510 21,903 23,413

VI Capiz State University210,145 432 16,526 16,958

VI West Visayas State University330,604 2,471 21,823 24,294

VIIIEastern Visayas StateUniversity 173,345 - 10,492 10,492

VIII Leyte Normal University92,119 - 4,327 4,327

VIII Samar State University 100,186 - 6,415 6,415

VIIISouthern Leyte StateUniversity 117,647 - 8,008 8,008

IXWestern Mindanao StateUniversity 253,227 372 33,470 33,842

IXZamboanga State College ofMarine Science and Tech. 74,072 - 1,050 1,050

X Central Mindanao University -


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NEP 2009

Proposed

CO

Increase

Proposed

Student

Subsidy

Total

Proposed

Increase

236,471 8,083 8,083

X Mindanao Polytechnic StateCollege 99,587 - 25,037 25,037

XMindanao State University -Iligan Institute of Tech. 379,713 951 11,130 12,081

XIUniversity of SoutheasternPhilippines 168,579 879 15,362 16,242

XII Mindanao State University1,282,234 182 9,313 9,496

XIIUniversity of SouthernMindanao 237,638 1,653 36,000 37,653

NCR Philippine Normal University

282,318 2,012 10,917 12,929NCR

Polytechnic University of thePhilippines 663,637 15,919 18,855 34,775

NCRTechnological University ofthe Philippines 393,214 3,835 30,191 34,027

CAR Benguet State University237,383 1,175 14,413 15,588

TOTAL 536,728

Box 1. Delors Standard and Debt Service

The Delors Standard: A Short Review

Since its international recognition in 1996, the Delors standard built the necessary impetus to investmore on education by giving education spending a clear political weight among governments. It alsosets the demarcating contour by clearly establishing the minimum level below which state subsidy oneducation cannot dip or be neglected without causing serious ill effects in terms of its quality,accessibility and sustainability.

Because of this, governments, especially those based in developing countries, tried to comply with thestandard by raising their level of public spending on education as proof of their concrete commitmentto education.

The graph below from a 2006 Education For All (EFA) study5 shows some of the countries (with dataavailable) which have invested 6 percent or more of their gross national income (as measured by tgross national product or GNP)to education.

5 Education for All (EFA) 2006 Global Monitoring Report: Literacy for Life


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Figure 11. Public Expenditure on Education as % of GNP, various countries, 2002

While it also showed countries that were not able to act in accordance with the widely acceptedbenchmark, it was reported that significant strides were made to fulfill the goal. According to thesame study, an increase in education spending from 1998 to 2002 was reported in about two-thirds ofthe countries (with available data). Some of the glaring examples are Malaysia, Madagascar,Grenadines, Cameroon and Cape Verde.

While in another study6, it was reported that countries like Bangladesh, Brazil and Egypt investedclose to 6 percent of their GNP to education. It can be argued that appropriate level of governmentspending varies especially if taking into consideration the peculiarities of their economic and politicalbackgrounds. But looking at countries with similar income per capita as the Philippines, even war-torn Lebanon is fractionally higher than the Philippines. All others are spending above five percent oftheir GNI (gross national income) to education.

Thus, more than everything, education spending is mostly a matter of national policy.

Least Spender on Education

While previous governments are equally accountable and guilty for our dismal state of education, theArroyo governments treatment of education expenditure is alarming if not outrightly exasperating.

6 UNESCO Institute for Statistics 2000 Facts and Figures

Table 30. GNP per Capita and Education Spending, 2004

UNESCO 2004

Data

GDP per Capita,

PPP in US$

Education spending

as % of GNP

Cape Verde 5,449 6.23

Lebanon 5,422 2.51

Philippines 4,834 2.36

Swaziland 4,646 6.24

Guyana 4,482 5.35


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Of the total P1.66 trillion losses, the Arroyo Administration contributed P1.3 trillion in deficit makingher the least spender on education.

Figure 12. Delors Gap per Administration

Delors Gap per Administration

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Aquino Ramos Estrada Combined Arroyo 01-07

Series1

While some will argue that total national incomes vary through the years, even the said amount isdeflated to real value (1985 prices), Mrs. Arroyo will still emerge as the least spender compared to thetotal losses earned by Ramos and Estrada.

Of course, the Arroyo government could also argue that its deficit was the product of a lengthy rulewhich is currently on its 8th year. However, we include the losses of the Aquino government7 togetherwith Ramos and Estradas amounting to P733 billion, Mrs. Arroyo will still emerge as the mosttightfisted of all post-Marcos governments concerning education spending.8

Where is the Money?

So where did the money go? While there are many answers to this question, one way of knowing isby looking deeply into our debt problem.

As of end-December 2006, the Consolidated Public Sector Debt (CPSD) stood at P 4.944 trillion orUS$ 98.99 billion.9 A large chunk of our public sector debts are composed of debts by the NationalGovernment (NG). As of end of 2007, the NG Outstanding debt is pegged at P 3.782 trillion or US$81.6 billion.

7 The Delors Benchmark does not cover the Aquino government as it was only widely recognized in 1996.However, for the sake of argument, we included her administration.8 Deflating the amount loss to real value, the combined deficit of Aquino, Ramos and Estrada (10 years) is P345.6 billion as compared to the P 303.9 billion of Mrs. Arroyo gained in only seven years.9 Department of Finance data as cited in Sustaining the Momentum of Indebtedness: Debt and the Proposed2008 National Government Budget, Freedom from Debt Coalition, September 2007


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Due to the government's standard policy of prioritizing debt payments as institutionalized by theautomatic debt servicing provision enshrined in the Revised Administrative Code of 1987,succeeding administrations have been investing much less in social services in terms of percentage.

This decrease in allocation for social services is evidently seen in the per capita and per studentspending of the administration for health and education respectively. According to FDC, from the

Estrada Government's P201.00 per capita on health, it radically dropped to P184.00 under Mrs.Arroyo. Furthermore, per pupil spending dropped from Estrada's P5,830 to P5,467 during Arroyosterm.

Consistently, the Arroyo administrations top priority like her previous predecessors remains to bedebt servicing. Education, which is supposed to get the highest budgetary allocation this year, ismerely a third of what they will be spending on debt payment also this year (P181.86 billioncompared to P624.09 billion).

Debt Constricted Education Financing

Finding light to the question where did the losses go can be seen by comparing total Interest payments

from the time (1996) UNESCO adopted the Delors Benchmark for education up to 2007 and Delorsgap earned by the Ramos, Estrada and Arroyo governments.

As of 2007, total interest payments amounted to P 2.2 trillion compared to the total gap or losses oureducation suffered through the years which totaled to P 1.66 trillion.

Clearly, increased social spending is being siphoned away by debt servicing. And the trend throughthe years is, the larger the payment of debt interests is, the larger the Delors gap becomes.

Figure 13. Delors Gap vs. Interest Payments

117,417154,493

232,607

346,976

1,318,346

1,782,867

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Ramos 96-97 Estrada Arroyo 01-07

Delors Gap vs. Interest payments

Total, Delors Gap

Interest Payments

Of Democracy and Resources

The real culprit in this dismal spending on education is not only our government's predilection in theacquisition of debt, but also more importantly, the institutional mechanisms that dictate and aggravateour reliance to more borrowings to pay our debts. Section 26 (B) Book 6 of the RevisedAdministrative Code of 1987 is the kernel stone of all these debt-creating laws.

Because of the automatic debt servicing provision, payments for both principal and interest on publicdebt are automatically appropriated undermining social services like education and health. This is


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done without the pleasure of the publics review or scrutiny, which inevitably resulted in payingdubious if not illegitimate debts.

The assertion that we are increasingly having a scarcity of resources is a fat lie. Correctly, what wehave is a scarcity of democracy in the management and disbursement of our collective resourcesbrought about by archaic institutional mechanisms. It not only compelled our government to reject

widely accepted international standards on social spending such as the Delors standard, it alsosubjected our people to a life of forced indebtedness.

Automatic Appropriations on Education

Thus, the government must make an effort to reach the 6 percent of GNP to education. This can bedone in a gradual manner, with a 1 percent of GNP increase yearly for education spending until 2010.

However, this must be complemented by a strong legislative effort to institutionalize the standard bypassing a law giving automatic appropriations on education. It will force our legislators to finallyrepeal Sec. 31 (B) of Presidential Decree 1177 in Sec. 26 (B), Book 6 of the Revised AdministrativeCode of 1987, which ensures the automatic appropriation of payments for principal and interest on

public debt. There must be no middle ground in this issue. Our national leaders must choose betweenthe education of our people and the interest of foreign creditors.

Equal Standards for Equal Opportunities

Now more than ever, education must be transformed from a tool of social and economic inequity intoa process and apparatus which will equalize opportunities for the realization of premium humandevelopment and the deepening of social consciousness geared towards creating responsible, criticaland dynamic persons. Lastly, education must become a vehicle for progressive social and economicmobility between citizens and the government geared towards promoting the individual's and society'sfuture development.

However, unless the appropriate political will and commitment from our government are exercised totransform our education into such a powerful force of change, we will have to content ourselves withthe current educational system which will only give our people equal prospects towards collectivepoverty and obtuseness.

YAD 2009 ABI Higher Ed Tech Paper

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Transcript of YAD 2009 ABI Higher Ed Tech Paper