The new class: Reform initiatives include big changes in expansion and funding

As it seeks to simultaneously expand access and improve quality, the Philippines faces numerous challenges in the realm of education. Increasing enrolment, low levels of per capita spending and under-investment in previous years have left the sector in need of key infrastructure and educational resources. At the same time, a shifting economy demands more skilled graduates to fill roles in growth areas, such as business process outsourcing, hospitality, catering and shipbuilding. While the government has launched several ambitious reform initiatives, the private sector is also playing an increasingly important role in helping young Filipinos to fulfil their aspirations in higher education.

STRUCTURE: The country’s education system closely resembles that of the US. Elementary school provides education from ages of six to 12. High school continues for a further four years until graduation at the age of 16, meaning that mandatory education lasts a total of 10 years. Tertiary education begins at the age of 16 (among the youngest in the world). With a typical undergraduate programme taking three to four years to complete, graduates are often under 20 years old.

While both the public and private sectors play a role in the provision of education in the Philippines, the latter is predominately active in the tertiary segment. An estimated 87% of Filipinos attend state-funded elementary and high schools, and about 80% enrol in private colleges and universities at the tertiary level. The Department of Education (DepEd) oversees primary and secondary education, while the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority are responsible for supervising tertiary degree and non-degree programmes.

INCREASING ENROLMENT: The primary challenge for the DepEd is expanding offerings to meet the needs of a growing youth population and a new government policy designed to boost kindergarten provision, with a target of covering some 2.4m five-year-olds by 2012 (see analysis). Official figures from DepEd show that public enrolment is projected to increase by an average of around 4.1% per year, rising from 19.7m in 2009 to some 22.1m in 2012. Total enrolment, including private education, should reach 25.2m in the same year.

Falling dropout rates are also a factor. The DepEd recently compared two cohorts, the first covering the years between 1975 and 2004, and the second the years between 2001 and 2010. The department found that dropout rates held steady at 24% for elementary grades 1 to 4, but dropped 10% for high school entrants in the second cohort, with 8% more students graduating from high school. That said, even with the reduction in dropout rates, out of every 100 children starting school in the Philippines, only 50 graduate with a diploma at the age of 16. Attendance can be particularly low in poor areas, where children are expected to help support their families financially, particularly during busy harvest times.

STRETCHED RESOURCES: The administration of President Benigno Aquino III is attempting to support reforms and plug investment shortfalls with a series of funding increases. The budget for 2011 was 18.4% higher than that of 2010, coming in at P207bn ($4.7bn). The 2012 budget rose by an additional 15%, reaching P238bn ($5.4bn). However, spending remains quite low even by regional standards, at some P11,000 ($250) per pupil per year. By way of comparison, the Thai government spends $1095 per pupil per year.

Resource limitations have generated a range of challenges. For example, the DepEd estimates it needs an additional 11,620 teachers in 2012. The problem is not one of the quantity of qualified teachers available, but rather the required budget of P2.57bn ($58.3m) to pay their wages. Salaries constitute around 79% of the DepEd’s budget, which means there is little room for capital investment in facilities and teaching resources. The result is class sizes that reach 70 children for every teacher, well beyond the targeted figure of 45.

Historical budget constraints have also left the sector short about 66,800 classrooms. Government funds of P800m ($18.2m) helped to build 1054 classrooms by the end of 2011 and a further P1bn ($22.7m) in investment is set for 2012. The state-owned Philippine Amusement and Gaming Corporation is also helping in the effort, having pledged to provide 1000 fully equipped classrooms by the end of 2012. The private sector has also been encouraged to lend support through the DepEd’s Adopt-A-School programme, with contributions from large private businesses so far amounting to P1bn ($22.7m). Despite these initiatives, it will take time for resources to match up with demand.

Progress is more advanced in other areas, however; for example, the DepEd is on target to achieve a 1:1 student-to-textbook ratio across all five core subjects: English, science, maths, social studies and Filipino.

GOVERNMENT INITIATIVES: The DepEd is leading several reform initiatives. The most far-ranging is the K-12 programme, which aims to extend kindergarten coverage to 2.4m five-year-olds and to add two additional years of schooling, bringing the Philippines in line with the international standard of a 12-year education period. With resources already stretched, critics say emphasis should first be on improving quality through a better teacher-to-pupil ratio and on making sure children have enough food to eat so that they can concentrate throughout the school day.

Several other programmes are under way as well. The Aquino administration hopes to get every child reading by the end of grade 1. Key to this is switching from teaching in English to teaching in students’ mother tongue from grades 1 to 3. In addition, science and maths will also be taught in the mother tongue for the first three years. The reasoning is that most children only begin learning English when they enter school and so the learning of other subjects is limited by their ability to first learn English. In the future, elementary education will be split 50:50 between mother tongue and English, shifting to a 30:70 emphasis in high school.

HIGHER EDUCATION: If education up to the age of 16 is dominated by public provision, then the private sector largely drives education after that point, accounting for over 80% of enrolment. The sector is currently responding to several challenges. Most pressing is the imminent extension of education for two additional years at the senior high level, which has the potential to temporarily reduce revenues. With no implementation plan or costing yet worked out, it seems likely there will be a compromise whereby the government pays universities for facilities during a transitional period.

Universities face further financial constraints. Regulations dictate any fee increase must go 70% towards teachers’ salaries and 30% for books and educational equipment. This makes it difficult to invest in new facilities and programmes. Only those institutions receiving significant donations through an alumni network are able to expand and modernise. A lack of credit also hampers growth, and a government-backed student loan system would help families access higher education while supporting overall investment levels.

According to Guillermo M Luz, the co-chairman of the National Competitiveness Council, consolidation would help to improve quality. “I believe we should have fewer but better universities,” he told the local press in June 2011. The World Economic Forum’s “Global Competitiveness Report 2011-12”, ranked the country 61st among the 142 surveyed for its educational system.

In addition, according to Alfredo E Pascual, the president of the University of the Philippines, courses of study need to be better aligned with the needs of the job market. “The Philippines has over 500,000 unemployed college graduates, yet the country is suffering from shortages in many areas. Meanwhile, government offices, think tanks and industry associations regularly assess industry and job trends. To address the jobsto-education mismatch, universities can use these assessments as a basis for restructuring programmes.”

INTERNATIONALISATION & EXCHANGE: More positively, universities are looking to internationalise. Keen to boost revenue, most institutions are hosting an increasing number of foreign students. With English as the primary instruction language, many Korean and Chinese students see the Philippines as a low-cost option compared to more expensive alternatives in Europe or the US, both for stand-alone English-language training and full-time university degree courses. Institutions such as Ateneo de Manila University and Jose Rizal University are looking into more exchange programmes as a way to widen students’ exposure to foreign visitors and provide learning experiences abroad. Exchanges are popular, partially because they rely in large part on host universities waiving fees.

A highly competitive marketplace means universities seek to distinguish themselves through international accreditation. Although no Philippine universities made it into the top 300 of the recent QS World University Rankings (University of the Philippines was top-ranked at 332, with Ateneo de Manila University coming next at 360), progressive universities continue to look for external validation, particularly from US and European bodies. According to the other two major international rankings, the “Academic Ranking of World Universities”, published by China’s Shanghai Jiao Tong University, and the UK’s Times Higher Education supplement “World University Rankings”, no local university has yet made it into the top bracket at the global level.

SUPPORTING ECONOMIC GROWTH: Private education is becoming increasingly important to equipping young Filipinos with the skills and qualifications needed in the global economy. CHED is forging strong links between higher education and business by encouraging more on-the-job training and internships – already common in medical fields, but now expanded to technical disciplines and agriculture. Universities say they can support the provision of new skills more cost-effectively than industry; all they need is a positive response from business and the required investment.

Private businesses are taking a keener interest in private education and acquisitions are on the rise. The sector is currently fragmented and in need of greater economies of scale. “There are around 2000 private institutions of higher learning in the country, while there are only 111 public universities, and 80% of enrolment occurs at private institutions,” said Jesus Torres, the president of Rizal Technical University. “Private investors are continuing to look at additional acquisition opportunities, with some of the country’s major conglomerates carving out a wider presence in the sector.”

Several private universities have been bought by leading business people, who are providing cash injections to upgrade facilities, while also considering consolidation via mergers. This trend is in its infancy, but the sector looks ripe for further activity going forward. The K-12 initiative in particular presents opportunities for higher education providers to develop shorter courses geared towards vocational and job-ready qualifications for students entering the workforce.

OUTLOOK: The education sector is entering an exciting and challenging new phase. Expansion of provision will further stretch budgets, requiring more funding to accommodate rising student numbers and increase quality. Simultaneously, higher education must respond to new demand from employers for graduates trained in in-demand disciplines. A flurry of more focused vocational courses is expected. Universities, meanwhile, are placing ever more importance on finding financing and ties with business will likely strengthen as a result.