2018 Philippine Association of State Universities and Colleges (PASUC) Midterm Convention Opening Ceremonies

June 27, 2018, 10:00 a.m. | SMX Convention Center, Pasay City

sbed pasuc 2018

Secretary Benjamin E. Diokno, Ph.D.
Department of Budget and Management

To Dr. Tirso A. Ronquillo, President of the Philippine Association of State Universities and Colleges; to all PASUC officials and members; esteemed guests; good morning.

Since the Universal Access to Quality Tertiary Education Act, was signed into law by President Rodrigo Duterte last August 3, 2017, the government has kept its promise to fund the Free Tuition Law according to the spirit it was written.

In keeping with the spirit of the law, we have budgeted for the four main components of the law, namely: Free Higher Education in State Universities and Colleges (SUCs) and Local Universities and Colleges (LUCs), Free Technical Vocational Education and Training in TESDA-accredited Technical-Vocational Institutions, Education Vouchers through the Tertiary Education Subsidy, and the establishment of a Student Loans Program.

 

For 2018, we are spending around 40 billion on the Free Tertiary Education Program overall. As it stands, the proposed budget for the program in 2019 is around 51 billion pesos, or an 11 billion-peso increase from 2018. Around 44 billion pesos will be lodged in the Commission on Higher Education (CHED) budget, while 7 billion will be lodged in the TESDA budget. Both the numbers and arrangements surrounding the budget for the Free Tuition program are of course still subject to changes in Congress.

Through this law, we have effectively done away with cost-sharing principles in funding higher education, and adopted a more dual track system. In countries with dual track systems, public universities are kept inexpensive but have limited carrying capacity; hence, significantly more expensive private universities absorb much of the demand for higher education. This system is shared by countries like Russia, Japan, and a number of countries in Latin America.

To be perfectly candid with you, I opposed the passage of the Free Tuition Law. Such a law would allow for many leakages. Filipinos who are eligible for a college education are likely to be able to afford it in the first place. I argued providing Free Tertiary Education would subsidize the rich and the middle class. Furthermore, the International experience had been, at least in countries with some degree of income inequality, that dual track systems would “do little to benefit the poor” for precisely the reasons I had brought to the table.



The other strong argument is that in an economy where there is budget constraint, and it looks like all economies have budget constraint, there is a strong economic justification to allocate resources to basic education and secondary education than to tertiary education. The benefits of basic education go to both individuals and society; the benefits of tertiary education are enjoyed largely by recipients of tertiary education.

Of course, I could not downplay as well the increasing demand for higher education from all levels of society. Higher education, whether correctly or incorrectly, promises better jobs, higher earnings, and greater social mobility. This demand, I also feared, might actually exceed the growth of employment opportunities requiring this level of education.

There are, of course, the long-term benefits to higher education, which I believe the President is fully sold on, and I am with him here. A better educated citizenry means greater economic prosperity, as well as the advancement of democracy and social justice.

It is with these short-term challenges and long-term goals in mind that we tread Free Tertiary Education carefully. The success of the program depends on a number of factors, namely: quality, inclusivity and adaptability.

Quality

As a government program, the success of Universal Access to Quality Tertiary Education program should be measured in terms of overall social benefit. The focus should be in producing an agile, competent workforce that is being demanded by a globalizing and aging world, not half-baked, unemployable graduates.

As I have mentioned, investing in higher education has important long-term social returns. For one, higher education is responsible for producing the cohort of citizens with the knowledge and aptitude required for managing our most important public and private institutions -- government, business, hospitals, schools, media, among others. Ultimately, higher education ensures the sustainability of our economy and our democracy.

This is a tall order. It requires those of you who run our Universities and Colleges to adhere to strict quality standards. The Universal Access to Quality Tertiary Education Law emphasizes this point by requiring CHED and TESDA to establish stronger quality standards, and requiring Universities to have better student information systems, as well as requiring comprehensive student guidance and career development services.

Given the limited carrying capacities of our SUCs and LUCs, we are also enforcing eligibility requirements for students. To avail of Free Tuition, students have to comply with admission and retention requirements and should be able to finish their respective degrees within a prescribed period of time. I hope Universities also up the ante by requiring rigorous entrance examinations for incoming students.

This brings me to my next point: on inclusivity.

Inclusivity

In countries with dual track systems and some degree of income inequality, what happens is that students from upper-, upper-middle income families are the ones who end up passing rigorous public university entrance exams, after having benefited from a more superior, usually private, elementary and secondary education. Meanwhile students from middle- to lower-middle income and rural families are excluded altogether or forced to pay tuition-fee dependent but inferior private universities.

Fortunately, our Free Tertiary Education Law has provided for safeguards for students coming from low-income families through its Tertiary Education Subsidy component.

Through this component, Free Tertiary Education is not only limited to public universities but is also extended to private universities with the availability of Education Vouchers.

On top of Free Tuition Fees and Allowances, students from low-income families can also apply for allowances to cover lodging costs, transportation costs, books and other education-related expenses.

Finally, the law requires SUCs, LUCs, and TVET institutions to formulate and implement affirmative action programs to enhance access for Lumads, Muslims, other Indigenous People, Persons with Disabilities, students from public schools, and students from depressed areas.

There is no doubt about it: this law covers as much ground as possible when it comes to inclusivity. I hope the Universities stay true to the spirit of the law, and implement the right mix of programs to ensure access to Free Tertiary Education for those who need it the most.

Adaptability

I talk about the experience of other countries with dual track systems in Higher Education because I want us to learn from these experiences.




The way I see it, we not only have the benefit of hindsight, but of context. Our public universities service different populations due to our geography. Hence, we do not have to fear for hypercompetition benefiting the rich over the poor for most of our universities, except for maybe UP.

Furthermore, we can expect to close the gap on income inequality in the coming years. Unlike any other administration before it, the Duterte administration has come up with a target for poverty reduction. We want to reduce it from 21% to 14% by 2022. This further levels the playing field for our young population.

One limitation, however, is that we are still largely a service-based economy.  I fear that the demand for higher education might exceed the growth of employment opportunities requiring this level of education.

Then again, we are also living in times where changes brought about by technology are happening at an unprecedented rate. There is much discussion in business and investor communities on the increasing participation of Artificial Intelligence in various industries, and the future of work, in general.

Now, we are far from nearing a knowledge-based economy, but these are questions our Higher Education Institutions have to be discussing as well. Our State Universities and Colleges have to be at the forefront of making sure our graduates are able to meet the challenges of the future.

This is my last point: higher education has to be adaptive. Your graduates must learn how to think global. They must be aware of the current global trends and phenomena, while being able to act local,  to appreciate how to apply these trends to our own context.

These are just some of the points I will leave you for today. As you implement the Free Tertiary Education program in your own universities, think about: quality, inclusivity, and adaptability.

At the end of the day, we do not want just free education, but free, quality, relevant and inclusive education.

Of course, It’s one thing to articulate state policy, it’s another to be in the thick of implementing it. As the ones running your respective Universities and Colleges, yours is an all too important role.

We are investing heavily into this program, and we need your help in ensuring its success. Keep in mind that the subsidy you receive came from Filipino taxpayers. Spend it prudently. Invest in competent faculty; it accounts for more than half of student performance and more than ‘nice’ buildings and smaller class size. Incompetent faculty produces dysfunctional graduates.

As Secretary of Budget and Management, I would also like to remind you to fast-track your billings to UniFAST, so we can disburse your funds right away. Remember that we have adopted one-year validity of appropriations, and by next year, we will be entering a cash-based regime. You have to be able to pay for your annual expenditures within the year, with an extended payment period of three months.

As chief executives of your respective universities, you have your own ideas on how to foster free, quality, relevant and inclusive education in your own schools. Even so, I am glad that you have an avenue like PASUC where you can meet, share, and discuss these ideas, and, hopefully, create and push for a collective agenda for the benefit of our students in public universities.

I share with you the commitment to convert our youth into an agile, competent workforce. Let us all work together in providing better Higher Education in the country.

Thank you and God bless.