There is increasing attention worldwide on the debate regarding who pays university tuition fees. In contrast to other governments, the Philippine authorities have recently introduced a subsidy to cover tuition fees for Philippine students at all State Universities and Colleges (SUCs). This Universal Access to Quality Tertiary Education Act was signed into law on August 3, 2017. It commits to “provide adequate funding… to increase the participation rate among all socioeconomic classes in tertiary education.” The subsidy applies to first undergraduate degrees in all tertiary education institutions. The Act also increases income contingent loans available to the poorest.

There is a concern that the policy will lead to an exodus of students from private to public providers. As a result of a constitutional commitment to maintaining both public and private institutions, the Act allows for a subsidy toward fees at private institutions at a rate equivalent to their nearest SUC. Students can also benefit from support for books, supplies, transportation, accommodation, and other related expenses. The Act counters a longstanding trend of increasing fees in higher education. Philippine Senator Benjamin Aquino IV, the Act’s key supporter, suggested that the provision of free tuition would “unlock the door to a brighter future,” thus “empower(ing) more Filipinos with the promise of a college diploma.”

This resounded strongly among Filipinos, who value higher education qualifications.

The government’s allocation to higher education has recently seen significant increases, doubling from US$484.47 million in 2010 to approximately US$1 billion in 2016, although spending per capita remains relatively low. The Philippine constitution demands that education receive the largest share of the national budget, and national authorities have allocated US$793 million (1 percent of the budget) to introduce the subsidy in 2018. The national economy is projected to expand at over 6 percent in the medium term and the subsidy appears affordable. However, while the measure is politically popular, it has been fiercely debated.

SUPPORT AND OPPOSITION

The Act aims principally to address dropout rates: only a quarter of students in higher education graduate at present. The Act is meant to help those dropping out because of a financial shortfall. This support would not primarily redistribute resources, but rather assist those who face difficulties in the last phase of their studies. The Act is also intended to enhance quality. Tertiary institutions in the Philippines are governed by the Commission for Higher Education Development (CHED), which monitors, evaluates, and manages quality assurance and enhancement. The Act originally included an enrolment cap for every SUC, which could only be increased if SUCs met increased quality standards set by the regulator. However, in the final version of the Act, there is no longer a cap; SUCs will be able to set student numbers themselves.

Stakeholders express three key criticisms. First, there are already a number of programmes in place to improve equitable access. SUCs are already subsidised by the government and tuition is significantly cheaper than in the private sector. The system of “socialised tuition” also implies that students pay in proportion to their family income. Second, the Act disproportionately benefits the middle-to-upper classes, because the bulk of SUC students come from moderate to well-off backgrounds. Only 12 percent of SUC students belong to the first and second poorest deciles—while 17 percent come from the ninth and richest deciles. The Act is characterised as having an “unintended regressive impact.” The National Union of Students raise concerns that SUCs might raise other school fees to compensate for their lack of control over tuition fee income. These other fees are not automatically covered by the subsidy and could penalise the poorest students further (tuition fees comprise only between 20 to 30 percent of the total cost of a degree.) Third, reducing the cost of SUCs could lead to an exodus out of private and into public institutions. Of the 1,943 Philippine tertiary institutions, 88 percent are private and 12 percent are public. Approximately 54 percent of students are enrolled in private higher education and 46 percent in public. Given that enrolment is already on the increase in public higher education institutions, there is concern that this initiative could dramatically alter the sector. This comes in conjunction with the move to extend compulsory education from 11 to 13 years in the “K-to-12” programme. During the transition period, which ends in 2018, smaller cohorts have entered university as students have been kept for an additional year in secondary education.

This has affected the finances of higher education institutions, placing particular pressure on private institutions. The exodus of students could also be mirrored by a migration of faculty, as salaries are often lower in private institutions, whereas SUCs pay a standardised government salary.

CONCLUSION

The Act’s potential effects go beyond economic efficiency and targeting specific economic groups. It sends a powerful signal, particularly to poor and struggling students, that higher education is accessible to all. The rhetoric of “life dreams” establishes a narrative of prosperity based on merit and work, in which higher education plays a critical role.

However, there are important questions about this initiative’s sustainability. In principle, the Act allows all Filipinos to access quality tertiary education and commits to “provide adequate funding,” potentially establishing universal access. The Philippines has a young and growing population: the number of 15–24 year olds has increased from 17.6 million in 2006 to 19.9 million in 2016. As the “K-to-12” transition period ends, more students will be entering higher education. Given the powerful hold of the higher education “dream” among Filipinos, we expect a large increase in entrants into higher education, which may not have been expected when preparing the Act’s budget. The absence of a cap on student numbers in the final version of the law confirms an intention to expand the sector, incentivising SUC leaders to raise revenue by increasing student numbers. This could exacerbate the projected flight of students and faculty from private to public institutions. Thanks to the expanding economy, the Act is affordable in the short-to-medium term. But concerns about a rapid expansion of student numbers call its long-term sustainability into question.

Can the Philippines afford not to introduce such a policy? For the country to compete with its regional rivals as a knowledge economy, expanding access to higher education would likely provide a competitive advantage. With its large service sector and rapid industrialisation, the Philippines is well equipped to take advantage of the skilled workforce provided by expanding enrolment in higher education.

This article was originally published in International Higher Education, No. 94, 2018.