EDUCATION INDUSTRY REGULATORY REVIEW

Researc h Fe l low: Laurence Mic hael T ibonResearc h Assoc iate : Ferd inand Del Rosar io

Education Policy

• 1987 Constitution guarantees the right to education of every Filipino

• “The State shall protect and promote the right of all citizens to quality education at all levels and shall take appropriate steps to make education accessible to all.”

• Further, “The State recognizes the complementary roles of public and private institutions in the educational system and shall exercise reasonable supervision and regulation of all educational institutions.”

Philippine Education System: Tri-focalization

• Department of Education – sets overall standards in Basic Education and mandates standardized test for the K-12 basic education system

• Commission on Higher Education (CHED) – supervises and regulates colleges and universities

• Technical Education and Skills Development Authority (TESDA) – regulates and accredits technical and vocational education programs and institutions

Recent Reforms in the Education Sector

• R.A. 10157 (Kindergarten Education Act) of 2012 – made kindergarten education the first stage of compulsory and mandatory formal education prior to Grade 1

• R.A. 10410 or the Early Years Act (EYA) of 2013 - institutionalizing a National System for Early Childhood Care and Development (ECCD); 0-4 under ECCD council, 5-8 under DepEd

• R.A. 10533 (Enhanced Basic Education Act) of 2013 - provided for at least one year of preschool and 12 years basic education

• R.A. 10931 or the Universal Access to Quality Tertiary Education Act of 2017– provided for free tuition and other fees in SUCs, LUCs; subsidies also for private higher education institutions.

Recent Reforms in the Education Sector

Private Sector Contribution

• Basic Education. Enrollment in Grade 11: 11.4 million (Manasan, 2016), of which: 51.4% in DepEd SHS vs 48.6% in non DepEd SHS (45.8% in private SHS)

• Share of private sector increased from 18% (for Grade 7-10) to 22% (for Grade 7-11)

• Higher Education. 88% (1,706) Private HEIs vs 12% (228) Public HEIs (Licuanan, 2016)

• In terms of students, 54% (2.22 M) in private vs 46% (1.88 M) in public

Issues and Challenges

• Significant increase in public sector spending, but massive inputs still required (e.g. new classrooms, hiring and training new teachers, facilities and equipment)

• Raising the quality of education remains a challenge:• Low National Achievement Test Scores

• Mediocre performance in producing innovators (74th out of 128 in 2016 Global Innovation Index), researchers, and knowledge producers

• Low national passing percentage in licensure examinations

• Low employability of graduates of technical and vocational education institutes (65% in 2013) - indicative of the low quality of TVET

Issues and Challenges

• Raising the quality of education remained a challenge

Source: Updated PDP 2011-2016. Basic Education Indicators

Issues and Challenges

Higher and Technical Education Indicators (Updated PDP, 2011-2016)

Source: Updated PDP 2011-2016. Basic Education Indicators

Regulatory Environment

• Regulations in the Industry• All private educational institutions shall be subject to reasonable

supervision and regulation by DepEd, CHED, and TESDA

• Accreditation Voluntary.

Scope and Limitations of Study

• Basic Education (K+12)

• National in scope, albeit there may be differences/peculiarities in the regulatory environment in certain regions (e.g. BARMM)

• Regulatory environment in education

Objectives of the Study

• To identify, validate and prioritize major regulatory inefficiencies, particularly in basic education

• To propose alternative solutions to maximize regulatory benefits and minimize regulatory costs to the public and private sectors and society in general

Methodology

• Desk review

• Perception surveys, FGDs, consultations

• Value Stream Mapping (VSM) (from VSM team),• Asked team to map DepEd permitting, recognition and accreditation

Regulatory Inefficiencies

1. Heavy/Unnecessary Regulatory Burden• Requirements for opening schools/DepEd permit – specifications for

school physical features can be very strict.

• BIR tax exemption – requirement that private schools should submit a certificate of tax exemption every year.

• Accreditation – many or most private schools stop at the permit level because DepEd recognition and accreditation is too expensive.

• GASTPE – only big schools can afford to provide the requirements of PEAC (e.g. accreditation) (regulatory capture)

• R.A.10410 or the (Early Years Act of 2013) – additional requirement for schools permitted by DepEd to offer kindergarten education to seek another permit under DSWD for ECCD

Regulatory Inefficiencies

2. Non-Developmental Regulatory Environment/Lack of Support• Clarification on tax exemption – LGU regulatory fees imposed in lieu of

exemption from taxes dof to streamline (check that link)

• Prohibition of No Permit, No Exam policy – difficult to collect receivables/revenues vital to continued operation (minor)

• R.A. 8525 (Adopt-a-School Act of 1998) allowed private entities to assist only public schools, for tax credit

Emerging Recommendations

1. Heavy/Unnecessary Regulatory Burden• Review the requirements for opening schools/securing DepEd permit

• BIR to consider relaxing the requirement that private schools submit a certificate of tax exemption every year (BIR-DOF); invest in data management systems

• Lower costs of DepEd recognition and accreditation, particularly for small schools.

• Review requirements of PEAC, to promote greater private sector participation

• Review the requirement for schools already permitted/recognized by DepEd to offer kindergarten education to seek another permit under DSWD for ECCD (DepEd and DSWD to coordinate and harmonize requirements)

Emerging Recommendations

2. Non-Developmental Regulatory Environment/Lack of Support• BIR-DOF to coordinate with DILG/LGUs on honoring certificates of tax

exemption; also to standardize reasonable rates and increase transparency on regulatory fees

• Lift Prohibition of No Permit, No Exam policy – to enable private schools to collect receivables/revenues vital to continued operation; implement alternative mechanisms for payment (DepEd)

• Amendment to R.A. 8525 (Adopt-a-School Act of 1998), to allow private entities to assist both public and private schools, for tax credit

References:

Briones, L. (2016). ‘Quality, Accessible, Relevant, and Liberating Basic Education for All.’ [PowerPoint Presentation]. Education Summit 2016.

Conchada, M. and Tiongco, M. (2015). A Review of the Accreditation System for Philippine Higher Education Institutions. Discussion Paper Series. Philippine Institute for Development Studies.

Licuanan, P. (2016). 'Driving Philippine Higher Education to Meet the Goals of Human Capital Development and the Knowledge Economy in the 21st Century' [PowerPoint Presentation]. Education Summit 2016.

Manasan, R. (2016). 'State of Philippine Education: Where are We Now and Where are We Going?' [PowerPoint presentation]. Education Summit 2016.

National Economic and Development Authority. (2017). Philippine Development Plan 2017-2022.