As another school year opens, hundreds of thousands of students will continue their tertiary education in the 2,299 higher education institutions (HEIs) across the country. A fourth of these HEIs make up the 547 state universities and colleges (SUCs) subsidized by the national government. In 2012, the Commission on Higher Education (CHED) allocated PHP 26 billion to support SUCs, aligned with the country’s commitment to promoting human capital development and improving the country’s economic competitiveness. But how well have SUCs contributed to realizing that commitment? The situation revealed by PIDS Senior Research Fellow Rosario Manasan and Supervising Research Specialist Danileen Parel in their study, “Review and Assessment of Programs Offered by State Universities and Colleges”, uncovers a dismal performance that puts to question the cost and the efficiency of SUC management relative to the quality of education they actually provide.

The study measures SUCs’ performance using the results of 36 professional board exams (PBEs) as an indicator of the quality of instruction. Overall, the numbers reflect very low averages for SUCs. “The weighted passing rate of all SUCs combined in all the PBEs taken together is 4 to 9 percent lower than the national passing rate in 2004-2011,” reveals the study. Only 9 out of the 36 PBEs had average passing rates above 60 percent and only 3 had passing rates above 70 percent.

The SUCs’ performance in PBEs dropped in 12 course programs, namely, accountancy, aeronautical engineering, civil engineering, criminology, electrical engineering, electronics engineering, library science, mechanical engineering, medical technology, physical therapy, social work, and veterinary medicine. The authors add, “More worrisome is the preponderance of SUCs and private higher education institutions (PHEIs) with zero passing rate in many PBEs in 2004-2011.”

In short, SUCs are not meeting the expectations that come with increased budget allocation for their institutions. They are not producing qualified people in the courses they offer. Manasan and Parel surmise that the root of the problem comes down to the collective management issues of the CHED and the SUCs, particularly where duplication of programs distract a big number of SUCs from carrying out their core mandates efficiently.

SUCs per region all have core mandates that indicate the programs that each college and each university specialize in. Program duplications occur when SUCs start offering programs that are not unique to them, not their competitive advantage, and are outside of their core mandate. This becomes problematic for a number of reasons. Firstly, the increase in duplicate programs also increases the per student cost of SUCs. Secondly, given the cheaper tuition fees in SUCs, the latter siphon enrollment numbers from PHEIs that traditionally offer similar programs. Well and good if cheaper signifies quality, but as Manasan and Parel found out, it does not.

Thirdly, while SUCs’ lower tuition fees evidently fail to reflect quality, it also says a lot about the quality of CHED’s regulation and monitoring of SUC activities. Many PHEI officials are concerned about the uneven playing field where SUCs are given more leeway in offering new programs even if they do not have the required facilities and qualified faculty. There is also a standing confusion about the level of autonomy that SUCs have in modifying their charters and the CHED’s role in making sure that SUCs follow the guidelines.

Other factors contribute to perpetuating these scenarios, such as SUCs being forced to open programs due to the demands of their communities, local politicians, and other stakeholders. Another factor once again considers the problems with management.

Increases in the number of enrollees boost subsidized funding. This becomes expedient for SUCs to generate more income by acquiring more enrollees by offering popular programs.

What the study makes clear at the end is the utmost importance of rationalizing the programs offered by SUCs and improving the quality of instruction. Improving the performance in PBEs cannot be achieved solely by offering exam reviews at the end of term, but by investing in the quality of instruction and faculty development to ensure high-quality teaching personnel that can help develop a globally competitive workforce. This way, the Philippines would be poised to take advantage of opportunities under the ASEAN Economic Community’s mutual recognition arrangements.

CHED is undertaking measures to address the problems of program duplications and SUCs’ departure from their core mandates. Some of the recommendations Manasan and Parel indicated in their study include encouraging SUCs to comply with CHED policies, standards, and guidelines, and reforming the funding formula to ensure that no additional subsidies will arise from additional enrollment resulting from SUCs expanding into the territories of popular programs.

Download a copy of this study under the PIDS Research Paper Series 2015.

Want more? Know what other PIDS studies have to say about higher education in the Philippines. For other related studies, visit the SocioEconomic Research Portal for the Philippines. Simply type “higher education” and other relevant keywords in the Search box.

1. A Review of the Accreditation System for Philippine Higher Education Institutions
2. Analysis of the President's Budget for 2012: Financing of State Universities and Colleges
3. Establishing the Linkages between Human Resource Development and Inclusive Growth
4. Reviewing Quality Assessment Tools for Graduate Education
5. Higher Education in Agriculture: Trends, Prospects, and Policy Directions
6. Efficiency of State Universities and Colleges in the Philippines: A Data Envelopment Analysis
7. Education and Globalization
8. A Profile of Graduate Education Programs in the Philippines
9. Reviewing Quality Assessment Tools for Graduate Education
10. An Assessment of TESDA Scholarship Programs
    

16 JULY 2015
Pulong Saliksikan on SME Internationalization and Finance in Asia
Presenter: Dr. Ganeshan Wignaraja, Advisor in the Asian Development Bank's (ADB) Economic Research and Regional Cooperation Department.
Venue: C.P. Romulo Hall, NEDA sa Makati Bldg., Makati City

17 JUNE 2015
Pulong Saliksikan on Enhancing Access to Financial Services through a More Competitive Financial System
Presenter: Dr. Mario Lamberte
Venue: C.P. Romulo Hall, NEDA sa Makati Bldg., Makati City

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NETWORK OF EAST ASIAN THINK-TANKS

Officially recognized at the “10+3" summit meeting, the Network of East Asian Think-tanks (NEAT) is a mechanism for research and academic exchange, and a platform for the second-track diplomacy in the regional cooperation among “10+3" countries in East Asia. It aims at integrating the research resources in East Asia, promoting the academic exchanges, and providing intellectual support for East Asian cooperation. By establishing a network among East Asian think-tanks, governments, and enterprises and promoting the interaction of these three circles, it intends to study the key issues related to East Asian cooperation, work out strategic ideas and concrete policy suggestions for the regional integration, and submit research reports to the “10+3" summit meeting.

The PIDS, together with the Institute of Strategic and Development Studies and the Asian Center of the University of the Philippines, represents the Philippines in this network.

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Call for Papers: Philippine Journal of Development

The Philippine Institute for Development Studies (PIDS) is inviting submissions to the Philippine Journal of Development (PJD). The PJD is a peer‐reviewed journal published twice a year by PIDS. Now on its 40th year, PJD considers original, unpublished papers on economic development, political economy, public administration, foreign relations, and other fields/topics, which are policy oriented and may or may not explicitly have a bearing on the Philippines. Book reviews are also accepted. The theme or topic of the book should fall within the scope of the articles accepted for publication. The target readers of PJD include researchers, educators, policymakers, and development planners. Click here for the guidelines in the preparation of articles. Inquiries and submissions should be forwarded to the Managing Editor at ssiar@mail.pids.gov.ph.

PHILIPPINE JOURNAL OF DEVELOPMENT

• PJD Vol. 40 Nos. 1-2: Special Volume on Health
  

The Aquino Health Agenda of 2010 articulates succinctly the Philippine health sector's aim for universal health coverage. The agenda has three thrusts: rapid expansion of enrollment and benefit delivery using subsidies for the poorest families, improved access to quality hospitals and health-care facilities, and attainment of health-related Millennium Development Goals through additional effort and resources targeted to the most critical areas in the country. Years after the launch of the agenda, the Department of Health collaborated with key institutions to implement the Health Systems Research Management (HSRM) Project, with the Philippine Institute for Development Studies as one of the collaborators. Through this HSRM project, several research projects were carried out, providing critical updates and new information on the progress of the health sector's Aquino Health Agenda. Several of these critical updates and new information are presented in this special volume of the Philippine Journal of Development. The volume focuses on health financing and service delivery, particularly PhilHealth coverage, household spending for health, and health infrastructure. Click here for the full article

 

POLICY NOTES

• PN 2015-10: Mainstreaming SMEs through Social Enterprises
  by Leonardo A. Lanzona, Jr.

Social enterprises (SEs) are crucial both for the development of small and medium enterprises (SMEs) and labor generation. The goal of SEs is to provide public goods to communities. In the Philippines, SEs are linked to social entrepreneurship as a process of creating spaces and transforming markets toward the goal of poverty reduction and sustainable development. This Policy Note discusses the findings of a study that explored the key policy variables necessary to support SE and SME development. The study also examined the extent to which nongovernmental organizations, as well as international trade arrangements, such as the Asia-Pacific Economic Cooperation, can improve the business environment for SEs and SMEs. Results indicate that the business environment affects the revenues and incomes of these enterprises. To support SEs, it is crucial to link them to global value chains and to provide them with the necessary global public goods that can help address poverty directly. Click here for the full article

 

DEVELOPMENT RESEARCH NEWS

• DRN 2015 Vol. XXXIII No. 2
  Banner article: Toward Regional Cooperation for the Sustainable Development of the East Asian Seas
  by Raphael P.M. Lotilla

In an era where development issues concerning human security, health, and the environment transcend national boundaries, international cooperation has become more crucial than ever. This issue of the Development Research News explores this theme in which various facets of collaboration in addressing transnational and local concerns are presented, particularly in the areas of resource management, research, and policy development. The price of noncooperation is high, as the banner article on the East Asian Seas shows. In the absence of a coherent cooperative management arrangement, the unsustainable and illegal exploitation of resources in the South China Sea will continue. With or without territorial disputes, sustainable development should remain both a national and an international goal. A good example of mutual cooperation in development is regional cooperation in research and capacity building as exemplified by the East Asian Development Network and the APEC Study Centers Consortium. This issue reports on the recent activities of these two regional research platforms. The other articles look at the positive economic outlook for the Philippines in the next two years and the dwindling numbers of out-of-school children—two optimistic scenarios that should serve as an impetus for the country to further move forward. As the Philippines becomes integrated with its Southeast Asian neighbors in the ASEAN Economic Community, serious and sustained efforts to improve the country’s competitiveness are a must. This calls for a dynamic teamwork between the government and the private sector, together with civil society and the international community, to address the binding constraints to economic growth and inclusive development. Click here for the full article

 

DISCUSSION PAPERS

• DP 2015-33: Green and Gold: Promoting Eco-Adventure and Cultural Tourism for Inclusive and Sustainable Growth
  by Oscar F. Picazo

This paper briefly reviews the literature on the emerging concept of eco-adventure and cultural tourism, dubbed “green and gold tourism”, respectively. It provides the rationale for conducting such a study in the Philippines (why the concern for inclusivity and environmental sustainability in tourism). It then establishes the feasible scope of such study and lists illustrative activities of inclusive and sustainable green and gold tourism. It also identifies concerns and issues about green and gold tourism in APEC countries and in the Philippines. Finally, it classifies emerging good practices in this area, including volunteer travel, promotion of home stays, community-organized and -owned tourism activities, establishing nonmainstream tourist routes and destinations, and tourists' involvement in cultural preservation and eco-rehabilitation. Click here for the full article

• DP 2015-32: Toward an Effective Regulatory Management System: Philippines
  by Gilberto M. Llanto
  

In the emerging ASEAN Economic Community, regulatory quality and coherence will be critical in stimulating investments and improving the overall business and investment climate. The different countries in the region are concerned not only with aligning and harmonizing regulatory frameworks, but also first and more fundamentally, with reducing regulatory burden, improving regulatory quality and coherence. To achieve these objectives, the literature suggests the establishment of an efficient and effective regulatory management system (RMS). An efficient and effective RMS will be a critical mechanism for “reducing the costs of doing business, facilitating international trade and investment, and improving regulatory outcomes in areas such as health, safety, and environmental protection.” The paper examines the case for a regulatory management system for the Philippines and recommends specific measures for its establishment in Philippine policy space. It describes the overall experience of the country in regulatory reform, highlights the challenges in its journey toward regulatory quality and coherence, and identifies steps in constructing a responsive regulatory management system. Click here for the full article

• DP 2015-31: Rapid Appraisal of the Postharvest Facilities Projects in the Philippines
  by Nerlita M. Manalili, Kevin F. Yaptenco, and Alessandro A. Manilay

The Philippine government’s postharvest loss reduction programs entail significant investments (manpower, facilities, and equipment) and their impacts need evaluating. Thus, the Philippine Institute for Development Studies and the National Economic and Development Authority commissioned NEXUS Agribusiness Solutions to undertake the “Rapid Appraisal of Selected Postharvest Facilities in the Philippines”.

The postharvest facilities (PHF) selection process considered at least one each for Luzon, Visayas, and Mindanao, and for the following PHF categories: 1) equipment and facilities required immediately after harvest; 2) processing and storage facilities; and 3) market infrastructure and transport facilities. Selected were four rice processing centers, established through a Korean International Cooperation Agency grant, in Pangasinan, Davao del Sur, Bohol, and Iloilo. Using these sites as hub, other nearby PHF such as food terminals, flatbed dryers, and threshers were included for evaluation. In the context of upgrading value chains, reducing postharvest losses and improving economic outcomes for smallholder farmers, selected PHF were characterized and assessed. Recommendations centered on project management enhancement (timeliness of preparatory activities, participatory planning, etc.) and on operational improvements (capacity utilization, viability, and sustainability). Click here for the full article

• DP 2015-30: A Review of the Accreditation System for Philippine Higher Education Institutions
  by Mitzie Irene P. Conchada and Marites M. Tiongco

For any developing country, improving the quality of higher education institutions is of paramount interest to government agencies especially the Commission on Higher Education. Several reforms have taken place and that one of the initiatives being done is rationalizing the structure of public higher education and improving the budget to ensure resource mobilization and cost efficiency. Despite these efforts, there are several issues that need to be addressed and one is the voluntary nature of the accreditation system. Another related issue is the number of multiple agencies catering to the accreditation of the various higher education institutions. This paper reviews the existing accreditation processes and roles of accrediting bodies to present a clearer perspective on the current situation of higher education institutions. Similar to other countries in the region, the accreditation process in the country is initiated by the private sector and is also voluntary, which adheres to the nature of the academe. Though it is a way of fostering academic freedom and motivating some institutions to compete, this could result in complacency in others. Policy implications include reshaping the institution in terms of keeping an accreditation mechanism built into the system, such as a quality assurance framework. Click here for the full article

Gross Domestic Product

The gross domestic product (GDP) grew by 5.2 percent in the first quarter of 2015. This rate is lower than that of the same quarter last year by 0.4 percentage point. The gross national income (GNI) growth rate also went down from 6.6 to 4.7 percent.

Source: Philippine Statistics Authority

VIEW TABLE for time-series data on gross national product and gross national income.

Headline Inflation

The country's year-on-year headline inflation rate went down further to 1.6 percent in May, from 2.2 percent in April. Interestingly, this has been the lowest inflation rate registered since 2000.

According to the Philippine Statistics Authority (PSA), the downtrend was mainly due to indices of housing, water, electricity, gas and other fuels, and communication. Lower annual increments in the indices of food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; and furnishing, household equipment, and routine maintenance of the house also contributed. Likewise, core inflation rate went down to 2.2 percent in May, from 2.5 percent in April.

Source: Philippine Statistics Authority - National Statistics Office

VIEW TABLE for time-series data on year-on-year inflation rate.

Philippine Stock Exchange Index

The Philippine Stock Exchange Index (PSEi) ended at 7,580.46 for the month of May. This is lower compared to last April's 7,714.82.

Source: Philippine Stock Exchange

VIEW TABLE for time-series data on Philippine Stock Exchange Index.

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