Page 1

25 1977 2002

PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas

Vol. XX No. 5

September - October 2002

S

Tuition hike,

chool fee increases have been a perennial issue in Philippine education. Students have rallied intermittently against these increases over the last three decades. Yet, the demonstrations failed to attract a large following and, on the whole, are still ineffective in influencing school management decisions. Perhaps one important reason for the weakness of the rallies is the lack of information on the nature of school fees. Should students rally for zero or uniform rate of increase? Are they rallying against fee increases in particular schools? To address this concern, this paper attempts to provide a better understanding of the structure and movement of tuition fees as well as other related issues in various colleges and universities (CUs) in the Philippines. Theoretically, in a market system, cost would be the basis for setting fees. Thus, tuition and other school fees may vary widely from one higher educational institution (HEI) to another and, within these institutions, across academic programs due to various characteristics— field of study, degree level and quality. Laboratory-based instruction tends to have a higher cost than book-based programs; graduate degree programs cost more than undergraduate programs; and higher quality instruction entails

This is a condensed version of Dr. Tan's paper titled "The Structure and inflation of tuition fees in Philippine colleges and universities" presented on August 20, 2002 during the Philippine Economic Society (PES)-PIDS Distinguished Speakers Forum Series in connection with the 25th anniversary of the Institute.

*

ISSN 0115-9097

education strife?* By Edita A. Tan, Ph.D. Professor, School of Economics University of the Philippines

more cost. There is a market for each program and each HEI faces the choice of what program(s) to offer to the public in terms of these characteristics. For instance, a school may decide to employ just the minimum standard required by education authorities or the best quality from the available inputs. The demand in turn for a particular program is revealed in the number of enrolees per program. Assuming that students (and their families) consider higher education (HE) as an investment, they will choose a program on the basis of the cost and the benefits it is expected to produce over their lifetime. Labor market outcomes in the form of earnings, employment probability and working conditions are the principal benefits to be expected of education.

Appropriate choices, however, based on a comparison of the costs and expected benefits can only be made if the market conditions are perfect and competitive. In cases where the conditions are highly imperfect and where institutional factors impinge highly on the market functionings, the choices for the best, affordable and appropriate program(s) become limited. Moreover, imperfect and inadequate information resulting from such conditions may blur the estimates of benefits. In this regard, how are choices made in the Philippine higher education setting among the three major players, namely, students, schools and employers? And how do they affect the structure of demand for various programs and their ☛ page 3 corresponding costs/fees?

What's Inside 8 12

PIDS turns 25 Malacañang declares September as Development Policy Research Month


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DEVELOPMENT RESEARCH NEWS

DEVELOPMENT RESEARCH NEWS Vol. XX No. 5 September - October 2002 ISSN 0115-9097 Editorial Board: Dr. Mario B. Lamberte, President; Dr. Gilberto M. Llanto, VicePresident (on secondment); Mr. Mario C. Feranil, Director for Project Services and Development; Ms. Jennifer P.T. Liguton, Director for Research Information; Ms. Andrea S. Agcaoili, Director for Operations and Finance; Atty. Roque A. Sorioso, Legal Consultant. Staff: Jennifer P.T. Liguton, Editor-in-Chief; Genna J. Estrabon, Issue Editor; Sheila V. Siar, Jane C. Alcantara, Claudette G. Santos, Ma. Gizelle R. Gutierrez and Edwin S. Martin, Contributing Editors; Valentina V. Tolentino and Rossana P. Cleofas, Exchange; Delia S. Romero, Galicano A. Godes, Necita Z. Aquino and Alejandro P. Manalili, Circulation and Subscription; Genna J. Estrabon, Layout and Design.

September - October 2002

DEVELOPMENT RESEARCH NEWS is a bimonthly publication of the PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS). It highlights the findings and recommendations of PIDS research projects and important policy issues discussed during PIDS seminars. PIDS is a nonstock, nonprofit government research institution engaged in longterm, policy-oriented research. This publication is part of the Institute's program to disseminate information to promote the use of research findings. The views and opinions expressed here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the studies contained in this publication, or any of the PIDS papers, as well as suggestions or comments are welcome. Please address all correspondence and inquiries to: Research Information Staff Philippine Institute for Development Studies Room 304, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, 1229 Makati City, Philippines Telephone numbers 892-4059 and 893-5705 Telefax numbers (632) 893-9589 and 816-1091 E-mail address: publications@pidsnet.pids.gov.ph Reentered as second class mail at the Makati Central Post Office on April 27, 1987. Annual subscription rates are: P200.00 for local subscribers; and US$20.00 for foreign subscribers. All rates are inclusive of mailing and handling costs. Prices may change without prior notice.

Editor's Notes Enter a typical Filipino family home and chances are, you will see framed graduation photos of family members in toga prominently displayed in the family living room. Or diplomas of merit neatly hung on the walls. Said photos and diplomas are always a source of pride for parents, especially those who have worked hard to send their children to college, for they signify the fulfillment of a dream for their children to finish college. College education, after all, is considered a legacy that most parents want to leave for their children. And in certain cases, it becomes a ticket to upper mobility in the economic ladder. College education, however, is becoming more expensive as the years go by. Because of this, it is commonplace to see in many families, younger siblings giving way to their older brothers and sisters’ education while theirs are put on hold. In return, the elder siblings are expected to later help put the younger ones through college. Such situation, in itself, is heartbreaking in terms of opportunity cost and time lost for many students but what is more depressing is the fact that the quality of the education that they get is quite often not commensurate to the sacrifices that they make. Edita Tan, in her study on the inflation and structure of tuition in the higher education sector of the Philippines, shows the wide range of variations in the fees and program costs of educational fields in the country’s tertiary education sector. With seemingly no rhyme or reason in the structure of fees of various schools, Tan

points out that there is no clear relationship between prices of fees of schools and their passing rates in professional licensure examinations (used as proxy for quality) in various educational fields. Thus, the high fees being charged by many schools do not necessarily translate into high passing rates for their graduates. In this case, therefore, it becomes a double whammy for the students and their families as they pay so much and yet get little in terms of quality of education. Meanwhile, at the other end of the pole, Tan also shows that there are schools that charge quite low; but expectedly, they likewise churn out such low-quality level of education. Unfortunately, it may be that a large number of our students, who can only afford to pay so much, are drawn into this cluster in their desire to acquire a college degree and have that graduation photo and diploma being treasured so much. Still, as Tan also indicates, there are a number of tertiary institutions, both private and public, that offer relatively good quality education in certain fields at fairly reasonable fees. And yet very little information about them, in particular, and about the whole range of choices, in general, is available for students and their families to consider in terms of options on where to go and which course and school to select from. So what can be done? At the core of the matter seems to be the need for a rational allocation of resources. For the national government, this calls for a rethinking in its allocation of funds in the country’s tertiary education sector. In which case, the discussions should perhaps be centered in the halls of Congress rather than in the street rallies against tuition hikes in order to strike directly at the issue and draw up serious educational reforms. DRN


DEVELOPMENT RESEARCH NEWS

Tuition...from page 1 The imperfect world of Philippine HE One of the starking features of Philippine higher education market is the inadequacy and unequal distribution of information about all the important facets of education. There are more than 1,300 CUs scattered in the country. Most are located in capital towns and major cities like Metro Manila. However, information regarding their quality ranking, if any, has not been made available to the public.

3

on school fees for their operation. Donations and philanthropic assistance are very few and limited only to a select number—the better quality ones—of private CUs. As to the SUCs, their operations are financed mainly by government subsidies. As such, private CUs must offer programs that students are willing to pay for while SUCs need only to exist and be supported by the national government. On the part of the students, meanwhile, financing of their studies is mostly sourced from family resources. Some

In addition, while there is information on earnings and employment of graduates collected from regular labor force surveys, this has not been disseminated in useful form to the public. At the same time, the presence of a large number of CUs that offer variegated programs exacerbates the information problem.

September - October 2002

example, the CU that offers the best quality for a given fee level) is available and thus limits the choices or options of students and parents. Imperfect information and capital market therefore impair the ability of students to make efficient choices as to where to obtain degrees and what field to choose that will maximize the returns to their HE investment. As a consequence, the situation of not knowing if one can or cannot afford the best option or combination of school and program weakens the competitive behavior of schools because the pressure for HEIs to employ the most efficient technology and scale to attract enrollees is not present.

Schools vary, fees vary There are four types of HEIs in the Philippines, namely, sectarian, nonprofit nonsectarian, profit nonsectarian and SUCs. Their presence contributes much to fee variations. Nonsectarian CUs usually cover all costs including management cost (for nonprofit) and revenue (for profit-oriented schools). Sectarian CUs, meanwhile, run by religious orders usually provide management and education services for free. There are elite sectarian CUs, though, that allocate resources for social amenities, thereby adding to fees.

Still, there is apparently a widespread awareness or acceptance of which CUs are the best in the country—most of which were founded and are managed by Catholic and Protestant religious groups or missionaries— but not about the middle quality CUs. There also seems to be hesitation to really look into the quality of low standard but affordable schools. On the other hand, there are 110 state universities and colleges (SUCs), including the University of the Philippines (UP) in Diliman. Some of them have maintained high standards in particular programs such as the Central Luzon State College in agriculture, Bicol University and West Visayas Sate University in the health sciences, Mindanao State University in Iligan for engineering and the Philippine Normal University for teacher training. The other SUCs, however, have no known special qualification.

work while studying to augment their funds. Unfortunately, unlike in other countries like the United States, very little credit for education is available for them. The preneed insurance industry for education has also just recently been developed. And while scholarships are available from government and private sources, most of them cover only tuition and very few include allowances for books, living expenses and transportation costs. Thus, few students can afford to pursue high-cost programs and/or enrol in distantly located CUs since these would entail extra expenses.

In terms of funding, majority of the privately owned CUs are fully dependent

At the same time, very little information about schools and fields/programs (for

On the other hand, SUCs get the support they need from the national government, which allocates almost all its subsidy to higher education for their operation. The fees are less expensive because these are set at a minimum of five percent of the unit cost usually offered by private CUs. SUCs thus pose unfair competition to private CUs because the former can offer the same set of courses to the same set of students at a small fraction of the fees charged by the latter. A good insight into the full structure of fees in private CUs and in SUCs may be gleaned from the distribution and ranges of tuition fee per academic unit across regions in seven important professional fields, namely, accountancy, civil, mechanical and electrical engineer-


DEVELOPMENT RESEARCH NEWS

ing, nursing, and elementary and secondary education. Tuition fee per unit ranges from P100 to P1,422 across all private CUs nationwide, with Ateneo de Manila charging the highest fee (De la Salle University is supposed to have an even higher fee but the amount is not available in the database of the Commission on Higher Education or CHED). For a 20-unit load per semester, the range for a school year is from P4,000 to P57,680. Additional fees for laboratory and other charges, which again differ across CUs and programs, substantially increase total fees. These range between P20,000 and P321,000 (for the University of Perpetual Help). The distribution of tuition fees across CUs thus differs across fields and across regions. If one would look at those institutions charging the lower end of the fee range (P250 or less per unit or equivalent to P10,000 or less per school year), one will see that these are mostly outside the National Capital Region (NCR). Conversely, the proportion of CUs charging P250 or less per unit is smaller in NCR than in other regions, that is, zero in civil engineering, 5.7 percent in accounting, 16.7 percent in nursing, and 9.0 percent in secondary education. Outside Metro Manila, only three CUs charge tuition of P500 or more —one each in Regions III, IV and VII. These regions are quite urbanized and have a sufficiently large population of rich students to support high-cost programs.

On tuition and quality education But the critical issue is—is the price of getting an education a reflection of its quality? One widely accepted indicator of quality education in the HEIs is the percentage of graduates who pass the professional licensure examinations. Looking at the data for 2001 on passing rates in licensure examinations and program costs in various engineering fields and accounting in the higher-fee and

4

more reputable CUs in regions outside the NCR, one would see the huge range in costs among the schools across regions. The differences are explained largely by the miscellaneous fees added to the tuition. There seems to be no discernible pattern in the former's figures which somehow reflects the school's discretion in choosing their total fee level. Passing rates, however, are found to be weakly related to the program costs, meaning that passing rates in licensure examinations are not necessarily high if tuition and other fees are increased as Table 1 clearly shows. In civil engineering, for instance, passing rate ranges from 11 to 92 percent. The highest-fee school (University of Perpetual Help) has a modest perfor-

September - October 2002

formance in all engineering fields but did poorly in accountancy. Meanwhile, for SUCs, those in Metro Manila —with the exception of the Technological University of the Philippines (TUP) and UP Diliman—have comparable unit costs with provincial SUCs. Moreover, SUCs in general have higher performances in licensure examinations than private CUs and have much fewer graduates with extremely poor passing rates (Table 2). But just like in the private school system, the passing rate of SUC graduates appears not to relate closely with program costs. TUP, for one, which has the highest program cost at P411,000, has a much lower passing rate in all engineering fields than UP. Other SUCs with

Passing rates, however, are found to be weakly related to the program costs, meaning that passing rates in licensure examinations are not necessarily high if tuition and other fees are increased...

mance of 53 percent while the University of Negros Occidental-Recoletos (UNO-R), with a modest fee of about a third of that charged by Perpetual Help, has the best passing rate performance. In mechanical and electrical engineering, meanwhile, Xavier University has a 100 percent passing rate even though its tuition is said to be relatively low compared to other CUs in this group. A school’s performance has also been found to differ across fields. For example, while UNO-R performed well in civil, mechanical and electrical engineering, it did poorly in chemical engineering and even worst in accountancy. Central Philippine University, on the other hand, achieved a consistently high per-

much lower program costs also have higher passing rates in a number of engineering fields than TUP. On the whole, the performances of SUCs in engineering, nursing and accountancy are comparable to that of better quality private CUs. The best performing SUCs have lower unit costs than private CUs. UP compares well with De La Salle University and Mapua University, which have higher program costs. However, at the same time, some private CUs also have better performances than some SUCs for a given program cost. This leads us to take a closer look at the data which also show the existence of a number of inefficient SUCs that are charging higher unit costs and yet are


5

DEVELOPMENT RESEARCH NEWS

still performing poorly in the examinations. Should these SUCs be allowed to continue to receive the same budgetary support given to them even if they do not perform as well as the other SUCs? Relatedly, it should be stressed that the data likewise indicate that SUCs admit

September - October 2002

mostly nonpoor students and that better quality SUCs which attract many applicants admit few poor students. The irony here is that SUC students are subsidized irrespective of their socioeconomic backgrounds and previous academic performances. Henceforth, a

number of SUCs may be considered to be biased against poor students whose education should have been their priority in the first place. On the whole, the data for both private CUs and SUCs show that passing rates

Table 1: Colleges and Universities (CUs) Charging High Tuition Fees (P250 per unit and higher) and Passing Rate by Field, 2001 Region/Name

Civil Engg. Program Cost

Passing Rate

108.80

20.00

Mechanical Engg.

Chemical Engg.

Program Passing Cost Rate

Program Passing Cost Rate

V

Aquinas University

V

Ateneo de Naga

-

XI

Ateneo de Davao

113.50

80.00

104.60

III

Baliwag Colleges

128.50

23.10

133.30

VI

Central Phil. Univ.

101.70

68.40

VI

Colegio de San Agustin

IV

Divine World College

-

98.20

-

112.30

63.60

127.70

66.70

133.80

78.60

105.70

91.70

104.60

84.60

103.30

104.10

10.00

-

III

Holy Angels University

131.90

39.30

142.10

X

Liceo de Cagayan

109.00

10.80

-

I

Luzon Colleges

104.60

17.00

105.50

V

Naga College Foundation

107.40

15.40

I

Philippine College

50.00

27.20

95.20

22.20

131.80 83.30

77.80

-

Program Cost

113.70

111.10

-

Passing Rate

Electronics Passing Rate

-

109.20 56.80

-

Program Cost

-

66.70

Electrical Engg.

-

96.80

58.80

65.60

Accounting Program Cost

Passing Rate

96.60

3.80

106.70

17.30

101.40

25.20

109.50

12.50

89.80

20.60

88.80

13.60

71.40

76.60

14.20

-

133.50

45.10

138.20

46.70

118.20

18.70

-

112.90

33.30

112.60

15.90

90.50

24.50

102.80

21.80

94.30

9.00

93.60

14.30

100.20

8.70

-

-

-

107.10

-

162.00

25.00

108.60

38.70

-

of Science and Technology VII Siliman University

161.40

51.40

170.20

CAR St. Louis University

76.70

60.20

79.60

II

79.80

75.40

41.30

80.20

153.00 60.90

St. Paul University

CAR University of Baguio

105.80

12.00

100.00

81.20

57.90

79.00

31.00

83.30

44.80

59.30

23.10

101.40

17.20

-

7.60

IV

University of Batangas

155.60

33.30

-

-

157.40

80.00

-

15.40

IV

University of Perpetual Help

321.50

52.90

321.50

56.30

-

321.50

33.30

-

11.10

V

University of Nueva Caceres

120.40

39.20

123.10

50.90

-

116.60

50.00

106.50

17.50

V

University of St. Anthony

101.20

16.00

-

VI

University of San Agustin

85.90

15.10

100.40

VI

University of Saint La Salle

II

University of La Salle

-

43.50

-

34.10

84.20

93.40

91.70

105.20

270.10

34.60

339.20

-

77.30

8.70

92.20

37.50

-

93.00

27.80

96.80

23.10

-

90.50

58.30

75.40

27.60

76.30

9.70

235.50

22.60

70.80

63.80

104.90

50.00

-Santiago VI

University of Negros

87.50

91.50

52.60

97.90

336.00

5.90

268.80

85.70

Occidental-Recoletos VII University of San Jose

339.20

-Recoletos X

Note:

Xavier University

82.40

na

100.00

61.50

Program cost = total fees for completing the degree program, in P000. Passing rate = number of passing examinees to number of takers, in percent.

na

100.00

na

100.00


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DEVELOPMENT RESEARCH NEWS

September - October 2002

Table 2: Program Cost and Performance of SUCs in Licensure Examinations, 2001 Civil Engg. Name

Program Cost

Aurora SC of Technology Bataan Polytechnic SC Bataan Polytech. State Univ. Benguet State University Bukidnon State Colleges Bicol University Bulacan State Univ. Cavite State Univ. CLSU Cagayan State Univ. Catanduanes University Camarines Sur Polytech. Coll. Capiz Institute Technology Cebu General Hospital Central Mindanao Univ. Central Visayas Polytech. Coll. Cebu State Coll. of S and T Cotabato City Polytech Coll. DMM MSU Don Honorio Ventura Coll. E A Rodriguez Eastern Samar State Coll. Isabela State Univ. Leyte Institute Tech. MMSU MSU - General Santos MSU- Iligan MSU- Marawi Marinduque State Univ. Mindanao Polytech. State Coll. Mountain Prov. Polytech. Coll. Naval Institute Tech. Nueva Ecija Univ. of S and T Nueva Viscaya State Univ. PUP Manila PLM PNU Pablo Borbon MIT Palawan State Univ. Panay Polytech. and Coll. (Manbusao) Panay State Polytech. Coll. Pangasinan State Univ. RM Polytechnic Coll. Rizal Technology Samar Poltech. Coll. Southern Luzon Polytech. Coll. State Polytech. Coll. Palawan TUP Manila Tarlac State Univ. Tiburcio Tancinco Univ. of Northern Phil. UP-Diliman UP Los Banos Univ. Eastern Phil. Univ. of SE Phil. Univ. Southern Mindanao Urdaneta Comm. Coll. Western Mindanao State Univ. West Visayas State University

124 113 67 56 139 76 127 108 93 56 136 23 82 47 134 89 51 89 59 73 124 51 224 47 65 91 55 79 44 56 210 65

Mechanical Engg.

Electrical Engg.

Passing Rate

N

Passing Rate

N

Passing Rate

N

60.0 100.0

5 1

50.0

4

28.6

7

34.3 62.9 42.9 35.6 64.3 27.8 17.7

137 62 7 73 14 115 17

44.1 75.0

118 32

76.9

13

37.9 20.0

29 10

23.8 6.3

21 16

61.7 57.1

47 7

66.7

9

64.0 66.7 14.3

25 3 7

58.2 16.7 17.4 50.0

55 24 23 2

35.6 51.7 78.3 100.0 100.0

73 29 23 30 12

71.4 66.7 40.0 26.3

28 3 5 152

9.1

22

19.7 13.3 15.8 90.9 36.3 61.7 76.9 76.9 52.1 43.5 33.3 12.5 11.1 20.0

61 15 19 11 322 47 39 13 73 46 6 16 18 145

60.6 54.6 54.8 57.1

54 43 13

66.7 32.3 58.8 94.4 100.0 70.6

21 65 17 18 9 17

0.0

1

155 51

109 33

31.7 61.5 66.3 75.0

60 13 83 16

45.5 37.5

88 32

73 35

83.3 66.7

60 9

71.3 88.0

80 25

72 59 119

22.5 0.0 26.7 26.0 100.0 82.5 44.7 43.2 17.8 100.0 100.0 39.1 38.3 58.8

1 40 85 44 100 40 26 46 47 17

59

21.1

109

51 67 50 109 411 38 46 61 310

53.7 25.6 7.7

25.8 74.5

40 1 15 50

45.5 68.8

11 16

44.4 26.9

9 26

58.3

40

81.8 100.0 67.1 36.4 33.3

11 2 88 33 15

45.8 45.5 66.7

24 11 12

54.1 48.6 75.0

61 72 12

100.0

22

100.0

11

45.0 69.6

20 23

68.2

22

25.2

88

16.0

100

Nursing

Accountancy

Passing Rate

N

Passing Rate

N

64.4 87.5

59 24

15.8

19

60.6

94

16.7 36.2

6 58

34.1 0.0 10.0

41 1 40

0.0

1

0.0 35.3 57.1 14.5 31.9 20.0

3 17 21 55 91 100

0.0

15

25.9 33.7

795 172

27.3

22

9.1

3

33

26.7

30

53.4 96.6

163 29

25.0 0.0 35.7 95.6

76 1 28 90

65.2

23

40.0

30

26.9 58.0 100.0

104 274 117

32.2 40.0

59 25

53.8

26

77.5

57

76.5

68

100.0

12

93.8

48

0.0

1

90.9

Note: Program cost = total fees for completing the degree program, in P000; Passing rate = number of passing examinees to number of takers, in percent; N = number of examinees for each SUC.


DEVELOPMENT RESEARCH NEWS

in licensure examinations do not necessarily go up as tuition and other school fees are increased. This is shown clearly in the results of the regression analysis done for the data and explained further in the next section. Indeed, there are private CUs that charge high fees and do well in the examinations but there are also CUs that charge exorbitantly high and yet have per formed—and continue to perform—poorly in licensure examinations.

Under the regression knife… To show more clearly the relationship between fees and quality, of type of schools and level of enrolment, regression tests were run on five groups of regions (National Capital Region, Northern Luzon, Southern Luzon, Visayas and Minda-nao). There were estimates for seven fields (civil, mechanical and electrical engineering, nursing, accounting, elementary and secondary education) in private CUs. With tuition as the dependent variable, the results are shown to be not generally robust for all the seven fields and five regions or for the total of 35 regression runs. Passing rate, however, significantly influences tuition fees in accounting in Southern Luzon and Mindanao, in civil engineering and nursing in Southern Luzon, in elementary education in all regional groupings, and in secondary education in all regional groupings except NCR. Specifically, the results indicate that a percentage point increase in the passing rate in accounting in

7

September - October 2002

...There are private CUs that charge high fees and do well in the examinations but there are also CUs that charge exorbitantly high and yet have performed—and continue to perform— poorly in licensure examinations.

Southern Luzon increases tuition per unit by almost P6 or P920 for the whole four-year program. The corresponding figures for civil engineering are P4 and P614 while those for elementary education are P1 and P160. Enrolment also has a significant and positive effect on fees, especially in nursing in the Visayas and Mindanao areas. Being a sectarian school, however, does not affect fees. With program fees (include both tuition and miscellaneous fees) as the dependent variable, meanwhile, it was found out that passing rate exerts no significant effect on the variable except in the following cases: in nursing in Northern Luzon wherein a percentage point increase in the passing rate raises program cost by P675; and in both elementary and teacher training in all areas except NCR. On the other hand, enrolment has a significant effect for nursing in the Visayas while type of school raises program cost in nursing in the Visayas and in mechanical engineering in the NCR. For SUCs, relating program cost to passing rate is not significant at all except in civil engineering and accountancy. For civil engineering, it would take an additional budget of P6,000 to raise passing rate by

just one percentage point. For accountancy, the equivalent amount is P3,816. On the whole, the level of spending in SUCs does not affect their performance in licensure examination.

Conclusion and implications What do the above findings tell us? One, the results indicate that there is no single price or amount for a given HE category that prevails, leading us to the conclusion that our HE sector is characterized by an unexplained fee structure. Two, based on the data and regression analysis, it is clear that passing rates do not necessarily increase as fees increase. Accordingly, we note that there has been no significant relationship between tuition/school fee hikes and quality in education in our HE system. And three, the findings show that indeed, the national government allocates almost all its subsidy to higher education for the operation of SUCs. Unfortunately, however, the allocation to individual SUCs is not based largely on economic or education criteria but on political and historical grounds. And while it is true that some SUCs are quite competitive with better quality CUs in terms of per unit cost and passing rates, it is also true that there are a number of extremely inefficient SUCs. Given the fact, too, that enrolment in ☛ page 12 many SUCs consists


DEVELOPMENT RESEARCH NEWS

T

8

he Philippine Institute for Development Studies (PIDS) celebrates its silver founding anniversary this September. The Institute, the government's think-tank attached to the National Economic and Development Authority (NEDA), is mandated to conduct policy-oriented research on social and economic development.

Director-General Dr. Gerardo P. Sicat. In the mid-1970s, Sicat was inspired to develop a government think-tank that could undertake strategic long-term research on issues and concerns to help in a more rational and comprehensive formulation of plans and policies for sustained social and economic development.

Since its establishment 25 years ago, the Institute has tried its best to consistently respond to the demand for independent, systematic, comprehensive and rigorous analysis of issues in order to guide and support policymaking and planning in the government.

Through his influence, then President Ferdinand Marcos signed Presidential Decree No. 1201, mandating the creation of PIDS on September 26, 1977. Since its creation, the PIDS has been chaired and/or advised by, apart from Dr. Sicat, socioeconomic luminaries like Cesar Virata, Vicente Valdepeñas, Solita Monsod, Jesus Estanislao, Cayetano Paderanga, Cielito Habito, Felipe Medalla and Dante Canlas.

Through the years, it has produced studies that look into current and emerging concerns and their implications on national policies and various sectors. To date, almost 900 publications have been produced in various formats based on more than 600 studies conducted by both inhouse and Institute-commissioned researchers. No less than the present Philippine President Gloria Macapagal-Arroyo was at one time involved in a research project coordinated by the PIDS. In terms of utilization, a good number of the Institute's studies are known to have been used in the formulation of policies and decisions by legislators and executive officials and have helped in the country's development efforts.

Giving birth to an institute The Institute is the brainchild of former Secretary of Socioeconomic Planning and NEDA

The founding members of PIDS. A number of distinguished men and women have run the PIDS through the years. Leading the group in the 1970s was Dr. Gerardo Sicat (second from right), then NEDA director-general, as chairman of the Board of Trustees. The rest included, among others, Dr. Jaime Laya, Dr. Filologo Pante, and Dr. Manuel Alba.

To ensure the independence and objectivity of its research, the Institute has its own Board of Trustees that guides and directs the Institute’s research agenda. Only the first set of board members was appointed by the President; the succeeding members were chosen by the board members themselves from a wide list of

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respected authorities in the academe and research community, government and private sector. The Board is also responsible for recommending the succeeding PIDS president if the post becomes vacant. In addition, the Institute has a Research Advisory Committee composed of distinguished local and foreign social scientists—the list has included Nobel laureates like Lawrence Klein, Amartya Sen and Jeffrey Sachs—that reviews, critiques and advises on the directions and outputs of the PIDS research staff.

Contributing to national policies For more than two decades now, the Institute has pursued development research under several broad themes that have defined its research agenda. Among these themes are: employment, human resource development and technology; resource mobilization; agricultural and industrial development and trade policy; poverty and wealth distribution; regional development; natural resource management; energy and infrastructure development; and macroeconomic policy.

PIDS turns

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PIDS President Dr. Mario Lamberte (left) and PIDS Research Fellow Dr. Melanie Milo (right) presented their papers on the evolution of central banking in the Philippines and issues in the financial services integration and consolidated supervision, respectively, during the Institute's celebration of its 25th anniversary. Present to give their comments were five gentlemen who have served in the Board of Trustees of the Institute in various years: (from left) Dr. Vicente Valdepeñas, Jr., Dr. Placido Mapa, Dr. Cesar Virata (standing behind podium), Dr. Jaime Laya and Dr. Romeo Bautista.

In the course of its existence, the Institute's research have contributed in the deliberation of significant issues and national policies. For instance, the Institute’s study on the Industrial Promotion Policy in the Philippines in 1979 was used as a key reference in the recommended measures for the industrial restructuring in the country. The study was completed at a time when the first structural adjustment loan from the World Bank was being negotiated and was considered to be a critical input to that undertaking. The Institute was also involved in the preparation of the so-called “Yellow” and “Green” reports during the Aquino administration which aimed at identifying agenda for development reforms. The recommendations in these reports were used as inputs in the preparation of the Medium Term Philippine Development Plan, 1987-1992 and the policy framework for agriculture, respectively. The Institute was likewise actively involved in the preparation of a report for the country’s accession to the World

Trade Organization (WTO) and the country’s commitment to the Asia-Pacific Economic Cooperation (APEC). For the latter, many of the Institute’s senior research staff participated in the drafting of the Manila Action Plan for APEC in time for the 1996 APEC Leaders’ Summit in Subic, Olongapo. In 1998, the Institute, through the Philippine APEC Study Center Network (PASCN), led the conduct of industry studies aimed at determining the likely impact of the Early Voluntary Sectoral Liberalization (EVSL) scheme on 15 identified sectors. These studies were undertaken in response to the call of the WTO/AFTA Advisory Commission for assistance in defining the government’s position and strategy in the country’s participation in the EVSL initiative. In terms of fiscal policies, the Institute provided assistance to the Bureau of Internal Revenue (BIR) in formulating policies and strategies aimed at attaining maximum efficiency and increased tax collection. The Institute’s findings from its reasearch on Rural Finance, meanwhile, were used in the review of

various banking policies like restrictive entry, branching regulations and rural lending schemes. The Institute also provided inputs to Congress in its deliberation of legislative bills with regard to financial intervention in the rural sector. Likewise, it was active in providing crucial information on financial sector reforms, particularly in the passage of the Central Bank Act, the General Banking Act and the Securities Regulations Act. In the area of agriculture, the Institute was able to provide valuable inputs to the government’s restructuring efforts through its study on Economic Policies and Philippine Agriculture that reviewed the impact of macroeconomic policies on the agriculture sector. The PIDS also looked into the overall dynamics of rural development and the methods of developing the rural sector to maximize its potential contribution to the economy. The Institute’s recommendations under the project Dynamics of Rural Development targeted the government’s strategy in formulating adjustment mechanisms and policies that would reduce the pos- ☛ next page


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sible disruptive effects of the Comprehensive Agrarian Reform Program (CARP) in the rural community. Under natural resources and environment policies, the Institute initiated a number of studies that looked into the demand and supply of water in Metro Manila and other urban areas. A major recommendation of the studies is to consider the formulation of a water pricing policy that will correctly price water to include not only its distribution costs but also its sourcing. On the social sector, the Institute implemented a major project entitled Baseline Studies on Health Care Financing aimed at formulating a core policy reform package for the country’s health care financing system. Different researchers are also currently utilizing several PIDS

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studies on poverty analysis, especially the GIS-based data, as a convenient mode of interpreting poverty situation in the country. The Institute’s various models in population, meanwhile, are being used by other government agencies in their respective planning and monitoring systems.

PIDS core programs The Institute continues to pursue analysis of policy issues and, through its research advocacy and dissemination program, has helped enlighten the public on development concerns through more informed discussions. In continuing to pursue its mandate, the Institute maintains three basic component programs, namely, research, outreach and research dissemination. The Institute’s research program is concerned with the identification and prioritization of research studies needed in planning and policy formulation. Under its outreach program, in the meantime, PIDS senior staff provide technical expertise and advice to policymakers and other individuals and organizations to help shed light in the deliberation and discussion of key policy issues and important socioeconomic topics. Its research dissemination program, on the other hand, promotes the utilization of its studies as inputs to mainstream planning and decisionmaking.

Looking forward As a new century enters, the Institute reassesses and reprioritizes its research directions

In the last 25 years, the Institute has undertaken research on various issues such as water costing and pricing, population and poverty analysis.

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in order to ensure its continuing usefulness to the overall development community. Its latest five-year research agenda identifies its future studies and investigations on, among others, the following concerns: macroeconomic management and globalization, competitiveness and competition policies, governance, social sector reform, infrastructure development, agricultural modernization, and environment and natural resources management. In gearing up for the future trends in research in the Philippines, the Institute has likewise initiated several ITbased undertakings that could set the tone for a more efficient and relevant socioeconomic research in the country. These undertakings, which aim to cut short the usually tedious process of research and data collection, are the Electronic Resource Base for Legislation (ERBL), the SocioEconomic Research Portal for the Philippines (SERP-P), the Online Public Access Catalog (OPAC) system at the PIDS library, the Social Science and Policy Research Network for Agriculture (SSPRNA), the PIDS Information Database System (IDS) and the PIDS Geographic Information Systems (GIS)-based Socioeconomic Profile. The ERBL is a joint undertaking of PIDS and the House of Representatives’ Congressional Planning and Budget Office (CPBO) with the primary objective of electronically bridging and, hopefully, blending studies done by PIDS and pending major economic bills at the House of Representatives. Aside from accessing the full-text copies of said bills and being informed of their current status, a device has also been provided for researchers to directly interact with authors of these bills. The SERP-P is an electronic-based information system that provides an inventory of completed, ongoing and pipeline research undertakings related to economic development and policymaking in the Philippines as conducted by various research institutions and development agencies in the country.


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The OPAC system of the PIDS library serves as a gateway to the library collection of the PIDS and provides researchers with access to its bibliographic description even without the assistance of librarians and even from outside of the library premises. The SSPRNA is a consortium that helps organize a more coordinative means to plan and direct various research and development efforts under the Agriculture and Fisheries Modernization Act, one of the major priority areas of Philippine economic development. A webpage of the Network has been created and is attached to the PIDS website. The IDS addresses the accessibility problem by systematically organizing available economic databases and different studies through the Economic Database System (EDS), which stores and maintains databases from various official sources. The GIS is an automated and userfriendly database system incorporated in the PIDS website that provides a unique way of viewing and analyzing spatial data by presenting them in a geographical format. Full color maps reveal patterns and relationships that allow users of data to view information in a new and easily understood perspective.

Anniversary activities. (top) The Institute hosted the 28th PAFTAD Conference, which was attended by representatives from 16 Asia-Pacific countries; (middle) Invited to the opening of the Research Fair were Dr. Sergio Ortiz-Luis of PhilExport, Dr. Vicente Valdepeñas, Jr. of the Central Bank, Dr. Dante Canlas of NEDA and Dr. Romulo Virola of NSCB, seen here looking at various PIDS memorabilia that include President Gloria Arroyo's papers on the tourism and social services sector; (bottom) PIDS founding father Dr. Gerardo Sicat comments on PIDS Vice-President Dr. Gilberto Llanto's (right) paper on infrastructure.

These IT-based research initiatives of PIDS may be accessed through the PIDS website at http://www.pids. gov.ph.

sis and housing development, among others.

The celebration For its silver anniversary, several activities were held to highlight the importance of policy research in governance and to acknowledge the assistance of individuals and institutions in the evolution of PIDS. In the Perspective Paper Symposium Series, PIDS research fellows presented a perspective of the development and evolution of issues and concerns over the past 25 years in their respective fields of specialization such as infrastructure and privatization, banking and finance, science and technology, human resources development and labor markets, competition policy, poverty analy-

In collaboration with the Philippine Economics Society, distinguished Philippine economists who have been part of the growth of the Institute over the years presented four special papers focusing on selected economic issues. Topics discussed were the political economy of economic reforms, lessons from growth models, developmental issues of exchange rate policy, and tuition structure and education. The Institute also hosted the 28th Pacific Trade and Development (PAFTAD) conference in Makati with the theme “Competition Policy in the New Millen-

nium.” Representatives from 16 countries in the Asia-Pacific region attended said conference. In the same week, two policy fora on the agricultural extension system and sustainable tourism development in the Philippines were organized wherein key officials from the agriculture and tourism departments were invited as keynote speakers. Both fora served as venues for the discussion of issues and problems faced by the agriculture and tourism sectors. The culminating activity in the celebration was the holding of a research fair at the AIM Conference Center, Makati City, in collaboration with 14 research and academic institutions in the country. DRN


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Malacañang declares September as development policy research month President Gloria Macapagal-Arroyo has declared the month of September as Development Policy Research Month. This is to recognize the importance of policy research in the policy formulation, planning and decisionmaking processes affecting socioeconomic development issues. The President stressed in Proclamation No. 247 that the observance of Devel-

Tuition...from page 7 mostly of nonpoor students, then it simply highlights the indiscriminate subsidy and irrational budget allocation to SUCs.

Recommendations What can and should therefore be done? It is imperative for the government and the higher education sector to address the two market imperfections readily shown in the analysis of the Philippine HE system. In terms of information needs, modest investments and efforts will go a long way in improving information about schools and the labor market. Cross-section data on schools are directly useful to students. Useful data would include quarterly labor force surveys regarding employment and wages by education, occupation and field of study, in particu-

opment Policy Research Month will provide the means for promoting, enhancing, instilling and drawing nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socioeconomic development. This will also ensure the support of the public for all activities aimed at advancing the quality and standard of policy research in the country.

lar, analyses on rates of return and employment/unemployment patterns and conditions. Such information will help any student and his family choose what degree to pursue—one that will provide him a better and high paying job in the future—and where to pursue it. As for policies and strategies meant to address the capital market constraints, the government must review the indiscriminate and irrational allocation of funds to SUCs and consider its replacement by a scholarship system that truly looks at merit. Such system will lead to two desirable effects. One, subsidy will be provided to deserving students who could be directed to programs of higher social returns such as physics and history at the graduate level.

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As the government’s policy development think-tank, the Philippine Institute for Development Studies (PIDS) has been designated to oversee and coordinate all programmed activities lined up to mark and celebrate the Development Policy Research Month. The President likewise called on all departments, agencies and instrumentalities of the national government, local government units, government-owned or controlled corporations, the private sector and the public at large to support the activities and programs for Development Policy Research Month. The President’s proclamation coincides with the celebration of the Institute’s silver anniversary. The anniversary activities, including the Research Fair, were held at the Asian Institute of Management Conference Center (see related story on page 8). DRN

Two, if scholars are given the choice of which schools to attend, high quality private and public HEIs will compete with each other. The less deserving students in SUCs, on the other hand, will be made to bear the full cost of their studies. This financing system will stop the crowding out of private colleges and universities by SUCs. Finally, there should be an open and effective discussion of all these issues so that they can hopefully lead to serious education reforms. DRN References Annual Poverty Indicator Survey. 1999. Makati City: National Statistical and Coordination Board. CHED (Commission on Higher Education). Various papers. Tan, E., G. Ducanes, L. Garcia, T. Puriran and L. Ramos. 2002. Studies of Access of the Poor to Education. Paper prepared for the Asian Development Bank (ADB).

Tuition Hike, Education Strife?  

Should students rally for zero or uni- form rate of increase? Are they rallying against fee increases in particular schools? By Edita A. Tan...

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