PRESIDENT Rodrigo Duterte signed a law earlier this month granting tuition-free education in all state universities and colleges (SUC) in the Philippines. This despite his economic managers reportedly opposing this measure mainly because funding for this measure is doubtful. He, however, still signed it into law challenging the lawmakers to look for ways to fund this move.
The Deputy Executive Secretary Menandro Guevarra explained that the President signed this law because the benefits of this measure far outweigh the costs, though this will be in the long-run. Digong, supposedly, weighed everything and came to the conclusion mention earlier. Another reason is that this measure is a very strong cornerstone of the President’s social development policy. The funding was passed back to the legislature to look for funding for this new law.
Education
As a merit good, education as a public good (or service) benefit the consumer. Some of the benefits of education include providing academic and technical know-how to people which is developing their human capital (effort of labor that is paid by the business firms for their contribution). This human capital is the most important asset of the factor input, Labor. The higher or more skills that labor have, the higher compensation the person may derive from his employment.
Education also provides positive externalities of consumption. This means that when this good is consumed or availed, there are positive effects to parties other than the individual who received the education. Therefore, aside from the benefit that the consumer of education derived from going to school, the family, as the most proximate institution will also benefit; the standard of living of this educated person’s family will increase as a result of having higher education.
The positive externalities may also go beyond the educated person’s family, like their community, city or province society as a whole. The positive externalities would increase demand for free public higher education come 2018, but budgetary concerns haunts the implementation of this law. Now that Digong signed this into law, and will be implemented come School Year 2018-2019.
Budget
Digong challenged the legislature to come up with ways to raise the budget for education. The earlier proposed budget for next year was already submitted by congress and approximately 16 million in education scholarships for students who will be enrolling in the 114 SUCs spread across the Philippines.
However, Digong’s economic managers disclosed that around 100 billion would be need to fully subsidize SUCs. This will be included in the budget allotted for Dutertenomics, where it is planned that about P9-trillion will be spent for infrastructure projects until the end of Digong’s term.
What did not sit well on me was that Digong challenged the legislature to raise funds for this measure. I believe this is not the role of Congress and Senate, unless what he was referring to was to create laws increasing tax, which is where the main revenue of the government is coming from. This is again contrary to his earlier measures of decreasing the income threshold that will be taxed. A measure foreseen to greatly decrease government revenues.
RA 10931 or the Universal Access to Quality Tertiary Education Act also allows funding coming from official development assistance, local and international donations. This is also expected. Aside from other projects that local and international non-government organizations support, namely in agriculture, etc., this measure is again included in the roster of government programs that require the charity of other nations, even those who are constantly being cussed by the President.
I personally believe that our country will benefit from providing better access to quality education in the tertiary level. The benefits in the long run is unimaginable. I agree with Digong that long run benefits will outweigh the costs. However, I believe there should be other things that should be considered as well.
One is on Basic Education. I read somewhere that out of 100 children who entered Grade one, less than 10 finish Grade 6. This should be addressed, too. There is no use for free tertiary education if children do not even finish their elementary. Something has to be done here.
Another is greater exemptions. Free education should not be across the board. Those who can afford need to pay, too. When government provides free education, this is to redistribute income equitably to everyone in the country. So if the rich one still get free education, then the macroeconomic goal of equity will not be achieved.
