The Wrong Solution to the Right Problem

The headline read, “Poverty keeps 16% of youth aged 6 to 17 out of school” but the proposed solution was targeted at older college aged students. What’s going on?

The bill proposed by Senator Peter Cayetano seeks to provide scholarships in state universities and colleges to the top ten per cent of each high school’s graduating class. Something sounds amiss here since college students usually are aged 18 and above and the headline talks of younger students dropping out. Here is how the Senator posed the problem, according to Monday’s edition of the Manila Standard newspaper:

Cayetano, citing the Annual Poverty Indicator Survey, said 16 percent of Filipinos age six to 17 are out of school and 28.9 percent of high school graduates could not attend college because it is expensive [emphasis added].

The article seems timed for the opening of classes in the tertiary sector. It has a nice striking headline that reels you in, but reading further, you realize that it is talking about something else. The thing is there are a few factual errors in need of correction.

First off, if one goes to the website of the National Statistics Office, the source of the survey cited, one will find that in 2010 (the last year survey data has been made available) the sixteen per cent quoted by Cayetano actually refers to youth aged six to 24 (by definition, an out-of-school-youth is a family member aged 6 to 17 not attending formal school or aged 18-24 not in school, unemployed and who has not finished a post-secondary school qualification).

Second, the 28.9 per cent that say the “high cost of education” is keeping them away again refers to those aged 6-24 and not high school graduates solely. Although a higher proportion of those aged 16-24 (around 32%) say they are discouraged for this reason, that proportion is off a smaller number (4.6 million 16-24 year olds compared to 6.1 million 6-24 year olds who are OSY).

This means that there are less, about 1.45 million OSYs, who are prevented from studying due to cost, not 1.75 million as originally implied by Cayetano’s statement, and they would not all be high school graduates either or graduates of public schools for that matter as a good proportion come from the middle to upper income brackets.

If the good senator who claims to represent young Filipinos expects us to take his proposal seriously, it would do him well to get the facts straight especially since he has had time to digest them (the survey has been available at the NSO website since November of last year).

Given the inaccuracies in the interpretation of published data, I would hesitate to take the number of recipients targeted by the proposal, which is just under 25 thousand, seriously either. But suppose we were to do so, that would mean that only two per cent of the target group would be affected by the new policy, if at all given that the way the eligibility criteria is constructed, there would likely be unintended recipients receiving benefits.

Again, given the way the problem was posed, one cannot take seriously the claim that the policy will address it. It seems more like a piece of legislation aimed at gaining attention for its sponsor who is seeking re-election in May 2013 rather than a considered policy approach aimed at systematically dealing with the issue at hand.

To address the problem, one has to recognize the scale and complexity of it. First of all, in dealing with the OSY phenomenon, we need to recognize that there are other issues that may be just as important as cost. For every OSY who sees it as a barrier, there is another who disengages due to a “lack of personal interest”. Among the OSYs of primary and secondary school age, there is about a four-to-one and two-to-one ratio respectively of those who find “lack of personal interest” versus those who identify cost as the main barrier. Dealing with the cultural and social factors for this lack of interest would be just as important, if not more so, as dealing with economic factors.

Admittedly, when one goes on to the older age category, those 16 to 24 year olds, the relationship is reversed. Lack of personal interest is only 21% compared to 32% who find school too expensive. Needless to say, influencing personal tastes and preferences might be the low lying fruit that government might seek to exhaust first prior to it turning to the more vexed problem of cost.

Secondly, as cost becomes a major factor the older one gets as only one in ten OSYs aged 6-11 consider cost the main barrier to education compared to three in ten for those aged 16-24, the policy response needs to be measured in relation to the scale. Tuition, incidental and opportunity costs all increase dramatically the higher one goes up the education ladder.

If we can retain students up to Year 12, give them an alternate vocational education track that would entice those with very low personal interest in academics, provide apprenticeships in schools that make them ready for work, then they will have a fighting chance whether they pursue further education at the tertiary level or not. They will be less likely to settle for informal, low skilled, low wage employment. This is why the K-12 reform is very important.

Thirdly, as a corollary to the second point, aside from the K-12 reform, what is needed is an expansion of the coverage of CCT beyond the current band of 0-14 years of age. It is important to keep the older youth engaged in education because as our labor statistics reveal, the bulk of our unemployed are aged 15-24 years old. In 2010, there were roughly 2.9 million unemployed, and roughly 1.5 million of them or 51% were 15-24 year olds (the numbers have hardly changed since).

If these youths had been engaged in full-time study, the unemployment rate of our workforce would have halved. That is why our unemployment problem can be seen largely as a youth unemployment problem. The priority for the government is to get them engaged in full-time study if they cannot find employment.

The challenge now would be to quantify the cost associated with a youth allowance for the OSYs aged 15-24 which would be conditioned upon full-time study. I estimate there to be about five million youths in this category. Assuming that we target a third of this population (roughly the proportion of those belonging to the bottom income quintile or 1.6 million of them) and allow a more generous allowance of 750 pesos per student per month compared to 300 for primary school students (because of the increased cost of higher learning), that amounts to 15 billion pesos more to be added to the CCT budget which will be 45 billion next year. Of course, the inevitable question then becomes where to get the money. That is a topic for another conversation.

Finally, when it comes to the area of university scholarships as a part of the solution to the OSY problem, it is best to consider it within the context of tertiary education funding in general. Creating entitlements for one group of students without providing for the necessary funding inevitably means forcing institutions of higher learning to charge greater fees to the rest of their students. Would that be a fair and equitable thing to do? Again, that discussion opens a whole new can of worms, which is meant for another day.

Let me conclude this by saying that the short-sighted thing to do would be to consider further education purely a cost, without realizing that a more educated, highly skilled workforce in today’s technology driven world is an asset that pays off for society in the long-run. At least in quantifying the problem properly, we are able to see whether any proposed solution would make a dent in it; and clearly, the one put on the table by Senator Peter Cayetano misses the mark.

Doy Santos aka The Cusp

Doy Santos is an international development consultant who shuttles between Australia and the Philippines. He maintains a blog called The Cusp: A discussion of new thinking, new schools of thought and fresh ideas on public policy ( and tweets as @thecusponline. He holds a Master in Development Economics from the University of the Philippines and an MS in Public Policy from Carnegie Mellon University.

  • UPnnGrd

    You would think it would be a 5-year old law at least already, but India just passed a brand-new law  that makes it illegal  for 15-year-old and younger  to be out-of-school.  ( Maybe 18-years old and younger, I don’t remember).

    So is there a Pilipinas law about requiring 15-year-old and younger   to be in school? 

    Of course, it may mean that Malakanyang builds less houses for soldiers and more schools instead…  but is there a law????

  • When kids who are IN school are packed 45 per classroom, they might as well be out of school. Because you can’t learn much from a cow caught in a stampede of ignorance where teaching is aimed at the slowest cow.

  • Manuelbuencamino

    It’s not the first time that a politician got his statistics wrong. As you said, these kinds of mistakes cost money.  This kind of solution also reminds me of how an armed forces chief of staff arrived at a solution to the problem of rigged bids for military contracts. 

    When the rigged bidding to supply boots to soldiers was exposed, the AFP Chief of Staff Gen. Narciso Abaya said that  he had known about the operations of bidding syndicates in the AFP even before he became AFP-COS. He said the suppliers acted like a cartel, that they would meet in “dimly-lit restaurants” to rig their bids and then they would send “sexy girls in miniskirts” to collect payments from AFP General Headquarters. So what did Abaya do to break the syndicates ? He issued an order prohibiting miniskirts in General Headquarters .

  • Roberto

    “Cayetano, citing the Annual Poverty Indicator Survey, said 16 percent of Filipinos age six to 17 are out of school and 28.9 percent of high school graduates could not attend college because it is expensive [emphasis added].”

    I agree with Cayetano.  The 16% (whatever) Filipinos who are out of school can be helped in some other ways but not much by the K-12.  The right problem actually, as I understand it, according to Cayetano, is that “28.9 percent (whatever) of high school graduates could not attend college because it is expensive”, and by that, my friend Doy, I think Cayetano has the right solution by proposing to give scholarship in state universities and colleges to the top 10 percent of each high school graduating class.

    Here’s why.  The top 10 percent of any class usually is the cream of the crop, the brightest.  They are the brightest not only because they are the smartest but also they have the most interest in acquiring proper education. Any high school graduating class is no different.  Giving them scholarship by virtue of Cayetano’s bill will greatly boost the number of college graduates needed by the country without having to fear what you called the “low lying fruit” which is the ” lack of personal interest” you also mentioned.

    • The first job of the policy maker is to define what the problem is. Part of that is getting the facts straight so you can analyse the scale and magnitude of the response required. Only by doing so can he or she determine if the state and society can afford to pay for the solution.

      Most of our politicos enact entitlements without determining how much of an additional impost it will place on the system. They leave it to the executive to try and scrounge around for money. The politico, if he gets his or her way then takes bragging rights, while leaving it to the agencies or in this case the universities and colleges to deal with the unintended effects of the new entitlement. Most of them will simply have to spread their funding a lot thinner, so quality suffers, and on it goes. The “product” of the system fails to then reap the rewards of the investment, because it failed to deliver what was expected.

      That’s the “solution” being proposed here.

      • Manuelbuencamino

        Agree with you, Doy. If I may add, entitlements need not be enacted into law in the sense that politicos understand them. If Congress wants to pass a law addressing entitlements, it should enact one that mandates budget priorities. In other words, congress will command the executive to put for example education or health or defense as the biggest item on its budget for the coming year and so forth. And the executive will have to prepare a budget based on priorities mandated by Congress. After all, all revenue and appropriations measures come from Congress. The Executive will not have to scrounge for money to fund a specific entitlement as he will be juggling whatever Congress appropriated according to it stated priorities. Wala individual na pabida-bida dito.  

      • GabbyD

        di ba may counterpart ang congressional budget office sa pinas? they should develop that as an office responsible for scoring expenditure and taxation plans.

  • GabbyD

    i think you make an interesting point here. to add, i’d say that i’d like to believe senators like cayetano want to do good, but need/require an electoral talking point as well. i’d like to see the deped assigning senators/congressmen certain “educ goals” they the senators can take ownership in/champion, while preserving a unified, rational plan to move forward with educ reforms. 

    i think it can be done, but it requires a great deal of planning.