The path towards “inclusive growth” – some indicators

In his fourth State of the Nation Address before a joint sitting of Congress, President Noynoy Aquino made reference to inclusive growth, inclusive progress or broad-based growth about thrice in his hour-and-a-half-long speech, but he mentioned the words transformation 15 times, change 14 times and reform 11 times. At the midpoint of his term, PNoy sought to bring home the message that change in the culture of “wang-wang” which he coined in his inaugural state of the nation address has taken place under his watch and that as a result of the reforms he instituted, the path for providing opportunity to all has been opened up irrevocably.

Inclusive growth as he declared in his speech was about providing everyone the chance to have a go at life, what the Australians call “a fair go”, which constitutes a social contract that if you work hard at bettering yourself, you can move ahead in life. It is not about guaranteeing the same outcome, however, meaning it is up to the individual whether to take advantage of the opportunities presented, or not. Providing equal opportunity means building human capabilities to pursue “the good life”.

The Asian Development Bank has come up with a Framework for Inclusive Growth which provides a set of indicators for measuring whether governments and societies develop that basic level of capacity in its people. The framework is comprised of three pillars: the first one supports economic growth to expand opportunity, the second one supports social inclusion to provide equal access to economic opportunity, and the third supports social safety nets for those who slip through the cracks. There are a number of indicators for each pillar.

I have sampled a few and collated the results for the Philippines and six other emerging economies from our region to compare the different paths we have taken down the road of inclusive growth and development. Let me start with the most basic one: income or the lack of it. Having a decent level of income is one of the most basic measures of material well-being. Social disadvantage comes from not having income sufficient to live on. The following chart shows the proportion of people living on less than $2 a day for us and our Asian neighbours at the start of the 90s and the end of the noughties.


At the start of the 90s, Vietnam had the highest rate of poverty at 85.7%, followed by China and Indonesia which were each at 84.6%, India at 81.7%, the Philippines at 55.4%, Thailand at 37.1% and Malaysia at 11.2%. By the end of the noughties, India had the highest poverty rate at 68.7%, followed by Indonesia at 46.1%, Vietnam at 43.4%, the Philippines at 41.5%, China (29%.8%), Thailand (4.6%) and Malaysia (2.3%). In percentage terms the countries that had the largest decline of poverty was Thailand which saw a drop of 88%, followed by Malaysia (-79%), China (-65%), Vietnam (-49%) and Indonesia (-46%).

The Philippines and India saw the least amount of poverty reduction at -25% and -16% respectively from their initial states. Despite the periods of rapid growth that both these countries experienced during the past two decades, the relative insensitivity of their poverty rates to growth is a bit disconcerting.

The most important predictor of future income is of course the amount of schooling one receives. This is best measured by the years of schooling a person achieves by a certain age. The following chart shows the average total schooling for youth aged 15-24 at the start of the 90s and end of the noughties for the same set of countries.


At the start of the 90s, Malaysia and the Philippines recorded the highest totals with 10.2 years and 8.1 years for each of them respectively. China (7.6 years) and Thailand (7.2 years) came next, followed by Indonesia (6.5 years), India (4.6 years) and Vietnam (4.5 years). Two decades later and Malaysia retained the top spot with 12 years on average, but China with 10.9 years overtook Thailand (10.6 years) and the Philippines (9.7 years). Vietnam nearly doubled its number of years to 8.8 overtaking Indonesia (7.7 years) and India (7.1 years). Vietnam succeeded the most in this area lifting the average years of schooling by 4.3 years, followed by Thailand (3.4 years) and China (3.3 years). India lifted its average by 2.5 years, followed by Malaysia (1.8 years), the Philippines (1.6 years) and Indonesia (1.2 years).

The Philippines which started out as first runner up has been relegated to fourth in ranking among these seven countries with Vietnam closing in. The high tech industries of the Philippines and India demand college educated workers. This means that good employment opportunities in these two countries are available only to a few. To be able to perform well at school, children need adequate nutrition.

When people suffer starvation at a young age, it affects their future prospects in life. Malnourished children suffer learning difficulties as their mental development is set back. The prevalence of underweight children under five years becomes a significant predictor of future misery. The following chart depicts this for the same set of countries.


At the start of the 90s, the highest levels of malnourishment were found in India with 52.8% of children underweight, Vietnam with 36.9%, the Philippines with 29.9% and Indonesia with 29.8%. They were followed by Malaysia (22.1%), Thailand (16.3%) and China (12.6%). At the end of the noughties, India still had the worst result at 43.5% followed by the Philippines (20.7%), Vietnam (20.2%), Indonesia (17.9%), Malaysia (12.9%), Thailand (7%) and China (3.4%).

Both India and the Philippines saw their prevalence drop the least in percentage terms by 18% and 31% respectively, while China and Thailand saw it drop the most by 73% and 57%. The huge disparity of income in India and the Philippines is the main cause of their underperformance.

Finally, how can an individual seek human well-being if he or she does not even survive early childhood. The under-five mortality rate provides an indication of the quality of health care provided to mothers during pregnancy and children at the very start of their lives. The following chart shows the number of deaths per 1,000 live births across the same sample of countries.

child mortality

At the start of the 90s, India had the highest rate of child mortality at 115 deaths per 1,000 live births, followed by Indonesia with 85, the Philippines with 59, Vietnam with 51, China with 48, Thailand with 32 and Malaysia with 18. By the end of the noughties, the mortality rate in India dropped to 63, while in Indonesia it fell to 35, likewise in the Philippines to 29, Vietnam to 23, China to 18, Thailand to 13 and Malaysia to 6. In percentage terms Malaysia saw the largest drop at 67% followed by China at 63%. India saw the slowest reduction at 45% followed by the Philippines at 51%.


These figures provide a good baseline for measuring inclusiveness within these countries. There are more indicators provided by the ADB, but these form the core set for anyone interested in studying inclusive growth. The Philippines seems to be in the same situation as India, in that they both experience the slowest reduction of social disadvantage among these countries–social disadvantage which is experienced at the very beginning of life. It is for this reason that the social reforms undertaken by the government are worth noting.

In his SONA, the president announced that he would be increasing the coverage of the conditional cash transfers to four million families and the period of eligibility up until children reach the age of 18. Patterned after successful programs in Brazil and Mexico that have been around for over a decade, the program screens participants based on a multi-dimensional test of social disadvantage. It provides cash straight to them through e-cards given to the mothers to avoid the usual bureaucratic double handling. They continue to receive a monthly cash transfer if they keep their children in school, make them undergo vaccinations and receive reproductive health counselling at health centres.

Their compliance and continuing eligibility is monitored regularly by the Department of Social Welfare and Development. A recent impact evaluation conducted by the World Bank shows that the intended program objectives are being met. School enrollment and attendance and better nutrition has been observed among children of CCT participating communities compared to non-participating ones. Although the poverty rate of the Philippines did not shift significantly between 2009 and 2012, it does not mean that this program was ineffective. The intergenerational nature of this reform implies that the Philippines will begin to reap the benefits of Pantawid Pamilya six to ten years after it was instituted. That means only by 2016 and beyond will this reform’s impact be noticeable through national family income and expenditure surveys when the children of Pantawid reach the working age of 15 years.

It will be PNoy’s successor who will reap the social dividend from the expansion of this program. It is true that this reform can now be considered irreversible in the sense that it will be hard for any successive administration to retract it. The only way to phase it out would be to make it obsolete by reducing the number of poor households. Although the president inherited the program from his predecessor, he can claim credit for rapidly expanding it. The other reforms which the administration instituted, such as closing the classroom gap, the sin tax law, expanding affordable healthcare, offering rent subsidies to informal settlers and the reproductive health act could also reap benefits for successive administrations.

What is disconcerting is how many Filipinos among the educated and upper socio-economic groups still oppose the reforms just mentioned, begrudging the opportunities given to the poor as mere dole outs. It is a sign of just how exclusive and inequality tolerant we have become as a society. Perhaps it isn’t any wonder why our growth has not been very inclusive so far, and why the path towards inclusive growth needs to be pursued even more vigorously by the current administration.

The Human Development Report 2011

The latest release by the United Nations of the Human Development Report provides an occasion to review how the Philippines is tracking compared to its Asian neighbors.

Since 1980, the UN has compiled data relating to the human development of nations. The HDI or human development index is a composite of three dimensions of human well-being. The following dynamic chart provides a history of the country’s HDI from 1980 up to 2011 in relation to four other countries in the region, namely Malaysia, Thailand, Indonesia and Vietnam.

Click the “play” button and you will find that as all nations in the region climbed up in the HDI ladder, the Philippines which ranked a close second to Malaysia in 1980 with an HDI score of .55 compared to .56 for the latter was overtaken in 1992 by Thailand. Malaysia has widened its gap with the rest of the pack scoring .76 this year compared with .68 for Thailan and .64 for the Philippines.


Turning to the Education Index, which is based on the mean years of schooling for adults and the expected years of schooling for children, we find that the Philippines was the leader of the pack back in 1980 with a score of .53 compared to Malaysia the first runner up with .42 and Vietnam the second runner up with 0.4.

It took seventeen years for Malaysia to close that gap and overtake us in 1998. It now sits in the lead with a score of .73 compared to us at .68. Thailand ranks third with a score of .6. This is in part because of the expected years of schooling of our children which at 11.9 years is below Indonesia’s which is at 13.2, Malaysia’s at 12.6 and Thailand’s at 12.3, Vietnam is catching up to us with 10.4.


In health, the Philippines began in third position with a health index of .68 in 1980. It has ended at the bottom of the heap in 2011 with a score of .77. It has the lowest life expectancy at birth of 68.7 years compared to Vietnam which ranked first with 75.2, Malaysia at 74.2, Thailand at 74.1 and Indonesia at 69.4.

The Philippines has the second to the lowest level of expenditure on public health at 1.3% of GDP compared to Vietnam which ranked first with 2.8%, Thailand with 2.7%, and Malaysia with 1.9%. Only Indonesia spent proportionately less than us with 1.2%.

The Philippines also has the second to the highest mortality rate for under-five year olds with 33 children out of one thousand live births dying before the age of five, compared to 39 for Indonesia, 24 for Vietnam, 14 for Thailand and 6 for Malaysia.


In terms of income, the Philippines ranked second to Malaysia in 1980 but was overtaken by Thailand in 1982 and then by Indonesia in 1993. Vietnam is quickly gaining on us. In the three decades from 1980 and 2009, average incomes rose by 22% in the Philippines from $2,620 to $3,220 (measured in purchasing power parity terms). Thailand’s average income tripled to $7,260 from $2,200. Malaysia’s grew by 260% to $12,725 from $4,890.

Poverty headcounts measured as a percentage of the population was included in this year’s report. It showed the Philippines with the second lowest poverty incidence of 13.4% compared to Thailand with 1.6%, Vietnam with 17.7% and Indonesia with 20.8%. Malaysia’s poverty headcount was not available.

In terms of the severity of poverty felt by those who are in poverty, however, which is based on multiple dimensions of poverty, not just income, the Philippine poor suffered the highest intensity of poverty.

Gender Gap

The Gender Inequality Index started to be collated in 1995. This is a composite measure which tracks inequality between women and men in three dimensions involving reproductive health, empowerment and the labor market. The lower the score is, the higher the level of development.

The Philippines had an inequality index of about .49 the second highest. This has gone down to .43 with no change in its ranking among the five countries. This is in part to do with the high maternal mortality ratio which in 2008 was still close to one in a thousand live births resulting in death for the mother compared to the leader Malaysia which sees three in ten thousand live births.

Our adolescent fertility rate is the highest in 2000 at 49.1 per one thousand women aged 15-19 years falling pregnant. It has actually gone up to 54.1 per one thousand women falling pregnant in 2010.

On the plus side, our representation of women in secondary education is the highest with 1.03 women to men enrolled, and similarly our ratio of women in parliament is second best at 27%. However in terms of labor force participation, we place a very distant third place with only about a 63 percent ratio of women to men participating compared to nearly ninety percent for Vietnam and about eighty percent for Thailand.


The Philippines had the second highest average number of people per year affected by natural disaster with 48,370 per million inhabitants affected in 2010. Thailand had the highest number with 58,220 affected. Indonesia had the lowest with 1,364. But in terms of casualties, the country suffered the biggest number of deaths with ten for every million inhabitants dying due to natural disasters.

Budget 2012: How it all stacks up

Among the nations in the developed world that follow in the Westminster parliamentary tradition, the most eagerly anticipated policy speech by the government is not the state of the nation address but the budget speech.

The budget tackles not only the spending side, you see, but the tax side as well. On budget night, citizens find out if they are to get some form of tax relief. They also look for any additional spending on things they directly benefit from, like schools, hospitals or infrastructure.

The rich nations that make up the OECD (Organization of Economic Cooperation and Development) have varying levels of taxation. The Scandinavians typically tax more and provide a high degree of social insurance and welfare. The Anglo-American nations of the UK, US and Ireland tend to have lower taxes but provide a smaller safety net for their people.

Australia, the nation I am most familiar with seems to have the best of both worlds, with a tax take much lower compared to the Nordic countries but providing a level of social insurance and welfare comparable to them. That is because its tax and spend policies are some of the most progressive in the world.

Australia spends about 16 per cent of GDP on cash benefits (pensions, unemployment insurance, healthcare and community services) compared to an OECD average of just over 19 per cent. It is able to keep this expenditure down by means-testing benefits enabling it to target spending on those that most need it. Its tax take is about 27 per cent of GDP compared to an OECD average of close to 35 per cent. It is the sixth lowest-taxing country in that group.

Rich country, poor country

It is perhaps in this light that we need to focus on the Philippine tax and spend situation. Most poor countries are able to generate only as much as 20% of GDP from their tax systems. Yet the demand for public service is much higher than in advanced economies. The Philippines is no exception.

In 2012, the government projects it will generate about 1.5 trillion pesos worth of revenue out of a domestic economy that is expected to reach 11 trillion or about 13.6% of GDP. In the current year 2011, the government projects to earn 1.4 trillion out of an economy of 9.9 trillion or 14.2% of GDP. In 2010, the ratio was 13.3% (based on DBM papers).

In 2012, due to its low tax take and with a budget of 1.8 trillion, the government will incur a deficit of 286 Billion (up from the original 260 B) or 2.6% of GDP. That is compared to its projected deficit in 2011 of 300 Billion worth 3% of GDP and 314.5 Billion for 2010 or 3.5% of GDP.

Social services which include education, health, housing and land distribution are programmed to consume 556.2 billion pesos or 30% in 2012. That compares with 529 Billion in the current year equal to 31% of the budget in 2011 and 399.3 billion in 2010 worth 26.2% of that year’s total spend.

Among the social services, education takes the largest share. Next year it will amount to 309 billion or about 2.8% of GDP. This is up slightly from 2011 which was 272 Billion or 2.7% of GDP and from 2010 which was 225 billion or 2.5% of GDP. By contrast, Singapore and Thailand spend anywhere from 3.5-4% of GDP on education. Malaysia spends from 5-6%. If we were to match Thailand’s education to GDP ratio, we would need to spend an additional 70 billion on education.

As for health, next year’s budget includes 59 billion or 0.5% of GDP, up from 48 billion in the current year (0.48%) and 36 billion last year (0.39%). In contrast, Singapore spends about 0.9-1.5% of GDP, while Malaysia spends 1.8%, and Thailand 1.2-3%. If we were to match Singapore’s ratio, we would need to spend about 40 billion more on health.

Finally in housing, the 2012 budget contains 14.5 billion worth of spending or 0.13% of GDP compared to the current year’s 21 billion (0.2%) and 12 billion (0.13%) from 2010. Singapore by contrast spends about 1.8-2.5% on housing. Malaysia spends 0.3-0.6%, and Thailand spends 0.5-1%. If we were to simply match Malaysia, we would need to double our current spend by another 14 billion.

Living within our means

Judging from the magnitudes and ratios alone, we can plainly see that the country will continue to lag behind its neighbors in the region when it comes to providing basic social services for its citizens. As a result, it has much higher levels of poverty and inequality and lower levels of human development among the ASEAN-5.

If you take out the possibility of tax reform, “living within our means” confines the budget department to look for savings and improve the structure or mix of spending to improve the quality of the spend rather than the quantity. Past studies have shown that our education spending is already quite progressive, while that of our health sector tends to be regressive with its focus on the tertiary hospitals in urban centers rather than on primary healthcare in the community.

Certainly, there are opportunities to improve the progressivity of our spending program in health. One problem is that our health system follows the model in the US, Europe and Japan which relies of specific contributions. Those who earn more tend to receive higher reimbursements. While in Australia, health expenditures are financed from income taxes, but then are spent in a more egalitarian way by means-testing recipients so that those who earn more tend to pay more out of pockets than those who earn less.

Can afford more

The orthodoxy of constraining the budget because we have to live within our means can of course be challenged by simply asking the question, can society afford to pay more?

From his State of the Nation Address, the president hinted that we probably could afford to pay more when he cited to his own disbelief the close to two million self-employed entrepreneurs and professionals who declare incomes beneath the minimum wage. The BIR has said subsequently that it believes that the current 10 billion raised from these individuals should actually be about 100 billion.

Aside from professionals and self-employed individuals, the corporate sector might also afford to pay more. That is according to a five year old study by Dr. Renato Reside. His work showed that a very low correlation between investments approved by the BOI and PEZA with actual capital formation in all regions except Regions 4 and 7. He concluded that since investments did not materialize companies were simply using their fiscal incentive privileges to engage in tax avoidance. The recipients of such incentives read like a who’s who of Philippine business elite according to Dr Ben Diokno.

Because companies under this scheme are also allowed to sell as much as 50% of the goods they produce to the domestic market, Dr Reside also believes that much revenue is lost. According to him, back in 2004, we were losing as much as 59 billion pesos from revenues on imported capital goods, 135 billion on imported raw materials, 10.5 billion on the use of domestic capital goods, and 44 billion on income tax holidays provided to these so called exporters. If even half of these were recoverd, it would be an additional 125 billion in revenues.

Another form of tax incentive is provided to sin products because of the non-indexation of taxes imposed on them. It is an incentive because every year the prices of these products go up, but the taxes imposed on them don’t. Government revenues are eroded over time. By gradually increasing the taxes along with the rise of prices in general, the additional revenues from sin products estimated to be as much as 70 billion annually could help beef up our infrastructure which in 2012 will be 270 billion a mere 2.5% of expected GDP.

Indeed, from the combined tax breaks given to entrepreneurs, professionals and corporations, our society could afford to bridge the gap in social as well as economic infrastructure. We could become a more inclusive society. With a combination of better policies and stricter enforcement in revenue and incentive granting agencies, by renovating our economic bureaucracy, we could produce a more progressive tax and spend system. launches its pencil project

Hotelwithheart .com (HWH) in partnership with Dynamic Teen Company (DTC) launches its HWH Pencil Project Signature campaign which aims to provide pencils for underprivileged children being taught by DTC. By signing up on the HWH Facebook Page, HWH will donate 1 pencil to DTC for every digital signature (Like and Sign Ups) collected.

“We can measure statistics of children without the means of Basic Education, we can measure poverty, we can measure the rising crime rate, and we can even measure the cost of ignorance. But can we truly measure the potential of a child?” says Dr. Rudy Sabater, HWH Director.  “By providing these children with the materials wherein they can continue to learn, we are offering them a brighter future”.

Facebook is a powerful tool for sharing status, pictures, and videos. With more than a 500 million members and counting, the potential for social interaction is great. Sharing for a cause has been gaining ground in social media for years. hopes that letting people participate in a simple yet symbolical campaign will help Facebook users contribute to the betterment of society.

The Pencil Project will run for 1 month starting June 1 to June 30, 2011. HWH hopes to raise 10,000 pencils to be donated to DTC as materials they could use to help children further their education despite their poverty. To support this campaign, visit HWH Fanpage at Like the page, Sign Up and share to help children receive the pencils.

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About Efren Penaflorida and Dynamic Teen Company

Dynamic Teen Company (DTC) is a group of concerned young people with a mission of making a small yet significant difference in other people’s lives, particularly the small children in slum areas who have no access to education, basic hygiene and sometimes, even love from their families. The group was founded in August 1997 by four teenagers from Cavite National High School, one of whom was Efren Penaflorida, 2009 CNN Hero of the Year.

Contact Information: Manu T. Ofiaza, Tel: 7280406
Email: [email protected], Website:

Kabayanihan builds classrooms in Mindoro

Kabayanihan Foundation (KF) founder and chairman emeritus Alex Lacson was the guest of honor at the ribbon-cutting ceremony of the new classroom for the Daan Elementary School in Brgy. Villareal in Socorro, Oriental Mindoro, donated in memory of barangay chairman So King Hui and initiated by the KF.

Kabayani Gerardo Gamez grew up in this barangay and he experienced firsthand the difficulty of not having enough classrooms for students. When he was in grade five, he remembered sharing the same classroom with other grade levels and studying while rain waters flooded the room. As part of the advocacy on education and community development of KF, he decided to help give back to the community by helping them build a classroom.

The turnover ceremony began with a performance of the Socorro Hymn and the Mindoro March by grades 4 and 5 students. The school principal Merlene Fabregas and district supervisor Celestina Patulot thanked the donors, saying they hope that more individuals and organizations will take interest in helping schools provide the facilities the students need.

Read more at The Philippine Star


Unkindest cut

By Luis Teodoro

They’re called state universities and colleges (SUCs) — part of a public educational system that’s supposed to enable those who either can’t afford to pay the huge fees most private schools charge, or who simply prefer schools where winning basketball games isn’t a matter of life or death, to send their children to college.

SUCs are supposed to prevent the injustice of young people being prevented from entering college because their parents can’t afford it. SUCs deepen the country’s pool of teachers, lawyers, engineers, doctors, accountants, journalists, etc., and are at the same time keys to social mobility. Without SUCs the country would produce lawyers and doctors whose parents are lawyers and doctors, and would make it almost impossible for the son or daughter of a farmer or worker to be a teacher or an accountant. They are as much institutions for democratization as they are for learning, which is why the state founded and should support them. That’s why they’re called state universities and colleges, in the first place.
The “lightweights” (Senator Miriam Santiago’s word) Benigno Aquino III has surrounded himself with and their friends in the House of Representatives either don’t understand the phrase “state universities and colleges,” or are completely clueless about what policies can propel this country to the 21th century (assuming it’s already reached the 20th). They declare that SUCs should be “self-sufficient”; they argue that SUCs should have the capacity to raise their own maintenance and operating funds; they declare in no uncertain terms that, the tuition in some SUCs being “too low,” they should be raising their fees (which would keep the poorest out, and defeat their purpose).

I’m considering either possibility — that they’re just plain clueless about the role of education in the development that has eluded this country for centuries, or have absolutely no understanding of the concept behind SUCs — on the assumption that they’re interested in reducing poverty incidence not through the dole-outs Gloria Macapagal Arroyo put in place during her unlamented term, but through the authentic development that will enable the people of this country to realize their potentials in a society of justice and relative prosperity.

I’m also assuming that they’re not being elite-malicious — i.e., looking at the children of poor and middle-class families as unworthy of tertiary education, and that they think education beyond high school to be only for the children of the privileged. I am also hoping that these creatures and their House cohort are not so shortsighted as to limit their vision (if they have any) of this country’s future to more of the same: that is, keeping its status as the main supplier of maids and peons to the world as well as of raw materials to the industries of other countries.

But it’s possible that they don’t even have the excuse of ignorance, and may actually be acting and speaking out of the kind of malice one doesn’t have to go to college to acquire. The chances are they’re knowingly developing the same policy past administrations have implemented in furtherance of the global division of labor over which the 20 most developed countries preside, and which mandates that certain countries shouldn’t be sending their young men and women to college because they’re better used as busboys and domestics.
What these lightweights have done is to submit a budget for next year to the House of Representatives, which has approved it, in which SUC budgets have been severely cut. When SUC students and faculty members began protesting the cuts, these creatures justified them by saying that the government’s emphasis is on basic education; that certain state colleges and universities can raise their own funds; and that, in any event, there’s not enough money to even maintain the budgets of state universities and colleges at their current levels.

Aquino III himself pled for “understanding,” echoing the argument that basic education is his government’s main concern, and that some SUCs can raise their own funds. But his subalterns began singing a different tune as the protests escalated: after justifying the cuts, they began denying them. The current line is that there aren’t going to be any cuts in SUC budgets at all, and that, in fact, those budgets have been increased — in a demonstration of how quickly this administration has developed a forked tongue.

The version of the 2010 budget approved by the House severely reduces state support for several SUCs. The budget for operations and maintenance of the University of the Philippines System, which has seven constituent universities including an Open (Cyber) University, has been cut by 50% — the biggest among the SUCs — from last year’s P1.2 billion, for example. The budget of the biggest state university in the country, the Polytechnic University of the Philippines, has been cut by P24 million, and that of the Philippine Normal College, which trains most of the country’s teachers, by P92 million.

Budget secretary Florencio Abad declared that there wasn’t any money to keep the SUC budgets even at their current, already deficient levels. What he didn’t say was that there’s money to increase pork barrel allocations, bloat the police and military budgets, and boost the intelligence funds of the Office of the President, the Armed Forces of the Philippines, and the Philippine National Police. And, of course, there’s more than enough money for the widespread corruption, which costs the treasury billions, that Aquino III pledged he would eradicate once in office. Billions for human rights violators, assassins and crooks, but not a cent more for the country’s future.

The message the budget the Aquino administration has put together is sending should be crystal clear by now: it’s no better than past ones in meeting state responsibilities in maintaining state universities and colleges, and in mapping a future that’s any better than the present. The cuts are the worst since the Marcos dictatorship, and should help complete the destruction of the SUCs that began during that period, further bringing this country down the slope of the poverty that every Fidel, Joseph, Gloria, and Noynoy has been promising to end since campaign speeches were invented.

Republished with permission of Mr. Teodoro.

Save us from the Left!

Earlier ProPinoy published a snippet of William Esposo’s “What’s the education budget cut ranting all about.”

In my humble opinion, the most important part of it is this:

Unlike the students in the SUCs, the pupils in the primary education level do not have the capability to organize rallies and demonstrations, stage media events and employ methods of agitprop as mastered by the Leftist militants who are playing a visible role in these campus agitations. Unlike the students in the SUCs who have undergone primary and secondary schooling, the pupils in the primary education level have very few options to augment their means. College students have the option to be part-time workers.

The students today have not experienced the student activism of the 1970s and may not be aware of Leftist manipulations through their front organizations. There has been a marked increase in Leftist agitprop in the new administration assured perhaps that P-Noy will not resort to killing suspected Leftist elements.

A top intelligence official of the P-Noy administration had revealed to your Chair Wrecker recently that the agenda of the Left is to demonize the President and erode his public support. At a certain point the Left is hoping that the Opposition will be encouraged to join their destabilization activities.

There will always be reasons to complain about things in our country. There will be justifications to bring our complaints or clamor for reform to the media or to the streets. We must make sure that what we are doing will serve our real personal objective and not the sinister agenda of groups that are out to subvert and destroy our democracy.

As I mentioned in The Ungovernable Republic,

The militant struggle on the matter of education speaks from a corner of entitlement. “we are poor, we deserve to be educated by the state.”

There are better ways for constructive engagement.

What's with education budget cut ranting all about?

This one from, William Esposo’s As I wreck this chair column:

Sec. Abad clarified that the P2.8 billion of the GAA allocation for SUCs are considered Congressional Initiatives (CIs) which are subjected to a conditional veto in the 2010 GAA by the previous President. The conditional veto says that CIs can only be released subject to new revenue measures passed by Congress.

So, the question screams at you – what education budget cuts are they ranting about? Still, another question screams at you – what SUCs budget cuts are they ranting about? Clearly, the P-Noy administration is true to its campaign pledge that it will prioritize education but you must wonder if all those who have been ranting about education budget cuts learned arithmetic at all.

In a memorandum to P-Noy, Sec. Abad rationalized the 2011 P23.4 billion for SUCs, as follows:

1. SUCs have a total of P19.1 billion in cash advances as of end of 2009 that the SUCs could and should use. The average SUC had P65.8 billion in cash advances, equal to 41.3 percent of their expenditures. The largest, P11.9 billion, belonged to the University of the Philippines (oddly one of the noisiest in ranting against the budget cuts).

2. On a more fundamental level, the utilization of public funds for tertiary education is highly regressive, and with the scarcity of funds, other more pressing needs that will benefit such as basic education which benefits more poor students had to be prioritized.

According to the latest Philippine Public Expenditure Review (PER) by the World Bank (WB), the distribution of public school enrollment becomes increasingly skewed in favor of richer households as the level of education rises.

On State Universities and Colleges budget

November 30, 2010 briefer by the Department of Budget and Management and by the Presidential Communications Development and Strategic Planning Office

republished via

Education—from basic to higher education—remains a priority of the Aquino administration. It understands the concerns of teachers, students, and their parents, and has proposed the 2011 Reform Budget precisely to ensure that the education sector will receive the funds they need. The bottom line:

1. The proposed budget for the whole education sector actually increased by P31 billion. The proposed budget for basic education in particular increased by 18.5%, the highest increase in a decade.

2. The 2011 Budget proposes a larger amount for State Universities and Colleges ( SUCs) than what they actually received for 2010.

Funds appropriated in 2010 to SUCs vs Proposed 2011 SUC budget
The first bar in toto represents the 2010 appropriated budget for SUCs, including the Congressional Insertions subjected to a conditional veto by former President Arroyo -- and were never released. The second bar represents the proposed SUC budget for 2011. The graph illustrates that the proposed 2011 budget is P2.373 billion higher than that of the 2010 proposed budget, which was the only amount not subject to the former President’s conditional veto.

Percent allocation of Education in the National Budget
A graph illustrating the difference between the overall education budget for 2010 (left) and 2011 (right).

Q & A

Was the Education Budget cut?

The education budget was actually increased from 15.6% (P240.59 billion) of the National Budget to 16.5% (P271.67 billion).

Was the budget for State Universities and Colleges (SUC) cut?

The proposed SUC budget for 2011 is P23.407 billion, or 11.3% of the total National Budget: higher than the P21.034 billion proposed in 2010. The increase is allotted for Personal Services (PS) to support the requirements of the Salary Standardization Law.

The P23.845 billion 2010 appropriation for SUCs in the 2010 General Appropriations Act was not the actual budget released for 2010. At the least, P2.8 billion worth of congressional insertions was subjected to a conditional veto by former President Gloria Macapagal-Arroyo, and was never released. The actual SUC budget released for 2010 only amounted to the 2010 proposed budget of P21.034 billion.

Why do people say the budget was cut?

As stated, the nominal figures for 2010 include congressional insertions which made the 2010 figures seem higher, but which were never disbursed as per the conditional veto of former President Arroyo.

Another reason may have been the relatively larger basic education funding increase to P207.3 billion, 18.5% of the 2011 budget—the highest increase in a decade. This move was made to aid the sector of basic education, which the administration deems most in need of public assistance [see charts below]. Furthermore, it is in accordance with Section 2, Article XIV of the 1987 Constitution, which encourages the Government to focus on basic education.

What is a Conditional Veto?

It is defined as a veto in which the President objects to parts of a Bill and proposes amendments and conditions to make it acceptable.

The insertions could only have been released if the 14 Congress enacted new revenue measures. This condition was not met.

What does this mean for SUCs?

SUCs may earn extra income through different ventures, including partnerships with the private sector, and utilizing resources, such as land, that are available to them. The institutions are free to manage and allocate these resources as they see fit to augment their budget.

As stated in Higher Education Modernization Act of 1997 (Republic Act 8292), SUCs are authorized to retain and utilize their own income. At the end of 2009, SUCs had a total amount of P19.1 billion in cash balances. These institutions, as proposed, should use their cash balances to fund academic programs. This is in line with the President’s objective to make SUCs more self-reliant.

What does this mean for teachers in SUCs?

The salaries and benefits of teachers are fully covered.

What does this mean for students in SUCs?

The general concern is that this might lead to tuition hikes in SUCs. The 2010 budget was proposed as such to prevent unnecessary tuition fee increases. The whole amount allotted to SUCs will be released unconditionally.

Students should nonetheless encourage the administrations of their respective schools to come up with creative ways to maximize income from their existing resources to develop their respective universities or colleges.


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