Free public education and the freedom of SUCs



THE P8.3 billion infusion into Commission on Higher Education’s (CHEd) budget for 2017 should be seen as a trigger for a more rationalized look into tertiary education financing. This budgetary maneuver of transferring P8.3 billion from ARMM to CHEd is not the end, but hopefully a beginning to pass a comprehensive law on financial assistance to tertiary education, and not just to state universities and colleges (SUCs).

Congress should seriously address the concerns raised on the blanket waiver of tuition fees on all students, regardless of social class, and of maintaining the inequality among SUCs, where some like the Philippine Normal University (PNU) charges only P35 per unit, while the University of the Philippines (UP) charges from P1,000 to 1,500 for Bracket A students, or those students who belong to the uppermost income bracket and are required to pay the full amount.

The appropriation by Congress of the P8.3 billion to cover the tuition fees of all students enrolled in SUCs, including UP, while appearing to be a feather in the cap of the Duterte administration, has in fact created logistical concerns which need to be addressed. This is the consequence of a knee-jerk reaction from Congress, where the move was a last-minute budgetary insertion at the bicameral conference committee, thereby bypassing committee hearings and a more serious technical study. In saving P8.3 billion from being wasted as lump-sum pork, there is risk that the money could be tied up in technical and logistical problems, or even be frozen by potential legal suits, and could even threaten whatever latitude SUCs have in spending their revenues.

For one, unlike government budgets that work on a fiscal year, universities and colleges operate on an academic year basis that starts in June, and for UP and some other SUCs, in August. This begs the question of when students can begin enjoying the benefit of non-payment of tuition fees. Will it start in January, or in the opening of SY 2017-2018?

SUCs propose budgets that already factor into their financial plans the anticipated subsidies coming from government through the General Appropriations Act (GAA). Theoretically, any university, be it public or private, would source their funds mainly from tuition fees. Hence, the budget that they will prepare will take into consideration the maximum anticipated revenues from tuition fee collections. In private universities, this is more straightforward accounting. The bulk of the budget for SUCs, on the other hand, is drawn mainly from congressional appropriations. This is what makes the kind of education provided for by SUCs as public, in the sense that it is subsidized by taxpayer’s money.

This principle has already been considered in the preparation of the 2017 budget. Whatever minimal tuition fee revenues the SUCs may collect, which is not that much if we go by the example of PNU which is P35 per unit, is retained by the SUCs to augment their regular budget. UP, for example, uses tuition fee collections to improve teaching, such as for laboratories, faculty development and curriculum workshops.

This is because these fees are considered as revenues, where SUCs are allowed to have more latitude in spending, unlike direct fund transfers from CHEd or the Department of Budget and Management (DBM).

For purposes of the 2017 budget, the SUCs have offered a budget proposal that already took into consideration the anticipated enrollment in the computation of their requested subsidies. This infusion of additional budget funds is an added bonanza and can be used by SUCs to augment their resources. However, it is not entirely clear how these additional monies will be treated, and under what auditing rules they will be accounted for.

Under CHEd rules, there are only three modes for student financial assistance, and this P8.3 billion will definitely be disbursed not as a loan, and it is also not a scholarship considering that it is not competitive. Thus, it appears like a grant-in-aid.

At present, the money is clearly a budgetary item appropriated to CHEd. Technically, it should be given to students to pay for their tuition. So, the key question is will CHEd remit these funds directly to the SUCs in the form of a fund transfer where the SUCs are considered the implementing agencies. If so, then the consequence will be loss of prerogative for the SUCs to determine how to spend the money, considering that budget transfers are subjected to stricter auditing rules. On the other hand, if they will be treated as direct payments to students who shall be collecting the money from CHEd in the form of vouchers, then they will become revenues for SUCs which can be spent according to the rules in CMO 12, Series of 2012.

The CHEd has to craft a workable implementing mechanism that will give latitude to the SUCs, without violating government auditing rules, while Congress has no choice but to pass a more comprehensive legislation before 2017 ends.


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  1. Germany has this program too and the Saudi Arabia and even France. Our legislators need to learn from these countries on how they implement it.