Report No. 7473-PH The Philippines Education Sector Study (In Two Parts) Part Two: Technical Chapters and Annexes December 1988 Population and Human Resources Operations Unit Country Department 11 Asia Regional Office FOR OFFICIAL USE ONLY U~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Document of the World Bank This report has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents $ 1 = P .21.00 e 1 $ 0.05 Fiscal Year January 1 - December 31 School Year June - March Acronyms BEE - Bureau of Elementary Education BNFE - Bureau of Nonformal Education BSE - Bureau of Secondary Education DBM - Department of Budget and Management DECS - Department of Education, Culture and Sports EDPITAF - Educational Development Projects Implementing Task Force FAAP - Federation of Accrediting Agencies of the Philippines FAPE - Fund for Assistance to Private Education FMS - Financial and Management Service HSMS - Household and School Matching Surveys IEA - International Association for fSe Evaluation of Educational Achievement IHLs - Institutions of Higher Learning NCEE - National College Entrance Examirnation NCR - National Capital Region NEDA - National Economic and Development Authority NFE - Nonformal Education NGO - Nongovernmental Organization NMYC - National Manpower and Youth Council OPS - Office of Planning Service OSY - Out-of-School Youth PRODED - Program for Decentralized Educational Development SEDP - Secondary Education Development Program SOUTELE - Survey of Outcomes of Elementary Education SUCs - State Universities and Colleges UP - University of the Philippines VTE - Vocational and Technical Education FOR OFFICL USE ONLY PHILIPPINES EDUCATION SECTOR STUDY PART TWO: TECHNICAL CHAPTERS AND ANNEXES Table of Contents Page No. MANAGING THE EDUCATION SYSTEM . . . . . . . . . . . . . . . . . 1 A. Structure of Sector Management . . . . . . . . . . . . . . . 1 B. Processes for Sector Management . . . . . . . . . . . . . . 4 C. Issues and Reco.7endations .... . . . . . . . . . . . . . 13 List of Text Tables 1.1 Interactions of Planning and Budgeting Cycles . . . . . . . 9 1.2 Planning Process . . . . . . . . . . . . . . . . . . . . . 10 1.3 Budgeting/Financing Process ... . . . . . . . . . . . . . 11 1.4 Comparison of Methods and Coefficient Used in Enrollment Projections .... . . . . . . . . 17 1.5 Comparison of Population and Enrollment Projections for 1992/1993 . . . . . . . . . . . . . . . . . . . . . . . 18 List of Figures 1.1 DECS Organization . . . . . . . . . . . . . . . . . . . . . 3 1.2 Regional Office Organization . . . . . . . . . . . . . . . 5 1.3 Division Office Organization . . . . . . . . . . . . . . . 6 1.4 Policy-Making Process in Education . . . . . . . . . . . . 7 II. ADJUSTING COST AlD FINANCING STRUCTURE . . . . . . . . . . . . . 23 A. Overview .... . . . . . . ....... . . . . . . . . . 23 B. Cost and Financing: A Statistical Profile . . . . . . . . . 23 C. Efficiency in the Allocation of Educational Resources. . . 36 D. Equity Outcomes in Education .... . . ..... . . . . . 49 E. Policy Issues in Education .... . . ...... . . . . . 54 F. Overall Conclusions .... . . . ...... . . . . . . . 59 List of Text Tables 2.1 Central Government Budget Allocations, 1980-88 . . . . . . 24 2.2 Central Government Spending, 1980-88 . . . . . . . . . . . 25 2.3 Expenditure Per Student by Source of Funds and Unit Costs in Elementary Education, 1986 . . . . . . . . . 27 2.4 Annual Teacher Compensation in Public Elementary Schools, 1983-88 . . . . . . . . . . . . . . . 28 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Page No. 2.5 Expenditure Per Student in Secondary Schools by Source of Funds, 1986 . . . . . . . . . . . . . . . . . . 31 2.6 Annual Teacher Compensation in Public Secondary Schools, 1983-88 .... . . . . . . . . . . . ....... . . . 32 2.7 Ex.penditure on Higher Education by Source of Funds, 1986 . 35 2.8 Private and Social Rates of Return to Education, 1985 . . 38 2.9 Achievement Scores in Secondary Schools, Circa 1986 . . . 42 2.10 Class Size, Teaching Load and Pupil-Teacher Ratio in Secondary Schools, 1985 . . . . . . . . . . . . . . . . 44 2.11 Size Distribution of Public Secondary Schools, 1986 . . . 45 2.12 Distribution of State Universities and Colleges by Number of Campuses, 1987 . . . . . . . . . . . . . . . . . 47 2.13 Cohort Survival Rates in Elementary Education by Socioeconomic Groups, 1982 . . . . . . . . . . . . . . . . 53 2.14 Simulati"n of the Cost Savings of Consolidating Small National Secondary Schools, 1986 . . . . . . . . . . 56 2.15 The Cost Implications of Nationalization of Local Secondary Schools . . . . . . . . . . . . . . . . . . . . 57 List of Figures 2.1 Aggregate Flow of Funds in Elementary Education, 1986 . . . 26 2.2 Aggregate Flow of Funds in Secondary Education, 1986 . . 29 2.3 Aggregate Flow of Funds in Secondary School System After Policy Change, 1988 ... . . . . . . . . . . . . . . 33 2.4 Aggregate Flow of Funds in Higher Education, 1986 . . . . . 34 2.5 Relative Academic Achievement of Secondary School Students on Initial Test and the NCEE, 1987 . . . . . . . . . . . . 43 2.6 Relationship between Jnit Costs and Enrollments in National Secondary Schools, 1986 . . . . . . . . . . . . . 46 2.7 Relationship between Unit Costs and Enrollments in State Universities and Colleges, 1987 . . . . . . . 48 2.8 Distribution of Cumulative Public Spending on Education, Philippine and Developing Countries . . . . . . . . . . . . 51 2.9 Cohort Survival in Elementary, Secondary and Tertiary Education, 1986 .... . . . . . . . . . . . . . . . . . . 52 2.10 Cohort Survival Rates in Elementary Education by Father's Education, 1986 ... . ...... . . . . . . . 54 III. IMPROVING BASIC EDUCATION QUALITY . . . . . . . . . . . . . . . 61 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 61 B. The Outcomes of Basic Education . . . . . . . . . . . . . . 61 C. Inputs into Basic Education . . . . . . . . . . . . . . . . 64 D. School Processes . . . . . . . . . . . . . . . . . . . . . . 72 E. External Environment . . . . . . . . . . . . . . . . . . . . 74 F. Additional Recommendations ... . . . . . . . . . . . . . . 83 Page No. IV. RATIONALIZING HIGHER EDUCATION .... . . . . . . . . . . . . . 85 A. Introduction .... . . . . . . . . . . . . . . . . . . . . 85 B. Characteristics of Public and Private Sectors . . . . . . . 86 C. Public Policy Toward Private Education . . . . . . . . . . . 95 D. Efficiency Within the Public Sector . . . . . . . . . . . . 101 E. The Efficient and Equitable Use of Public Funds . . . . . . 104 F. Conclusion .... . . . . . . . . . . . . . . . . 111 V. HARMONIZING NONFORMAL EDUCATION AND TRAINING . . . . . . . . . . 113 A. Introduction .... . . . . . . . . . . . . . . . . . . . . 113 B. Nonformal Skills Training and Unemployed Out-of-School Youth . . . . . . . . . . . . . . . . . . . . 115 C. School Equivalency Programs and Nonformal Education . . . . 120 D. Nonformal Education, Poverty and Rural Life . . . . . . . . 124 E. Harmonizing Management and Resources . . . . . . . . . . . . 127 List of Text Tables 5.1 Numbr of Classes, Enrollment and Graduates by Region . 117 5.2 NumDer of Functional Literacy Classes, Enrollment and Graduates by Region .... . . . . . . . . . . . . . . . 121 ANNEX 1. COMPREHENSIVE LIST OF RECOMMENDATIONS . . . . . . . . . . . 133 ANNEX 2. NOTES .... 145 1. On the Problem of Elementary Grade Completion . . . . . 147 2. Higher Education: A Mathematical Model of the Price-Wage-Quality Relationship . . . . . . . . . . . . 159 ANNEX 3. TABLES.. .. 163 Chapter I: Managing the Education System . . . . . . . . . 165 A1.l Main Areas of Decentralization A1.2 DECS Manpower Component A1.3 Data Collection and Processing A1.4 Projections for Elementary and Secondary Enrollments, Teacher Demand, Physical Requirements and Capital Outlay Page No. Chapter II: Adjusting Cost and Financing Struccure . . . . 179 A2.1 Enrollments by Level of Education, 1965-86 A2.2 Growth (if Overall Enrollments, 1965-86 A2.3 Enrollmetnt Ratios, 1960-86 A2.4 Enrollece Population by Age, 1986 A2.5 Enrollment Ratios by Level of Education, Philippines and World Regions, 1980 A2.6 Share of Private-Sector Enrollments, 1965-85 A2.7 An International Comparison of the Share of Private Enrollments A2.8 An International Comparison of Recurrent Public Spending on Education, Early 1980s A2.9 Distribution of Recurrent Public Spending on Education, Philippines (1980-1988) and World Regions (1980) A2.10 Sources of Differences n the Unit Operating Costs of Public and Private Elementary Schools, 1982 A2.11 Estimated Operating Costs in Public Elementary Schools, 1983-88 A2.12 Salaries of Public School Teachers, Philippines and Other World Regions A2.13 Distribution of Enrollments in Secondary Education by Type of School, 1986 A2.14 Sources of Differences in the Unit Operating Costs of Public and Private Secondary Schools, 1982 A2.15 Estimated Unit Costs in National Secondary Schools, 1983-88 A2.16 Distribution of Enrollments in Higher Education, 1985 A2.17 Aggregate National Expenditure on Recurrent Educational Costs, 1986 A2.18 Aggregate Recurrent Spending on Education, Philippines (1983-88) and Selected World Regions (Early 1980s) A2.19 Government Expenditure Per Student on Public Education, Philippines (1988) and World Regions (Circa 1980s) A2.20 Cohort Survival Rates in Elementary Education, 1980-86 A2.21 OLS Regression Results Using Divisional Cohort Survival Rates as the Dependent Variable, 1985 A2.22 Predicted Cohort Survival Rates in Elementary Education, 1985 A2.23 Cohort Survival Rates in Secondary Education, 1986 A2.24 Science Achievement in the Philippines and Other Countries, Mid-1980s A2.25 OLS Regression Estimates of Total School Expenditure in National Secondary Schools, 1986 A2.26 Average Unit Costs and Size of Enrollments in Different Types of National Schools, 1986 Page No. A2.27 Estimated Unit Costs of Higher Education in State Universities ar,d Colleges, 1987 A2.28 Distribution of Cumulative Public Spending on Education by Terminal Level of Schooling, Philippines (1986) and Major World Regions (Around 1980) A2.29 Transition Rates, 1986 A2.30 Scholarship and Student Loans, 1988 A2.31 Growth of Population and Enrollments in Elementary Education, 1965-86 A2.32 Cohort Survival Rates, Average Family Income and Life Expectancy by Region Chapter III: Improving Basic Education . . . . . . . . . . 211 A3.1 Public and Private Pre-Elementary Schools by Region, SY 1985186 A3.2 Growth of Pre-Elementary Education, SY 1981/82 to 1985/86 A3.3 Pre-Elementary Pupils and Schools by Region and Sector, SY 1986/87 A3.4 Public and Private Elementary Schools by Region, SY 1985/86 A3.5 Enrollment Trends and Projections in Public and Private Elementary and Secondary Schools, SY 1939/40 to 2000/01 A3.6 Distribution of Seconiary Schools by Region, by Sector and by Type, SY 1985/86 A3.7 Education Indicators of Selected East Asian Countries, 1960-85 A3.8 Enrollment Trends in Secondary Schools, SY 1965/66 to 1986/87 A3.9 Achievement Test Performance of Grade Five and Six Pupils by Type of School, 1986 A3.10 Grade Level Equivalent of Errolled Students Aged 11-15, by Grade Level and Sector A3.11 Grade Level Equivalent of Enrolled Students Aged 11-15, by Grade Level and Type of Community A3.12 Comparison of Mean Scores of Grade Six Pupils on 1975 and 1986 SOUTELE Tests A3.13 Trends in Pupil Achievement at the Secondary Level by Subject, 1982-85 A3.14 Cut-Off Scores in the National College Entrance Examination, 1983-87 A3.15 Trends in Pupil Performance at the Secondary Level by Region, 1983-87 A3.16 Trends in Pupil Performance at Secondary Level by School Type, 1979-86 A3.17 Survival Rates in Public and Private Schools by Level of Education, SY 1963-64 to SY 1985-86 Page No. A3.18 Enrollment Indicators in Public Elementary Schools, SY 1985-86 A3.19 Enrollment Indicators in Government Elementary Schools by Region, SY 1984-85 A3.20 Dropout Trend in Public Elementary Schools by Grade, SY 1980-81 to SY 1984-85 A3.21 Age Group 7-12 Years in Public Elementary Schools by Grade, SY 1983-84 and SY 1985-86 A3.22 Over- and Under-Age Pupils by Selected Grades in Public Elementary Schools, SY 1983-84 and 1985-86 As.23 Proportion of Sample Barangay and Vocational Technical High Schools Complying with Selected Minimum Standard Criteria A3.24 Percent of Sample High Schools Meeting and Not Meeting Enrollment Ranges A3.25 New Elementary School Curriculum, 1982 A3.26 New Secondary School Curriculum (Pilot), 1986 A3.27 Effect of Teacher Testing and Small Group Instruction on Pupil Performance A3.28 Mean Scores of Philippine Science High School, NCR, Region III, Region IX and Other Regions in Seven NCEE Subtests, 1973-83 Chapter IV: Rationalizing Higher Education . . . . . . . . 239 A4.1 Elementary Schools and Enrollments, 1903-85 A4.2 Secondary Schools and Enrollments, 1903-85 A4.3 Higher Education Institutions and Enrollments, 1903-85 A4.4 Unemployment, Underemployment and Education A4.5 Higher Educational Inst'tutions and Enrollments by School Type, 1984-85 A4.6 Enrollment Distribution by Field in Bachelor's Degree Programs A4.7 Vertical Integration A4.8 Undergraduate Size Distribution of Institutions of Higher Learning, 1984-85 A4.9 Tuition, Size and Private College Type in Manila, 1987 A4.10 Faculty and Staff A4.11 Expenditures, Tuition and Assets per Tertiary Student, 1984-85 A4.12 SES Indicators, Manila Institutions of Higher Learning, 1987 A4.13 Private Costs of Higher Education Per Student Per Semester, 1987 A4.14 Current Expenditures on Higher Education by Source, 1987 A4.15 Sources of Income in the Private Sector PaRe No. Chapter V: Harmonizing Nonformal Education . . . . . . . . 255 A5.1 Government Agencies Involved in Nonformal Education A5.2 Directory of Training Institutions in the Philippines A5.3 Sample Profile of Nonformal Education Programs ANNEX 4. REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . 261 I. MANAGING THE EDUCATION SYSTEM 1.1 There is a new environment in the making in the Philippines, with a renewed emphasis on the work ethic and nation building, and on the primacy of education for national development. Quality education is an important prereq- uisite for the effective functioning of a democratic state, for enhancing the productivity of its citizenry, and for preparing the country for the scien- tific and technological changes of a modern society. To prepare for these changes and the future society that they will shape, long-term planning of the education sector is needed with purposeful preparation and deliberate commit- ments and allocations of the nation's resources. 1.2 The Philippines has already undergone a series of organizational changes to improve the capability of the Department of Education to lead and manage human resource development. From 1901 to 1975, the management struc- ture for the sector was highly centralized, with all major policies and deci- sions coming from the central office in Manila. A secretary at the top of the structure was assisted by Bureau directors who were both line and staff offi- cials. Outside the central office, there were over 120 school divisions headed by superintendents who reported directly to the directors. In 1969, a major study was carried out by a Presidential Commission to Survey Philippine Education. One of the key recommendations of that study was to decentralize the Department of Education in order to make decision-making more responsive to local requirements. The principal features of this reorganization were the establishment of regional offices in 1975 and the transfer of line functions from Bureau directors to the regional offices. The main areas of decentralization are shown in Annex Table Al.l. The system is, howe," er, still experiencing difficulties in institutionalizing these changes, and many of the organizational problems constraining the sector stem from the ongoing efforts to successfully decentralize education management. To explain those problems and how they might be addressed most effectively, this chapter reviews the current structure for managing the education sector, the processes for sect?7 management, and the main issues and recommendations related to these areas.- A. Structure of Sector Management 1.3 The Department of Education, Culture and Sports (DECS) is responsi- ble for formulating, implementing and coordinating policies, plans and pro- grams encompassing all levels of formal and nonformal education, both in the public and private sectors. The Department's overall objective, as set out in the Government's 1987 statement of education policy, is to pr9tFect and promote the right of all citizens to quality educaEion at all levels.-' To attain this goal, the Department has a constitutional mandate to: 1/ Management at the institutional level and specific aspects of managing basic tertiary and nonformal education are dealt with in other chapters. 2/ Section 3, Executive Order No. 117 (known as the Reorganization Act of MECS), January 30, 1987. -2- (a) establish, maintain and support a complete, adequate and integrated system of education relevant to the needs of the people and the society; (b) establish and maintain a system of free public education at the elementary and high school levels. Without limiting the natural right of parents to rear their children, elementary education is compulsory for all school-age children; (c) establish and maintain a system of scholarship grants, studenit loan programs, subsidies and other incentives which shall be available to deserving students in both public and private schools, especially to the underprivileged; (d) encourage nonformal, informal and indigenous learning systems, as well as self-learning, independent and out-of-school study programs, particularly those that respond to community needs; and (e) provide adult citizens, the disabled and out-of-school youth with training in civic, vocational and other skills. 1.4 At present, DECS executes these responsibilities through the four main strata of its organization (Figure 1.1): (a) the Department proper; (b) the Department Services; (c) the Bureaus; and (d) the Regional Offices. (a) The Department proper consists of the Office of the Secretary wno is assisted by five undersecretaries, one in charge of each of the fol- lowing functional areas; (i) elementary and secondary education; (ii) nonformal and vocational/technical education, (iii) higher edu- cation, culture and foreign-assisted projects; (iv) administration and management; and (v) legal and legislative affairs. (b) The Department Services include the following five Offices, each headed by an assistant secretary or a service chief: (i) the Office of Planning Service (OPS) for planning, programming and project development; (ii) the Office of Financial and Management Service to provide staff advice and assistance on budgetary, financial and management improvement; (iii) the Office of Administrative Service to deal with such matters as legal assistance, records, supplies, equipment, disbursement, security and custodial work; (iv) the Office of Human Resources Development Service to administer person- nel programs, including staff training; and (v) the Office of Tech- nical Service to provide special technical staff activities and furnish information and publication services. (c) Six Bureaus, each headed by a director, are in charge of elementary education, secondary education, technical and vocational education, higher education, nonformal education, and physical education and school sports. The Bureaus are engaged in staff functions such as the formulation and evaluation of guidelines and standard designs for curricula, instructional materials, physical plant and equip- ment, and general management. I I~~~~~~~~~~~~~~~~~~~~~ L--j ~ ~ H ~~~~I S~~~~~I + ~~~~ ~~~~~~~~~ [ij1Fh a + k < Xo~~~~~~~~~~~~~~~~~--------- lI 1' l 1!- - - i - - - - - I I - 4 - (d) Fourteen Regional Offices, each headed by a director and each staffed with about 150 to 180 personnel, have the following main functions: (i) the formulation of regional plan proposals based on the Department's national plan, taking into account specific regional needs; and (ii) the regional implementation of the poli- cies, plans, and programs of the Department. As front-line mana- gers, the Regional Directors report directly to the Secretary. Each Regional Director is responsible for the school divisions headed by superintendents within his administrative region. In turn, the superintendents are tesponsible for the secondary schools within their divisions, as well as the elentent"ry school districts headed by supervisors. District supervisors are responsible for the ele- mentary schools within their districts. About 90% of DECS's 4,000- person work force are in the regional offices. The organization at the regional and division levels is shown in Figures 1.2 and 1.3, respectively. 1.5 With this organizational structure and its personnel contingent (Annex Table A1.2), DECS is expected to lead and manage the country's educa- tion system and achieve the sectoral goals established. The quantitative dimensions of the education system alone indicate the magnitude of DECS's task, which includes the management of 32,800 elementary schools, 5,43G secon- dary schools, and 1,160 colleges and universities. A teaching force of 284,000 elementary, 99,000 secondary and 57,000 tertiary level teachers serve an estimated total current enrollment of about 15 million. Furthermore, the system continues to expand to accommodate a greater proportion of the school age population which is increasing at about 2.5% annually. B. Processes for Sector Management 1.6 The processes for education management include: (a) the formulation of policy, setting forth broad goals and medium- and longer-term plans; (b) annual planning and budgeting ao a basis for annual work program prepara- tion; (c) program and project development and execution; and (d) monitoring and evaluation. Policy and Plan Formulation 1.7 DECS is the primary government body responsible for developing and implementing plans and programs in education in line with broad policies legislated by Congress (Figure 1b4). Coordination of plans and programs awnong departments is a function of the Inter-Agency Committee on Educatior and Manpower as the operational arm of the Yational Economic Development Authority (NEDA). The nature of policies varies from those that are broad and general, indicating the basic parameters of the system, to those that are narrow and specific, like operational guidelines or budget allocations. Education poli- cies and plans may be issued in different forms such as laws, executive orders or memoranda. 1.8 The Congress has two committees on education, one in the Senate and the other in the House. The committees have their own legislative agenda prepared by their technical staff and consultants. Their main instrument in Figure 1.2 DEPARTMENT OF EDUCATION, CULTURE AND SPORTS Regional Office Organizational Chart Otfice of the Regional irector Elementary I Secondary Higher Non-Formal [ Education Division | Education Division Education Division Education Division Physical Education Technical & Vocational Administrative Budget and Finance Division [ Educaton Division DMsion Division Division Office TechnicaWocational Post-Secondary Schools Schools Elementary Secondary Schools Schools Regional Educational Planning Unit Learning Center cakkw42330a Figure 1.3 DEPARTMENT OF EDUCATION, CULTURE AND SPORTS Division Office Organizntional Chart Division Superintendent Assistant Division Superintendent District | | Secondary School ] Supervisor Principal Elementary School Elementary School [ Secondary School Principal Head Teacher Assistant Principal | ---- r-F-- - Elementary School 1 Elementary School Secondary School School Teacher I Teacher | Department Head er cSOb42 Figure 1.4 THE PHILIPPINES Policy-Making Process In Education 3 LEGISLATIVE AGENDA PRESIDENTS CABINET 2 FOR EDUCATION APPROVAL * APROVAL MANPOWER PLAN C Senate Committee L Natonal Eonomic & O on Education COMMITTEE HEARINGS Development Authotity N _ (Mainly in Manila (11)G House Committee but sometimes In major NEDA Inter-Agency Committee N R on Education provincial I chaired by DECS Undersecretary E (II) E IAND PUBLIC D S * Technical Staffs CONSULTATIONS 0 Inter-Agency Stafts A S & Consultants * Public Agencies * Private Sector _ NGOs EDUCATI GENDA FOR | r Board of Higher Education 5-YR AND ANNUAL PLANS + I Technical Panels: Department of Education……n Ag__E iricglt Education Culture & Sports * Tencher Educa ton Central Office Committee: T Business Education * Secretary of Educaffon * Medical Education * Undersecretaries 0 Health & Related Courses * Assistant Secretaries D * Arts & Sciences ( Service Chiefs E () 0 Maritme Education (a) A Bureau Directors C 0 Legal Education & Criminology s t * ~~~~~~~~Assistant Bureau Directors S Regional Office Committees: * Cultural Agency Directors * Regional Director This Committee meets Weekly Assistant Regional Director > Divisin Office Committees: ( Regional Subject Area * Dision Superintendent c (b) Specialists ..i Z T * Assistant Dhision Superintendent Official Secretariat / District Committees: * Distct Supervisors Meets Once a Monrt * District Supervisor *Seconary School Principals Meets Onoe a Month ___ * Prinidpals Meets Once a Month *Assistant Principals (d) * Head Teachers * Teachers in Charge (This is the weakest link in Meets Once a Month the chain of policy-making, _. policy implementation (Nothing happens to and evaluation - also the School Committees: education unless it most neglected.) * PridnpaVHead Teacher first happens In the * Assistant Principal (e) classroom - should * M.aster Teachers be the motto of policy- Regularity of Meetings makers.) Not Fixed or Known decision-making is public hearings to which DECS, NEDA and other public and private agencies are invited. The role of NEDA, specificaily that of its social services sector, is to ensure the integration of education policies and plans into the overall national framework, ana to prepare five-year and one- year education development plans. The formulation of a medium-term plan is the responsibility of the Inter-Agency Committee on Education and Manpower, which consists of representatives from relevant departments and private sector agencies. The plan is submitted to DECS, the Cabinet, and then to the President for approval before final presentation to Congress. 1.9 DECS decides policies at weekly Central Office Committee meetings attended by top-level officials, including the secretary, undersecretaries, assistant secretaries, service chiefs and bureau directors, and at monthly Regional Office Committee meetings attended by regional directors, assistant regional directors and regional subject area specialists. Division, district and school level committees also hold meetings, although their involvement in the policy-making process needs to be strengthened (Figure 1.4). Planning and Budgeting 1.10 An overview of the planning and budgeting process is shown in Table 1.1. The planning process begins with NEDA's issuance of plan guide- lines to DECS, which in turn issues guidelines to the regional offices and ultimately to the schools. The plans themselves are submitted by the schools, and verified and consolidated at each level of the administrative structure as they move upward to the central office of DECS. Details of the process are given in Table 1.2. 1.11 The annual budget process begins with the determination of budgetary ceilings for the next year by the Budget Coordinating Council comprising the heads of the Department of Budget and Management (DBM), NEDA, the Department of Finance and other agencies. The Office of the President through DBM then issues the budget calls to various agencies and indicates the budget ceilings (Table 1.3.). IECS Office of Finance and Management Service (FMS) circulates the guidelines for budget preparation to the regional offices and thence to the divisions, districts and schools. On this basis, the districts and divi- sions prepare their proposals. Since salaries, which account for most of the school budget, are centrally determined based on approved staff positions, the district and division budgets consist of expenditures related to maintenance and operations of programs and projects and capital outlays. A regional plan which combines all district and divisional plans and budgets is submitted to the NEDA regional office for review, and the proposals are forwarded to DECS central office and the DBM for review. An Executive Review Board, which includes both the DBM and DECS Secretaries, sets the criteria for reviewing and adjusting budget requests. DBM analysts review the proposals against these criteria and submit the reviewed version to higher officials and ulti- mately to the Secretary. The proposals are then submitted to the Cabinet for the President's approval and to the Congress for Legislative enactment. - 9 - Table 1.1: INTERACTION OF PLANNING AND BUDGETING CYCLES Planning cycle Budget cycle 1. School level: Principals prepare annual school No budget is prepared at this level. plans, mainly a subject cataloging without any budget. 2. District/Division level: Supervisor/Superintendent District/Division budget is pre- prepares annual District/ pared, mostly maintenance and oper- Division Plan. ating expenditures (MOEs) for pro- grams/projects and capital outlays. 3. Regional level: Puts together Regional Plan and submits to: REGIONAL DEVELOPMENT COUNCIL consisting of: - Regional leaders - Interagency staff From which emerge Regional Budgets for programs/projects, MOEs and capital outlays. 4. Central Office: DECS Fiscal and Menagement Office OPS, in consultation with the (particularly Budget Office) prepare Bureaus, prepares the DECS Plan budgets. and Plan Assessment Report. They work closely with DBM Committee through its Budget Analysts. 5. The Plan/Budgets go to the Undersecretary of Finance and Administration, whose staff meets with the NEDA Committee on Education and Manpower to which all Bureau Directors are invited. Some commlttee and public hearings are conducted in Manila and the prov- inces to which are invited State institutions, the private sector, NGOs, etc. 6. Plan is submitted to the Secretary who convenes DECS top-level Committee for final analysis and approval. 7. Plan is submitted to the Cabinet, the President, and then to Congress for appropriations. Table 1.2: PLANN1NG PROCESS Department of Education, Culture and Sports (DECS) E:ternal agencies Central office Regional office Division office District office School (I) Office of the President directs all government instrumentalities to prepare development plans (medium-term, annual). (2) (3) (4) (5) (6) (7) NEDA issues guidelines Secretary issues guide- Regional Director issues Division Superintendent District Supervisor School Heads formulate to all departments/ lines for the Department guidelines to the Divi- issues guidelines to the Issues guidelines to the and submit Instttutional government corporations/ Regional Offices, sion Offices, nonchar- District Offices, heads of public elemen- Plan. offices. Bureaus, Agencies, Ser- tered higher institu- national secondary and tary schools. vices, Centersi, State tions, public secondary barangay high schools. Universities and Col- schools. leges. (8) Consolidates the institutional plan and prioritizes the proposed program and projects. o Formulates District Educational Plan. (11) (1)(9) Consolidates plans of Consolidates division Consolidates district regions, bureaus, agen- plans and those of non- plans and those of cies, centers. chartered higher insti- nationally and locally tutions and other public funded secondary Reviews.'prioritizes secondary schools. schools. national programs and projects. Prioritizes regional Priorttizes programs/ programs/projects. projects of the Divi- Formulate Educational sion. Development Plan. Formulatas Regional Edu- cation Plan. Formoulates Division Edu- cation Plan. Submits to NEDA. (12) Consolidates all plans. Formulates National Development Plan for submission to Cabinet, DBM, Congress, Presi- dent. Table 1.3: SUDGETING/FINANCING PROCESS - REGULAR FUNDS Department of Education, Culture and Sports (DECS) External agencies Central office Regional office Division office DIstrict office School (I) Government appropria- DECS Informs the regions Regional offices Inform Dlvision offices inform District offices inform The principals shall tions are made before to prepare their reports the divisiona and set a the district offices and the individual elemen- prepare their plans and the following year or budget requests by a deadline for submission. secondary schools and tary schools to submit submit them to their enters. Specific dates specified deadline. set deadline for their budget requests. respective divisions or are set for budget hear- (2) submission. districLs, the districts ings, which the differ- The regional office con- to their respective div- ent government agencies solidates the individual isions, the divisions to attend. Letters of reports of the different their respective region- Advice regarding the divisions, and assesses al offices. "budget ceilings" are whether the budget re- given to _ e various quests submitted are agencies. Such advice consistent with needs, will also be given to based on the data In the the regions for their regional office regard- Inkormation. ing the schools (e.g., enrollment, number of teachers and other enrollment Indicators); they also ensure that the budget request reflects the thrust of DECS. (3) The OPS and PHS inte- grate the regional and central offices budget requests Into the total education budget which is presented to D8tl. The various DECS pro- grams are presented in order of priority. (4) Budget calls for the technical panel cosposed of staff of DBE and DECS with the DECS Asst. Sec- retary for Finance as the highest officer in- volved. Technical mat- tern/content are dis- cussed at this point. (5) (6) (7) After the technical con- The DECS budget office Regional directors mittee, an executive re- allocates thr approved affected by the reduc- view board, composed of education budget to its tions may find other the Secretaries of both different components fund sources to augment departments (DbM and according to the prior- budgets to be used for DECS), establishes the ity list if the appro- programs affected by the justification and prior- priation has been budget cut (e.g.. need ity of the requests and reduced. for additional text- on this basis prepares books). The regional the national budget. director may recomaend The budget is submitted to the DECS Secretary to the Congress through possible sources of the Office of the Presi- funds (e.g., the calami- dent. ty fund). In some cases, however, che Sec- At this point the na- retary may request that tional budget for educa- the DECS budget officer tion is ready for find the source of approval by Congress. funds. Table 1.3: (cont'd) Departinent of Education, Culture and Sports (DECS) External agencies Central office Regional office Diiof ion fficer District office School (8) Release of funds: DBM DECS releases CDCs to After receiving the CDCs After receiving the sub- Schools receive their issues a comprehensive the region. for their MOE, sub-CDCs CDCs, the division MOEs in kind from their advice of allotment pro- are given to their offices procure items division offices. gra_ed for the year's respective divisions. necessary for MOE (e.g., expenses. However, re- chairs, textbooks, etc.; leases by quarter are for their schools. Pro- made through Cash Dis- curement is normally bursement Ceilings handled by the division (CDCs). office. (a) DBN releases CDCs to DECS, advising them of the amount they should spend for maintenance and operating expendi- tures (MOE). (b) DBM releases CDC to DECS shall take charge (9) DECS for the capi- of monitoring the con- Salaries of teaching, tal outlay needed struction works using administrative, and f by the schools. In its network of regional other nonteaching staff: turn this is re- and subregional offices. the teachers fill out a leased to the De- Note that school build- daily time record which partment of Public ings to be built shall the payroll clerk con- Works and Highways, be under standards set solidates and submits to for implementation by DECS. the division office. of construction works. (11) (10) The DBM in turn shall LIaIson officer of the issue individual teacher division office brings salary checks to be sent payrolls of the differ- or distributed to the ent schools to the DBM. different division through their respective (12) (13) liaison officers. (Note The principals/district Distribution of checks that DBM makes an ad- supervisors, authorized for teachers and other vance of three months representatives of the staff done by the prin- for teacher salaries, to s:hool get the salary cipal/school heads. compare with the quar- checks from the division terly release of the office. CDCs.) - 13 - Project Development and Implementation 1.12 A Presidential Memorandum of November 4, 1987 required all depart- ments to establish a central project group to be responsible for project development and implementation. In response to the Memorandum, DECS confirmed in March 1988 that the Educational Development Projects Implementing Task Force (EDPITAF) is responsible for all foreign-assisted projects in education or other areas as may be assigned by the Secretary. 1.13 EDPITAF was created in 1972 by Presidential Decree No. 6-A (the Edu- cational Development Decree). It was originally set up as a ten-year task force but, after an internal debate, was decided to remain operational after its term had expired. EDPITAF is under the Office of the Secretary and headed by an Undersecretary and staffed by technical personnel ant.. consultants. An Office of Planning Service (OPS) under DECS also exists, with responsibilities which include research, project development and evaluation. OPS has not, how- ever, been very active in these areas. Monitoring and Evaluation 1.14 The various bureaus and offices submit weekly, monthly, quarterly, semiannual and annual reports, such as statistical bulletins and project reviews. The data collected include student enrollments, repetitions, fail- ures, graduations, the number of classes, teachers by sex and appointment sta- tus, administrative and support staff, sections per grade and shifts. The main areas being monitored and evaluated based on these data are the partici- pation, retention and failure rates in public elementary and secondary schools. The Bureaus have also begun to institutionalize student achievement testing at the elementary and secondary levels. At the tertiary level, no achievement indicators are currently monitored except for results of tests administered to graduates who want to be qualified in their professional areas, i.e., professional board examinations. C. Issues and Recommendations 1.15 Although the organizational structure and processes for sector man- agement are in place, further examination reveals a number of problems, many stemming from difficulties in institutionalizing decentralization. The prob- lem areas include data availability and accuracy, policy research capacity and coordination, performance audits, duplication and at the same time the absence of certain functions, and management personnel capacities. These issues sur- face as common weaknesses in the processes of sector management, i.e., policy and plan formulation, planning and budgeting, project development and imple- mentation, monitoring and evaluation, and coordination of nonformal education. Policy and Plan Formulation 1.16 To keep the policy aims and process realistic, a continuing dialogue among all the involved parties (e.g. DECS, NEDA, Congress) must be sustained, with the objective of ensuring that policies can be effectively translated into viable action plans. Within DECS, the Office of Planning Service (OPS) has the critical responsibility of briefing DECS senior managers on alterna- - 14 - tive ways of achieving policy targets while ensuring the attainability of those targets. 1.17 The present policy formulation and planning process could be further strengthened by improving the sectoral data base, augmenting certain institu- tional capabilities in planning and coordination, and initiating long-term planning. 1.18 When the Senate and House Committees on Education take up an issue, the Committee members are likely to decide on a policy based on their politi- cal judgment and experience. For example, Congress enacted a law in April 1988 to implement the constitutional provision for free secondary education. This law was passed and ordered to take effect in school year 1988/89 in spite of the inadequacy of funds, the shortage of classrooms and teachers, and with- out examination of the implications for the private secondary schools which rely almost exclusively on income from student fees. The popular demand for free secondary education was clearly the overriding consideration. While this political orientation is understandable, it is imperative that policy deci- sions be supported with prior analysis of their feasibility and potential impact. Educational policies should be accompanied by e clearly defined strategy for implementation, including financial and administrative costs. 1.19 Since DECS currently lacks the institutional capabilities required for policy analysis, the Government is considering the establishment of a con- gressional education commission to provide information and analysis for policy decision-making. In the long run, however, strengthening of a policy research capacity in OPS would be a more efficient solution since a core unit for this activity, the Research and Statistics Division, already exists in OPS and would have easier access to system-wide data and information. The OPS also offers a more desirable solution by being located somewhat apart from the scene of politically inspired decision-making. DECS's recent actions to strengthen OPS in data collection and research are thus well supported and should be continued with the recruitment of professional planners and statis- ticians. To do so, the current requirement that all DECS staff must have taken 18 units of educational courses at college should be eliminated in order to widen the scope of recruitment beyond education specialists. 1.20 As noted earlier, DECS is the lead agency for education policy- making and implementation. At present, there are some institutional arrangements for consultation with various sectors of society. For example, there is the Board of Higher Education, the NEDA Committee on Education and Manpower, and various ad hoc committees created for specific tasks. These committees have multisectoral representation. However, such arrangements still need to be strengthened in order to accommodate inputs from teachers, parents, students, community leaders and private education representatives, especially those from regions outside the Metro Manila area. In view of this consideration, it is desirable to explore the feasibility of establishing a national board or council of education as a policy-making advisory arm of DECS as well as of the Congress. 1.21 Sectoral planning is still done more as an annual extrapolation of past trends to fulfill the minimum needs of a five-year development plan. - 15 - Given the long gestation period of education developments, a national educa- tion planning system spanning perhaps a ten-year period and providing broad direction for developing human resources should be reinstated. In this con- text, the role of NEDA needs to be strengthened so that it can engage in joint planning, work with DECS/OPS. 1.22 Data and plan targets relating to teacher training and private education are currently inadequate because there are no focal points in the DECS structure to undertake systematic data gathering and formulate direction, plans and programs. The main functions of a recently created Technical Panel for Teacher Education include making recommendations on the size and programs of teacher education. While the panel provides overall direction, DECS still needs organizational arrangements clearly devoted to the collection and analy- sis of teacher training data. Similar arrangements are necessary for data on the private sector. Planning and Budgeting 1.23 The current process of planning and budgeting (paras. 1.10-1.11) seems to suffer from several weaknesses stemming fromn the aggregation of per- formance indicators, problems with data collection, planning and budgeting methods, unclear procedures and standards, and the low status and compensation of planning and budgeting officers. 1.24 Performance Indicators. Key criteria used in planning and budgeting for formulating performance targets as a basis for setting priorities and com- mitting resources are the participation, retention and cohort survival rates. At present, these rates are determined at the national and regional levels, and thus tend to mask variations in performance and resource needs in individ- ual districts and schools within a region. For example, teacher requirements traditionally have been determined for each region based on a nationally pre- scribed student-teacher ratio. While a regional student-teacher ratio may be high compared to the national average, many school divisions and districts within the region may still need teachers since there is often an excess of teachers in urban areas but insufficient numbers in rural and remote areas. Thus, performance targets and planning and budgeting should be set and carried out at the subregional level. Since the key performance indicators are already available and are increasingly being used at the division level, sub- regional targets should be developed fairly easily with the assistance of Division superintendents. 1.25 Data Collection. The sector data base requires improvement in time- liness and accuracy. Data collection is currently carried out by OPS through the distribution of forms to schools. Data gathered from the completed forms are then compiled to produce the national data base (Annex !able A1.3 gives an overview of the entire process). However, the completion of forms may be delayed, incorrect or never done because of the work involved. In school year 1986/87, only 56% of all forms were returned. Although the number of data forms has recently been reduced substantially from over 100 to 12, they still request too much data, which are often too complicated to be easily generated. Since not all data requested is used for management purposes, the forms could be further reduced. - 16 - 1.26 Data collection forms should contain only useful information for management and be further simplified. The capacity of schools to fill in the forms also needs to be improved. Computerization of data processing has been introduced at the regional and central levels and should be strengthened through adequate funding and staff training. Data collection could be further improved by adopting a cluster school management system by which a major school in a district would serve as a leader school for a cluster of 10 to 15 small schools. The leader school would assist small schools and integrate their data as well as plans and budgets into those of the cluster unit. 1.27 Methods. Deficiencies in current planning parameters and methods are translated erroneotsly into plan targets and resource allocations. These deficiencies are particularly noted in demographic parameters and enrollment projections. 1.28 Enrollment projections in the Medium-Term Development Plan (1987-92) are based on the 1980 census data and the overall demographic parameters (e.g., fertility and mortality rates) obtained during the census. According to these data, the annual growth rate of 7-12 year olds will decline from 2.74% in 1985 to 0.64% in 1992 and Lhat of 13-16 year olds will increase from 1.80% to 2.86%. These growth rates vary significantly from the mission popu- lation estimate for the Philippines, 2.45% for the 7-16 age group for the same period. Various demographic surveys conducted in the Philippines since the 1980 census have also shown demographic indicators and population growth rates different from the 1980 census estimates. It should be noted that DECS recog- nizes the need tolimprove the demographic data base for enrollment projec- tions, but is constrained to using the official government figures until they are formally revised. 1.29 The Medium-Term Plan projections for elementary school enrollments are based on the assumption that: (a) the net participation rate (NPR) of 7-12 year olds will increase from 95% in school year 1984/85 to 99% in 1992/93; (b) the enrollment growth rate for grade one will vary according to the 1980 census figures; and (c) the cohort survival rate (CSR) from grade one to grade six will rise from 64% in 1984/85 to 70% in 1992/93. Since grade one enrollments are based on the population growth rate and grade six enrollments on targeted CSR, enrollments in individual grades two to five are interpolated proportionately, resulting in erratic transition rates between grades, with no rational pattern. First year enrollments in secondary schools are based on the predetermined transition rate from the previous year's grade six enroll- ments and the target rate of 93% for 1992/93. NPR and CSR are also predeter- mined from the rates in the previous year and targeted for 60% and 82% in 1992/93, respectively. Second and third year enrollments are arbitrarily interpolated and the transition rates are not consistent with past trends. 1.30 Table 1.4 shows a comparison of the coefficients and methodologies used for projecting elementary and secondary school enrollment as estimated in the Medium-Term Plan and by the mission. Annex Table 1.4 shows estimated enrollments as well as teacher and classroom needs based on the two sets of variables. According to the mission estimate, an additional 373,000 students will be enrolled in elementary education in school year 1992/93. However, the estimate of the participation rate would fall short of meeting the Plan target Table 1.4: COMPAr1ISON OF METHODS AND COEFFICIENTS USED IN ENROLLMENT PROJECTIONS Philippines medium-term plan projection model Mission projection model A. Elementary Level 1. Based on Grade I growth and targeted Net Participation Rates for 1. Based on Grade I growth. Single-grade enrollments are based on transi- 1992/93 for the 7-12 year-olds. Single-grade enrollments are projected tion rates between grades obtained from past trends with improvements by interpolation between Grades I and VI enrollments in each year. over the next few years. 2. Transition rates are derived. 2. Net and Gross Participation Rates are derived. 3. Cohort Survival Rates from Grades I to VI are input variables targeted 3. Cohort Survival Rates for Grades I to VI are derived variables. for 70Z in 1992/93. 4. Population growth rates of 7-12 year-olds vary from 2.7% to 0.641% from 4. Population of 7-12 year-olds projected at a medium rate of 2.45% after 1984 to 1992. 1984. 5. 94% of total enrollments are in public elementary schools. This per- 5. 94% of total enrollments are in publi. elementary schools. This per- centage is constant until 1992/93. centage is constant until 2000/01. 6. Percentage of Grades I to VI enrollments who are actually 7-12 years 6. Percentage of Grades I to VI enrollments who are actually 7-12 years old are fixed at 89.43%, based on 1984/85 figures. old are fixed at 89.43% up to 1992/93 and increased to 90.90% by 2000/01. B. Secondary Level 1. Enrollment projections based on targeted Net Participation Rates of 1. Enrollment projections based on targeted transition rates between Grade 13-16 year-olds and targeted transition rates between Grade VI and 1st VI and 1st year high school and transition rates between grades based year high school. on past trends with improvements over the next few years. 2. Transition rates are derived variables. 2. Transition rates are input variables. Net and Gross Participation Rates are derived variables. 3. Cohort Survival Rates for 1st to 4th year are input variables targeted 3. Cohort Survival Rates for 1st to 4th year are derived variables as a at 82% in 1992/93. result of transition rates between grades. 4. Population growth rates of 13-16 year-olds vary from 1.80% to 2.86%. 4. Population growth rates of 13-16 year-olds vary from 2.0% to 2.45%. 5. Percentages of public school enrollments are actual up to 1984/85 and 5. Percentages of public schools enrollments are actual up to 1984/85 and projected to show an increase over the next few years. projected to show a bigger increase after 1989/90 due to free secondary education. 6. Percentages of 1st to 4th year enrollments who are actually 13 to 16 6. Percentages of 1st to 4th year enrollments who are actually 13 to 16 years old are fixed at 77.062, based on 1984/85 figures. years old are fixed at 77.06% up to 1992/93 and increased to 78.65% by 2000/01. - 18 - because of the larger base of the population, as shown in Table 1.5. Thus, more reliable demographic data are required. Table 1.5: COMPARISON OF POPULATION AND ENROLLMENT PROJECTIONS FOR 1992/93 Age group population (%) Participation rate (X) 7-12 12-16 Elementary Secondary Medium-Term Plan 9.3 5.9 99 (111)/a 60 (77) Mission estimate 10.2 6.2 94 (105) 57 (74) /a Net and gross enrollment figures, with gross enrollment in parentheses. 1.31 Procedures and Standards. The main issues relating to planning pro- cedures and standards are: (a) unclear planning and budgeting processes and standards; (b) the lack of budgetary authority at the regional level to ensure that regional planning is in line with budgetary allocations; and (c) the lack of performance evaluation in the DECS administrative cycle. 1.32 Planning and budgeting precesses and standards are unclear due to frequent changes introduced in the budget management system. The Philippine system has traditionally been patterned on US government practices, and as a result introduces periodic changes in line with those in the US system. These changes in the budget management system combined with the introduction of numerous adjustments to facilitate greater decentralization of decision-making have led to serious confusion, owing to an outpouring of memoranda, circulars and notices that staff cannot assimilate. For example, adjustments in capital outlays can now be processed through the regional DEC"", to the regional DBM, and then the central DBM. In practice, the regional DECS still sends the request to its central office for endorsement and submission to the central DBM, which then returns the request to the regional DBM for evaluation after which the request is processed by central DBM. 1.33 Regional plans and budgets have not been consistent due to the lack of budgetary power in regional offices, which tend to inflate their plan tar- gets and resource requirements on the assumption that plans will be cut back by the central office. Thus, effective regional planning and budgeting need to be supported by the increased decentralization of budgetary authority as well. This is being addressed with the institution of Regional Development Councils, which were involved for the first time in the 1989 budget process. The Councils include governors, city mayors and regional directors of all government departments, as well as representatives from the private sector. 1.34 DECS's administrative cycle starts with an annual planning call issued by NEDA and budget calls issued by DBM. However, no serious efforts are made at evaluating a Department's past year's performance through a semi- annual review or management audit comparing achievements against original tar- gets in order to decide on the next year's performance targets and budgets. As a result, the targets may not be realistic. - 19 - 1.35 To clarify the entire planning and budgeting process and address the problems described above, the following measures are suggested. First, as a simple management tool, although a tedious c,ie, manuals should be prepared on the processes and standards involved in planning and budgeting as well as for activities such as the submission of project proposals to DECS regional and central offices, property management, personnel management and communication flow. Second, regional planning and budgeting should be supported by increased regional budgetary authority. DECS might experiment in one or two regions on the limit and possibilities of decentralizing budgetary responsi- bilities. Third, a management performance audit should be added to the annual planning and budget calls. In this regard, it would be useful to start with a pilot project over the next two to three years which would introduce a perfor- mance evaluation cycle prior to, or simultaneous with, the planning cycle. 1.36 Personnel Status. Current planners and budget officers for the sec- tor have limited expertise in these areas since most of them were originally trained as teachers, not as education resource planners, accountants or man- agement auditors. According to civil service requirements, all DECS staff must have 18 units of education-related subjects. This prevents DECS from recruiting professionals in management, economics, finance or data processing, and promotes staff inbreeding throughout the entire staffing structure. Fur- thermore, regional planning units and offices have a lower institutional status than those at the central level. Unlike the central office where the planning group is recognized as a division and its staff as teaching staff, the regional group is categorized as a unit and its staff as nonteaching. This means that their compensation is lower than that of their counterparts at the center, and they could not benefit from the recent 50% increase in teacher salaries. The combined effects of low status and compensation reduce incen- tives for planning officers and lead to rapid employee turnover and demorali- zation. It is therefore recommended that: (a) the educational qualifications for these positions be revised; (b) the qualifications and experience of the planning and budgeting officers be assessed and appropriate training be pro- vided; and (c) the regional planning units be upgraded in terms of organiza- tional status and compensation. Project Development and Implementation 1.37 Organizational responsibilities for project development and imple- mentation are unclear with both OPS and EDPITAF mandated to carry out research and project development and both the DECS bureaus and EDPITAF involved in project management. Such an overlapping of responsibilities causes confusion and uncertainty among the groups concerned. 1.38 The recent reorganization of DECS introduced important but conflict- ing changes by attempting to establish a closer administrative link between EDPITAF and DECS, but at the same time expanding the EDPITAF organization with new offices and posts which seem to reinforce the overlapping of project- related functions with DECS. Under the recent changes, EDPITAF is headed by a DECS undersecretary, thus bringing the two organizations closer, but measures strengthening certain EDPITAF functions such as research and project develop- ment seem to further duplicate tasks already assigned to DECS. Further func- tional duplicstion has resulted from the increasing involvement of the DECS - 20 - bureaus in project execution, also a responsibility of EDPITAF. Although the bureaus are supposed to serve the staff function of developing policies, pro- grams and standards, their expertise in these areas, in conjunction with recent projects introducing curricular reforms, has brought them in to head project management units. 1.39 All of this highlights the lack of permanent institutional arrange- ments for project development and implementation. In the past, it was effi- cient to delegate project implementation to the noncivil service Task Force to facilitate flexibility in determining incentives, recruitment qualifications, career development and working conditions. This flexibility has helped attract young and well-qualified people, reduce red tape and meet implementa- tion schedules. However, several factors seem to favor a move towards full integration of EDPITAF with DECS. First, the salary structure of senior civil servants has recently been reviewed and significantly upgraded, and the sala- ries of other staff are also expected to be raised as part of the reorganiza- tion program. This, combined with various other civil service benefits, is likely to make the civil service reward system competitive with that of EDPITAF. Second, the integration would reduce the duplication of functions between the two organizations. Once integrated, DECS should address the con- cerns of present EDPITAF staff about creating a work environment that accommo- dates more flexible and innovative management styles and technologies, and encourages professional growth. 1.40 To streamline the roles of DECS and EDPITAF, it is suggested that EDPITAF's functions be transferred to OPS, the Bureaus, and a new office of project services to deal with external relations, project implementation, including procurement and disbursement, and project monitoring. The new office might consist of two divisions, one for domestically-financed projects and the other for externally-assisted projects. Each project would be managed by a coordinating committee comprising members of OPS and the relevant Bureaus, with the new office of project services acting as the committee's secretariat. OPS would refocus its resources on improving data on the sector, identifying major sectoral constraints, undertaking studies of sector-wide issues such as costs, finance and management, and preparing five-year and annual development plans and programs. As for the Bureaus, it seems inevita- ble that with the type of projects now being undertaken, they would be respon- sible for line functions, on a selective basis. Monitoring and Evaluation 1.41 As in most other organizations in the Philippines, monitoring and evaluation in DECS are weak. If goals are to be attained in an environment of scarce resources and cultural and geographical diversity, feedback on plans and programs through monitoring and evaluation is critically important. It is particularly essential to develop financial indicators such as cost per stu- dent for different types of school and student achievement indicators. How- ever, while budget inputs are monitored by DBM, there are no systematic efforts to evaluate their relationships to DECS performance through a semian- nual or annual review, which coula be taken into account at the time of annual budget and planning calls. Regional DBM does monitor capital and recurrent expenditures by region, but not by school or expenditure item. The present - 21 - guidelines for monitoring budgets and performance, which were developed by DBM's National Accounting and Finance Bureau in 1981, need to be reviewed and updated. Nonformal Education 1.42 A final key issue in management and planning is harmonizing the operations of the various agencies (public and private) working in the many areas of nonformal education (NFE). There is a strong case to support the development of NFE Coordinating Councils at the local and national levels to harmonize NFE programs (but without centralizing or controlling those programs to maximize the use of local and voluntary effort), and to maintain data and provide advice on developing support services such as the training of nonformal educators. The local councils would prepare and operationalize specific programs responsive to their local needs while the National Council would be concerned with formulating the national policy agenda. The DECS Bureau of Nonformal Education (BNFE) might provide a secretariat for the National Council wlhich should be accorded statutory authority to clarify its role and give it the necessary powers both to permit its efficient functioning and to delimit its boundaries. Recommendations 1.43 Decentralization efforts in the Philippines should be strongly supported. Research evidence (discussed in detail in later chapters) indi- cates that the delegation of decision-making to local administrative units from the center helps improve performance by increasing responsibility and accountability. For further progress in this direction, the following suggestions are made: Policy and Plan Formulation (a) Improve longer-term national education development policy and plan- ning and decide what data and policy research are needed for the purpose. (b) Strengthen the role of OPS in data gathering and sector-wide policy research. (c) Resolve inconsistencies in basic data such as the gap between enrollment growth and 7opulation growth rates. (d) Consider the establishment of a national board or council of educa- tion as a policy-making advisory arm to DECS as well as to the Congressional committees. Planning and Programming (a) Revise performance indicators and criteria downward from the regional to the divisional level to address intraregional differ- ences in educational achievement and resource needs. - 22 - (b) Improve timeliness and accuracy of annual data collection for man- agement information by including only essential and clearly under- stood data, thereby reducing complexity and the time required to fill in data-gathering forms. (c) Prepare manuals which will clarify procedures and inter- and intra- departmental responsibilities and accountability by each level of administration. (d) Experiment in one or two regions on the limit and possibilities of decentralizing budgeting responsibilities. (e) Improve the methodologies used for projecting enrollments, teachers and classroom facilities. (f) Intensify computerization in data processing and analysis by ensur- ing full operatien and maintenance of computers. (g) Establish separate organizational arrangements for teacher training and private education to serve as focal points in DECS for data collectiont analysis and planning. (h) Introduce a management audit cycle besides the planning and budget- ing cycles. Project Development and Execution (a) Transfer the current role of EDPITAF to DECS proper by improving and expanding research and project development capacities of OPS and the relevant Bureaus, and by creating an office of project services which would take charge of implementation, especially in procurement and disbursement. A committee to coordinate each project should be formed, comprising OPS and the relevant bureau with the new office as its secretariat. A monitoring function might be placed with the new office. (b) Encourage EDPITAF personnel to be absorbed into DECS proper, partic- ularly in OPS, the Bureaus and the new office of project services. Staff Development (a) Strengthen DECS recruitment by revising its qualification require- ments, such as the 18 units of education credits, to attract professionals of various backgrounds. (b) Upgrade the status and compensation of regional planning and budgeting officers to attract and retain well-qualified people. (c) Intensify management training, giving priority to principals, supervisors and superintendents. - 23 - II. ADJUSTING COST AND FINANCING STRUCTURE A. Overview 2.1 This chapter reviews the cost and financing of education and finds that equity and internal efficiency in the system need to be improved. The Philippine education system currently manifests substantial social selectivity which originates in elementary education where dropout rates vary widely and correlate with level of social background. On the positive side, investments in education are in general externally efficient, with social returns averag- ing around 12% and 13% at all three levels of education, as productive as investments in physical capital. The intrasectoral allocation of resources across levels of education also appears to be efficient. 2.2 Internal efficiency may be improved in a variety of ways. In par- ticular, the scope for reducing costs exists in secondary and higher education through exploiting economies of scale. It is recognized that school amalgama- tion would need to take account of political considerations, geographical barriers and equity outcomes. There is also a need to increase the links, financial or otherwise, that a school has with the local community. Such links encourage school authorities to be more responsive to local needs in the provision of schooling. Closer supervision is also appropriate through, for example, the introduction of standardized student evaluation at selected points in elementary and secondary education. Such evaluation can inform the community of the relative performance in their locality, identify low- achieving schools for closer supervision, and provide feedback data to the teachers. 2.3 Efficiency in public higher education can be improved by strength- ening the existing scholarship program, which currently serves less than 2% of the population. A concomitant requirement of this intervention is the development of widespread accreditation. B. Cost and Financing: A Statistical Profile 2.4 The flow of funds in the education system consists basically of two streams: public and private spending. The size of public spending and trends in this indicator define an important aspect of the overall financial con- straints on the sector. The level of private spending on education is also useful to document, particularly in systems where it is highly developed, as in the Philippines. Overall Public Spending on Education 2.5 Data on government budgetary allocations for education appear in Table 2.1. The share for education has been rising steadily since 1981, except for 1985 when government spending was particularly constrained. The 1985 education budget, measured as a percent of GNP, was at its lowest level (1.3%) since 1980. With the change of Government in 1986, the allocation for education as a share of GNP has been rising for three successive years, reflecting the priorities of the new government. In 1988, appropriations for - 24 - education accounted for over 20% of the total recurrent budget of the Govern- ment. It is difficult to predict whether further increases in this share can materialize, given the competing claims on government funds from other sec- tors. Experience in other countries indicates that allocations rarely exceed 20%. Table 2.1: CENTRAL GOVERNMENT BUDGET ALLOCATIONS, 1980-88 /a Total govt. Education recurrent and Education budget as a capital budget as % of recurrent budget GNP share of GNP Total govt. as % of total Year (P billion) (%) budget GNP recurrent budget (1) (2) (3) (4) (5) 1980 264.6 14.3 11.4 1.6 16.9 1981 303.6 16.6 10.1 1.7 14.6 1982 335.4 17.0 10.3 1.8 14.7 1983 378.8 16.3 11.7 1.9 15.5 1984 526.3 10.2 13.7 1.4 17.1 1985 595.1 9.8 13.7 1.3 16.7 1986 604.2 11.2 16.4 1.8 18.7 1987 675.0 11.8 18.1 2.1 20.8 1988 740.6 11.8 19.9 2.3 20.7 /a Excludes debt service; GNP datum for 1988 reflects projection. Sources: General Appropriations Act, corresponding years, for budget data; and World Bank (1986b, 1987) for GNP data. 2.6 Data on actual Central Government expenditures are given in Table 2.2. As a proportion of GNP, actual public spending on education rose from 1.5% in 1984 to 2.2% in 1986. 2.7 In the early 1980s, recurrent public spending on education as a pro- portion of total government recurrent expenditure was compar7ble to that in East Asian and Latin American countries (Annex Table A2.8).l But government spending as a proportion of CNP was lower, with the difference attributable to the large share of private enrollments and low unit costs in public education in the Philippines. This difference has probably narrowed owing to the drama- tic chenge in government spending trends since 1986. 1/ The comparisons are based on recurrent spending to enhance the compara- bility of data across countries, since this category of spending is more stable over time, unlike capital spending which Fends to vary signifi- cantly from year to year. - 25 - Table 2.2: CENTRAL GOVERNMENT SPENDING, PHILIPPINES, 1980-88 /a Spending on Spending Ratio of actual Total govt. education as on educa- spending on spending % of total cation as education to as % of GNP govt. spending % of GNP budget allocation Year (1) (2Y (3) (4) (5) (6) 1980 15.7 13.3 11.1 13.0 1.7 1.07 1981 16.3 14.2 10.9 12.4 1.8 1.06 1982 16.7 14.0 11.5 13.6 1.9 1.09 1983 16.3 13.4 10.7 13.1 1.7 0.92 1984 15.5 10.2 8.4 14.5 1.5 1.06 1985 15.5 11.6 11.5 15.4 1.8 1.33 1986 19.1 12.2 11.6 18.1 2.2 1.21 1987 - - - 20.0 2.5 1988 - - - 22.0 2.8 /a In columns (1) and (3), total government spending includes debt service; in columns (2) and (4), it excludes debt service. Data for 1987 and 1988 are estimated on the basis of the ratio between actual and budget data for 1986. Data include recurrent and capital spending. Sources: Government of the Philippines Audit Reports, corresponding years. 2.8 In terms of the distribution of public spending by level of educa- tion, the share of secondary education was lowest among the three levels of education in 1980 at 13% of total recurrent expenditures in education (Annex Table A2.9). By 1988, however, its share had risen to 23%, with the new allo- cation bringing the Philippines closer to the pattern in other developing countries. Spending on elementary education still claims a much greater share of total spending on education than in many other countries (61% in 1988), reflecting the uniqueness of the public-private division of responsibility in Philippine education. Cost and Financing of Elementary Education 2.9 Public schools, which enroll about 95% of elementary students, are funded mainly by the Central Government. Private schools are financed by con- tributions from households and other private entities. The flow of funds in the elementary education system appears in Figure 2.1. The total operating costs amounted to P 8.2 billion in 1986, of which 6% was borne by private sources. If private costs other than fees were added, the aggregate costs reached P 9.4 billion, raising the share of private contribution to 18%. - 26 - Figure 2.1: AGGREGATE FLOW OF FUNDS IN ELEMENTARY EDUCATION, 1986 (Millons of Pesos) Agdea Flow ot Fund Opeatn costs 8.221 Private share . 6% Direct social costs - 9,445 Privateshare -18% HouSehokMs Other Pivate Local Govemments Central Fees related soures Govwnment 316 explate 145 209 7,551 316\ \ 276 /e 1,224 335~~~~~~~~~~~~~~~~~~~~15 EK\w42236b 2.10 Differences in the cost and financing of public and private schools are revealed by thte data in Table 2.3. The unit operating cost of public schools is on average over 1.4 times that of private school.s. However, pri- vate school students spend nearly five times more on school-related inputs (e.g., books and supplies) than their public school peers. When all the direcL. c1sts are added, private schools actually cost more per student, an outcome that should be taken into account in comparing the academic performance of students in public and private elementary schools. - 27 - Table 2.3: EXPENDITURE PER STUDENT BY SOURCE OF FUNDS AND UNIT COSTS IN ELEMENTARY EDUCATION, 1986 (Pesos) Item/source of funds Public Private Expenditure per Student National government 900 0 Local governments 25 0 Households: Fees 0 625 Other school-related items /a 112 545 Other private sources /b 15 38 Operating Cost per Student /c 940 662 Direct Social Cost per Student /d 1,052 1,207 /a Includes the cost of books, supplies and transportation. 75 Refers to private donations, income from school activities, etc. 7c Tncludes expenditures by national and local governments, households' contribution in fees, and contributions from other private sources. 0d Includes all items listed; excludes forgone income. Sources: Data on national and local government expenditures are from Govern- ment of the Philippines budget and audit reports; data on household expenditures are from the 1982 Household and School Matching Sur- veys, converted to 1986 prices using a consumer price index of 2.05; and data on the contribution of other private sources are calculated from DECS-EDPITAF (1983). 2.11 Public and private schools also differ in the distribution of spend- ing on the various school inputs. For instance, the cost of teachers per student in private schools was about 72% of that in public schools in 1982, due to lower teacher salaries (20% lower), heavier teaching loads (about 5 more hours of teaching per week), and probably greater reliance on part-time staff (Annex Table A2.10). Class size and the hours of instruction that students receive are other factors that could affect unit costs, but there appears to be little difference in these indicators between public and private schools. 2.12 Changes in teacher salaries, the largest single component of operat- ing costs, clearly alter unit costs over time. The salaries of public school teachers, after a decline in real terms during the budget squeeze of 1984 and 1985, have risen sharply since 1986, as can be seen in Table 2.4. As a result, operating costs for students in public elementary schools are estimated to have increased from 6% of per capita GNP in 1985 to 9% in 1988 (Annex Table 2.11). At 2.2 times per capita GNP, the salaries of public - 28 - elementary school teachers in 1988 were lower than, but still comparable to, the pay of teachers in Asia, Latin America and the OECD countries (Annex Table A2.12). Table 2.4: ANNUAL TEACHER COMPENSATION IN PUBLIC ELEMENTARY SCHOOLS, 1983-88 Average basic Allowances (Pesosi ToLal annual compensation salary Cost-of- Current 1983 Ratio to per Year (Pesos) living Clothing Pesos Pesos capita CNP 1983 9,817 1,200 250 11,267 11,267 1.5 1984 10,970 3,000 250 14,220 9,480 1.4 1985 13,280 4,200 300 17,780 9,611 1.6 1986 16,998 E,000 300 23,298 12,459 2.1 1987 20,253 6,000 300 26,553 13,547 2.2 1988 22,277 8,400 300 30,977 15,111 2.2 Source: Mission estimates based on data supplied by DECS and MECS (1986). Cost and Financing of Secondary Education 2.13 The secondary school system before 1986 was more diverse than it is now. Schools varied between the public and private sectors, and by type of curriculum offered. Within the public sector itself, schools differed by source of finance. This diversity in the public sector has disappeared with the nationalization of the salaries of teachers in local schools, and the 1988 abolition of tuition fees in all public schools. To place the current poli- cies in perspective, the main features of the cost and financing of secondary education both before and after these policy changes are reviewed below. 2.14 There were at least eight types of secondary schools in 1986: (a) two types of nationally-funded schools--those administered directly by DECS and those attached to state universities and colleges; (b) four types of locally-funded schools--provincial, city and municipal secondary schools financed by local governments as part of their program of providing the social services in their respective jurisdictions, and the barangay schools financed largely by local communities with varying amounts of financial transfers from the central government; and (c) two types of private schools--sectarian schools affiliated to religious groups and nonsectarian schools operated either as stock or non-stock corporations. Public schools enroll4d about 60% of secondary school students in 1986, the majority of them in national and barangay schools (Annex Table A2.13). 2.15 The financial flows in the secondary school system in 1986 appear in Figure 2.2. The Central Government is the largest source of funds, but most Central Government spending goes to national secondary schools with less than one-fifth of the total channeled to local schools. In 1986, local governments - 29 - spent 53% as much as the Central Government, and households contributed over 90% as much in school fees alone. School fees are also an important source of income in local secondary schools outside the National Capital Region (NCR), comparable in volume to the flow of resources from the central and local governments. Local schools in the NCR region charge little or no fees because local property taxes generate sufficieo funds for the operation of schools and other local government activities.- Figure 2.2: AGGREGATE F!.OW OF FUNDS IN SECONDARY EDUCATION, 1986 (Millions of Pesos) Aggeao Flow o F_und OperatIng costs - 3216 Private share * 37 Dwct soal costs - 4,355 Pivat shae * 54% Io hOb _ __.____Local Govenments S _ N.a__ti27 Nationaw H School Fees _ _2_ Governmenl NCR Non-NCR rera lnao.te sod a eVendtn 1.200 1,343 1,139 521 178 6 19 73 l/ Theinania posiionoflcalovermenSttsn UteheiNCes Nalbreg Hioh &a alse b wkeng ind re cy es NCR Non-NCR 09=94S Dh673 Is 5248 6 0 §5_ Operafin costs 2,22 Direct s1ia cams 2,782 EKWA2306C 2/ The financial position of local governments in the NCR region may have been weakening in recent years, however, and it appears that free secon- dary education was becoming increasingly difficult to sustain. The Cen- tral Government has in fact been making transfers to local governments in the NCR region due to this difficulty (Laya, 1987). - 30 - 2.16 Total expenditure on the operating costs of the secondary school system amounted to P 3.2 billion in 1986, 37% of which was borne by house- holds. This high percentage reflects the large share of enrollments in pri- vate schools. The share of private contributions in the direct social costs of the system was even higher, amounting to over 50% of a total of P 4.4 bil- lion in 1986. 2.17 Data on unit costs in secondary schools are given in Table 2.5. Uiiit costs in public schools vary widely. Schools attached to state universi- ties and colleges (SUCs) cost over 1.7 times as much per student as regular national schools, arising largely from differences in teacher salaries. According to a recent survey (Laya, 1987), teachers in SUC-attached schools receive 1.5 times the salaries of their counterparts in national high schools. The advantage in pay, reflecting one aspect of the fiscal autonomy of SUCs, is partly responsible for the proliferation of SUCs in which a large share of enrollments consist of secondary students. Locally funded schools in the NCR cost almost as much as the schools attached to SUCs, also reflecting higher teacher salaries but in this case the higher pay may be Justified by the dif- ferences in the cost of living between NCR and other regions. Local schools in non-NCR regions cost the least, at P 686 per student. 2.18 As the public secondary school system was organized and financed in 1986, obvious inequities existed. Local schools outside the NCR operated on less than a third of the resources available per student at the best-financed public schools, although their fees were higher--over 5 times the fees at national schools and nearly 1.3 times that charged at schools attached to SUCs. Fees accounted on average for nearly 30% of the operating costs per student in these local schools, compared to only 3% and 7%, respectively, at the other two types of schools. The wide disparities existed even though government subsidies to local schools were inversely related to a community's level of poverty. The weak equalization effect of the system was perhaps one motivation for the shift in policies since 1986--the nationalization of the salaries of local school teachers and the abolition of tuition fees in all public secondary schools. 2.19 Unit operating costs are generally higher in public than in private schools. But as in elementary education, families of public school students spend less on transportation, books and other pedagogical materials. The gap is not as large, however, so that public secondary schools remain more expensive than private schools in terms of the direct social costs per student. 2.20 The operating costs per student in private schools are also lower than those in public schools because private school teachers generally receive lower salaries and work longer hours, about 5 more hours of teaching per week than teachers in national schools (Annex Table 2.14). Teachers in barangay schools are the most poorly paid; thus, although their teaching load is not as heavy as that of other teachers, unit costs are lowest in this type of school. The difference is reinforced by the fact that spending on nonsalary inputs is also relatively small, accounting for less than 20% of the total unit cost compared to nearly 40% in national schools. - 31 - Table 2.5: EXPENDITURE PER STUDENT IN SECONDARY SCHOOLS BY SOURCE OF FUNDS, 1986 (Pesos) Nationally-funded Locally-funded Schools National attached to NCR Non-NCR All public Private Item/source of funds schools SUCs region region schools /a schools Expenditure per student National government 1,250 2,000 12 296 689 0 Local government 0 0 2,000 202 268 0 Households: Fees 37 147 0 188 106 700 Other school- related costs - - - '' 287 439 Operating costsjper student lb 1,250 2,147 2,012 686 1,139 /c 753 Direct social cost per student - - - - 1,440 1,192 /a Unit expenditures are weighted by share of enrollments. 7o Fees collected in national schools are transmitted to the national treasury, unlike the arrangement elsewhere. Thus, for these schools, fees are excluded to avoid double counting in calculating the operating cost. For private schools, about 72 of the operating cost is supported by private contribution other than fees (DECS- EDPITAF, 1983). /c This figure differs from the sum of the preceding figures in the column because of adjustmeuts made to avoid l -uble counting; see footnote b above. 2.21 lince the salaries of public school teachers are now standardized, it is of interest to trace their evolution over time, as in Table 2.6. Sala- ries have increased in current terms every year since 1983, but in real terms, only since 1986. By 1988, the salaries of public secondary school teachers rose to 2.4 times the per capita GNP, compared to only 1.7 in 1983. Secondary school teachers have been receiving only slightly more pay than elementary school teachers. 2.22 With the increase in teacher salaries in public schools, the operat- ing costs per student have also been rising (Annex Table A2.15). Under the new policies, the operating costs per student in public schools as a percent of per capita GNP reached 11.8% in 1988, an increase of 42% over the level in 1983. Since the increase is reflected entirely in higher teacher salaries, disparities in the supply of material inputs may still remain substantial. - 32 - Table 2.6: ANNUAL TEACHER COMPENSATION IN PUBLIC SECONDARY SCHOOLS, 1983-88 Average basic Total annual compensation salary Allowances Current 1983 Ratio to per Year (Pesos) (Pesos) Pesos Pesos capita GNP 1983 10,653 1,450 12,103 12,103 1.7 1984 11,886 3,250 15,136 10,091 1.5 1985 14,389 4,500 18,889 10,210 1.7 1986 18,393 6,300 24,693 13,205 2.2 1987 21,883 6,300 28,183 14,379 2.3 1988 24,069 8,700 32,769 15,985 2.4 Source: Estimated from dAta on teacher salary scnles supplied by DECS and MECS (1986). 2.23 Given the drastic changes in the secondary school system, it is appropriate to update the data on the financial flows of funds. The estimates fer 1988 shown in Figure 2.3 are based on tentative data, and should be treated with caution. Under the new policy regime, there are essentially two basic sources of finance, households snd the Central Government. Fees paid by households go entirely to support the operation of private schools. The Cen- tral Government channels its resources mainly to two types of schools, those attached to state universities and colleges, and other public schools. Under the Service Contracting Scheme a small amount of Central Government funds also reach the private sector.- The aggregate operating costs of the secon- dary school system is estimated at P 4.5 billion in 1988, 22% of which is borne by fees compared to 37% in 1986. Similarly, the share of aggregate direct social costs (estimated at P 5.8 billion in 1988) declined to 39%, down from 54% in 1986. 3/ Under the Service Contracting Scheme (initiated only recently), the government pays for private schools to enroll overflows from the public school system. The amount paid per student is limited to the cost of public education in the locality. - 33 - Figure 2.3: AGGREGATE FLOW OF FUNDS IN SECONDARY SCHOOL SYSTEM AFTER POLICY CHANGE , 1988 (Millions ot Pesos) Aggrbe Flow of Funds Operatng costs . 4.520 Private shae - 22% Direct social costs = 5,805 Private share - 37% Househokds Sdvd- Ca~~~~~~Gntral Govemment Fees related 960 expenditures \ / 1,285 960 645 / 31 Prive 1s co lX ct ,t -1.M42 sdiols Operatng costs Drect sodal cost .3.532 .4.163 EKW42231 Cost and Financing of Higher Education 2.24 Higher education is perhaps even more diverse than secondary education in the courses offered and the types of institutions that exist. Students are enrolled in nondegree courses and in degree programs at the undergraduate and graduate levels in a wide variety of fields. In the public sector there are three types of institutions: chartered universities and colleges, unchartered institutions, and community colleges. The first two types are funded mainly by the Central Government, but differ in the degree of fiscal autonomy. Chartered institutions enjoy greater flexibility as they receive funds that a.pear as separate line items in the budget appropriations act; unchartered institutions are subjected to greater fiscal control since their funds are appropriated as part of the general budget of the Department of Education. Community colleges are funded mainly by local governmerts. In the private sector the institutions are divided into sectarian and nonsectar- ian categories. In 1985, over 80% of total enrollments in higher education - 34 - were in the private sector, the bulk in nonsectarian institutions (Annex Table A2.16). Community colleaes enrolled the smallest share, just over 1Z in that year. 2.25 The financial flows in higher education appear in Figure 2.4. Cen- tral government support is only slightly larger than the total amount of fees paid by households. The bulk of fees go to private institutions, accounting for all the operating costs of the private sector, in contrast to just over 10% in the public system. If the cost of other privately-financed school .nputs (such as transportation, books and pedagogical supplies) were included, the private share in the total direct social cost of higher education rises to a remarkable 64%. In terms of aggregate operating costs, the private system is less costly even though it enrolls far more students than the public system. Flgure 2.4: AGGREGATE FLOW OF FUNDS IN HIGHER EDUCATION, 1986 (Millions of Pesos) Aggregate Flow of Funds Opeatingces *.3,676 Pi*at Share . 62% Dku Social ode 5,187 Puvat Share 67% CM" Goveffunam ~Locali GoPvernGents lUl2 SW 73 PI at. lnHIAio. derahng Duec 5ouaf -1.606t a 906 5 37 - 35 - 2.26 Data on unit costs are given in Table 2.7. The operating costs of private institutions are lowest at an average of P 1,186 per student in 1986, compared to nearly P 2,850 in unchartered public institutions, and an average of P 7,966 in chartered public institutions. The unit cost at the University of the Philippines is particularly high, about P 21,000 in 1986, compared to about P 6,000 in the remaining 77 SUCs. Of the latter, the seven institutions which are located in the NCR region had a unit cost of P 3,600 in 1986, while the other 70 SUCs located outside the NCR region had a unit cost of P 7,200. The high unit cost in chartered institutions may be due to the relative con- centration of enrollments in "expensive" fields, such as medicine and science; the private sector tends to offer less capital-intensive courses, such as law, accounting and business. Even so, the cost differences still appear substan- tial. Additional analysis to explore the reasons for the gap would clearly be useful. Table 2.7: EXPENDITURE PER STUDENT ON HIGHER EDUCATION BY SOURCE OF FUNDS, 1986 (Pesos) Public institutions Pi zate Item/source of funds Chartered /a Unchartered Community institutions Expenditure per student Central government 7,966 2,850 0 0 Local government 0 0 1,584 0 Households /b Fees 828 828 828 1,186 Other school- related expenses 793 793 793 1,029 Operating cost per student 7,966 2,850 1,584 1,186 Direct social cost per student 8,759 3,643 2,377 2,215 /a Includes University of the Philippines system which has an average unit cost well above that for other public chartered institutions. /b Fees and other school-related expenses are assumed to be the same in all public institutions; fee revenues from SUCs and other government institu- tions flow to the National Treasury and are not included in calculating the operating unit cost to avoid double counting. Sources: Mission estimates based on budget data, data on private expenditure from the 1982 HSMS survey and other documents. However, the budget documents do not provide a breakdown of expenditure in the SUCs by level of education for all institutions. Thus, for the chartered institutions, the estimates of unit cost are based on data in Ables et al. (1987), adjustpd to 1986 prices using a CPI of 1.048. These results are probably less Lnaccurate tha.i those based simply on a division ot the total budget of SUCs by total enrollments. - 36 - Overall Financial Flows: A Summary and Further Comparisons 2.27 In 1986, a total of P 15.0 billion or 2.5% of GNP was spent on the recurrent operating costs of the education system, including the costs that were financed by sources other than the Central Government (Annex Table A2.17). The bulk of the resources was invested in elementary education, 55% compared to 21% and 24% in secondary and higher education, respectively. At each level of education, the Central Government shoulders a significant pro- portion of the total operating costs: an overwhelming 92% in elementary schooling, 41% in secondary, and 47% in higher edi!cation. Local governments are involved mainly in secondary education, where they financed just over 20% of the aggregate operating costs in 1986. Their involvement has just about evaporated in the last two years, however, after the responsibility for local school teachers' salaries--which make up the bulk of costs--was transferred to the Central Government in 1986. 2.28 The first level of education remains the most heavily subsidized; this pattern contrasts with the practice in many other developing countries, where higher education tends to receive the heaviest subsidies (World Bank, 1986a). Even if other privately-financed expenditures for schooling were included, the pattern of subsidization across levels of education persists. The share of private expenditures rises significantly, however, 18% in elemen- tary education, 39% in secondary education, and 67% in higher education, com- pared to 5%, 21% and 52%, respectively, if private expenditures were excluded. 2.29 Compared with other countries, the Philippine Government spends less on education (Annex Table A2.18). However, this comparison is misleading as the national investment "effort" in education includes the contribution of the private sector, which in the Philippines is unusually large. Taking the sys- tem as a whole and including funds from both public and private sources, total recurrent funding in education as a proportion of GNP was actually around 3% in 1988. While still lower than in most countries in Asia and Latin America, the gap is not as wide as it was, for example, in 1983. The smaller aggregate expenditures in the Philippines could be interpreted in one or both of two ways: greater efficiency of a system that depends more on the private provi- sion of education, or underinvestment. As will be seen later from estimated rates of return to education, the extent of underinvestment is probably limited. 2.30 In terms of the governmenit cost of public education, the unit costs of elementary and higher education are comparable to those in Latin American countries (Annex Table A2.19). In secondary education, however, unit costs are significantly lower, reflecting relatively low teacher salaries (compared to, say, the salaries of elementary school teachers). C. Efficiency in the Allocation of Educational Resources 2.31 In general, efficiency is a term used to describe the relationship between inputs and outputs. When output is defined as broad societal goals (e.g., production of educated manpower, lower fertility rates, improved health), the analysis focuses on the external efficiency of the education - 37 - system. When output is defined as goals internal to each level of education (e.g., students' achievement, reduced dropout rates), the focus is on the sys- tem's internal efficiency. Both definitions of output are important to consi- der since they relate to different but complementary aspects of the al.'cation of educational resources. External Efficiency of Investments in Education 2.32 Among various societal goals of educational investments, a chief concern is the economic performance of educated people, i.e., whether their productivity has been enhanced and whether the increase in productivity is commensurate with the cost of their education. There are different ways to analyze this issue, but a standard approach is through rate-of-return analy- sis. Other signals that relate more directly to labor market outcomes in a shorter-run perspective (e.g., waiting periods, unemployment rates, degree of match between schooling and jobs) are also useful, since they provide comple- mentary information. The following will evaluate the evidence on the rates of return. 2.33 Several estimates exist on the returns to education in the Philippines, but most of them are either dated or refer to only one level of education. Estimates for the latest available year, 1985, contain results for all three levels of education (Tan and Paqueo, 1988). These estimates are based on: (a) earnings data from the 1985 Household Income and Expenditure Survey of the National Census and Statistics Office; (b) data on the public cost of education, checked for consistency among various sources; and (c) data on private expenditure on fees and other school-related items from the 1982 Household and School Matching Surveys of DECS. The estimated rates of return incorporate appropriate weights for the relative shares of enrollments in pub- lic and private schools. The results appear in Table 2.8. 2.34 First, compared to estimates for 1971 reported in an International Labour Organization study (ILO, 1974), the 1985 estimates are higher. The two sets of estimates are not entirely comparable due to methodological differ- ences, but the trend permits the following conclusion: investments in educa- tion have remaired profitable despite the sustained expansion of the system over the last 15 years. However, the returns are not as high as in other developing countries, although they exceed at all three levels of education the 10% yardstick normally used to evaluate the social profitability of other investments, usually in physical capital. In other words, current investment in education is reasonably profitable for society, justifying a modest, rather than a massive and rapid, expansion of the system. In practical terms, this means expanding enrollments at about the rate of growth of the school-age population. - 38 - Table 2.8: PRIVATE AND SOCIAL RATES OF RETURN TO EDUCATION, 1985 (Z) Tndex of Private Social subsidization /b Complete Cycle /a Elementary 18.2 11.9 1.53 Secondary 13.8 12.9 1.07 Higher 14.0 13.3 1.05 Incomplete Cycle /a Elementary 7.2 4.4 1.29 Secondary 10.2 9.3 1.10 Higher 12.5 11.6 1.08 /a Complete cycles refer to 5 to 6 years of elementary schooling, or 4 years of secondary schooling, or 4 years of higher education. Incomplete cycles refer to fewer than these years of education at each level. For both complete and incomplete cycles, the rates of return for elementary education refer to the returns over no schooling; for secon- dary education, over 5 to 6 years of elementary education; and for higher education, over 4 years of secondary education. /b Defined as the ratio between the private and social raLes of return. Source: Tan and Paqueo (1988). 2.35 With regard to the relative efficiency of educational investments within the sector, the social returns are comparable among complete cycles of the three levels of education, which suggests that there are no serious dis- tortions and inefficiencies in the current intrasectoral allocation of resources. A noteworthy feature, however, is the gap between the returns to complete and incomplete cycles of education. That gap is especially conspi- cuous in elementary education, suggesting considerably improved social gains to investing in education if dropping out were reduced at this level. 2.36 The index of subsidization, which is the ratio between the private and social rates of return, reaffirms the findings that elementary education receives the heaviest subsidies. Since this level of education is generally acknowledged to generate the largest externalities, this pattern of subsidi- zation also confirms that public resources are efficiently allocated across the three levels of education. - 39 - Internal Efficiency of the Education System 2.37 An education system is internally efficient if it produces the desired output at minimum cost or if it maximizes the proauction of the desired output for a given input of resources. The desired output is often measured in terms of such indicators as retention rates (i.e., the proportion of students who do not drop out), students' cognitive and technical skills, scientific know-how, and conformity to social norms of behavior. An education system can be made more internally efficient in several ways, e.g., by using appropriate incentives to discourage dropping out, by altering the mix of inputs in the educational process to raise achievement scores, and by improv- ing the physical organization of schools and classes to reduce unit costs. Selected aspects of the internal efficiency of the education system are discussed below focusing on the above three issues. 2.38 Dropouts in Elementary Education. Although a student may drop out at any level of education, the problem is particularly serious when it occurs in basic education. The reason is that basic education generates social externalities (e.g., improved political and social consciousness, widespread literacy in society, better health status) that would be lost if a student dropped out. Besides, basic education is often considered a fundamental human right, so that retaining students at this level of schooling becomes a valid goal in itself. At the higher levels of education, the externalities are probably smaller, and the benefits of education accrue almost entirely to individuals. For the above reasons, the following discussion focuses on the problem of dropouts in elementary education. 2.39 In elementary education the cohort survival rate 41 has remained unchanged between 1980 and 1986, at 67% (Annem Table A2.20). The incidence of dropping out therefore appears to be significant: a third of all grade one students exit the system before they reach th2 end of elementary education. There is, moreover, wide regional variation. In regions IX and XII, for example, more than 50% of grade one students survive less than six years in the system, compared to just over 10% in the National Capital Region. 2.40 The decision to drop out is influenced by many factors. Included are factors associated with (a) the quality of schooling (e.g., the availa- bility of textbooks, facilities, and qualified teachers) and (b) a student's personal background (e.g., scholastic aptitude, family's economic and social circumstances). The interaction between school and family characteristics is also important because poor academic achievement which often leads parents to discontinue a child's schooling could result, for example, from a curriculum design that makes inadequate allowances for differences in learning when the language of instruction (Pilipino or English) differs from that spoken at home. 4/ The cohort survival rate is defined as the proportion of students enrolled in the first year of a cycle who persist to the end of that cycle. It is used here rather than the dropout rate for reasons explained in para. 2.86(a). - 40 - 2.41 Without more detailed data, it is difficult to determine the relative importance of the various factors. Two pieces of indirect evidence suggest, however, that economic considerations are probably influential. First, the private returns are much higher when a student completes the cycle instead of dropping out (16.6% compared to only 6.7%), indicating that the financial incentives for completion4 are very strong. The fact that some people nevertheless drop out signifies that they probably do so involuntarily, owing perhaps to such factors as an inability to afford the costs (direct costs and foregone income), lack of access to loans, and so on. These are clearly problems that affect poor families more than rich ones. 2.42 Second, cohort survival rates vary across provinces. In general, this indicator is lower in provinces with higher levels of average household income (Annex Table A2.21). Regional factors, which may reflect differences in the supply of schooling, also appear to be important. The gap between rich and poor localities, and among regions, is indicated by cohort survival rates predicted on the basis of regression analysis (Annex Table 2.22). The results suggest, for example, that a rich locality in the National Capital Region with an average household income of P 45,000 a year could achieve a cohort survival rate over 1.7 times that in a poorer locality in Region IX with an average household income of P 15,000 a year. 2.43 Student Achievement. Cognitive skills are one of the desired out- puts of the education process. Schools that maximize student achievement for a given input of resources are considered internally efficient. This result is achieved by choosing school inputs with the greatest impact on student achievement per unit of resources spent. Thus, one issue in assessing inter- nal efficiency concerns the allocation of spending across school inputs: which inputs appear to have a significant effect, and is the impact on achievement commensurate with their costs. An in-depth analysis of internal efficiency is beyond the scope of this report. Nevertheless, some insights are afforded by several existing studies on elementary and secondary educa- tion. 2.44 Elementary Education. In a recent international study on science achievement in 17 countries (IEA, 1988), the Philippines ranked last in the average score of both 10- and 14-year-old students (Annex Table A2.24).5' The low scores are a cause of concern, but they are perhaps to be expected given that the low ranking is probably linked to the Philippines' being the poorest country in the sample and to the limited resources spent per student. Perhaps more important for the analysis of internal efficiency is the variation among schools in the country. The intraclass correlation or Roh statistic (defined as differences in science achievement between schools as a percentage of the total variance in achievement among students) is extremely high, 56% compared to an average of 16% in other sample countries. This result highlights the wide disparities in the performance of individual schools and suggests that 5/ The 10-year old group corresponds to students in Grade 5 of elementary school, while the 14-year-old correspond to students in the third year of secondary school. - 41 - there may be inefficiencies in the allocation of resources across schools and in the use of resources within schools. 2.45 Recent preliminary evidence on the relative effectiveness of various school inputs (Paderanga, 1987) shows that inputs with statistically signifi- cant effo'cts on student achievement include the availability of physical faci- lities (e.g., desks) and their condition of upkeep, the availability of refe- rence books, and the quality of teachers as indicated by their achievement scores. Inputs traditionally thought to be important such as the availability of textbooks, the paper qualification of teachers and their teaching experi- ence, exert a weakly positive effect on student achievement. One interpreta- tion of these results is that on average, the provision of the traditional inputs have reached adequate levels across schools, and it is in other areas such as the subject knowledge of teachers and their classroom organization ability that the potential for improvement is greatest. Paderanga's results should be interpreted with caution, however, given their preliminary nature and because traditional inputs are not yet at accessible levels for remote rural schools. Moreover, since data on relative costs are lacking, the analysis does not address the relative economic efficiency of those inputs that affect achievement. This issue probably deserves additional attention in future analyses of the differences in achievement across elementary schools. 2.46 Another study on the internal efficiency of elementary schools (Jimenez, Paqueo, and de Vera, 1987) analyzes the impact on student achieve- ment of management inputs, measured by the degree to which a school depends on sources of funds other than the Central Government. It is thought that the more decentralized the sources of funding, the more are school resources like- ly to be allocated in line with local conditions, because the authorities are more familiar with local conditions and have greater incentives to minimize costs while maintaining school quality. The results of their study show that after standardizing for quality differences, unit costs are indeed lower in schools that are more dependent on local sources of funds. Their findings thus underscore the importance of appropriate management inputs at the local level. 2.47 Secondary Education. The Philippines also lags behind other coun- tries in science achievement at the secondary level (Annex Table A2.24). As in elementary education, wide differences exist among schools in the country, reflected in a high Roh statistic of 48%. 2.48 The internal efficiency of the secondary school system is difficult to assess, but data on the achievement scores across school types permit the preliminary analysis presented in Table 2.9. Results on the National College Entrance Examination (the NCEE which, strictly speaking, is not an assessment of student performance on the curriculum but a measure of student aptitudes) show that private schools, particularly the sectarian schools, achieve the highest scores. Students in barangay schools perform the worst, while students in national schools attain a score that is slightly below the average (last column in Table 2.9). These differences themselves do not signify lower internal efficiency in the barangay schools because: (a) the average input per student is lower, only about half as high as that in national schools in 1986; and (b) the quality of entering students is also poorer, as apparent - 42 - from the results of a test administered to first-year students in the various types of schools (first column in Table 2.9). In fact, the barangay schools retain their relative position, at about 0.34 to 0.35 normalized deviations below the mean, on both the initial test and the NCEE, which implies that they are no more inefficient than other schools if differences. in student quality and in resource availability are taken into account. On the other hand, national schools started out with an advantage on both ccunts and yet dropped from 0.21 normalized deviations above the mean to 0.01 points below the mean. Table 2.9: ACHIEVEMENT SCORES IN SECONDARY SCHOOLS, CIRCA 1986 /a Initial Score NCEE /c score lb 1 year later /b score Public Schools National +0.21 +0.27 -0.01 Provincial +0.13 +0.24 +0.13 Municipal/city -0.07 -0.18 +0.13 Barangay -0.34 -0.30 -0.35 Public vocational -0.30 -0.19 -0.05 Private Schools Sectarian +0.36 +0.23 +0.67 Nonsectarian -0.01 -0.08 +0.17 /a Calibrated in terms of normalized deviations from the sample mean. Tr These scores refer to results obtained on tests administered to a cohort of first-year secondary-school students in Region IV enrolled in the various types of secondary schools. /c The National College Entrance Examination (NCEE) is administered nation- ally to students wishing to enter college. Sources: Mission estimates based on data supplied by the DECS Regional Office, Region IV; and the National Educational Testing and Research Center. 2.49 Differences in the relative performance across school types also appear in Figure 2.5. Schools below the diagonal are those that have declined in relative achievement on the NCEE compared to their ranking on the initial test administered to first year students. The sharpest contrast exists between national schools and private sectarian schools. Both groups ranked much above the average on the initial test, but in the NCEE the latter group's relative ranking rose even higher, whereas the national schools dropped to below the average. Given the lower unit costs in private schools, they indeed appear to operate with greater internal efficiency. This result is confirmed by one study that uses survey data on individual students to compare the effi- ciency of public and private schools (Jimenez, Paqueo, and de Vera, 1987). The study shows that even after controlling for selectivity in student - 43 - characteristics, private schools outperformed public schools, particularly in the teaching of English and Pilipino. The authors of the study conclude that this finding is consistent with the hypothesis that a more decentralized management of schools and greater accoustability are key factors leading to greater internal efficiency. Flgure 2.5: RELATIVE ACADEMIC ACHIEVEMENT OF SECONDARY SCHOOL STIJDENTS ON INITIAL TEST AND THE NCEE, 1987 NCEE Score .7 - _ _--l PwMate o .6 - _ -sectarian- - .5 . - - … .4 -__ 1 .3 __ _ Privae - _ /_ Nonsectanan 1 - _ _ _ ~Municipal 0 _ P (Zvinc __ Vocational 4 7 Notionol l_hittl test - .1 - - , - _ _ - score _.5 _ -Z X -.5S --__ _--- -.6 -5-4 -.3 - 2 - 1 0 1 .2 .3 4 .5 .6 World Bank-42761 1 2.50 Efficiency in the Physical Organization of Schooling. The provision of schooling requires organizing students into discrete groups in schools and in classrooms. It also involves assigning teachers to various school duties. These aspects of schooling are affected by many considerations. Small schools, for example, may cater to localities with sparse populations, and some teachers in a school may be assigned low teaching loads because of other school duties or because of the insufficiency of facilities (e.g., for teach- ing science subjects). The analysis here focuses specifically on the question of whether unit costs would drop if there were fewer schools, each with a - 44 - larger enrollment, and if so, by how much costs would be reduced. The avail- able data relate to secondary and higher education. 2.51 Secondary Education. Consider first the variation across types of secondary schools in three indicators shown in Table 2.10: the average size of classes, the average teachers-to-classes ratio, and the pupil-teacher ratio. Class sizes are uniformly large in public and private schools; although the average may hide variations, very small secondary school classes are likely to be few. Therefore, little room probably exists for exploiting economies from the consolidation of small classes. Teaching loads vary more significantly across schools. Schools that face tighter budget constraints (i.e., local schools outside the NCR and private schools) require teachers to bear a heavier load. It would appear possible, in theory, to keep teaching loads at the non-NCR local schools unchanged after nationalization, and to increase the loads at the national schools. The pressure, however, is for standardization towards the practice in the national schools; note, for example, that the local schools in the NCR--with their stronger financial base, and perhaps better organized teachers--already have the same characteristic in this respect as the national schools. As the teaching loads of local school teachers lighten, unit costs will also rise, over and above the increase due to the standardization of salaries towards the national scale. Table 2.10: CLASS SIZE, TEACHING LOAD AND PUPIL-TEACHER RATIO IN SECONDARY SCHOOLS, 1985 Students Teachers Pupil-teacher per class per class ratio Public Schools Nationally funded 51.5 1.75 29.4 Locally funded 47.8 1.49 32.0 NCR region 47.2 1.71 27.5 Non-NCR regions 48.3 1.30 37.3 Private Schools 51.3 1.38 37.2 Source: Mission estimates based on data supplied by DECS. 2.52 There may be greater scope for reducing unit costs through a better distribution of students across schools. As can be seen in Table 2.11, on average national schools enroll 1,145 students each compared to slightly over 2,150 at NCR-local schools. Other local schools are generally much smaller, with an average student body of 373 each. These averages hide big differences among schools: nearly two-thirds of the national schools have fewer than 1,000 students, while a handful have nearly 8,000 students. About a quarter of local schools in the NCR enroll less than 1,000 students. Among the larger schools, one even has as many as 13,000 students. Nearly 60% of the local - 45 - schools outside the NCR enroll no more than 300 students, while fewer than 5% had enrollments exceeding 1,000 students. Table 2.11: SIZE DISTRIBUTION OF PUBLIC SECONDARY SCHOOLS, 1986 National Local schools, Local schools, Size of school schools /a NCR region non-NCR regions < 100 0.2 0.0 4.9 100 - 200 3.6 1.1 26.8 200 - 300 9.F 3.3 27.2 300 - 500 16.1 8.8 24.0 500 - 1,000 32.7 13.2 12.4 1,000 - 2,500 23.9 33.0 3.1 2,500 - 5,000 11.4 34.1 1.2 > 5,000 2.4 6.7 0.4 All Schools 100.0% 100.0% 100.0% Total no. of schools 625 91 2,533 Total enrollments 715,916 195,650 945,793 Avg. size of schools 1,145 2,150 373 /a Excludes schools attached to state universities and colleges. Source: The size distribution of schools reflects mission estimates based on data supplied by the Office of Planning Service, DECS; other data are from DECS Statistical Bulletins. 2.53 The reduction in unit costs that might result from consolidating the small schools into larger ones depends on the existence of economies of scale. Evidence from a sample of 497 national schools (representing about 80% of all national schools) suggests that unit costs decline with rising enrollments, although the decline begins to taper off beyond an enrollment of 1,200 stu- dents, as depicted in Figure 2.6 (see also Annex Table A2.25). This analysis does not take into account increases in commuting costs associated with school amalgamation. Thus, the savings in total social costs (which include the costs borne by all parties) would probably be less than the savings in the operating costs of schools (borne largely by the government). 2.54 Figure 2.6 further shows that unit costs vary across types of cur- riculum (see also Annex Table A2.26). The differences derive from two fac- tors. First, vocational schools tend to have smaller enrollments; and second, they also tend to be more expensive at any given school size. If the smaller of those schools could be consolidated, the difference in unit costs would narrow significantly. For example, if agricultural schools were increased from an average size of 536 students to the size of comprehensive schools (1,603 students), their average unit costs would drop from P 1,878 per student - 46 - to P 1,094, or from 2.3 times as high to 1.3 times as high. Even if the increase in enrollment reaches only 1,000, unit costs would still be signifi- cantly lower than before at P 1,319. Figure 2.6: RELATIONSHIP BETWEEN UNIT COSTS AND ENROLLMENTS IN NATIONAL SECONDARY SCHOOLS, 1986 Comprehensive Unit costs - K Agrculture (pesos) *^... AlItpes 3.000- 2,500 '4- `1.000 1500 50 -f -. V 0 200 400 600 800 1.000 1.200 IAOO 1.600 1,800 2.000 2.200 Enrollments World Bank-42761:4 2.55 To summarize, the data suggest that economies of scale exist in secondary education. Since a significant number of public schools have small enrollments, it would appear that a consolidation of such schools would result in lower unit costs, and therefore, also lower costs for the system as a whole. The potential cost savings are discussed later. 2.56 Higher Education. Many writers have stressed the need for rational- ization or the system of b higher education in the Philippines, orne objective being to reduce inefficiencies and thereby, unit costs (e.g., see MECS, 1987a). The data analyzed here relate to the state universities and colleges - 47 - (SUCs), of which a total of 78 exist in the country. The proliferation of campuses in the SUCs, each enrolling a small number of students, has been noted as a possible cause of low internal efficiency in the system. The distribution of SUCs by number of campuses appears in Table 2.12. Table 2.12: DISTRIBUTION OF STATE UNIVERSITIES AND COLLEGES (SUCs) BY NUMBER OF CAMPUSES, 1987 Average higher education enrollment /b Number of campuses No. of SUCs Per institution Per campus 1 43 1,160 1,160 2-5 18 2,391 800 6-9 12 3,332 488 10+ 3 2,641 226 All SUCs /a 76 1,853 762 /a Excludes the University of the Philippines which has 9 cam- puses with an enrollment of 3,250 per campus; and the Poly- technic University of the Philippines which has 5 campuses, and an average enrollment of 6,659 per campus. /b Excludes enrollment at the elementary and secondary levels. Sources: Ables et al. (1987). 2.57 Two institutions, the University of the Philippines and the Poly- technic University of the Philippines, are excluded from the analysis because they are exceptional in the size of enrollments, and their inclusion would bias the average considerably. Two-fifths of the remaining 76 SUCs operate from two to over 10 campuses. Institutions with a large student body tend to have more than one campus, but the average enrollment per campus drops sharply as the number of campuses rises. Since economies of scale often exist in higher education, the proliferation of campuses with small enrollments implies that the system is inefficient in its physical organization. 2.58 Evidence of the potential gains from the consolidation of SUC cam- puses is pictured in Figure 2.7 (see also Annex Table A2.27). For example, if an institution has 1,000 students, the unit costs would average P 8,600 if it operates only one campus; but the costs would jump by 55% if it chose five campuses instead. A movement toward larger institutions would also add to the decline in unit costs. For example, unit costs in the one-campus institution would decline by 57% if enrollments were increased from 1,000 to 5,000 stu- dents. Beyond 5,000 students, unit costs continue to decline, but only slowly. The difference in unit costs between multiple- and single-campus institutions also narrows as the total enrollment risese - 48 - Figure 2.7: RELATIONSHIP BETWEEN UNIT COSTS AND ENROLLMENTS IN STATE UNIVERSITIES AND COLLEGES, 1987 Unit Costs (~00 peRso)', 14- - - - - - - 12 …- 10…- 8…… No. of 0 1 2 3 4 5 6 7 6 9 10 EnrollIments ('000) World Bonk-42761 :6 The Efficiency of Resource Allocation: A Summary 2.59 With regard to the external efficiency of investing in education, the data indicate that there is little underinvestment in the sector as a whole. The sector's future expansion should probably be moderate, the rate of expansion being guided to a large extent by demographic considerations. The evidence also suggests that the intrasectoral allocation of spending is not seriously distorted. More effort could be focused, however, on reducing the incidence of dropping out in elementary education; investments directed toward this end would yield high social returns. 2.60 As for the internal efficiency of the system, the analysis points to several areas Lor improvemenL. Conort survival rates in elementary education vary widely across regions, and there is probably scope for improving this indicator. Although a detailed analysis is beyond the scope of this report, - 49 - the available preliminary evidence suggest that economic factors are probably as important as the schooling process itself in affecting a student's persis- tence through the system. 2.61 With regard to student achievement, the available preliminary evi- dence suggests that in elementary education, teachers' subject knowledge and the provision of reference books are two factors with positive effects. How- ever, in the absence of cost data, the relative efficiency of the allocation of resources across inputs is impossible to evaluate. More analyses on this issue would be desirable. In secondary education, the performance of students on the NCEL provides a measure of the relative rankings of schools in a stan- dardized examination. Locally-financed schools, particularly the barangay schools, have the lowest average scores, but if differences in the quality of student intake and the input of resources per student are taken into account, these schools are probably not more inefficient than other schools. On the other hand, national schools appear to be inefficient, since they have better students to begin with and more resources per student, and yet perform rela- tively less well than one might expect on the NCEE. In both elementary and secondary education, providing school managers with the incentives and the authority to make appropriate decisions appears to be necessary for the efficient operation of schools. 2.62 Finally, greater internal efficiency in the education system can result from improvinig the physical organization of schooling. The available data are for secondary and higher education. Unit costs in secondary schools drop markedly up to an enrollment of at least 1,200 students. Since the num- ber of national schools below this size is quite large, there is significant scope for cost savings from consolidating small schools into larger ones. In higher education, there is also room for exploiting economies of Rcale, in addition to limiting the proliferation of campuses as enrollments rise. D. Equity Outcomes in Education 2.63 The current structure of the education pyramid, with its broad base of nearly universal enrollments in elementary education and smaller coverage at the higher levels of education, is consistent with an efficient intrasec- toral allocation of spending. Since only some workers are needed with advanced levels of education and training, it would not be economically effi- cient if everyone in the country obtained a postgraduate degree. However, the fact that people differ in their schooling career implies that social inequi- ties may exist in the access to education when the chances of entry are not proportionately distributed across social groups. As no country in the world has a perfectly equitable education system, the first task is to compare the Philippines to other countries. A basis for comparison is the structure of the education system itself as well as the way education is financed. A second perspective is provided by the differences that arise within the Philippines, in particular, in survival rates among social groups in the edu- cation system, and the level of education at which these differences originate. - 50 - Structural Equity 2.64 The allocation of public spending on education affects the amount of education provided as well as its quality (which is linked to the level of spending per student). Assuming that unit costs and total public spending on education are the same, a country with a flatter educational pyramid has a more equitable system than a country with a steeper pyramid; this is because it has placed more emphasis on widening access at the base of the educational ladder. Alternatively, the two countries could have the same educational pyramid, but different patterns of public subsidization across levels of edu- cation. Government spending per student in higher education is, say, 6 times that in elementary education in one country, compared to 12 times in the other country. The latter country has a less equitable education system since pub- lic resources are concentrated in higher education (the ievel at which rela- tively few people are enrolled) at the expense of fewer resources per student in elementary education. 2.65 In assessing the structural equity of an education system, both features of the system, the enrollment structure and the pattern of public subsidization, would therefore need to be taken into account. The enrollment structure determines the distribution of final years of schooling in any given cohort. When combined with information on the pattern of public spending, the result shows the distribution of cumulative public resources among a genera- tion of people who exit the educational system at different points. 2.66 Tne Philippine educatior systom has three characteriseti-c *U^- *^" to make it more structurally equitable than the sysLems of most other coun- tries: (a) the enrollment pyramid is flatter; (b) the share of enrollments in private schools is substa-tial in secondary and higher education (especially the latter level), which implies that a significant proportion of students pay for their own education at the post-elementary levels; and (c) the gap between public spending per student in elementary and higher education is not as large as it is in some other countries. 2.67 The data indeed bear out this expectation. In the Philippines, people with elementary or no schooling, in a generation that has left its schooling years, accumulate 21% of the total cumulative public educational resources received by that generation. Compare that with the average outcome in developing countries in which the 71% with the same level of final school- ing obtain a share of only 22% (Annex Table A2.28). Among developing coun- tries, the Philippines has perhaps one of the most structurally equitable systems of education. Its relative ranking in this respect can be summarized by a Lorenz curve and the associated Gini coefficient shown in Figure 2.8. The Lorenz curve for the Philippines is much closer to the diagonal than the average curve for developing countries, and the Gini coefficient is one of the lowest in the world. The structural equity of the system is comparable to that of more developed countries. - 51 - Figure 2.8: DISTRIBUTION OF CUMULATIVE PUBLIC SPENDING ON EDUCATION,-/ PHILIPPINES AND DEVELOPING COUNTRIES Percentoge of cumulattiv public spending on education so - Philippines Glni =0.19 60/ Developing countries Gini = 0.60 40 -- 20 20 40 60 80 100 Percentage of population WtOd Bonk-42761:2 6/ The Lorenz Curve in Figure 2.8 shows the proportion of cumulative public resources accumulated by people with different final years of schooling among a generation who has left its schooling years. The population is ranked from no schooling to higher education. The Gini coefficient is mathematically defined as the ratio between the area between the Lorenz Thus, the smaller the coefficient, the more equitable is the distribution of the cumulative resources. - 52 - Social Selectivity in Education 2.68 The fact that an education system is structurally equitable does not mean that people of all social backgrounds have equal access to the system. The greater the index of selective inequity, the more access is biased in favor of partict4lar social groups. For example, if only 20% of a school-age population enters college, the access to this level of education would be socially equitable if all social groups (e.g., urban versus rural populations, males versus females, rich versus poor people) have the same probability of entry, 20%. No education system is perfectly equitable in this respect. In most countries, particularly developing ones, the tendency is for the higher socioeconomic groups to be substantially overrepresented. The issue is to what extent the Philippines conforms to this general pattern. 2.69 Consider first the overall rates of transition at the various points of selection in the system depicted in Figure 2.9 (see also Annex Table A2.29). Of the entering class in grade one in elementary education, only 66% survive to grade six. Of the survivors, 95% graduate; and of the graduates, about 90% enter secondary education. Nearly three-quarters of the entering students reach the end of the four-year secondary school program. About half of these students pass the NCEE, gaining the certification to enter college. Of these, 80% finish their higher education. These transition rates imply that in a given cohort of students, only 16.7% finally graduate from college. Figure 2.9: COHORT SURVIVAL RATES IN ELEMENTARY, SECONDARY AND TERTIARY EDUCATION, 1986 Peroant 100 Bu _ 00.4 _ 60 _1D63.2_ 40_l_ 20 2 0.7 Elermntary Seconchwr Tertiary Wotd Bonk-42761:5 - 53 - 2.70 If adverse social selectivity exists in the education system, it probably originates in elementary education, where about one-third of the population exit the system before the end of the cycle. Table 2.13 shows, for example, that 57% of the children from households with annual incomes of less than P 10,000 complete their elementary education, compared to 89% among children from households with incomes exceeding P 30,000 a year. This result is consistent with the findings based on other indicators of socioeconomic status. Figure 2.10 illustrates that few students whose fathers received a college education drop out of elementary education, in contrast to a dropout rate of nearly 50% among those whose fathers had only an elementary education. Table 2.13: COHORT SURVIVAL RATES IN ELEMENTARY EDUCATION BY SOCIOECONOMIC GROUPS, 1982 (percent) Family income (pesos a year) * 10,000 57 > 30,000 89 Geographic origin Rural 57 Urban 80 Father' s education None 19 Elementary 51 Secondary 69 College 92 Father's occupation Farmert fisherman 53 Manual worker 75 Nonmanual worker 91 Source: Mission estimates based on HSMS survey data. - 54 - Figure 2.10: COHORT SURVIVAL RATES IN ELEMENTARY EDUCATION BY FATHER'S EDUCATION, 1986 Fothers education: Collge -- Elementary High school --- Noeducation 80 - _ ^\ N. s _S 60 - 40 - 20 - _ t, __ _ __________ ______ Elernentory Secondary Tertiary Wortd Bank4276i:7 E. Policy Issues In Education 2.71 The analyses in earlier sections provide a basis for identifying future policy issues in Philippine education. These issues fall into two categories: those that pertain to the sector as a whole, and those that have a more limited application. A third category also exists, comprising issues that are not addressed in detail owing partly to the lack of readily accessi- ble data. They are identified here as possible topics for future study. Social Inequities as a Sector-wide Issue 2.72 Social inequities in the education system constitute a sector-wide issue because the inequities generated in one level of education tend to be transmitted to subsequent levels. Thus, in reducing inequities through public policies, it i.s important to identify the source of selectivity in the educa- tion system. The earlier analysis shows that students drop out at all three levels of education, but that the dropout rate declines as the level of educa- tion rises (as indicated by the slope of the cohort survival rate in Figure 2.9). It also confirms that low socioeconomic status (SES) students are underrepresented among elementary school graduates because such students have significantly lower cohort survival rates than tnieir peerS f*1 LiUi _ri-;= leged backgrounds. Together, these findings suggest that in order to reduce overall social inequities in the system, government intervention should - 55 - generally be directed at elementary education. To formulate appropriate policies, questions such as the following are relevant: to what extent is dropping out linked to school factors and to what extent to home characteristics? Are these variables amenable to policy intervention, and at what costs? If more resources are to be devoted to elementary education, how should they be allocated, and how should they be targeted? A preliminary attempt to answer these questions has been made based on 1982/83 HSMS data and the findings are provided in Annex Notes No. 1. 2.73 Interventions in secondary and higher education, although also relevant, will probably have a weaker effect in reducing social inequities in the system. The two recent government policies in secondary education--the nationalization of public local secondary schools and the abolition of secon- dary school fees--have probably done much to reduce the wide disparities in the distribution of public resources across public secondary schools. How- ever, since these policies touch only those who enter this level of schooling (57% of the cohort), their system-wide impact is more limited than interven- tions within elementary education. 2.74 In higher education, there is some evidence suggesting that selec- tion into the better institutions is biased in favor of students from high SES backgrounds (MECS, 1987a). It is unclear whether low SES students fail to gain entry because of financial considerations, or because their previous edu- cation is inferior in quality, thus putting them at a disadvantage in compet- ing for places at the better institutions. There is clearly some scope for government intervention through such instruments as scholarships designed to help qualified students from poor families. However, these interventions help only the 21% in a cohort that survive to this level of education. As a result, their impact on reducing overall social selectivity will also be relatively weak. Subsector-specific Issues 2.75 Three issues are raised here. They concern: (a) the scope for improving the physical organization of secondary schools to reduce unit costs; (b) the need for creating incentives in the management of schools and classes; and (c) alternatives for improving efficiency in higher education. 2.76 Consolidating Small Secondary Schools. The above analysis suggests that as a general pattern, the operating costs per student in national secondary schools decline markedly as enrollments rise to about 1,200 students. Since a large number of national schools have smaller enrollments than this, it appears that costs could be reduced by consolidating the smaller schools into larger ones. Simulations of the potential cost savings appear in Table 2.14. These simulations are based on the conservative assumption that the small schools are amalgamated to reach a minimum mnrollment of 1,000 students, even though consolidation toward a larger size would continue to bring down costs. The potential savings amount to about 23% of the current operating costs of the 390 national schools with enrollments below 1,000 stuuenLs. iEat amount is equivaienc to nearly oz or totaL government spending on public secondary education in 1986. The amount of savings that would actually materialize depends of course on the extent to which school - 56 - amalgamation is feasible in light of political, topographical and equity considerations. Table 2.14: SIMULATION OF THE COST SAVINGS OF CONSOLIDATING SMALL NATIONAL SECONDARY SCHOOLS, 1986 Current After situation consolidation Schools with Small Enrollments /a Number of schools 390 212 Share of all schools (Z) 62.4 62.4 Total enrollments 212,300 212,300 Share of all enrollments (Z) 29.7 29.7 Total Operating Costs (millions of pesos) 297.5 228.2 Savings in Total Operating Costs As Z of current operating costs of small schools - 23.3 As x of current operating costs of public secondary school system /b 7.7 /a Small schools are defined as those with fewer than 1,000 students. After consolidation, each school has at least 1,000 students. /b Including general administrative costs. 2.77 Under the Government's recent policies in secondary education, local public schools became part of the national school system. Simulations of the cost implications of this change appear in Table 2.15. The raising of local teachers' salaries to the national scale in 1986 implies an immediate increase in unit costs of non-NCR local schools from P 686 to P 888. In the long run, unit costs are set to rise again as local schools acquire the characteristics of national schools, especially in such areas as staffing norms (e.g., nonteaching staff, librarians, health personnel) and the provision of pedagogical materials. The cost functions that were estimated for the sample of national schools in 1986 would then also describe how costs would behave in the long run in the nationalized local schools. Since local schaols are generally small, averaging only 373 students per school, unit costs are likely to increase substantially if they remain small. At their current average size, unit costs would be 1.72 times the initial cost of P 686 in 1986. Such a substantial increase can be avoided only by consolidating the smaller local schools. If the average enrollment per school reaches 1,500 students, unit cost would still be higher than before, but by only 22% instead of 72%. - 57 - Table 2.15: THE COST IMPLICATIONS OF NATIONALIZATION OF LOCAL SECONDARY SCHOOLS Initial Conditions, 1986 Average enrollment per school 373 Average unit costs per student (Pesos) 686 Short-Run Increase in Unit Costs (X) /a With no change in school size 29.4 Longer-Run Increase in Unit Costs (%) /a With no change in school size 72.2 If average enrollment per school rises to 500 55.2 1,000 30.1 1,200 26.0 1,500 21.8 /a The simulation3 reflect real increases. Source: Simulations based on regression estimates of the costs of national secondary schools (Annex Table A2.25); the wages of local teachers relative to those of national teachers in 1986; and the share of teachers' wages in total unit costs. 2.78 The simulations presented above are intended only to illustrate the magnitude of the potential benefits of consolidation. Clearly, the practica- bility of consolidation depends on several factors, including political and topographical considerations. After the nationalization of schools in 1986, the Government is probably in a better position to exploit the economies of scale. This source of savings can hardly be ignored at a time when overall public spending on education is unlikely to grow rapidly, given that it already absorbs one-fifth of the Government's total recurrent budget. Within a broad program of consolidation, equity considerations should of course be recognized. Thus, not all small Lchools should be abolished, since some of them serve remote communities with weak transportation networks. 2.79 Providing Incentives for Better Management of Schools. The perfor- mance of schools depends not only on the wa-y resources are used, but also on the motivation of school managers, teachers and students. Although bureaucra- tic measures can play a role in encouraging good management, they probably have limited effect because varied local conditions often require departure from administrative guidelines. Bureaucratic rules have an even more limited effect on motivating the various actors in the system. Thus, it is also important to create incentives that encourage good management. A consistent .irluirta ir, the literature i6 that more financial iap-ort a school receiveQ from local sources, the more is its management likely to be efficient. The available research findings for the Philippines confirm that private schools - 58 - tend to be more efficient. For this reason, the Government is rightly con- cerned about how the recent policy of free public secondary education will affect private schools. It is still tco early to assess the outcome, but the public sector will no doubt continue to absorb a large share of students and therefore will require efforts toward greater efficiency. The same applies to elementary education, where almost all the schools belong to the Government. 2.80 As schools tend to perform better with local support, it is desir- able to encoursge local community participation in a school's operation, for example, through parent-Leacher associations. If local financial support can also be mobilized to improve, for example, a school's facilities, its link to the local community is strengthened, and it is likely to become more account- able to its clientele. 2.81 Within schools, the need will arise for closer monitoring of student performance. For example, the results of standardized tests can serve several purposes: to inform the public about a district/school's performance compared with other districts/schools; to identify low-achieving schools for closer supervision by the authorities; and to provide feedback information to teach- ers about their effectiveness. Nationally standardized evaluations of student performance should be institutionalized as a management tool at all levels of the education system. 2.82 Enhancing the Efficiency of Universities and Colleges. Public higher education suffers from obvious inefficiencies, causing many to call for its "rationalization." There are broadly two potential instruments: adminis- trative regulation and market control. With regard to the former, a potential area for intervention includes setting guidelines about the size of institu- tions and the number of campuses they may operate. The earlier analysis indicates that most state universities and colleges are probably too small to exploit economies of scale, and are spread over too many campuses. 2.83 The second option emphasizes greater competition among institutions, public and private. Public institutions charge lower fees at present because a large part of their income consists of block grants from the Government. An alternative arrangement is to channel public funds through direct subsidies to the students instead. At the same time, fees in the public institutions should be raised. Under this arrangement, institutions will receive public funds indirectly by attracting students on government scholarship. If fees at the public institutions were raised by an average of P 400 per student (com- parable to the average fees in the private sector), a total of P 80 million would accumulate and the funds could be used to provide scholarships for higher education. If each scholarship is worth P 8,000 a year (the value of awards in the current scholarship scheme), a total of 10,000 new scholarships could be provided, almost as many as the 10,522 scholarships awarded in 1988 (Annex Table A2.30). An added benefit is that the scholarships could be tar- geted to students from low SES backgrounds by choosing appropriate selection criteria. 2.8 EXp^IzS;Q-LLiO" 6r ta L .f thS 1arship ;.^cJ w Iitn,-e of budgetary constraints. For this reason, the current student loan scheme, which has only 16,42. borrowers, could also be strengthened. Although - 59 - elements of a good loan scheme are already in place, the system lacks a well- developed accreditation body. A main function of such a body is to provide indicators about the relative performance of various institutions. In its absence the public is less informed in their choice of colleges. As a result, there is relatively little incentive for inefficient institutions to improve. 2.85 In general, the infrastructure exists for promoting greater effi- ciency in higher education. But the current scholarship and loan scheme is too small in scale, affecting less than 2% of the students in higher educa- tion, for it to be truly effective. An expansion could therefore be considered as a policy option. An essential part of this option is the setting up of a central accreditation body along the lines suggested above. Selected Issues for Further Study 2.86 Two issues appear to warrant further study: (a) inconsistencies in several basic educational indicators; and (b) the cost effectiveness of alter- native school inputs for improved achievement in elementary and secondary education. (a) Inconsistencies in Educational Indicators. This problem relates to the indicators for elementary education. The enrollment ratio, the cohort survival rate, and the dropout rate should be consistent with one another since they all provide alternative measures of the same phenomenon, namely, the extent of participation in schooling. According to official statistics, the gross and net enrollment ratios for 1986 are 99.6% and 88.9%, respectively. The net enroll- ment ratio is consistent with the reported cohort survival ratio of 64.1%, but not with the reported dropout rate of 2.0%. A related problem surfaces when considering data on the trend in enrollment ratios. Since 1965, enrollments have grown more slowly than the general population (which itself is growing more slowly than the school-age population; see Annex Table A2.31). Moreover, the gap has been widening over time. Thus, the net enrollment ratio may be declining more sharply than the official statistics imply. Such a decline would be consistent with a higher dropout rate than the one reported. These data suggest that dropping out and nonenrollment are an increasingly serious problem. (b) Cost Effectiveness of School Inputs. As indicated in earlier dis- cussions, the impact of various school inputs on student achievement in elementary education has been assessed in some recent studies. But as the results are not related to the costs of those inputs, little is known about the relative cost-effectiveness of alternative school inputs. The same issues arise in secondary education where wide variation in unit costs and achievement scores exists across schools. F. Overall Conclusions 2.87 In general, the analysis suggests the need for reducing social selectivity in the education system as a whole. The problem originates - 60 - chiefly in elementary education, but is perpetuated and possibly deepened at subsequent levels in the system. Public intervention should therefore be designed to increase participation and reduce dropout rates among people from disadvantaged backgrounds, t. ing into account the relative importance of eco- nomic and other factors. Beyond the issue of equity, public intervention should also focus on promoting greater efficiency within the system. The potential for cost savings appears to be substantial in secondary and higher education as indicated by the evidence on economies of scale. There is also a need to improve the incentives for better management in schools. At the lower levels of education, an option is the use of standardized testing inform the public about a school's performance, to identify low-achieving schools for closer supervision by the authorities, and to provide teachers with feedback information. In higher education, the incentives for greater efficiency could be provided through expanded financial aid programs combined with the strengthening of the accreditation system. - 61 - III. IMPROVING BASIC EDUCATION QUALITY A. Overview 3.1 Long-standing official concern for quality issues is evidenced by the succession of government-commissioned studies seekin2 ways to improve the country's school system, beginning with the Mon'-- jurvey of 1925, and culmi- nating with the 1969 Presidential Commisai- .o Survey Philippine Education (PCSPE). The PCSPE was a milestone by providing the impetus for the implementation of major educational reforms in the 1970s and 1980s. In basic education, two development programs are addressing the quality, efficiency and equity issues related to elementary and secondary schooling. 3.2 The Program for Decentralized Educational Development (PRODED) in elementary education began in 1981 to institute reforms aimed at raising quality, efficiency and access in educationally-deprived areas. A five-year Secondary Education Development Program (SEDP) is being prepared to complement PRODED, whose first graduates will enter secondary school in 1989. Both programs anticipate improvements in participation and cohort survival rates and in student achievement levels as a result of the institution of new curricula and the provision of teacher training, facilities, equipment and textbooks. 3.3 Despite the ongoing reforms, there remains a distinct public percep- tion of serious qualitative problems in elementary and secondary education. The analysis in this chapter confirms that there is a pressing need to further intensify efforts to improve basic schooling. Four approaches are used in discussiz.g the quality of teaching and learning in elementary and secondary schools. The outcomes approach focuses on the academic performance of stu- dents as a measure of school quality. The input approach judges the adequacy of the human and physical resources for classroom instruction, e.g., teachers and textbooks. The process approach investigates the organizational and man- agement aspects of school and classroom life. It focuses on how inputs are utilized, largely through the teacher's instructional methods and the princi- pal's school management. Finally, the environment approach examines conditions in the external environment which affect the internai functioning of the schools, including official government policies in education and the administrative and supervisory st- cture of the school system. 3.4 Since the inputs into schooling, the processes of utiliing and managing these resources, and the conditions of the educational environment largely determine school outcomes, it is these factors that must be addressed to improve educational quality. Thus, appropriate recommendationis follow each discussion of the specific inputs, processes and environmental conditions affecting the quality of basic education. B. Outcomes of Basic Education 3.5 Quality in education is typically judged in terms of the output of the educational process, i.e., how much students learn. One indicator of quality is academic achievement, usually measured by student performance on - 62 - standardized tests. Other indicators are student social and moral attitudes and behavior, though these are difficult to test. Student progression through grades and completion and graduation rates are also indicators of the quality of schooling outcomes. Student Outcomes 3.6 Two main findings have emerged from studies of student achievement in both elementary and secondary schools. First, mastery levels of subject matter by grade in all curricular areas are found to be low, generally between 30% and 50%, compared to a 75% learning norm set by DECS. Second, significant variations in achievement are evident along at least three dimensions--by region, type of community, and type of school. Achievement scores are almost always higher for students in Metro Manila compared to all other regions, in urban versus rural schools, and in private as opposed to public schools. These findings have been replicated consistently from study to study over the past decade or so, despite the uneven quality of many of them and the lack of strict comparability of one test with another. 3.7 At the elementary level, a major study of achievement is the 1976 Survey of the Outcomes of Elementary Education (SOUTELE) under the 1970 cur- riculum (DECS-EDPITAF, 1976). This survey found that, on average, the nation's sixth grade students achieved less than 50% mastery on all subjects except Pilipino, with the lowest scores in mathematics and English. Moreover, the sixth graders did not achieve levels significantly higher than the fifth grade sample. 3.8 The Household and School Matching Surveys (HSMS) Project is a special evaluation study of PRODED. HSMS administered achievement tests in English, Pilipino and mathematics in school year 1982/83 to a sample of school children in grades two through six (DECS-EDPITAF, 1986b). The results essen- tially supported the picture of low student achievement levels depicted by SCUTELE a decade earlier and indicated also that students in higher grades had more difficulty coping with the subject matter to be mastered than students in lower grades. Private school students scored from 1.25 to 1.6 times higher than their public school counterparts, while the scores of urban school pupils were 15% to 22% higher than those from rural areas. Regional averages varied from 30% to 50%; the highest scores were for Regions III, IV and the National Capital Region (NCR), the lowest for Regions II, VIII and IX. 3.9 A second sample of students identified by the HSMS study was admin- istered the Philippine Educational Placement Test, an instrument developed by the Department of Education to measure the grade level equivalency of early school leavers. The results showed that children age! 11 to 15 years who had completed grade six had skill levels appropriate to only 3.4 years of elemen- tary schooling (DECS-EDPITAF, 1986c). 3.10 Achievement tests in science were administered (in English) to 10- year olds under a 1983 study by the International Association for the Evalua- tion of Educational Achievement (IEA, 1988). The results showed the Philippines with an average score of 9.5 out of a possible 24, compared to 11.2 for the Hong Kong and Singapore students (Table A2.24). The highest average score was 15.4, obtained by both the Japanese and Korean samples. - 63 - 3.11 Preliminary Bureau of Elementary Education (BEE) findings under PRODED, from tests designed to evaluate all subjects under the New Elementary School Curriculum (NESC) between its introduction in 1983/84 and 1986/87, indicated that mastery levels were still around the 50% level and that students in higher grades still had more difficulty coping with the more advanced subject matter (DECS-BEE, 1988). As teachers' familiarity with the new curriculum grows, this situation may improve, but serious attention by the BEE should be paid to the possibility that curriculum mastery levels and coverage are overambitious (para. 3.77). 3.12 A replication of the SOUTELE study for the final cohort who studied under the old curriculum tentatively suggests a slight improvement in achieve- ment levels since the original survey was conducted (DECS-BEE, 1987). The study showed an increase for sixth graders in mean performance scores of nearly 7 percentage points, with the highest gains in Pilipino and mathema- tics, the lowest in English and science. These findings are subject to con- firmation nationally since Regions IV, X, XI, XII and NCR were omitted from the analysis (Annex Table A3.12). 3.13 What little evidence there is at the secondary level parallels that of the elementary school studies. National tests administered from 1982 to 1985 by the Bureau of Secondary Education (BSE) showed that students achieved less than 50% mastery in all subjects (Annex Table A3.13). Student perfor- mance was lowest in science, although mastery levels across core academic subjects appeared to be interdependent, i.e., pupils did equally well or badly on all subjects. In general, private school students did better in English and public school students in Pilipino. Analysis by school type revealed that private sectarian schools in urban areas did best, while rural barangay and vocational schools performed the worst. 3.14 The IEA study of science achievement also included a sample of 14-year-old students who, on average, correctly answered 11.5 items out of a total of 30 questions (Table A2.24). The Thailand, Hong Kong and Singapore samples all averaged about 16.5. The Japanese and Korean students again had the highest mean scores at 20.2 and 18.1, respectively. 3.15 Scores of high school seniors on the National College Entrance Exam- inations (NCEE) are often used to gauge the quality of secondary school out- comes. Strictly speaking, the NCEE is not a test of curriculum mastery but a scholastic aptitude test used to determine ability to benefit from college education. Much attention has been given to the fact that students from the private, especially sectarian, schools obtain the highest scores, whiLe students attending barangay and vocational high schools rarely succeed in reaching NCEE qualifying scores (Annex Table A3.16). Although the NCR has consistently outperformed all other regions over the years, NCEE mean perfor- mance scores from 1983 to 1987 exhibit a declining trend, compared to modest improvements in other regions (Annex Table A3.15). One possible explanation is that NCR is experiencing enrollment pressures due to continuing migration from the rural areas. 3.16 Internal Efficiency. Quality is often measured by the holding power of schools, i.e. cohort survival or graduation rates. The assumption is that - 64 - dropping out of school happens not only for reasons specific to individual children, but because what goes on in school does not motivate them to learn or to stay in school. Good quality schools are characterized by high rates of student retention and graduation and ineffective ones by high dropout rates. 3.17 Statistics from the Department of Education clearly show that cohort survival rates are low and need improvement, and that significant regional, urban-rural and public-private school variations exist. 3.18 More than one third of students who enter grade one never reach the sixth grade. Of those public school pupils who do enroll in grade six, 5% fail to complete the year or to graduate. Cohort survival rates at the ele- mentary level stabilized at 65% between 1975/76 and 1985/86, much improved from the 57% in 1970, but still some distance from the PRODED target of 86% by 1990 (Annex Table A3.17). Recent official progections of 74% by 1992 accord more with Bank mission projections of 70%. There has been little change in regional disparities since the start of PRODED, with Regions I, III IV and NCR far above the national average and Regions VIII, IX and XII much worse than average (Annex Table A3.18). 3.19 The rate of transition from elementary to secondary schools hovers around 85%, exhibiting little change over the last few years. The Department of Education reported that cohort survival rates in public secondary schools increased to 78% in school year 1984/85, up from 75% in 1983/84. With almost one-quarter of the students who enroll in high school failing to survive to the final year, it is clear that much more needs to be done to meet the basic educational needs of the population. SEDP proposes to improve the cohort survival rate in public secondary schools to 82% by 1992, a target comparable to mission projections. C. Inputs into Basic Education 3.20 Inputs into the educational process are examined because they are an indication of the quality of education actually delivered to students. Analy- tically, the outcomes of schooling are often explained in terms of the quality of the human and physical resources available in schools, though the precise ways in which inputs affects outcomes are mediated by the ways resources are managed and utilized. 3.21 Consistent with findings in industrialized countries, cumulative evidence in the Philippines shows that factors associated with the socioeco- nomic status of individual students play an important role in how well elemen- tary students do in school. A 1986 study HSMS suggest that home background explains about 30% of variation in student achievement (Arong, 1986). Other HSMS data suggests that parents of high educational and economic status main- tain attitudes that enable them to more effectively motivate, supervise and guide their children in school matters (Paqueo, 1985). Community factors, such as the availability of electricity for private study and the presence of mass media, are also found to reinforce the effects of household characteris- tics. Home background and the level of community development in turn deter- mine the type of schools in which children are enrolled. Better-off, mainly urban, families can send their children to private and higher quality public - 65 - schools, while lower-income, mainly rural, families have access to relatively poorly endowed barrio schools. SOUTELE, for example, found that -I5S of the pupils in barrio (village) schools, which do least well in terms of student achievement, came from households with a monthly income of less than 500 pesos, compared to 61% for urban public schools, and 25% for private schools which do best. The school system thus reflects the high degree of socioeconomic stratification in the society at large. 3.22 Granting the influence of out-of-school factors on achievement, the quality of schools and teachers remains critically important. Research shows that the impact of schooling on academic achievement is greater in nonindus- trialized countries and for disadvantaged communities where educational resources such as good quality mass media are not as widespread as they are in richer environments. In high school subjects such as mathematics and science, where family members are usually unable to coach children, the number of years spent in schooL contributes significantly to learning gains (Lockheed and Gorman, 1987). Preliminary results of the IEA science study, for example, attribute to home background only 10% of the variation in science achievement. Schools are also extremely important for language learning, which influences competency in other subjects; this is especially the case for pupils from communities with high rates of illiteracy or which do not use either Tagalog (Pilipino) or English. 3.23 The essential schooling inputs are teachers, textbooks and other instructional materials, equipment and facilities. Quality improvement rests heavily on realizing acceptable standards of these resources. Teachers and Teacher Training 3.24 For children whose homes and communities cannot provide the background and reinforcement needed for school achievement, teachers are the only sources of school knowledge and the impact of their own competencies on pupil learning is high. The Philippines does not have untrained teachers working in its schools. A college degree has been required of all teachers since the late 1950s, and the supply of teachers and of new graduates with qualifications in teaching has long outstripped teacher requirements. There are, however', serious problems with the quality of the teaching force. In general, teachers are perceived to be weak both in subject matter competency and pedagogical skills. 3.25 Some empirical evidence for the low subject matter mastery of teachers ia available from the HSMS Project (DECS-EDPITAF, 1986d). Elementary school teachers were given subject competency tests in English, Pilipino and mathematics, on which they averaged only 48%, 63% and 50%, respectively. The lowest scores were obtained by those teaching in rural, disadvantaged dis- tricts. Teachers in rural areas not considered disadvantaged by PRODED did as well on the math and Pilipino tests as teachers from urban disadvantaged dis- tricts. However, English skill levels were significantly tower for teachers in all rural schools than for their urban counterparts. 3.26 Another standard used to evaluate teacher quality is performance on the Professional Board Examination for Teachers (PBET). The PBET is a civil - 66 - service exam consisting of two parts--general and professional education. Passing the PBET is a requirement for civil service eligibility, which in turn is a requirement for a permanent appointment. While pass rates have varied significantly from year to year, the average rate between 1978 and 1985 was 30%. In and of itself, low pass rates on the PBET do not mean that the teach- ers actually in the system are of poor quality. The examinations are in fact supposed to screen out the less competent teachers. The results of the exams are also meant to provide a basis for ranking, but it is not clear that regional selection committees actually use PBET scores as a criterion when making appointments. 3.27 The existence of a surplus of teachers implies, at least in theory, that schools can be selective. Priority in hiring is supposed to be given to applicants who have a four-year teacher education degree and have passed PBET. A temporary teaching position is given to those who have a teaching degree but do not have civil service eligibility. Temporary appointees are supposed to be replaced as soon as a more qualified applicant is available, but the low turnover tate (1.5%, including deaths and resignations) suggests that they are usually reappointed. Furthermore, the Magna Carta for Public School 'eachers provides that temporary teachers who complete ten years of satisfactory service automatically acquire civil service eligibility. No data are readily available on the proportion of teachers who acquired their permanent appoint- ments in this manner, i.e., without ever having passed PBET; this figure would be another indicator of the overall quality of the public school teaching force. 3.28 The major factors contributing to the poor quality of teachers are believed to be: (a) the low quality of students entering teacher training; (b) the poor quality of faculty and facilities of teacher training institu- tions; (c) weaknesses in the preservice programs; and (d) insufficient and inappropriate inservice training (Dove, 1986). Teacher educatioin does not generally attract the most academically gifted students. DECS has tried to improve the qualifications of entering students by increasing the NCEE cutoff score for admission to teacher training from the 25th percentile rank in 1974 to the 60th percentile in 1988. However, there has been no concerted effort to improve the resources available to the training colleges or to raise their level of faculty qualifications. 3.29 Only 20% of the more than 300 teacter training colleges throughout the country are accredited, which means that the majority of institutions barely meet minimum standards for awarding degrees. The schools are often seriously overcrowded, lacking in facilities, and staffed by faculty with little graduate education. Although most teachers end up teaching in the pub- lic sector, the vast majority are trained in private schools. Teacher educa- tion is one field where state institutions attempt to maintain relatively high standards through selective admission and retention policies, but these schools produce less than 30% of the nation's elementary school teachers. 3.30 Preservice teacher training consists of a four-year degree course for both elementary and secondary school teachers after the ten-year basic education cycle. The Philippines differs from its Asian neighbors in that it require? the same length of formal schooling for both elementary and secondary - 67 - school teachers. The preservice training curriculum is prescribed by DECS, although private schools with higher-level accreditation have the authority to vary units and courses within the general curriculum framework provided by DECS. Over 80% of teacher education students are enrolled in the Bachelor of Science in Elementary Education (BSEEd) and the Bachelor of Science in Secon- dary Education (BSE) courses. 3.31 All preservice programs are developed by DECS in collaboration with panels of teacher educators. Changes in the programs are made primarily in response to the institution of new curricula, and there is no regular mecha- nism to adapt the courses in light of other education policies, or to cater to the needs of different types of students or schools. The programs for both elementary and secondary school teachers include more than two years of gen- eral education studies. The time devoted to subject content courses is equivalent to one year of study, and nine units of teaching methods are required. The BSE program allows for three units in methodology, and 30 units in the area of specialization for nonscience majors (45 units for science majors). 3.32 Inefficiencies in teacher utilization and deployment have implica- tions for the quality of instruction in classrooms (Dove, 1982). In public elementary schools, teachers in grades one to four teach all subjects to one class while grades five and six are taught by specialized subject teachers. Thus, the national teacher-pupil ratio stands at 1:32, but it is 1:38 for the first four grades and 1:22 for the fifth and sixth grades. While national and regional averages are low (ranging from 1:27 to 1:36), extreme interregional variations are known to exist. Despite the oversupply of teachers, vacancies and absences go unfilled. Teacher shortages contribute to repetition and dropout, through excessive class sizes and consequent weaknesses in instruc- tional quality. The number of teachers required for elementary schools could be reduced considerably if the pattern of one teacher per class was used throughout elementary school. In practice, however, there is no flexibility to redistribute teachers because the Magna Carta for Public School Teachers makes it difficult for teachers to be transferred without their consent. 3.33 There is also considerable variation in the deployment of secondary school teachers by school type. The teacher-pupil ratio varies substantially by type of secondary school, with a high of 1:46 in private nonsectarian schools to a low of 1:21 in city high schools. In addition, teachers in pri- vate schools teach an average of 5 hours a day, while public school teachers average 4 hours. The private schools rely on fees to pay the salaries of their teachers, so large classes are economically efficient although they sometimes encourage unsound teaching methods and cramming. Based on the per- formance of private school students on standardized tests like the NCEE, higher ratios do not appear to reduce curriculum coverage. Most international research in fact shows that schools could reasonably suffice with an average ratio of 1:40 without detriment to quality. 3.34 Teachers are not sufficiently well trained in specialized subjects such as mathematics and science, nor are they versatile enough to cope with the increased requirements, in terms of subject matter coverage, of the new curriculum. The large number of small high schools compounds this general - 68 - problem. In many small schools the choice must be between having an ineffi- cient number of specialized teachers with low teaching loads, or an efficient number of teachers who teach more than one subject regardless of their train- ing which undoubtedly affects the quality of instruction. Effective utiliza- tion of teachers by subject area becomes increasingly difficult as the size of the school decreases and is impossible when the scnool has only one stream at each year level. 3.35 Recommendations: Teacher Quality. The NCEE cutoff score for admis- sion to preservice teacher training programs should continue to be increased in order to raise the quality of entering students. 3.36 Cutoff scores on the PBET should be raised in an attempt to limit the permanent entry into the teaching force of teachers whose academic perfor- mance is low, assuming stricter implementation of the use of PBET scores for ranking applicants for teaching positions. Creater use of more flexible temporary appointments should be used to improve quality. 3.37 Inservice training will be a critical input for quality for the next three decades because of the low wastage and oversupply of existing teachers. This is discussed in detail later (paras. 3.86-3.94). 3.38 Recommendations: Preservice Training Program. The content and form of the program should be reviewed on a regular basis and adjusted as the abil- ity of entering students changes and as feedback from the field suggests the need for new approaches. Upgrading of the subject content mastery levels of teachers should be the primary objective. Admittedly, the ability of teachers to teach well rests as much on their skill in communicating knowledge as on knowledge of the subject itself. However, it is generally acknowledged that pedogogical skills are most effectively learned in conjunction with specific subject matter. 3.39 Recommendations: Teacher Training Institutions. The distribution of PBET scores by teacher training institution should be studied. If there is a pattern of consistently low scores in both examinations associated with institutions that are also found to be marginal in terms of their size and faculty qualifications, these institutions should be phased out as part of a program to improve the quality and efficiency of training. Teacher training would also benefit from the overall improvements in higher education recommended in Chapter IV of this report. 3.40 Recommendations: Utilization and Deployment. DECS should reconsider the policy of assigning teachers by subject specialization to the fifth and sixth grades of the elementary school program in order to address inefficiency in teacher utilization, and because the new curriculum requires subject integration and multidisciplinary teacher training. 3.41 The provision of the Magna Carta for Public School Teachers limiting the transfcr of teachers should be reviewed with the aim of identifying more flexible approaches while being sensitive to the legal and political dimen- sions of the document. The possibility of making greater use of temporary appointments which could address specific shortages without committing teach- ers permanently to a particular locale should be explored. - 69 - Textbooks 3.42 Textbooks are important physical inputs to classrooms for quality improvement, and government support for textbook development programs has been extensive. The Textbook Development Program of the late 1970s produced nearly 100 million texts. Under PRODED, an additional iiu million books are Largeted- for delivery to public elementary school pupils by 1990. The student-textbook ratio at tne elementary level has been reduced from 10:1 in 1979 to 2:1 at present, and studies show that this has led to significant gains in learning, especially for students from low-income households (Heyneman, Jamison and Montenegro, 1983). Under SEDP, textbooks are targeted to be available for 2 to 3 million public high school students by 1992 at a 1:1 ratio. 3.43 The beneficial impact of the textbook development programs is weak- ened by poor quality content and by inefficiencies in the delivery of the texts from local warehouses to the schools. The Instructional Materials Cor- poration (IMC) develops and prints the books. They are delivered by private contractors to DECS Regional or Divisional warehouses; delivery to the schools is a responsibility of the Regional Offices. It has been reported that books reach the schools up to four months after reception at the warehouses, and sometimes incorrect titles and quantities are delivered. 3.44 Recommendations. In order to ensure timely production of quality texts, longer lead times should be allowed for manuscript development, editor- ;al supervision and revision. Given the high initial development costs, text- books should not be printed until editors can assure their quality. Closer coordination is needed between the curriculum wings of the Bureaus of Elemen- tary and Secondary Education and the IMC editorial teams. The main issue now for the SEDP textbook component is how to develop quality manuscripts in time for the year by year introduction of the secondary curriculum between 1989 and 1992. 3.45 The distribution of textbooks to schools must be made more efficient in the following ways: (a) improve clarity in receipts, invoices and other documentation; regional, divisional, and district personnel, as well as the school principal should be equipped with precise information about what books should be delivered where and within what time frame; (b) clarify guidelines about which officials at which level are responsible for delivery and who are accountable for late or nondelivery; (c) provide transportation, or funds, to contract delivery privately, so that school principals and District education officials can reduce their reliance on local governments; (d) institute more systematic supervision and monitoring at every level; and (e) maintain the policy of providing elementary and high school texts through governmental agency for disadvantaged, rural and remote schools. To increase overall sup- ply and diversity of basic and supplementary texts in the school system as a whole, a study should be mounted to seek ways in which IMC can further collab- orate with private publishers and how the government can further encourage commercial booksellers to distribute books, including local language readers, to educationally deprived areas. - 70 - Other Instructional Materials 3.46 Even relatively well-endowed schools encounter shortages of supple- mentary instructional materials and teaching aids, such as workbooks, refer- ence books, remedial or enrichment texts, paper, pencils, etc., and maps and charts, all of which the new curricula demand. In rural elementary and barangay high schools many classrooms are bare. Yet these are the schools which need especially attractive classroom environments which can compensate for the deprivation of the home and community. The provision of expendables and teaching aids is neglected by national and local authorities. 3.47 The main causes of this deficiency are lack of funding and lack of public awareness of the importance for learning of instructional materials in classrooms, which therefore reduces pressure on the authorities to make ade- quate provision. Except for national schools which receive funds directly from the central government, locally-funded schools rely on Parent-Teacher Associations (PTA) and other local contributions, which only widens the gap between schools in more affluent areas and those in poor communities. Some fees are collected by the schools, but once submitted to the Government, they do not all flow back to the school. Furthermore, it can take several months for small purchase requests to be approved, even in the cities. 3.48 Recommendations. Supplementary instructional materials must accord with the teaching methods recommended in DECS curriculum guidelines. To rein- force the new curricula and to ensure that schools receive adequate supplies, DECS should directly issue to school principals guidelines on the minimum instructional materials appropriate to each grade level and subject, with sug- gested quantities per pupil. District, divisional and regional authorities could then evaluate the schools' statements of needs and allocate their avail- able resources equitably. This would not preclude local authorities from pro- viding locally relevant materials. To assist in the provision of readers in Pilipino, the local languages and English, language departments in higher edu- cation institutions should develop prototype low-cost quality materials, both curriculum-related and supplementary. DECS should mount a regular program to commission this effort, provide guidelines on content and format, and work with private publishers to contract bulk orders and supply local bookshops for the private sector; regional authorities should devise and budget for systems of delivery to schools. Schools which meet DECS criteria for educational deprivation should be served first. The technology and logistics of these efforts should he kept as simple as possible in the interests of promptly upgrading all schools to a minimum acceptable level of quality. 3.49 In 1980 developed countries' annual expenditure per student on instructional materials inclusive of textbooks was US$105 compared with US$4.80 for developing countries. At that time, the Philippines expended approximately USS3 per student on textbooks but other instructional material expenditures (public or private) were not available and by all accounts has been negligible from public sources. Therefore, a minimum of 10% of regional recurrent budgets should be earmarked for instructional materials and teaching aids, exclusive of textbooks for a three-year period to remedy critical defi- ciencies. With the planned nationalization of financing, the allocation for instructional materials should be disaggregated from operations and mainte- - 71 - nance (O&M) budgets, and clearly distinguished from administrative supplies and stationery for rout.ine office and reporting needs. (The current estimated 3Z of the Divisional O&M budgets allocated for expendables includes office supplies.) Principals should be provided with an annual petty cash fund to purchase instructional materials available locally and should be trained in priority requirements for the new curriculum to be implemented satisfactorily. Furniture and Equipment 3.50 Shortages follow similar patterns with regard to the more costly items of furniture and equipment. While good education can be provided with minimal facilities, given quality teaching, upgrading can improve the attract- iveness of schooling to parents and students, and simple equipment for science experimentation and other practical subjects is essential to deal with the new curriculum adequately. In addition, there are problems of intensive utiliza- tion of facilities in urban schools which operate on two or three shifts. Also, older students, accommodated in high schools, are hampered by seating and desks which are too small. PRODED and SEDP are attempting to remedy these deficiencies by equipping schools with desks, science kits and workshop equipment. 3.51 DECS has rules that in effect require teachers to pay the yroperty custodian (a designated teacher, the principal or District Supervisor) for loss or damage to school equipment and furniture. This predisposes teachers to place the items under lock and key rather than risk loss and breakage in the course of normal use. DECS has issued instructions that teachers are not accountable for normal wear and tear, but these instructions need to be commu- nicated more directly. 3.52 Recommendations. DECS needs to clarify the regulations regarding payment for damage to classroom furniture and equipment. The procedures for reporting deficiencies and for accounting and auditing need to be simplified. 3.53 DECS should take steps to determine whether or not the most deprived schools in fact receive the PRODED and SEDP furniture and equipment due them. School Buildings 3.54 PRODED has completed a construction program of about 8,000 class- rooms. According to DECS school location planning criteria, these were tar- geted for the most deprived schools. The developmental impact of the program, however, has been weakened by two problems. First, the formula for the allo- cation of funds, based on achievement, cohort survival and net participation rates, proved too complicated and regions applied their own criteria in deter- mining needs for school facilities. They often used the UNICEF concept of Deprived, Disadvantaged and Underserved schools (DDU) developed in the 1970s, but the designation no longer applies to all schools originally identified as such. It is not clear, for example, how many of the schools with less than six grades have been made complete. According to 1983/84 DECS data, 5,955 schools offered only the first four grades, and another 5,306 schools offered less than four grades; these constitute 36.8% of the total number of public elementary schools. Second, school location planning criteria were not always - 72 - followed due to site acquisition problems, the overlapping involvements of local governments and the Department of Public Works and Highways, and weak supervisory and monitoring capabilities at central and regional levels. 3.55 SEDP plans to construct over 30,000 classrooms, 10,000 science labo- ratories and 10,000 workshops. These are part of the minimum standard facili- ties package consisting of four classrooms, one workshop, one laboratory, one faculty room, one library and one toilet for every 325 pupils. DECS proposes to assist only those high schools with minimum enrollments of 325 pupils to improve efficiency, and increase the range and quality of academic offerings in a single school. This is a sound policy, but exceptions have to be made for small schools in sparsely populated and deprived areas. 3.56 SEDP also proposes to create a network of three national and seven regional fabrication centers which would mass produce low cost science equip- ment. Priority in receiving these supplies would go to 127 Leader Schools chosen to serve as local inservice training institutions and as resource centers for other schools in the area. 3.57 Recommendations. With the nationalization of secondary education, and based on lessons from the PRODED experience, regional authorities should assume full responsibility for the selection of schools to be upgraded in disadvantaged districts under SEDP. The Facilities Division of DECS does not have the supervisory power to ensure appropriate siting of schools. Responsi- bility for supervision should be with Division Superintendents, who should be accountable to the Regional Directors. 3.58 SEDP should assist small schools in sparsely populated and deprived areas even if they do not meet the minimum enrollment of 325 students. 3.59 SEDP Leader Schools should not be overburdened with multiple roles. Clustering schools for resource sharing needs careful conceptualization to work efficiently and requires skilled management. Giving priority to the Leader Schools in terms of resources should not work to the detriment of ordi- nary schools. D. School Processes 3.60 Input-output studies on the effects of schools have often produced ambiguous findings with regard to tae relationship between school resources and outcomes. In large part, this is due to the fact that the presence of the inputs does not mean they are effectively managed and utilized. Research on the impact of school resource management and teaching methods on student out- comes is still in its infancy. It does show, however, that student '.chieve- ment is affected by how well school principals and teachers encourage good study habits. Teaching Methods 3.61 Preliminary results of the IEA science study found that differences in achievement an a test of general science knowledge were not related to school size, teacher experience, teacher science education or the use of labo- - 73 - ratories, all factors conventionally associated with quality. The differences were, however, related to the regular use of small group instruction and test- ing of pupils. Pupils who were tested regularly scored 2.3 points higher than those who were not, while pupils in classes whose teachers used groups scored 1.8 points higher compared to pupils in classes which did not (Annex Table A3.27). The data show that neither of these practices are at all widespread: only 45 of 435 classes engaged in small group work, and just 124 of 431 classes were habitually tested. 3.62 Studies of effective schools suggest that learning gains increase when teachers manage classes in specific ways, i.e. when academic learning time (the amount of time pupils are actually concentrating on their lessons) is high; when homework is frequently assigned and checked; when there is regu- lar monitoring of pupil progress; and when the teacher uses a variety of teaching methods and provides opportunities for pupil participation. These practices must come hard for teachers who are inadequately trained, who oper- ate in a second or foreign language, lack teaching aids and are under pressure from crowded classrooms, excessive report-writing and multiple shifts. Obser- vational studies of teachers in Philippine classrooms report excessive atten- tion to pupil discipline and dependence on learning by rote. The new curricula do emphasize learning processes which call for pupil-centered methods such as class discussion, problem-solving, experimentation and project work, but teachers need to be guided accordingly. 3.63 Recommendations. Teachers should discourage rote memorization and encourage pupils to comprehend and apply what they learn. Inservice training, in particular Learning Action Cell training (para. 3.88) and teacher training materials should receive priority attention to assist teachers in adapting teaching methods to modern pedagogy and the new curriculum. School Leadership and Management 3.64 Many schools, especially incomplete elementary schools and barangay schools in rented or shared premises, do not have trained school principals. In recent years, educational research has begun to stress the vital role of the school principal in creating an environment that promotes high standards of teaching and learning. An effective school principal communicates clear academic and behavioral goals, maintains order and discipline, has high expec- tations of teachers and pupils, gives schoolwide recognition for achievement, and cultivates community support (Purkey and Smith, 1983; Fuller, 1985). Instructional leadership and day-to-day management is crucial to ensuring that teachers maintain high levels of morale and performance and give priority to teaching rather than other activities. Leadership is also critical to setting the tone and standards of the school and forging appropriately professional relationships with parents and the community. 3.65 Recommendations. DECS should ensure that all public schools, including incomplete elementary schools and all barangay secondary schools, have a trained school head. To attract high-quality school managers in educa- tionally deprived areas, DECS should significantly increase their responsibil- ity and hardship allowances and give accelerated promotion opportunities to potential principals and head teachers who give outstanding service in these schools. - 74 - E. External Environment 3.66 The elements in the external environment of the education system examined here which affect school quality are the structure of basic educa- tion, the curriculum, the administration and supervision of the school system, staff development, testing and evaluation, and official policies on selective admission, grade progression and the language of instruction. The Structure of Basic Education 3.67 Basic education consists of six years of elementary and four years of secondary schooling. In response to a growing public perception of declin- ing educational quality, policymakers are seeking to lengthen the basic educa- tion cycle, on the tenuous assumption that more inevitably means better schooling. Three proposals are being discussed: to add one or two years of high school; to institute a seventh grade at the elementary level; and to provide one or more years of pre-elementary education. None of these struc- tural changes are appropria-e when a large proportion of the population does not even complete the ten-year cycle and the average quality of the education currently being oEfered is still below an acceptable minimum. Changing the structure of basic education at this point in time is neither valid nor viable as a strategy for quality improvement. 3.68 The rationale given for extending the high school program is that the Philippines should lkeep pace with other countries in the region like Korea and Thailand, for example, which maintain a 6-3-3 structure. In fact, how- ever, basic education in these countries comprise only the first nine years-- six years of elementary and three years of lower secondary education. Access to upper secondary schooling is limited to those students who have demonstra- ted academic abilities suited for higher education. 3.69 Seven grades of elementary schooling are offered in some private schools and are now allowed for in the Education Act of 1982. Reasons given for adding a seventh grade are to undertake remedial education at the end of the elementaL; cycle and to provide enhanced opportunities for admission to high schools on selective entry tests. These rationales for a grade seven simply acknowledge the problems with the quality of education in the lower grades, as well as with the system of diagnostic testing and pupil progression. In addition, a seventh grade would undermine recent curriculum development efforts to provide appropriate sequencing between Grade six and the first year of high school. 3.70 Pre-elementary schooling is a limited, primarily private enterprise at present. Total enrollment in preschools was 165,000 in school year 1985/86, 64% of which was in private schools (Annex Table A3.2)- Half of the private and one-third of the public pre-elementary enrollment is in the National Capital Region (Annex Table A3.3). Although public preschool educa- tion is available, it is not free. It is now being proposed that public schools add one or two pre-elementary grades to the basic education cycle. According to the Department of Education, the end purpose of preschools is to improve pupil achievement by narrowing adjustment and learning gaps. But - 75 - recent PRODED research shows that, controlling for the child's socioeconomic status, preachooling has only nodest positive effects on achievement, with gains over pupils who did not attend preschool tapering off after grade three or four (Infante, 1982). A case might be made, on equity grounds, for early childhood education for children in disadvantaged communities (para. 3.112); otherwise, DECS should continue to channel resources into the elementary schools themselves. 3.71 Recommendations. The structure of basic education should not be changed before current reforms have been fully implemented and consolidated. Any structural change will absorb scarce resources from and delay quality improvement. The essential structure of the school system is sound and pro- vides the appropriate framework on which to develop quality basic education. The major goal over the next decade should be to get the 6-4 system function- ing efficiently and effectively. Curriculum 3.72 The elementary and secondary curricula are centrally developed in consultation with concerned sectors, and prescribed for all public and private schools. Detailed guidelines from DECS prescribe the scope, sequence, time allocations and credits for each of the subjects ir. the curriculum, as well as define the minimum learning competencies students are expected to possess at the end of their schooling. The guidelines allow some flexibility in incorporating local cultural content and in providing remedial instruction. The 1970 elementary and 1973 secondary curricula were revised under PRODED and SEDP, respectively, in order to simplify, update and indigenize the content of basic education (Annex Tables A3.25 and A3.26). Grade-wise phasing in of the New Elementary School Curriculum will be completed in March 1989; year-to-year implementation of the new curriculum at the secondary level will begin in June 1989. 3.73 The new curricula provide an appropriate framework to enhance school quality through specification of minimum learning competencies that stress comprehension rather than memorization, and the development of higher-level cognitive skills such as synthesis, analysis and application. However, given current teacher competencies and the level of material inputs, the curricular objectives apoi-mr ambitious. Furthermore, while NESC comprises only seven learning areas, with an appropriate balance between core and auxiliary sub- jects, some contain new material (e.g., science and health) or integrate pre- viously separate subjects (e.g., history/geography/civics), and will require adjustment by teachers. At the secondary level, the timetable may prove toO heavy, with nine subjects including values education and work experience. The increased number of courses reduces the time allocated to core subjects, espe- cially English. In science, physics, chemistry and biology, teachers who pre- viously specialized in the second to fourth years now have to teach elements of all three b-a,ches. Targeted competency levels in secondary science expe- rimentation ar. 'ikely to remain low until the planned equipment from the science fabrication centers and elsewhere is widely available, Resolution of these issues requires continuous evaluation, inservice training and gradual curricular modifications, as are found ne essary. - 76 - 3.74 A new subject at the secondary level, Work Experience, is currently being piloted, even though its rationale remains unclear. Initial feedback from curriculum trials is negative. Various objectives are put forward for it: occupational training, income generation through school and community projects, practical laboratory experience for home management and technology courses, prevocational education and the development of work ethics. None of these purposes, however, seems justified. Work experience as occupational training is not appropriate in basic general education. Income generation is a useful tradition in many schools, particularly the barangay high schools, but this activity should be extracurricular and should not infringe on time allocated to formal, general education. Laboratory practicums and projects should be an integral part of the home management and technology course, instead of being treated separately. The work ethic element should be incor- porated into other subjects including values education, social studies or science and technology. As a prevocational subject in itself, the precise rationale and objectives of work experience have not been satisfactorily clarified. Experience in OECD and lower-income countries indicates that pre- vocational subjects are extremely difficult to conceptualize, operationalize and assess. They are often deficient in intellectual content, while requiring major commitments of resources for materials and equipment. They cannot sub- stitute for formal occupational training which should remain a cocurricular activity provided by trained professionals. 3.75 Values Education is an important component of basic education for nation-building and citizenship (Ordonez, 1988). Pioneered by the Bureaus, Values Education is a separate subject in the new secondary education curriculum while it is integrated in all subject areas in the elementary program. Currently, further efforts are going into attempting to evaluate student achievement in this subject. The Department should actively inform the public and Congress that, as worldwide research shows, schools cannot alone change the social and moral attitudes and behavior of youth. In particular, the formal curriculum is a weak tool of values education compared with the informal curriculum of the school, including the example of adult role models such as teachers, and other social agencies such as the family. Schools _-e best at imparting information and cultivating cognitive skills. A Bureau of E'ementary Education study noted, however, that Values Education is not currently well learned, concepts of national unity and loyalty in civics and culture classes being poorly understood. This may be because teachers themselves have difficulty in dealing with the tensions between curriculum sophisticated requirements for developing critical thinking and problem- solving and strongly held cultural values such as obedience to authority and respect for elders (DECS-PRODED, 1984). 3.76 Recommendations. On the basis of the PRODED-NESC experience, the timetable for the introduction of the new curricula at the secondary level should be extended. In the effort to keep to the year-by-year, grade-wise introduction of the elementary curriculum, results from trv-out materials and experiments have not been thoroughly fed back into textbooks and training. Investments in these quality inputs are less effective than if curriculum development and implementation were gradual and incremental. - 77 - 3.77 Work Experience should not be included as a separate subject in basic education, and its time allotment of five hours a week should be reallo- cated among core subjects which alrerdy have appropriate practical and applied elements. 3.78 Implementation of Values Education depends now not on further cur- riculum refinement but the involvement of school heads and internalization of its messages and processes by teachers. Public school managers should be trained to develop an appropriate social and moral climate in their schools. Teachers should be trained in critical thinking without which values education comes close to indoctrination. Curriculum development should focus on teach- ing and teacher training materials, rather than on further efforts to measure the attitudinal and behavioral outcomes of Values Education which must, in any case, be dependent on efforts by society at large. Supervision and Administration 3.79 Schools and their teachers work within a bureaucratic and adminis- trative setting which influences everyday educational activities. Public elementary schools are subject to three layers of supervision: the Regional, Division and District Offices, which are headed by Regional Directors, Division Superintendents and District Supervisors, respectively, Public secondary schools report directly to the Division Superintendents. Although bureaucratic practices reach down into the classroom, through administrative instructional and forms to be completed, many schools rarely have substantive contact with supervisory personnel. Regional supervisors visit schools only when there are major problems. Subject supervisors from the Division Offices are usually office-bound due to the burden of paperwork and lack of transpor- tation. There is norma"v only one supervisor for each subject and one for private schools. Most also have supplementary responsibilities, e.g., special education or health and nutrition services. The District Supervisors have the most frequent and direct contact with teachers but they too are overloaded administratively and have oversight of many widely scattered elementary schools. 3.80 The broad-ranging duties and responsibilities of District Supervis- ors create ambiguity in the educational environment. The Supervisors' respon- sibilities fall into three types of functions: (a) making regulatory and administrative recommendations on school inspections and on such personnel matters as transfers, promotions and disciplinary action; (b) advising the Regional Director and Division Superintendent on policy, planning and budget- ing; and (c) providing professional advisory and support services to echools, including planning and executing inservice training, curriculum development, research and innovations. In the past, most of the Supervisors' time and effort went into the first group of control functions. Decentralization of planning to the regional level has expanded associated responsibilities, including increased monitoring and data-gathering. With the advent of PRODED and SEDP, the tasks involved in advisory and support services have also assumed more importance. The multiplicity of the Supervisors' functions make it difficult to competently and efficiently carry out all their responsibili- ties. In addition, a tension results from the conflict between the bureaucra- tic control dimension of the Supervisors' position and the need to provide a pro.essionally autonomous working environment for teachers. - 78 - 3.81 Recommendations. With the ongoing decentralization of DECS, the relationship between the Division and Regional Offices is ambiguous and needs clarification. 3.82 Simplification of the roles of District Supervisors is required to ensure that schools receive maximum developmental support and suffer minimum bureaucratic pressures. A general guideline might be for the policy, plan- ning, research and evaluation functions to be handled at the regional level with advice from senior division staff, Control and support functions should also be separated at the division and district levels. Personnel administra- tion and school inspections should be done by division supervisors, while the planning and oversight of school improvement programs and projects should be handled by division advisors. This would provide a more supportive framework for quality improvement, removing from specialists time-consuming, routine, administrative tasks and allowing them to concentrate on developmental work. 3.83 Currently, data on the numbers of positions filled for advisory, supervisory and training personnel are not readily accessible in DECS and the data should be strengthened. In the Divisions for both elementary and secon- dary schools, there should be a minimum of two subject-specialist advisors in each core subject. There should be at least one specialist for each of the following areas: coordination between elementary feeder schools and high schools, early childhood education, remedial education, curriculum develop- ment, tests and examinations, nutrition and health, and short-term training and professional development for school personnel. The Division should also continue to provide an elementary and a secondary education specialist for assistance to the private schools. The Division Supervisors and advisors should be involved in selecting schools for upgrading, and should coordinate with FAAP to develop criteria for assuring acceptable quality in all schools. 3.84 District-level support needs to be strengthened. A condition of new appointments and promotion should be willingness to travel. Advisors and trainers at this level should be in regular contact with their schools and be responsible for assisting each school principal or head teacher in developing, implementing and evaluating a biennial school improvement program. The pre- cise number of district advisors has to be determined according to local con- ditions, but elementary and secondary personnel should work in teams to coordinate developmental programs for school clusters and be responsible for no more schools than the team could regularly visit once in two months. 3.85 The DECS Manual of Regulations for Private Schools should be care- fully reviewed in two to three years to ensure that the regulatory environment remains as unencumbered as possible (see discussion in Chapter IV). Inservice Training and Professional Development 3.86 An extremely important external influence on school quality is the system for inservice training and professional development for educational personnel, including teachers, principals and subject supervisors. This sys- tem in various forms has long been a feature of the education system, and both PRODED and SEDP include inservice training components. However, inservice courses proliferate to such an extent that they cause serious disruptions to - 79 - classroom teaching, with classes frequently doubled up or without a teacher. This is one reason private school authorities decline participation in DECS- sponsored training programs. 3.87 The Educational Reorientation Program is the principal strategy used under PRODED to improve the delivery of basic education, by developing insti- tutional capabilities in DECS and the competencies of educational personnel at all levels. Its objectives and design are sound though its scope and coverage are ambitious. The program has been almost exclusively focused since 1982 on implementation of the new curriculum and value reorientation of all. personnel from DECS central and regional offices through to classroom teachers. Between 1982 and 1988, nearly 200,000 eLementary school teachers participated in the Teacher Formation Program, which included training in classroom instruction and management. 3.88 The training strategy follows the cascade or echo model, whereby trainers at the Regional levels train the Division level staff, who in turn train the District personnel, who then train the school teachers. Although the echo model has a drawback in that the message tends to get distorted as it flows down the system, it is nevertheless a familiar strategy which provides low cost, mass training over a short period. The main strength of the strat- egy, as it is implemented in the Philippines, is that the crash courses are followed up at the school level through Learning Action Cells. These are school, or sometimes cluster level, training sessions, managed by principals or head teachers on a monthly basis during lunch hours or after school. They are based on a problem-solving, team approach to instructional issues and cell leaders are provided with training materials developed by BEE. Given the large numbers of teachers and courses, there is a great risk that inservice training will become ritualistic aDd ineffective, unless sustained attention is paid to funding and content. 3.89 In 1987 staff development for secondary-level personnel in prepara- tion for the introduction of the new curriculum began with instructional lead- ership training for supervisors in five subject areas. A similar strategy for teacher training is being used as that at the elementary level, with Leader High Schools serving as training and resource centers, and with subject train- ing through colleges and univer.ities, as well as the structured involvement of preservice teacher training institutions. 3.90 Recommendations. Inservice training for curriculum implementation, diagnostic testing and remedial teaching should be continued as priorities in teacher training. In particular the needs of students at risk of dropping out because of low performance should be addressed. Training should first develop or reinforce in the teachers themselves the higher-level cognitive skills emphasized in the new curricula. They can then be trained in methods for teaching and testing these skills. 3.91 As a regular prelude to any training initiative, the authorities should work out teacher substitution plans in cooperation with local schocl heads and these should be approved before training programs are authorized. In order to involve private high school teachers in selected training programs or as resource personnel, substitute teachers should be provided by the public sector as needed. - 80 - 3.92 The school-level Learning Action Cells concept should be sustained and strer.gthened to become a regular feature of the delivery system. Funding should be made available to continually develop programs, materials and train principals. 3.93 Trainers at all levels should be drawn for a fixed termi from among excellent supervisors, principals and suitably qualified and experienced teachers, and specialists from preservice teacher training institutions. They should subsequently be available to schools as senior master teachers or to preservice institutions where their practical experience as professional trainers would have a useful multiplier effect. 3.94 To strengthen competence in curriculum subjects in elementary and seccndRry teaching, higher education institutions, in coordination with DECS, should be encouraged with seed money to form Basic Education Curriculum and Testing Units whicn would offer their services to the elementary and high schools for the development of training and testing materials, and to provide teacher scholarships to supplement those offered through DECS and school improvement consultancy services. Priority should be given to departments specializing in Pilipino, English, science and mathematics. This would help to keep school teachers abreast of the latest developments in their fields. The status of public schooling would be improved by involving local higher education institutions with elementary and rural high school teachers in curriculum research and developiiant. 3.95 Special attention shoula be given to the professional support of school principals, heads and senior curriculum specialists who are the criti- cal development agents at the school level. A regular program of professional training should be developed under the guidance of district advisors for every elementary and secondary school principal. The Philippine Elementary and Sec- ondary School Principals Associations, the Fund for Assistance to Private Education (FAPE) and other professional associations should be encouraged to participate in the development of such programs, if necessary with small public subsidies. Tests and Examinations 3.96 Tests and examinations may serve many functions including (a) national or subnational monitoring of school system quality through sampl- ing of student performance on standardized tests; (b) evaluation of curriculum innovations; (c) district or school level testing for selection or channeling into the different programs and schools; (d) diagnostic, teacher based testing of students for grade progression or repetition, to identify learning diffi- culties, gifted students and thereby to adjust teaching methods, guidance and counseling. Strictly speaking each of these functions of tests and examina- tions is best accomplished through different types of test. 3.97 Monitoring. Achievement testing external to schools is done at -he regional level to serve planners in monitoring regional performance. This system should be strengthened because it has tremendous, but as yet neglected potential as an instrument for school quality enhancement. - 81 - 3.98 The recent addition of a research 'mit to the National Educational Testing and Research Center (NETRC) should be further strengthened to provide national monitoring of school system performance on a regular basis and support to regional monitoring efforts. 3.99 Curriculum Evaluation. The Bureaus of Elementary and Secondary Education as well as divisional supervisory staff undertake national and sub- national curriculum evaluation. Testing by these agencies are complementary activities, not competitive. The Bureaus should exercise a leadership role in developing and coordinating subnational efforts by sharing with divisional personnel test construction programs, test item banks and the results of feed- back. 3.100 Selective Admission Policies for High School. When used for selec- tion purposes, t-sts and examinations enable schools, colleges and universi- ties to control cl.U.. quality, as well as the quantity of their student intake. Selection mechanisms for public high schools have become an issue because despite the new policy of free secondary education, which is intended to open access to the full ten-year basic education cycle, shortages of places in desirable schools allow rationing through entry tests. Currently, only private and a few public high schools screen their applicants. Educators in the country are rightly concerned that expanding the use of selective admis- sion policies will lead to greater inequalities in an already inequitable system. 3.101 One mechanism for allocating places in public high schools is an elaborate administrative setup whereby the regional authorities would have to establish residential or other criteria for placement. In order to achieve a mixed intake in terms of quality, busing of pupils may be necessary to compen- sate for the unequal socioeconomic status of neighborhood school catchment areas. But these administrative arrangements would be complex and costly. The alternative is to achieve the SEDP goal of establishing minimum standards of high school quality in terms of inputs and processes, narrowing the gap between the very best and the poorest schools. Selection in the public sector would be an efficient and educationally acceptable option only if all public high schools, especially those where there is now no competition for entry, are supplied with the resources and support necessary to offer an acceptable level of quality education. 3.102 Recommendations. It is inadvisable to legislate against selection by private schools since they depend mainly on tuition fees paid by parents who may see open admission policies as threatening the level oF quality they have come to expect. For the sake of efficiency and quality, the private sector should be allowed to continue to select pupils according to supply and demand. Selection in the public sector would be acceptable when all public high schools have established minimum standards of quality. 3.103 Teacher-based Testing. For individual student evaluation, classroom teachers construct their own tests. This activity has a most valuable contri- but;on to make for quality improvement. The IEA study of science achievement discussed earlier showed that regular classroom testing is related to increased learning. However, testing and evaluation skills are in short sup- - 82 - ply. PRODED and SEDP are attempting to upgrade teacher skills in this respect but trainers who have both subject specialization and testing expertise are scarce and test items and remedial materials are inadequate. 3.104 Recommendation. Master teachers should be trained in testing and then conduct Learning Action Cell training for teachers. 3.105 Grade Progression Policies. To eliminate repetition, and help reduce dropout rates, a Continuous Progression Scheme was instituted in 1971 whereby public elementary students were automatically promoted from grade to grade. The policy contributed to serious quality problems because many students who had failed to master the curriculum of the previous grade fell behind. This is still occurring extensively and exacerbates the serious problem of early dropout. The failure of the grade progression policy can be attributed largely to the fact that teachers were untrained in the diagnostic testing and remedial education procedures that were supposed to accompany the scheme. The policy has since been modified; grade progression is now decided primarily by teachers in cooperation with parents on the basis of school tests and records. Statistics for 1984/85 show a low overall repetition rate of 8% for public elementary schools. This is a sound policy and repetition should not be reinstated as a remedy for student failure to cope with the curriculum. How- ever, it must be accompanied by additional measures to improve teaching and learning. 3.106 Diagnostic testing, in ccnjunction with remedial programs for slow learners or those at risk for failure, is an important means for improving quality, reducing wastage and redressing inequities, and should be strength- ened. Some regions and divisions already have such programs in place, but they should be required for all. This is particularly important for grades one and two where both repetition and dropout are high and where the schools especially need to compensate for the negative effects of home background factors on disadvantaged students. 3.107 Recommendation. To help reduce early dropout teachers should be trained in diagnostic testing and remedial teaching, particularly for core subjects in grades 1-4. Trainers and master teachers should participate in materials and test development, possibly through workshops pioneered jointly by the Bureaus and NETRC. The Philippine Educational Placement Test, an instrument designed to place dropouts and the unschooled in the appropriate grade in elementary and secondary schools, is also an important program in this context. It should be continued, but operated in closer cooperation with the private sector, particularly in urban areas where the children of migrants suffer disruptions in their schooling. 3.108 There is no automatic promotion at the high school level. Students either repeat a grade or drop out. To be promoted, they must pass at the 75% level in all but one or two subjects, and they must pass the failed subjects in the following year. 3.109 Recommendations. Serious consideration should be given to a policy on grade progression at the secondary level with the aim of assisting all pupils to gain minimal skills in at least the core subjects to complete the - 83 - fourth year in high school. One possibility is to require students to pass only in English, Pilipino, mathematics and science in the first two years, with the proviso that, for full graduation, they pass in all other subjects at the appropriate grade level in the later two years. In other respects, pro- gression would be automatic. At the least, this would help ensure that students who dropped out after the second year would have some basic skills and credits for completing eight years of schooling. Such a scheme would need to be supplemented by frequent diagnostic testing and supplementary instruction for students at risk. Language of Instruction 3.110 An important curriculum-related environmental influence on schools is the policy of the language of instruction. There are always trade-offs in any chosen language policy and the debate in the Philippines has echoed that in other multilingual societies. A Bilingual Education Policy has been in effect since 1974, providir.g for instruction in English in science and math subjects, and in Pilipino for all other subjects. The policy seeks to gain the advan- tages of the scientific, commercial and cultural links of an international language, and the need to further develop the national language as an essen- tial instrument of national unity and integration. The policy, however, underrates the detrimental effect on school quality and instruction in view of the fact that 75% of the Philippine population do not speak either English or Pilipino as a first language. For the majority, school is the first place in which they encr iter either language. The education system cannot carry the whole responsi,,lity for promoting the goals of developing proficiency in the country's two official languages. Mass media and university-based research and development centers, in particular, can play a much larger role in creat- ing an environment to support official language policies. Within the schools, curriculum guidelines cannot control the actual languages used in the class- rooms. Students and teachers tend to use the language in which they are more competent or comfortable, translating and code-switching as necessary. 3.111 Recommendation. The major responsibility of the education system is to ensure that language becomes a facilitator of student learning, not a con- straint. DECS must take a serious look at how instruction in two second languages affects the quality of schooling. At the very least, there should be provision for some kind of formal transition from the home language to the languages of instruction in school (Dutcher, 1982). In addition, successful implementation of any language policy hinges on having teachers fully profi- cient in the languages in which they teach and on the availability of instruc- tional materials to support the language learning process. F. Additional Recommendations Equity through Quality Improvement 3.112 The National Government should urgently formulate a policy and the relevant regional agencies should draw up plans and programs and allocate capital and recurrent budgets to p ovide early childhood education and health care to deprived communities. Research conducted under PRODED shows that early childhood education programs can prepare children in unschooled - 84 - communities to cope with school life and study, thereby increasing the probability that they will not drop out of school. PRODED also demonstrated a significant relationship between malnutrition and poor academic achievement, and it is widely known that poor health has serious long-term effects on a child's ability to learn. With the reduction in support from external agencies, including UNICEF, a major initiative to coordinate efforts and pool experience, expertise and resources across government agencies and NCOs is needed at this time. A special interagency task force with representatives of DECS, the Department of Health etc. should be set up to review objectives, strategies and resources. Initiatives in the field, however, should not result in additional layers oi bureaucracy, to plan, coordinate and carry out programs. 3.113 Specially selected and trained supervisors should be assigned to supervise experimental projects designed to reach the marginal communities and the poorest areas via alternative delivery systems, e.g., multigrade teaching, flexible scheduling, educational technologies such as radio and tent school- ing. Many of these projects have failed to make a major impact beyond the pilot stage, not because they lack merit but because they are severely under- financed and understaffed. Conventional schooling is not an option because the children are often in remote, inaccessible and sparsely populated loca- tions, and because of the need to create an enriched school environment with greater holding power. Transportation and means of :-ommunication, such as low-cost citizen band radios, should be provided for these projects. Data Collection and Research 3.114 DECS should not only continue to strengthen its .zoLiaction of annual statistics at national, regional and subregional levels, but also undertake sample surveys and case studies for systematic policy-oriented analysis. The forthcoming follow-up survey to the HSMS baseline study is important, but insufficient for long-term policy control. The monitoring and evaluation efforts under the Project Preparation of Elementary Education Measures (PREEM) should continue. Even more important for future policy direction and public appreciation of progress under the reforms, the results and analysis of PREEM, HSMS and similar evaluations conducted in the regions should be disseminated to the academic community and the general public. 3.115 For overall monitoring of sector quality and for policy-making, DECS should require the private sector to provide a more comprehensive data base. - 85 - IV. RATIONALIZING HIGHER EDUCATION A. Introduction 4.1 This chapter analyzes the higher education system, its strengths, weaknesses, and areas where changes are recommended. A key feature of the system is its heavy reliance on privately managed, privately funded institu- tions, and particular attention is paid to this in terms of efficiency, equity and public policy. 4.2 A great strangth of the higher education system is the large quan- tity supplied at low cost to the public treasury. Almost all secondary school graduates enter some kind of po -secondary programs and about 35% of the age cohort is in college, approximately the same rate as in most European coun- tries and Japan. In contrast to many other developing countries, the partici- pation rate is as high for females as for males. In fact, females constitute over 50% of all college and university enrollments. 4.3 The system features great diversity in content, quality and price, appropriate to a country with a wide range in socioeconomic background of the population and the student body. But most programs are job-oriented, with heavy concentrations in business, engineering, teaching or nursing. Both non- degree courses of one or two years' duration and four-year bachelors' degree courses are available, with curricula offering transition from the former to the latter if students are able to pass the NCEE. Part-time as well as full- time programs are offered and the system provides easy reentry, second chances and second choices. 4.4 The weaknesses are related to its advantages. Quantity is often offered at the expense of quality: college faculty are poorly trained, only a minority having any graduate education. Libraries and laboratories are non- existent or ill-equipped in most institutions. The reliance on private fund- ing means that expensive products such as science education, graduate training and research are only minimally provided. It also means that potential stu- dents from low-income families cannot afford higher education and those who can only attend the lowest-cost, lowest-quality institutions. 4.5 Both the strengths and weaknesses are closely related to its key feature--the large private sector. About 80% of all college and university students attend private institutions which are run with virtually no subsidy from the Government. Moreover, both for-profit and nonprofit private schools are found, in contrast to some other countries where only the latter are per- mitted. A very limited supply of public places, combined with a high private rAte of return, led to an excess demand for higher education, making it a profitable industry for private investment during much of the period since independence in 1946. 4.6 The experience of many other countries has shown that private fund- ing can be generated to pay for teaching, especially of inexpensive subjects, but relatively little is available for expensive subjects and for research, whose benefits cannot be appropriated by individuals but instead accrue to - 86 - society at large. In addition, large numbers of people are willing to pay for quantity, i.e., for the educational credential, but relatively few are willing and -ble to pay for quality, i.e., for costly human capital (faculty with PhDs) ojr physical capital (laboratory equipment, computers, books). Private funding is also more forthcoming for vocation-oriented subjects, which are usually perceived to have a direct labor market payoff, rather than for liberal arts education, where this connection is less clear. 4.7 This chapter presents, first, the key differences between and within the public and private sectors in variables such as size, product mix, cost, quality, price, student background and future labor market experience. The policy implications of these characteristics are discussed. Secondly, it dis- cusses three issues and related recommendations ont (a) government policy toward private education; (b) efficiency within the public sector; and (c) the use of public funds in relation to the public and private sectors. B. Characteristics of the Public and Private Sectors 4.8 The public sector is subdivided into several categories: che Uni- versity of the Philippines (UP) established in 1908 to provide high quality higher education to a select few and, since expanded, to become a system with nine autonomous campuses; the more recently chartered public institutions established as a political response to the popular demand for mass higher edu- cation with a statutory base that gives them considerable autonomy; and the unchartered colleges and community colleges that are directly supervised by DECS. There are also two types of private institutions--nonprofit ard for- profit. Nonprofit schools are not permitted to distribute dividents or sell shares of ownerships. They are predominantly religious in origin but a substantial group of secular nonprofits exists. For-profits are permitted to disbribute dividents (but not all avail themselves of this opportunity and in many cases the profits are small). In the Philippines, the nonprofits are called non-stock corporations while the for-profits are called stock corporations (whose shares are somezimes traded on the stock exchange) or proprietary businesses, and this terminology will be adopted in the rest of this chapter. 4.9 The following will pursue the question as to what difference it makes when education is provided through private rather than public institu- tions and whether the two sectors differ systematically with respect to varia- bles such as product mix, cost, quality and socioeconomic distribution of their student body. A Priori Expectations Based on Other Countries 4.10 In countries with a large public higher education sector, such as the United States, a selective high-cost private sector often emerges to serve the relatively small group that is willing and able to pay for elite educa- tion. Reputation acts as an entry barrier which allows these institutions to charge high prices that cover their high costs and even earn a surplus, and donations (or government grants) give them further opportunities for discre- tionary behavior. But in many countries with a small public sector, a large nonselective private sector emerges to serve the large group that wishes to - 87 - purchase educational credentials. These private colleges and universities typically operate on the basis of fee-for-service with few donations or grants. Conipeting with each other in their appeal to a mass clientele, they offer products whose price will cover their costs and must keep their costs low in order to survive. 4.11 The large private sector driven by excess demand usually concentrates on teaching undergraduates rather than on graduate training or research. Undergraduate education is a relatively low-cost product with large private benefits for which individuals are willing to pay, white graduate education and basic research are more costly and their jenefits not readily captured by individuals or firms, hence less conducive to fee financing. For similar reasons, private universities usually emphasize fields such as management or social science which can be taught in large classes with low capital requirements, rather than laboratory sciences whose high costs cannot be recouped through tuition. The discipline of the market place also forces fee-financed private schools to realize all possible economies of scale and to operate at a cost-minimizing size. Finally, almost universally, private schools economize on teacher costs, e.g., by hiring teachers with lower credentials, often on a part-time basis, giving them more students to teach (in larger classes or with heavier teaching loads) and paying lower salaries than the public schools. Undergraduates vs. Graduate Education and Research 4.12 The data show that this pattern fully applies to the Philippines. Undergraduate education is the overwhelming task of institutions of higher tearning (IHLs) in the Philippines, encompassing 98% of total enrollments, 20% of them in nondegree courses and 78% aspiring for the BS or BA (Annex Table A4.5). In 1985 only 1% of these graduating from colleges and universities obtained graduate degrees, and less than 10% of these received PhDs--190 altogether. The numbers are particularly small in the scientific fields such as chemistry anf,physics, where only a handful of PhDs could be found in the entire country.- The emphasis on undergraduate education is true of both the public and private sectors, albeit slightly more so for the latter. 4.13 Programs ore also diverse within each sector. For example, UP has a large (21%) graduate component while the unchartered institutions have a heavy (40%) nondegree component. This is consistent with the origin and intended 1i In 1982 there were only 21 PhDs and 15 MS degree holders in physics in the Philippines. Only 14 PhDs were given in chemistry in the Philippines between 1916 and 19b0. See Science Education Development Plan (1985) and Data Bulletin on Higher Education (1984/85). For comparative figures on graduate enrollments overall, see Educational Standards in Japan (1975). For example, in Japan, where graduate education is less developed than in Europe or the US, 5% of college graduates go on to graduate school and there are 4 PhD degree grantees per year for every 100,000 people. In the US, 16 PhDs are granted per 100,000 people, while in the Philippines the ratio is 0.35 per 100,000. - 88 - consumers of these institutions. UP was established as a high-quality selec- tive university while the newer public colleges are nonselective, catering to a mass rather than an elite clientele. Within the private sector, non-stock schools have larger graduate enrollments than proprietary institutions because of the status attached and the income from donations to allow some flexibility to diverge from the pure profit-maximizing course. In most proprietary institutions, the fees they can charge do not cover the high costs of a graduate program. The limited evidence available also suggests that little research is done. A 1987 survey found that 9% of the total appropriations for chartered IHLs was designated for research and this was concentrated in a small number of institutions; in 70% of the chartered colleges, less than 5% of their budget was spent on research (DBM, 1988). Private colleges, which do not receive government funds, concentrate on undergraduate teaching as predicted. 4.14 Sincs private universities usually respond to demand, the absence of graduate programs presumably reflects the fact that for most potential consum- ers the private benefits do not cover the costs, so equilibrium enrollments are low. For example, the low salaries for college faculty do not make it worthwhile for them to acquire the MA or PhD; as will be discussed below, most have only the BS. Similarly, nonappropriability of benefits limits the amount of research. The issue is then whether these market signals accurately reflect social value. For example, if wages of faculty with graduate degrees understate the true value of their services or if there are external benefits from research that are socially desirable, decisions on graduate training and research that are based on private benefit-cost calculations limit their amounts below optimal levels, and government funding to increase these amounts might be warranted. Such government funding need not go only to public insti- tutions. This policy issue will be analyzed later. Vocation-Oriented Education 4.15 The emphasis on a product mix with private benefits is also indica- ted by the pattern of undergraduate enrollments by field of study (Annex Table A4.6). Over 90% of all enrollments are in vocation-oriented programs with a specific occupational goa'; most popular are business and engineering, which together attract over half the student body. Only 4% of all students major in the humanities, social science, natural science and mathematics--the core of the arts and sciences curriculum. 4.16 While this generalization holds for both the public and private sec- tors, it is particularly pronounced for the proprietary schools, where butsiness and engineering play the largest role. In contrast, the traditional arts and sciences play a larger role in the chartered public institutions, which can afford to offer fields even if they are undersubscribed and can pay for expensive laboratory equipment out of public funds. The high private proportion in engineering, a high-cost subject, is an anomaly not found in many other countries. However. many private schools have learned to teach - 89 - engineering cheaply, as a theoretical rather than a laboratory or hands-on subject, to respond to a high demand for the field (MECS, 1987b). 4.17 Filipino students apparently believe that their employers prefer more narrowly defined vocation-oriented education. Such training gives gradu- ates access to domestic professions and to the international labor market which seeks particular skills such as engineering and nursing. If they fail to get a job in their own field, they still have a BS as a more general cre- dential with which to seek a job in another field. In fact, at least a thirl/ of all graduates obtain work outside their fields (Arcelo and Sanyal, 1987)., This should not be regarded as undesirable but rather as evidence of a well- functioning labor market in . situation where the future skill mix demanded by employers cannot be accurately predicted years in advance. Workers shift fields to equilibrate supply with demand. But this situation does create an inconsistency between a flexible labor ma-:ket and a relatively inflexible curriculum. 4.18 DECS formulates a standard curriculum for different fields, which must be adhered to even by private institutions if they are to gain official recognition. Programs of study are narrowly defined and students are given little curriculum choice. As part of the deregulation now under way, the recognition process should be modified to encourage a greater number of gen- eral fields to allow greater institutional flexibility and elective options for students, and to teach courses that emphasize basic reasoning, communica- tions and quantitative skills, thereby permitting the academic market to become more adaptive to the labor market. Vertical Integration 4.19 Vertical integration is another characteristic of higher education in the Philippines (Annex Table A4.7). Two-thirds of all IHLs have affiliated elementary and/or secondary schools which share their buildings and facili- ties, and most others (mainly proprietary institutions) offer only nondegree posteecondary vocational courses. Only 15% of the institutions are degree- granting colleges and universities with no affiliated schools. 4.20 This vertical integration is typical of the private sector in many other countries. It is viewed as profitable by private IHLs because it allows them to "capture" and retain a group of consumers over a long period of time. In the case of the sectarian institutions, most have integrated all the way back to elementary school, reflecting their origin as religious organizations to gain adherents and shape beliefs. Vertical integration is less character- istic of the public sector in other countries. In the Philippines, however, many colleges and universities grew out of secondary schools which were then upgraded due often to political pressure from students who wanted to continue their education and teachers who wanted higher salaries. One of the important issues in the public sector, discussed later, is whether this pattern of ince- 2/ Also see ILO (1974). Probably over their entire lifetime an even higher proportion work outside their field at some point. - 90 - gration between secondary schools and colleges is efficient because it allows fuller use of buildings and minimizes student travel time, or inefficient because it does not permit higher education to become sufficiently differenti- ated in quality and achievement from the secondary education which spawned it. Institutional Size: Economies and Diseconomies of Scale 4.21 Cost-saving can be achieved by choosing an optimal scale of opera- tions for an IHL. One way to study the question of optimal size is to see which organizations survive; those that are too large or small for efficiency will have above-average costs and will be unable to compete in the market place. Ideal conditions exist in the Philippines for examining economies and diseconomies of scale, due to the presence of many proprietary colleges and universities; institutions of nonoptimal size are expected to be driven out of business in this competitive environment. 4.22 Using this approach it appears that colleges can operate efficiently enough to survive even at very small sizes. Even though enrollments grew much faster than the number of institutions during the last two decades, many small colleges remain: two-thirds of all IHLs, including 60% of all private IHLs, have fewer than 500 Bachelor's degree candidates (Annex Table A4.8). 4.23 Small colleges and universities can survive for several reasons. First, in many rural areas the market is not large enough to support larger institutions. Second, students predominantly enter particular ccurses, or fields, allowing institutions to concentrate on one or two popular subjects such as business or nursing. Since the curriculum is rigidly defined with few electives, the benefits from larger size are correspondingly reduced. In countries where general education plays a more important role, IHLs must offer a wide range of subjects, implying a large size for efficiency. Moreover, DECS has set a ceiling of 50 on class size in private and unchartered IHLs, thereby eliminating another potential economy of scale. Finally, bachelor's candidates typically share buildings and facilities with nondegree candidates and secondary school students, thereby reducing the problem of capital lumpi- ness. In other words, government regulations combined with institutional developments have partially diffused the economies of scale issue. If greater flexibility regarding curriculum and class size were introduced into the sys- tem and secondary schools separated from degree-granting colleges and univer- sities, average institutional size would need to be increased for efficiency. 4.24 To eliminate the constraint on size imposed by limited markets, the relationship is examined between tuition, size and school type for a sample of private IHLs in Manila, where half the private enrollments in the country are found (Annex Table A4.9). The Manila market is also large enough to allow institutions to grow to optimal size, whereas in other regions the local market is much smaller and widely dispersed. Thus, the fact that 90% of proprietary and 80% of the non-stock IHLs in Manila have enrollments exceeding 1,000 suggests that there may indeed be diseconomies of scale below this number. Public colleges and universities in Metro Manila are also larger than in uther regions, almost all having anrollments over 1,000 and most exceeding 5,000 (including nondegree candidates). - 91 - 4.25 In addition, a negative relationship is observed between tuition and size. IHLs with fewer than 5,000 students tend to be high tuition (i.e., above the median) while those with more than 5,000 are likely to be low tui- tion (i.e., below the median) and proprietary. The fact that institutions charging high and low tuition coexist suggests that a differentiated product is being offered: the sectarian and a feo, proprietary institutions are pro- ducing selective high quality education in small colleges and universities, for which people are willing to pay a high price, while most proprietary institutions are producing nonselective low-cost education in large universi- ties, and this is what the majority of students can afford. The very small institutions which are found outside Manila, in contrast, may not offer higher quality but may survive nevertheless in the absence of alternatives. These data taken together suggest that public IHLs whose BS enrollments are less than 1,000 should be carefully scrutinized to see whether they are indeed operating at acceptable cost and quality levels and, if not, whether merger and/or a redefinition of mission would be desirable. Faculty and Other Labor Costs 4.26 Faculty salaries are low, with most faculty members receiving less than the national poverty line. In the public sector, salaries range between P 2,000 and P 5,000 monthly, with special augmentations for UP. Although firm information is not available on private IHLs, each of which has its own salary scale, data from the Private Education Retirement Annuity Association together with mission discussions at several institutions indicate that monthly sala- ries rangq between P 1,400 and P 5,000 there, with most clustered below P 2,000.2' Most of this public-private salary differential appea-s to stem from the fact that faculty at public IHLs are able to exert more pressure through the political system than through the market system. 4.27 A small part of the public-private sector wage differential is accounted for by the differences in faculty qualifications in the two sectors (Annex Table A4.10). Most faculty (i.e., 71X of the total) have only a bache- lor's degree. Only 4% have a PhD and these are heavily conc itrated at UP and a few other chartered state institutions. Their number is lowest in proprie- tary IHLs and the non-stock IHLs are in-between. This observation corresponds to the fact that graduate enrollments in the Philippines are miniscule. 3/ Data and are from the Task Force Report on State Universities and Col- leges in the Philippines, updated to 1988 by adding 40%. - 92 - 4.28 In general, people will acquire costly PhDs if their training co4ps are subsidized or if a sufficient wage premium is paid to cover the costs.- In the highly privatized Philippine system, graduate students must largely cover the cost of their own training; private institutions are unwilling and unable to subsidize them nor does Government, outside of the public universi- ties. A high wage premium for graduate degrees is not offered either, as a combination of competition and regulation precludes private colleges from charging the high tuition fees needed to cover such a wage premium. Conse- quently, effective demand for graduate education, at a price which will cover its cost, is low, and faculty members do not have PhDs or even Master's degrees. Salaries are higher in the public sector and the proportion of faculty with graduate degrees is somewhat higher there, but still low by Western standards. It seems inevitable that this has a negative impact on quality. 4.29 Labor costs are also lowered by hiring part-time faculty. They are cheaper because they are typically paid less per course and are not entitled to vacations, pensions and other benefits. Part-timers may offer less commit- ment to the institution and to the student, but this loss is weighted less than the savings in cost by private IHLs. While part-time faculty are only 16% of the total in the public sector, they are 41% of the total in the pri- vate non-stock colleges and universities and almost 45% Aong proprietary institutions. 4.30 Similarly, the student-faculty ratio is much higher in proprietary institutions than in the public sector, as is the student-administrative staff ratio, with the non-stock institutions again in-between. Since size has been constrained by government regulations, heavy teaching loads (i.e., 20-30 hours per week in the private sector as compared to 15-20 in the public sector) are used to bring about their high student-faculty ratio. This, in turn, implies a very low, virtually nonexistent expectation of research and little time for graduate study. The large difference in administrative costs is especially striking and worthy of further investigation. One of the disadvantages of delivering services through public organizations may be the more complex administration to deal with the government bureaucracy, adding to transaction costs but not necessarily to quality of service. This may help account for the low student-administrator ratio in the public sector. 4/ In the United States, part of the cost of graduate training is covered by universities out of the profit they earn on their undergraduate programs, through the process of cross-subsidization (James, 1978; James and Neuberger, 1981). This is done particularly by prestigious universities whose reputat'lon serves as a barrier to entry and permits them to main- tain this profit, and whose endowments and donations further allow them to directly subsidize preferred products, such as graduate programs and research. - 93 - Expenditures per Student 4.31 Thus, low salaries, low credentials, frequent use of part-timers and high teaching loads yielding a high student-faculty ratio characterize the private sector, especially the proprietary institutions, and consequently most of higher education. Additional economies, albeit not quite so large, are achieved with respect to supplies and other current expenditures. As a result, labor cost per student is only one third as high in private as in pub- lic IHLs, while current cost per student is only 40% as high and can be covered out of the tuition fee which averaged P 1,418 per year in 1985 (Annex Table A4.11). 4.32 A number of problems arise in interpreting these data. One problem is that appropriations differ from actual expenditures in the public sector and it is not clear which concept was used by reporting institutions. While some expenditures were not included in these reports, some of the resources were used for research and extension services, particularly in the public sec- tor, and therefore stould not be counted as an instructional expense. The expenditure figures may also include resources that were used at the elemen- tary and secondary levels. This overstatement is perhaps greater in the public and sectarian non-stock sectors, where vertical integration is most pronounced. Clearly, further analysis is needed to arrive &t the "true" expenditure per tertiary student. But just as clearly, the true cost will be much higher in the public than the private sector. 4.33 A similar picture emerges with respect to capital outlays and capi- tal stock. Just as they invest little in the training of faculty and rewards for trained faculty, IHLs, particularly private ones, invest little in nhysi- cal capital (e.g., laboratory equipment, books and periodicals). In 1985 the average public institution had six books per student (half of them at UP) while the average proprietary institution had only three. Total private assets in the 1970s ranged between P 1,100 and P 2,700 per student in Manila and P 500-2,100 outside of Manila, wLth the ave§1ge investment twice as high in .he non-stock as in the proprietary schools.- Lower Quality versus Higher Efficiency 4.34 There is a question whether the lower costs per student in the private sector stem from lower quality or higher efficiency. If it reflects lower quality, this suggests that most people perceive the private benefit to stem from educational credentials rather than from educational quality. In doing so, however, they may be reading the labor market signals correctly; or they may prefer to invest in quality but are unable to pay for it; or they may be misinformed and undervalue quality. In the first case, private consumers 5/ See "The Financial Structure and Performance of Metro Manila Private Schools" and "The Financial Structure and Performance of Non-Metro Manila Private Schools," FAPE Review (1979); the Mendoza Report (DBM, 1988); and Ables, Valera and Ocampo (1987). At exchange rates prevailing in the 1970s, these figures imply a range of US$100-400 in assets per student. - 94 - and producers are acting optimally; in the second case a government-sponsored student loan scheme would improve the situation; and in the third case addi- tional regulations or subsidies would be needed to encourage or require schools to upgrade quality beyond the profit-maximizing point. 4.35 It is possible, too, that the lower costs of private schools stem from their greater efficiency and lower rents paid to teachers. A recent s,udy at the secondary level shows private schools to yield better achievement scores than public schools at lower cost (Jimenez and Paqueo, 1988). To ascertain whether quality or efficiency accounts for these cost differentials in higher education, analysis is needed on edu.ational outcomes, controlling for the varying student inputs to the two sectors. A recent study, focusing on labor market outcomes, shows that UP graduates who have the best incoming skills and receive the higbest-cost education, also have the greatest employ- ment success. Graduates of the other state colleges do less well than private sector graduates, although this difference is not statistically significant when other factors such as family background, occupation and industry are controlled (Arcelo and Sanyal, 1987). This can be viewed as a negative find- ing for the public sector, given the large cost differentials. It does not appear therefore that these higher costs produce a higher value added at most public institutions. 4.36 In suzr while we do not yet have the complete answers it seems that there is much r.om for quality improvement in the private sector and both quality and efficiency improvement in the public sector. Socioeconomic Background of Students 4.37 Higher educational enrollments are in general biased toward the upper class. The following will review how serious this bias is in the Philippines and whether it is affected differentially by the public and private sectors. 4.38 Although there are no comprehensive data on socioeconomic status (SES) of students, data do exist for a sample of public and private institu- tions in Manila in 1987 (Annex Table A4.12). Overall, both sectors draw from a population that is considerably above the national average. But there are large disparities among the institution-types, and there are even larger dis- parities within than across sectors. UP draws from the wealthiest and most educated families in the population, in which 58% of fathers have finished college and 77% are professionals or administrators, while only 18% of fathers of other state college students have finished college and 22% are profession- als or administrators. Within the private sector, the Catholic schools are almost as skewed toward the wealthy as UP, the secular non-stock institutions draw from a less advantaged subgroup and the Protestant and proprietary schools are in between these two extremes. These findings are consistent with data from a nationwide survey of college students carried out ten years ago, except that agricultural families are more heavily represented outside of Manila, especially in public schools, which therefore serve the poorest popu- lation (see Arcelo and Sanyal, 1987). - 95 - 4.39 Two factors play an important role for this considerable variability in income bias, with neither public nor private sectGr clearly more egalita- rian than the other. First, tuition fees constitute only half of the total private costs of higher education, and even less if foregone earnings are included. The other cost items are similar across public and private IRLs, thereby making total costs similar also (see Annex Table A4.13). Second, institutions vary in g7lectivity, which can introduce an even greater income bias than does price..- The UP system and the Catholic schools rank on top, in terms of NCEE score required for admission and hence in terms of family income. The proprietary and Protestant schools, having lower academic bar- riers and lower tuition than the Catholic schools, also have a smaller income bias. The other (nonselective) public institutions are cheaper, more accessi- ble to the poor, and seemingly more egalitarian. However, their graduates also receive the lowest future wages, casting doubt on the quality of their education. C. Public Policy Toward Private Education 4.40 Public policies to private education have two major parts: tax benefits that assist and regulation that controls. Both play a role in the Philippines with the latter more important.- Tax Benefits 4.41 Non-stock private schools receive several tax advantages. They are exempt from paying income tax on their tuition revenues and, currently, income from related services (canteen, bookstore, dormitories) and portfolio income are also tax-exampt. In addition, donations to non-stock schools are tax- deductible to both donor and donee. The current expenditures per student of non-stock institutions slightly exceed their tuitior, revenues (Annex Tables A4.11 and A4.13), and the difference is covered by other sources of tax ex3mpt income. Prcprietary schools also receive tax advantages, although not as large. For example, educational stock corporations pay a flat 10% income tax instead of the graduated rate up to 35% that applies to other companies. 4.42 Both proprietary and non-stock schools are exempt from applying the value-added tax (VAT) to their fees but must pay the VAT on goods that they purchase. The 1986 Constitution eliminated real estate taxes for all schools. It also decreed that stock companies should get the same tax privileges as non-stock institutions, providing they limit their distribution of profits. While this would not turn them into nonprofit organizations, it would turn them into limited profit organizations. This provision, however, requires enabling legislation which would define the conditions for tax exemption, and such legislation has not yet been passed. 6/ For an analysis of how academic and price barriers work themselves out in the Japanese and American contexts, see James and Benjamin (1987). 7/ For a more general discussion about public policies toward private educa- tion in other countries, see James (1987). - 96 - 4.43 Tax benefits are desirable if education is considered to provide external benefits at the margin, i.e , if the private cost-benefit calculation does not take account of all social benefits, so that a suboptimal amount is provided in the absence of government subsidy. But, this is hardly the case with respect to undergraduate education in the Philippines, which has one of the highest enrollment ratios in the world. Most of it is privately financed and the majority of students are in proprietary schools, which receive few tax advantages. Thus, it is difficult to argue that higher education requires tax exemption because of marginal externalities and suboptimal quantities of undergraduate education. Private institutions have been complaining about losses and threatening closure over the last decade, but this problem is better solved by removing government regulations, particularly price controls. as discussed in the next section, rather than granting additional tax concessions. 4.44 There is, however, a counterargument stemming from the vertical integration of the industry. Most private colleges and universities also have elementary and/or secondary schools attached. A stronger case can be made for the existence of externalities at these lower levels, since, if the existing tax privileges were withdrawn and some private schools consequently closed, the public sector would have to expand at much greater cost. But, if tax benefits are retained by elementary and secondary schools, and taken away From higher education, integrated colleges and universities could still avoid taxes by attributing their real estate to the exempt levels and much of their other (joint) costs to the higher levels, thereby avoiding tax liability. Further, this arrangement would give an advantage to integrated schools and encourage such mergers, purely to minimize tax payments. For these reasons, one could argue that the status quo should be retained, neither extending nor withdraw- ing tax privileges. 4.45 An alternative and probably preferable solution would be to increase subsidies directly targeted toward elementary and secondary schools, e.g., by a contracting out scheme or a simple per capita payment. This would draw a line between government policy toward basic and higher education, a line which makes sense in view of the Government's commitment to open access to the former but not the latter. It would also be consistept with more selective government assistance in higher education, targeted toward areas where the private market may be failing, such as the production of research, graduate programs, and access to low-income groups. Regulation 4.46 The attitude toward private education was relatively permissive until the late 1960s. Government inspection and recognition was obligatory but this was usually granted and schools could determine their own admissions and price, resulting in the huge expansion of private institutions and stu- dents. 4.47 The period of student unrest during 1969-72 brought about a drastic change in this policy and vastly increased regulations. These regulatiJns reflect the conflicting demands of different political groups for higher qual- ity, higher teacher salaries and lower price. The resolution of this conflict - 97 - was a series of rules which were not in the besE interest of students or teachers or society at large. 4.48 Quality. Many quality regulations date back to the 1940s and even earlier, although the number incre'sed in the late 1960s. The 1970 Manual of Regulations, still in effect in 1987, details rules covering ertry conditions, input and output mix, and teaching technology. For example, a program of study and a branch campus required government approval; at least 60% of the courses had to be taught by full-time faculty; the qualifications and respon- sibilities of principals, deans, registrars and various faculty ranks were spelled out; specifications for libraries were listed, including requirements for a Webster's Collegiate Dictionary, a Standard Atlas, a Thesaurus and a collection of short stories; textbooks could not be changed more than once every six years; a limit of 52 was placed on elementary school class size, a limit of 50 in secondary and tertiary education and a standard college class period of 60 minutes was established; and school had to start on the first Monday in July and within two weeks a list of all students was to be sub- mitted, in triplicate, to DECS. 4.49 These detailed rules countered one of the main advantages of the private sector: that it decentralizes decision-making to consumers and pro- ducers who can act quickly without bureaucratic red tape, accountable for their decisions and presumed to have the best information about efficient technology and preferred product characteristics. Here, the presumption seemed to be that they do not have best information and government interven- tion is needed. However, the content of the regulations suggests that Govern- ment is not always well informed and cannot be counted on to make the right decisions in all the cases. 4.50 Quantity. Fearing that enrollments were increasing faster than they could be absorbed by the labor market, since 1973 the Government hos required that all entrants to degree-granting programs, both at publi and private IHLs, must first take a national examination (the NCEE), in which the passing proportion is currently set at 50%. Again, this limitation reflects a belief that consumers cannot properly evaluate the benefits of education, that while they tend to underestimate the value of quality, they overestimate the value of quantity, the educational credential. Although this report has only limited analysis of the quantity issue, it should be recalled that the rate of return to a college degree still makes it a good investment and students seem able to predict their future wages with surprising accuracy (Arcelo and Sanyal, 1987). 4.51 The limitation on enrollments in degree programs helps account for the high enrollment in nondegree programs. Many students enter these courses, planning to take the NCEE again until, hopefully, they will pass--at which point the school transfers all their credits into a degree-granting program and they graduate. To the extent that this happens, the limitation imposed by the NCEE is more apparent than real. Indeed, it illustrates the point that, when a regulation is imposed against the preferences of both consumers and producers, they will work together and often find a way to evade it. - 98 - 4.52 Price. Faced with pressure by students, the government has imposed strong price controls since 1972. At first, fees were merely required to be "reasonable and just" and increases required prior consultation with student government. But soon, permission of the Department of Education was required and a ceiling on increases ranging between 5% and 15% per year was set, even in years when the overall rate of inflation exceeded this amount (1979, 1980, 1983, 1984). Such a ceiling discourages quality improvement, especially in periods when tuition increases can barely keep up with the price level. While on the one hand the Government was supposedly defending quality by mandating minimu& standards, on the other hand it was inhibiting quality by limiting the price increases which would finance it. 4.53 It may well be that, given their incomes, most people would be unable to pay the high cost of high quality. However, that proposition has not been tested since the free market in education has not been permitted to operate for the last 15 years. 4.54 Teacher Salaries. Another set of regulations stems from a politi- cally potent group, teachers. For example, when price controls were imposed to appease students, teachers complained that this would adversely affect their salaries. The political compromise took the form of a new requirement that 60% of any tuition increase go to teachers in the form of higher pay. Part of the remainder could be spent on facilities, with a 12% ceiling set on the return to investor's equity. Schools were additionally required to pay their staff cost-of-living increases that were periodically decreed by the Department of Labor. Thus, when the allowable price increase was limited and was largely allocated to teachers, the resources and incentives for capital investment were further dampened. The small capital stocks, their lack of libraries, laboratories, computers and other equipment (even among those that call themselves Schools of Engineering or Technology) are all quite predict- able in this context. 4.55 Enforcement Problem. Many rules on the books are not enforced. For example, a limit on teaching load of 18 hours per week could never be imple- mented because it would have required higher fees or lower teacher salaries. The teaching load remains 22-24 hours per week at most private schools and higher at some. Professors should have a Master's degree or PhD, but only 30-35% do so in both the public and private sectors and these are concentrated in a few high-quality schools. Remuneration for private school staff should be comparable to corresponding government positions, but this is rarely the case. Similarly, very few private colleges have the laboratories and libra- ries that are specified. Ironically, the limit on class size seems to be followed at most private schools, although some public schools exceed them. 4.56 Given the pressure for quantity at low cost, many countries fail to meet the standards that they have set for themselves on the books. This was the characteristic of Japan, for example, during the period of rapid educa- tional expansion (James and Benjamin, 1988). On the one hand, this may be efficient, a concession to consumer preference in the face of resource con- straints. On the other hand, the very fact that these requirements are on the books makes an investment in education a riskier enterprise and raises its costs. - 99 - Deregulation 4.57 During the past few years, a movement toward deregulation has occurred. Cycles of regulation and deregulation occur when the disadvantages of the status quo begin to predominate over its advantages: students were hurt when price controls also implied lower quality; limits on class size effectively limited faculty productivity and salaries and also led to heavy teaching loads, hence less time for graduate study, research and faculty development; detailed government scrutiny of private colleges and universities inhibited their ability to innovate and adapt to consumer preferences and labor market demands; the growth in private school places leveled off and closures were threatened. 4.58 Lifting of Price Controls. The Education Act of 1982 stated that "each private school shall determine its rate of tuition and other school fees or charges ... subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports." In fact, the Ministry did not promulgate these new rules until 1985, and when it did, price increases were still limited, albeit at higher levels than previously. More significantly, the 60% allocation to teachers could now include fringe benefits and cost-of-living allowances, as well as direct wages (whereas previously fringe benefits and allowances had been additional to the 60). This change in the rules was legally challenged by a group of teackers, which prevented its implementation until the Supreme Court decided against their claim in March 1988. 4.59 In 1988, for the first time in many years, the DECS issued an order giving all schools the right to set their own fees. At least 60% o4 tne pro- ceeds were still earmarked for teachers, but this could now include fringe benefits and mandated cost-of-living allowances as well as wages. Moreover, fees that are earmarked for the acquisition and maintenance of books and equipment and for other physical improvements were exempt from this require- ment. However, "no dividend shall be declared by any stock educational corpo- ration out,of the incremental proceeds resulting from the increase in tuition."S- 4.60 The new DECS order did not last long. Rumors of large price increases set off threats of demonstrations, and DECS quickly retracted, set- ting a 15% ceiling as a middle course. Continued price controls are likely to encourage school closures, discourage quality improvements, inhibit salary increases for teachers and lead eventually to pressures for government subsi- dies to private colleges and expansion of public college places. One way to avoid this undesirable outcome, especially the inhibiting effects on quality, is to exempt from the 15% limit special fees that are earmarked for faculty training, libraries, laboratories, and other capital improvement, or for repayment of loans for these purposes. 4.61 Controls Over Inputs and Outputs. In addition to deregulating price, the new Government has also rewritten the 1970 Manual, eliminating many 8/ For the implication, see Annex Notes, No. 2. - 100 - of the detailed rules. No rules are specifĽed on class size, the standard period, equipment, library books, space requirements, grading policies, quali- fications and functions of staff, etc. Private schools now have increased freedom to offer short nondegree courses, to suspend or exclude students, to generate and reallocate funds, etc. The Manual has been cut from 70 to 40 pages. These changes are steps in the right direction, but possibly not far enough. For example, greater control over their own curriculum would allow schools to better respond to consumer preferences and labor market signals. This will be discussed later. Self-Regulation and Accreditation 4.62 Finally, self-regulation through accreditation has begun to replace external regulation. The basic idea is that IHLs should be given an incentive to regulate themselves through their own trade associations in order to main- tain minimum quality standards without government interference. Accreditation can also provide an informational signal to consumers which will help them make more intelligent choices about colleges and universities. 4.63 As initially conceived in the early 1980s, colleges and universities could be accredited at four different levels, meeting increasingly stringent requirements and getting increased autonomy at each level. Level I schools are those which have had a preliminary survey visit and are working toward accreditation. They are given "limited administrative deregulation" which exempts them from the need to submit teachers' programs, enrollment lists and promotion reports. Level II schools are those with initial accredited status. Th y get full administrative and tuition deregulation, which means they cen set their own fees, graduate their own students without DECS approval and have only occasional visitations by DECS. Level III schools, which have been reac- credited a s6cond time, also get curricular deregulation--the right to operate courses without prior government approval. And finally, Level IV schools, which enjoy international prestige, are also eligible for subsidies. As of January 1988, 52 IHLs were accredited at Level II and 33 at Level III (FAAP, 1988). 4.64 However, many changes have recently occurred which make this system obsolete. The Education Act of 1982 as implemented by DECS in 1988 granted tuition deregulation to all schools (but later qualified that grant); on the other hand, virtually no subsidies have been available to any private schools. Therefore, Levels II and IV are largely irrelevant and Level I is really pre- accreditation with very little additional autonomy. Therefore, the system collapses to Level III, at which point the private institution will have sub- stantial autonomy regarding what courses to offer, how they are taught and who is eligible for its degrees, as well as what price to charge. The system should be further simplified to give full autonomy to institutions upon accre- ditation, s.bject to periodic reassessment (e.g., every five years). 4.65 One potential danger of the accreditation system is that it may result in log-rolling, lax standards and an atmosphere of "I'll scratch your back if you scratch mine." Poor-quality institutions may then be accredited and become autonomous, simply because they are part of this network where favors are traded. Countering this argument is the fact that high-quality - 101 - schools have an incentive to distinguish themselves from low-quality schools and therefore to exclude the tatter from the accrediting "club." 4.66 There are presently four different accrediting associations, cater- ing to Catholic, Protestant, secular private and public institutions. While these organizations attempt some coordination through the Federation of Accrediting Agencies of the Philippines (FAAP), it is quite possible that they will have different standards, so that accreditation will mean different things to each of them, thereby obfuscating rather than clarifying the quality issue. In the absence of subsidies, this lack of uniformity appears to be less of a problem than the government regulatory scheme that it is designed to replace. However, once accreditation becomes an explicit tool of public policy, (e.g., a criterion for eligibility for public subsidies), consister.cy seems important. In that case, an oversight committee would have to be formed, to periodically review the accrediting standards and procedures of the four associations. The technical panels established by the Board of Higher Education in various disciplines might be expanded to serve such a function. D. Efficiency Within the Public Sector 4.67 While the private sector dominates higher education, 20X of all enrollments are in the public sector and public institutions spend about half of all funds spent by IHLs (Annex Table A4.14). Different from private IHLs that operate in a competitive market, public institutions are heavily subsi- dized by the Government. Therefore, it is necessary to ask whether the public sector is organized in an efficient manner--producing the "right" outputs with the right factor mix and scale. Also, there is a need to ask the closely related question of whether public funds are spent in a way that is both effi- cient and equitable. 4.68 While private colleges and universities were developing in urban areas, many towns remained without access to higher education and many fami- lies objected to the fees charged by private institutions. In response, some public secondary schools began offering postsecondary courses. Initially, these tertiary ventures were under the direct supervision of the DECS. The teachers of these schools then pressed for chartered status which would give them higher rank and salary. Many such institutions have been converted to chartered colleges and universities with larger budgets, higher teacher sala- ries and greater autonomy than private IHLs. There are now 78 chartered state colleges and universities, many of which have quasi-autonomous branches. The total number of campuses is therefore close to 200. - 102 - 4.69 The new Government, aware of the budgetary explosion, has declared a moratorium on the. creation of new state colleges and several reportfi have emerged within the past year, critically evaluating this situation.- Variation in Inputs, Outputs and Student Background 4.70 All the studies show huge variation in the inputs and outputs of the state colleges and universities, in the attempt to satisfy the conflicting demands for quantity and quality with a very limited budget. UP is at the top of the state hierarchy, enrolling 10% of the students and receiving one-third of the total budget of the entire system, with an average operating expendi- ture per student of P 21,000 in 1986, while at the lower end, several schools spend less than one-tenth of this amount. The newer colleges tend to spend much less per student; they take in a student body with lower NCEE scores, coming from a poorer family background than UP or private IHLs, and their student output also seems destined to earn less in the future (MECS, 1987a; Arcelo and Sanyal, 1987). Whether this means they have a lower value added is not clear, however, because these data on future earnings do not control for differential selectivity. Close Ties with Secondary Schools 4.71 Many state colleges retain close ties to the secondary schools from which they sprang, often sharing buildings and facilities. Overall, 32% of the enrollments reported by state colleges and universities were at the elementary and secondary levels, and at many institutions, this proportion exceeds 50% (MECS, 1987a). While the sharing of facilities may enable fuller utilization, it may also downgrade the quality of higher education to secondary levels. Once the college reaches a critical minimum size, and preferably once it acquires degree-granting authority, its connection to the secondary school should be severed. Size 4.72 Many state colleges are small with fewer than 1,000 students. While a complete analysis of the economies of scale issue is not attempted in this paper, evidence based on the size of private institutions suggests that col- leges with fewer than 1,000 students may be suboptimal in size. Smaller col- leges should be carefully scrutinized, since they are probably paying a price in terms of higher costs or lower quality. Indeed, the high expenditures per student of many chartered and unchartered state colleges undoubtedly stem in 9/ For details, see: Realities, Reflections and Reform: A Study of State Universities and Colleges in the Philippines (Ables, Valera and Ocampo, 1987); Task Force Report on State Universities and Colleges in the Philippines (MECS, 1987); PASUC In-House Study of State Un2versities and Colleges (PASUC, 1987); Mendoza Report on Budgetary Process for SUCs (DBM, 1988). - 103 - part from their small size.!21 One reason for the small size of some state colleges is their location. In the past many state colleges were created in an ad hoc manner. As a result, about half of all public undergraduate enroll- ments are in the National Capital Region. Some regions have many state col- leges while others have few; some regions cannot fill their colleges with students while others have students clamoring to get in (DBM, 1988). Since the economy cannot afford to support a state college in every community, careful consideration must be given to the geographic distribution of those that do exist. 4.73 Such an examination might well conclude that some state colleges should be closed or moved to another community. Experience indicates, how- ever, that such closures are politically impossible to achieve. Subject Mix 4.74 To a large extent public institutions duplicate the offerings of the private sector, particularly when UP is treated as a special case (Annex Table A4.5). Both sectors are dominated by undergraduate teaching institutions focusing on vocation-oriented fields such as business, engineering and teacher training. While this provides evidence that public colleges are responding to the market, the absence of unique outputs makes it difficult to justify why the job cannot simply be left to the private sector. Resource Allocation Procedures 4.75 Closely related to this discussion is the procedures and criteria for allocating resources to public colleges and investments. The unchartered :nstitutions are directly supervised by and receive their budgets through LICS. In contrast, chartered IHLs were created by acts of Congress and get their budgets through separate Congressional appropriations. 4.76 Although the state colleges are almost totally supported out of public funds, there seems to be little system-wide coordination, accountabil- ity or consistency with regional development plans built into the budgeting system. The Secretary of Education is ex-officio chairman of the governing board of each chartered college which meets two or three times a year, but this is certainly an implausible way to oversee 78 widely dispersed institu- tions. While DECS has recently begun to play a role in the capital allocation process, which gives it some control over new programs and projects, it has no formal role in the decision-making process about current expenditures for the chartered colleges. 4.77 Expenditures per student, student-faculty ratios and student-staff ratios vary widely from institution to institution with no apparent rationale. In general, the formula seems to be: start with last year's budget and argue with those in power (President, Congress, Department of Budget) for as much additional resources as you can get. The increment is always positive and 10/ See Chapter II of this report for a detailed review. - 104 - positions are never eliminated or transferred, even for institutions with few students and high costs. 4.78 Resources are allocated in separate personnel, nonpersonnel and capital categories by program with transferability across categories and pro- grams very difficult even if needs change over the long budgetary preparation and utilization periods. While inputs are monitored by the Department of Budget and Management, their relationship to outputs is rarely examined. The process for securing approval of r.ew programs is long and cumbersome. Public funds cannot be saved from one year to the next, sometimes inducing wasteful spending from one year to the next. In other words, the budgetary process is not used to provide ex-ante incentives for producing desired outputs, to ensure accountability ex-post or to bring aboy /efficiency of production pro- cesses and equitable distribution of service.- 4.79 In such a situation, one could move in two divergent directions. As a first alternative, greater uniformity could be imposed on the system, together with more centralized control. For example, a more "rationalized" bureaucratic system was recommended by the Mendoza Report prepared for the Department of Budget and Management earlier this year. Most public university systems in the United States have moved in this direction over the past 20 years and the inherent problems in this approach are now bringing about a reconsideration and reversal in some states. As a second alternative, one could move toward greater differentiation, decentralization and autonomy for state colleges and universities, together with less reliance on public funds. Accountability would then be a by-product of their need to raise funds from fees or other sources. This would seem to be a preferable approach. 4.80 Chartered institutions are currently permitted to charge fees, in addition to their state subsidies. However, with the exception of UP, which has greater autonomy, their power to use these fees is severely limited; such funds must be deposited with the Department of Budget and Management, whose permission must be secured before they can be spent. This procedure is often very time-consuming, the response may be negative, and may also involve the sacrifice of state funds that the college would otherwise receive. Under these conditions, it is hardly surprising that fee-financing is very low at these colleges, adding to the burden on the public treasury and detracting from the quality provided in the long run. E. The Efficient and Equitable Use of Public Funds 4.81 This section examiras three alternatives for the efficient and equitable use of public funds: the first based on a pure economic model, the second a variation with political constraints, and the third an income- contingent loan scheme. 11/ For a more detailed analysis of the problems inherent in this system, see Felipe (1987). - 105 - Pure Economic Model 4.82 It is a well-known tenet of welfare economics that private funding and competition will achieve efficiency unless there are externalities or other types of market failure. Therefore, in a pure economic model, all IHLs would charge fees and compete for students and those that did not attract enough consumers to cover their costs would close down. Public and private schools are deregulated and compete on equal terms. Public funds are used primarily to remedy externalities, inequities or other types of market failure. 4.83 Externalities. There is a general agreement that externalities from teaching are concentrated at the elementary and secondary levels where they are needed for good citizenship and are of little importance at the undergrad- uate tertiary level where most benefits are received directly by the students. However, externalities may stem from research, whose benefits cannot be fully captured by any single zecipient and which therefore will be'underproduced by the private market. Most research projects have a combination of basic and applied components, rather than being purely one or the other. The more basic the components in the mix, the greater the external share of the benefits and the less likely such projects will be undertaken privately. For similar reasons, the training of researchers in graduate programs may be underproduced by the private sector. 4.84 A public goods rationale thus exists for subsidizing research and PhD programs in carefully selected fields. A similar rationale exists for funding programs at colleges directed toward the inservice training of ele- mentary and secondary school teachers. Such subsidies, however, need not be given exclusively to public universities. Instead, both public and private institutions could compete for grants, with the funds going to d small number of centers of excellence--institutions that offer the best faculty and the most complementary resources. That is, efficiency should override egalita- rianism in this instance. The argument here is that if resources are liv.ited, they must be concentrated in order to be effective; the productivity of margi- nal resources for research and graduate training will be greatest at universi- ties that are already devoting substantial resources to this task. Also, if matching funds are part of the allocation process, this creates an incentive for institutions to mobilize these funds from other sources such as private industry, and therefore to design programs that have a mix of basic and applied components which provide both medium and long term benefits to society. 4.85 Capital Market Imperfections. Faculty members may be unable to get loans to upgrade their qualifications because they have no physical capital to offer. In general, there is a wide spread between the borrowing and lending rates, which discourages investment (in education and also in other industries) below optimal amounts. Private college owners would have to pay over 20% interest on loans, although they could get less than 10% interest on their savings. The private discount rate may be higher than the social rate because of risk spreading and risk pooling. Ironically, the government regu- lations and price controls described above have probably increased the risk of lending to schools, therefore raised the interest rate, made school owners - 106 - unwilling to take personal responsibility for the loans, and discouraged quality improvement. All of these factors may help account for the lack of capital facitities in most IHLs. 4.86 The remedy for these capital market problems is a lending program that would make funds available to faculty and schools. A revolving fund could, for example, be established, which would in turn be relent to members of the educational community. The interest rate they pay would be high enough to cover the cost of setting up the revolving fund but low enough to encourage quality improvement. Both public and private IHLs might borrow to purchase computers and laboratory equipment and might repay the loans out of the higher fees they could subsequently charge. The graduate training of faculty members might be financed in a similar manner through loans to their schools or to the faculty members themselves. Obviously such a loan program would be tied into the deregulation which permits both public and ptivate schools to charge higher fees as their physical and human capital improve. Even if other fees have a ceiling, special fees levied to repay these loans would have to be exempt. Otherwise, Government would run the risk of default and would have to guarantee the loans out of public funds. 4.87 Students might also be permitted to borrow to finance these fees; however, the administrative and default costs of student borrowing would require careful calculation. The object would be to let the product and labor markets work in determining the optimal amount of quality improvements, remov- ing the capital market obstacles that may currently exist; there should be no net cost to Government in this scheme. 4.88 Informational Problems. Students may not have enough information to make intelligent choices about their future careers and educational programs. College administrators may not know enough about the educational production function, long-term academic planning, the budgetary process or alternative fund-raising possibilities to make intelligent choices about resource alloca- tion. It is appropriate for Government to step in to remove these informa- tional deficiencies, thereby enabling the market to work better. For example, Government might: (a) require that all IHLs provide information to help students evaluate their institutional performance, e.g., information on NCEE scores of incoming students, dropout and graduation rates, success rates on professional board exams of outgoing students and, if possible, labor market experience of alumni; (b) publish statistics about anticipated supply and demand for different occupational skills; however, the ability to predict accurately should not be overestimated and the importance of the foreign labor market should not be underestimated; (c) subsidize the accreditation process, which could be an important informational signal to students; and (d) provide intensive training programs in academic management to top administrators of public and private IHLs. - 107 - 4.89 Equity. Public spending on higher education is often defended on equity grounds: it provides access to low-income families who could not afford to pay high fees. This is desirable both because it enables a society to develop its talented individuals regardless of socioeconomic background and because it facilitates social mobility and therefore social stability. 4.90 However, the practice of subsidizing state colleges and universities often does not accomplish this equity goal. While it is true that some state colleges in rural areas cater to low-income families, it is also true that most college students come from relatively high-income families. The family background of students is not very different in the public and private sec- tors, in part because the academic barriers used by the better public institu- tions are just as income-biased as the price barriers used in the private sector, and in part because tuition is only a small portion of the total private cost of higher education. Moreover, the income bias increases at the best, and most heavily subsidized, institutions, with UP being at the top of the apex in terms of socioeconomic background and government expenditures per student (MECS, 1987a). While this nonegalitarian pattern is found in many countries, it is particularly inequitable in the Philippines where the dispar- ities in institutional spending are so great, access to the top-quality uni- versit117 are so limited, and income disparities are among the largest in the world _ 4.91 If the object is to redistribute educational opportunities to the disadvantaged, a better way to do so is through an enlarged scholarship pro- gram, which can be targeted directly to the poor, and used at any accredited public or private institutions. Because private tuition rates are less than expenditures per student at public colleges, this would actually save the Gov- ernment money. It would simultaneously provide an impetus to the accredita- tion process and accompanying quality improvements, and would give the poor much greater choice than they currently have. At the same time, public funds spent on subsidizing wealthy students at state colleges and universities should be cut back. 4.92 Such scholarships are currently given in negligible amounts. In 1985, P 60 million was appropriated for scholarships or study grants, most of them earmarked for members of minority ethnic and cultural communities or rebel returnees (MECS, 1986). These numbers should be vastly increased and scholarships made available to all students who meet specified socioeconomic and academic criteria. If the object of public funding is to achieve greater equity, this is an essential step. 4.93 In sum, in this "pure economic model" public colleges and universi- ties would revert to a fee-financed basis and the public funds currently spent to subsidize them (approximately P 2 billion annually) would be withdrawn and reallocated to the following programs: 12/ See James and Benjamin (1987) for a comparative analysis of the situation in Japan and the United States. - 108 - (a) a vastly enlarged program of scholarships to needy meritorious students to be used in any accredited public or private institution; (b) funding for research projects and grsfduate programs in selected fields and for inservice training of elementary and secondary school teachers, awarded on a competitive basis to a small number of public and private universities; and (c) the provision of information to students and college administrators, including small subsidies to the accreditation process and training in academic management. 4.94 Further, additional funds would be used to establish a revolving self-financing fund for loans to schools and faculty to foster quality improvement through the acquisition of physical and human capital. The interest and amortization payments on these loans should ultimately cover the cost of the revolving fund. The revolving loan fund would be run as a banking operation subject to policies set by DECS. 4.95 These programs (in para. 4.93) could be administered by an existing agency such as the National Scholarship and Student Loan Center, or by a new high-level quasi-autonomous agency operating under the Board of Higher Educa- tion and modeled after the National Science Foundation in the United States or the University Grants Commission in the United Kingdom. Economic Efficiency with Political Constraints: A Three-Tier Public System 4.96 The above scheme would however pose two major implementation prob- lems: (a) public institutions, particularly the higher-cost and lower-quality ones, will generate tremendous political pressure against having their subsi- dies taken away; and (b) determining the eligibility of a large number of stu- dents for a means-tested scholarship program is a difficult and expensive task, subject to cheating and corruption. Partly for this reason, such a program has not been implemented on a wide scale in any other country although the United States comes closest with its diverse computerized programs of public and private financial aid. 4.97 To take account of these implementation problems a variation on the pure economic model is proposed, which adds pragmatic political constlaints. To allow some institutions to retain some subsidies and to reduce the neces- sary amount of means-testing, the existing state colleges and universities would be reorganized into a three-tier system of public higher education. The object would be to assign each tier a differentiated mission, with differen- tiated degrees of subsidies, such that the most heavily subsidized colleges would also have characteristics that would automatically attract the poorest students. 4.98 Tier One would consist of postsecondary institutions which do not offer a bachelorTs degree but offer one- or two-year terminal vocational pro- grams or general education courses for eventual transfer to a four-year col- lege. Many of the unchartered state colleges and the smaller chartered state - 109 - colleges, whose faculty have only bachelor's degrees, would be candidates for Tier One. They may be attached to (on the premises of) a secondary school and might be thought of as the two years of upper secondary education which are currently lacking in the Philippines. Alternatively, they might be conceived as the equivalent of the American community colleges, affiliated with and managed by a "flagship" university in the region. 4.99 As a quid pro quo for giving up the bachelor's degree, these insti- tutions would continue to be heavily subsi 'ed by the Government. Their sub- sidies would be based on the number of stuaents times the expenditures per student needed when they are fully utili;-ing their facilities, so that schools would have to attract full capacity enrollments in order to survive. The expectation is that they would mainly attract low-income students, who are more likely to choose vocational courses or schools that are near their homes. However, because of the built-in transfer possibilities, this would not be a dead-end system for poor students. Scholarships would not be needed at these colleges, because they would be heavily subsidized by the Governrnent, thereby eliminating the means-testing implied by the pure economic model. 4.100 Tier Two would consist of four-year colleges and universities which give the BA, the BS and possibly the MA, and engage in some applied research. They would receive a much smaller subsidy per student, would mainly rely on fee- financing and would be more autonomous than existing state colleges, to enable them to compete in the marketplace. Criteria for eligibility for Tier Two would include size (sufficient to allow a variety of courses and a minimum core of faculty essential for intellectual interaction), qualifications of faculty (the majority should have master's degrees), library and laboratory facilities. Most state colleges with more than 1,000 students and with a sub- stantial number of faculty with graduate degrees would fall into this cate- gory. Scholarships could be used at these institutions which would enable them to recover their costs out of fees. 4.101 Tier Three would comprise a very small number of universities which also carry out applied and basic research and PhD production and are eligible for special grants, awarded on a competitive basis, for these purposes. Under- graduate education would not be subsidized at all at these institutions, which would charge fees to recover their teaching costs. The expectation is that, being the most prestigious IHLs, these would also have the highest admission standards and would attract the wealthiest student body, as UP does at present. However, these students would not be subsidized. At the same time, the presence of a vastly enlarged scholarship program would give bright but poor students increased financial access to these top-quality universities. 4.102 Besides directing subsidies to institutions with the poorest stu- dents, such a three-tier system would have several advantages. By encouraging colleges with small enrollments and limited facilities to concentrate their efforts on limited (one- and two-year) programs, it will make their mission more commensurate with their resources and would enable them to benefit from economies of scale in pursuing this limited mission. It would provide an informational signal to students about the differential facilities at various institutions. And it would lead to the development of short vocational- - 110 - technical programs which would, hopefully, prepare secondary school graduates for the job market in an economical way. 4.103 In sum, the above program should increase efficiency and equity in higher education and would involve gains and losses for all: (a) the Tier One IHLs lose their degree-granting authority but keep their public subsidies, albeit with incentives to operate at optimal size; (b) the Tier Two IHLs lose much of their subsidies for teaching under- graduates but gain greater autonomy, including control over fees which will be partially financed by scholarships for needier students; (c) the Tier Three IHLs lose all their undergraduate subsidies but gain increased funding for research and graduate programs; (d) in addition, all colleges and universities would gain access to loan funds for upgrading their physical capital (laboratories, libraries, equipment) and human capital (through faculty development); (e) while this realignment might include the phase-out of certain pro- grams, special government funding might be made available in the short run to facilitate and absorb personnel in other programs and institutions; (f) students lose their access to low-price public universities but retain access to low-price two-year institutions from which they may transfer. Moreover, poor students gain greater choice in an expanded scholarship program and middle-class students gain better- quality education as colleges and universities have the incentive and resources to upgrade their facilities. Student resistance to fee increases could be muted by phasing them in gradually and by exempting all cohorts currently enrolled from such increases. Only future cohorts would have to pay higher prices; (g) faculty lose the security of government financing but gain from the opportunity to raise their qualifications, supported by loans, and from the possibility of salary increases tied to qualifications and funded by higher fees; (h) administrators gain from greater autonomy, from programs in academic management and from enhanced opportunities to upgrade their institu- tions; (i) the private sector would gain from access to loan funds, from stu- dents financed under an enhanced public scholarship program and, in a few cases, from subsidies for research and graduate programs, in a deregulated environment. However, they would also face the cost of meeting accreditation standards, in order to qualify for some of these benefits; and - ll - (j) everyone would gain from the reduction in bureaucracy that currently regulates the public and private sectors. An Income-Contingent Fee-Financing-Loan Scheme 4.104 An interesting plan currently being installed in Australia might be adapted by the Philippines as part of the combined fee-financing-loan scheme. The Australians wanted to recover some of the costs of their higher education system (which is 100% public) but they also wanted to avoid the political trauma that comes with imposing fees. Under the plan they devised to accom- plish these twin goals, nominal tuition remains free. However, in their later years all students whose annual salary exceeds the national median must pay a fixed income tax surcharge for each year of university attendance. Students may also be given the option of buying out this tax obligacion at a discount, although this has not yet been definitely agreed upon. 4.105 In effect, the Australian system is equivalent to charging a fee which is financed by a loan to be repaid on an income-contingent basis. The disadvantage of this system is that it does not permit institutions to vary their fees or students to vary the amount of their loans. The advantage is that it establishes the principle of cost reimbursement on a progressive basis without the political stigma attached to fees or the bureaucratic hassle of means-testing. 4.106 While this system works best in a country which has a large public tertiary sector, it could also be adapted to the Philippine environment. All students at public uhiversities would be required to assume the income- contingent obligation unless they "buy out" this obligation. In the latter case, their "buy ouAt" money is their "pseudo fee" and goes directly to their IHL. In the former case, the revolving loan fund provides an equivalent sum to their IHL, and bubsequent repayments replenish the fund. Students at private universities could be given a similar option, which would decrease the immediate out-of-pocket costs for their college education; the private IHL would then receive an allocation from the fund (in lieu of fees) which would subsequently be repaid by the student. Higher-income students would automa- tically pay more and lower-income students automatically get scholarships, ex- post. 4.107 Such a system, of course, relies on a well-functioning tax system with few loopholes or evaders. Also, the problem of emigrating graduates would require special arrangements, such as the repayment in advance of the tax obligation, before permission is granted to work abroad. Despite these difficulties, this system may constitute a politically palatable way of making the beneficiaries pay for the public system, as well as increasing access to the private system, and therefore it should be seriously investigated. F. Conclusion 4.108 The basic challenge in Philippine higher education is: How can access and quality be improved without spending more public funds? How can the efficiency and etuity results of the current level of public spending be - 112 - increased? In the process of responding to these questions, this chapter has revealed that quantity (as measured by age-enrollment ratios) is high; quality (as measured by faculty with graduate degrees, laboratories and libraries) is low; graduate education is not sufficient to meet the internal needs of the system for qualified faculty members; little research is carried out; the cur- riculum is narrow and inflexible; many state colleges operate at suboptimal size and above optimal costs; the decision-making procedure used in allocating funds to them is arcane and arbitrary; the red tape involved in administering public and private institutions is excessive; many colleges in both sectors are attended disproportionately by students from high-income families. 4.109 The market system is often blamed for some of these problems, particu- larly those related to quality. The presumption is that ill-informed consum- ers undervalue quality. However, since government regulations have imposed severe obstacles to quality improvement, it is not known how the market would operate in their absence. The report has also raised corresponding problems concerning the management of public sector schools. 4.110 The overall recommendation is to remove these obstacles and replace them with incentives, using a combination of deregulation, self-regulation and competition; a restructuring of the public sector into a three-tier system, with two of the tiers dependent on fee-financing for their undergraduate pro- grams; subsidies targeted to a nondegree tier serving the lower socioeconomic groups, to a few carefully selected research and graduate programs, and to a vastly enlarged scholarship program for high-achieving poor students in the public and private sectors; and a loan scheme available to schools and faculty for the development of human and physical capital. The market would then determine the optimal mix of inputs, outputs and scale, subject to these clas- sical forms of government intervention. These recommendations do not require increased government expenditures in higher education. However, they do require a reallocation of government expenditures plus some start-up capital expenditures for a revolving loan fund, for carefully selected research and graduate programs and for training in academic management. - 113 - V. HARMONIZING NONFORMAL EDUCATION A. Introduction Nonformal Education: Definition and Scope 5.1 The concept of nonformal education (NFE) 1- covers a vast number of educational experiences, ranging from preschooling to alternative programs for literacy to equivalency programs for elementary, secondary and tertiary schooling managed by Ministries of Education and/or other agencies. Nonformal education likewise includes youth and adult programs providing structured learning opportunities in family life skills (health, nutrition, childcare, household management, family planning); vocational skills (training for self- employment, farming and animal husbandry, trade and technician skills); functional knowledge d skills for civic participation and positive attitude- ("values" education) - to strengthen cooperatives, self-help, and community development, and environmental education and the inculcation of a scientific, technological outlook. The programs may be free standing or linked educational activities, or they may be integrated into broader development 1/ The term "nonformal" may give the impression of representing a group of homogeneous educational efforts (either related clientele, syllabi, methods or institutions). This is misleading. Its use dates from the early 1970s when, for analytical purposes and out of a realization that traditional formal schooling appeared inadequate to meet the educational challenge in many Third World countries due to high cost, etc., other educational modes, conveniently termed nonformal (if organized) or infor- mal (if unorganized) were given greater consideration since they had les- sons to offer to help educational development. In the case of nonformal education, there was particular interest in low-cost programs which could replace conventional schooling. In this chapter, the definition first elaborated in the Coombs study of 1973 is used: "any organized education activity outside the established formal system--whether operating sepa- rately or as an important part of some broader activity--that is intended to serve identifiable learning clienteles and learning objectives." 2/ "Values education" is a strongly stressed government policy officially sanctioned in MECS Memorandum No. 99, s. 1986. Values development has been integrated into nonformal education programs/projects to promote desirable values such as love of country, faith in God, honesty, freedom, self-worth/self-esteem, social justice, conservation, responsible parenthood, loyalty, unity, hope, and creativity. The intent of the pro- gram is to contribute to the wholer;ome development of the NFE clientele as human beings, citizens and productive members of society. Activities being undertaken by the regions to enhance values development include sports and song festivals, dramas, drama contests, slogan contests, poster making contests, quiz bees and school fairs. Values development is also integrated into functional literacy and livelihood skills devel- opment programs. - 114 - projects (rural development, production activities, population management, etc.). 5.2 Sponsorship of nonformal education programs is also widely varied among diverse public and private sector groups (see Annex Tables A5.l and A5.2 for a list of agencies providing NFE). In the public sector, the various government departments all play important roles. The Department of Labor, for example, is involved in skills management and the Departments of Agriculture, Social Welfare, Health, and Transport in inservice training. The private sector, which includes both industrial/commercial enterprises and voluntary agencies, has taken an active role, with the former usually involved in skills training (though sometimes also in social and values education) and the latter in social/values education as well as school equivalency and vocational training. Overall, DECS has the major public sector role in NFE, but the private sector executes the largest total NFE program in terms of enrollments. 5.3 The clientele of NFE programs vary by socioeconomic levels, geo- graphic locations and school-leaving grades. The modes of delivery of NFF are similarly varied, ranging from conventional approaches like classroom lectures through the less conventional (self-instructional, radio, correspondence, television). The Approach Taken Here 5.4 To convey an idea of the needs, issues and problems of NFE in the Philippines as well as the size and effectiveness of existing programs, the discussion here focuses on a few `program areas" which address the most cri- tical learning needs, taking into account the priorities of the Government and DECS. The analysis emphasizes four aspects of NFE: (a) NFE livelihood skills development programs to improve job prospects for the many unemployed youth; (b) the NFE role in complementing the formal education system and its poten- tial to assist and compensate for weaknesses and omissions in that system; (c) the NFE contribution to alleviating the worst aspects of rural poverty; and (d) the possibilities for strengthening the spectrum of NFE programs and projects. 5.5 The examination of NFE here is necessarily selective and does not include a consideration of several important areas which deserve a series of special studies on their own. These include (a) special needs and programs such as preschool, population, health and agricultural education; (b) the special learning requirements of deprived groups, for instance, those living in urban ghettos or the handicapped; and (c) technical/vocational training strategies and programs. This latter area is, in fact, being undertaken as a special, separate study with an employment focus. 5.6 Finally, it cannot be overstressed that this NFE review is to an extent cursory and unavoidably founded on a very weak data base. Data on such fundamental essentials as course enrollments, student completions, budgets and expenditures are particularly weak, and more often nonexistent. This dearth of data is not a feature typical of Philippine NFE alone, but one shared with most other countries where the bulk of NFE is executed through private, locally-based agencies on an ad hoc basis. As might be expected, the more - 1)5 - "formal" the program, the firmer the data; typically, there is a greater availability of data from g.vernment departments than from nongovernmental organizstions (NGOs). B. Nonformal Skills Training and Unemployed Out-of-School Youth Characteristics of Out-of-School-Yuuth 5.7 Out-of-school youth (OSY), aged 15-24 years, numbered about 3.4 mil- lion in 1985, with the majority Iocated in the rural areas (63%). Females constitute about 58% of the total OSY group. About 43% of the OSY population is 17 to 24 years old and the majority are unmarried (84%). About 48% of OSYs completed some high school education, and about 7% some college education. Only 3.6X of the 3.4 million have had any vocational/technical training. 5.8 Some 1.8 million of the OSY popu'lation or 47% are unemployed. Those that are employed have low-paid jobs in agriculture, services, production and sales, although they may have attended courses in liberal arts and related subjects, which reflects their preference for white-collar jobs. Most OSY females are in the rural areas, demonstrating the need for basic livelihood skills, agri-trades and small-scale home economics/income-generating projects. 5.9 Future employment of OSY will depend on the overall level of eco- nomic development and the capacity for that development to absorb labor. While a full-scale discussion of employment and the labor market is beyond the scope of this chapter, some salient features of the labor market in the recent past and indications of future performance are useful to help assess the availability, efficiency and quality of ongoing NFE livelihood skills develop- ment programs. Unemployment and National Plan Targets 5.10 The 1987-92 National Development Plan reports that the deceleration in economic activities in the early 1980s, along with past high population growth and the consequent expansion of the labor force, have contributed to the present precarious employment situation. In 1985, unemployment had risen to 12.5% as new entrants to the labor force continued to compete for increas- ingly scarce employment opportunities. The impact of this high unemployment rate and other adversities experienced by the Philippines in recent years has most seriously affected the poorer segment of society, consisting mostly of marginal agricultural workers and the urban poor. Hence, the already impover- ished conditions of the poor were greatly worsened and the need to provide the basic necessities of life became even more urgent. 5.11 The existing labor market cannot absorb the unemployed pool of man- power or the new "youth" entrants to the labor force, which number about 750,000 annually. It is imperative therefore to provide alternative employ- ment strategies which rely more on income generating self-employment and small-scale enterprise. The National Development Plan proposes that "a demand-led, employment-oriented, rural-based strategy will lay the foundation for a more enduring growth path." The priority will thus be the generation of rural-based employment opportunities with the aim of alleviating poverty. - 116 - 5.12 In formal wage employment, given the proposed medium-term economic scenario and strategies which include small- to medium-scale enterprise devel- opment, infrastructure support systems and export promotion of indigenous products, the predominant manpower requirements are likely to be for semi- skilled and skilled workers in areas such as clothing manufacturing, food pro- cessing, construction, tranaport, power, electricity and water, with services as an emerging sector. In the agriculture sector, measures must be instituted to augment rural farm incornes by providing alternative employment and/or opportunities, especially between planting seasons and for the landless, who are largely underemployed. Nonformal Skills Training 5.13 NFE is a useful approach to help meet manpower needs and provide self-employment skills as part of the vocational and technical education system (VTE). However, nonformal skills training is currently limited to a relatively few institutions whose training efforts are fragmented and uncoor- dinated. The main institutions are: (a) National Manpower and Youth Council (NMYC) which, with 11 regional training centers and outreach programs, trains a total of about 90,000 OSYs annually. It aims to more than double this with an average training output of nearly 200,000 annually. In response to the need for more rural-based entrepreneurship development programs, NMYC is giving high priority to rural training and self-employment. (b) DECS Bureau of Nonformal Education (BNFE) has a major livelihood skills development program providing short-term training courses in vocational and technical skills at local schools and vocational cen- ters. Courses include dressmaking/tailoring, culinary arts, cosme- tology, handicrafts, typing, housekeeping, management, bookkeeping, bar service, waiter service, baking and embroidery. Technical courses include refrigeration, electronics, television servicing, practical electronics and driving. Graduates of these courses are typically either self-employed or employed locally or overseas. Out of the nearly 500,000 OSYs and adults who enrolled, about 350,000 completed various livelihood skills development courses offered by BNFE. Data show that Region VII, the National Capital Region and Region XI had the highest enrollment and graduates in various live- lihood skills development courses. The lowest enrollment and number of graduates was reported in Regions II and IV (Table 5.1). (c) Department of Social Welfare and Development provides practical skills, job placement and self-employment programs to some 280,000 OSYs and family heads annually. In the practical skills and devel- opment program alone, the 13-15 age group comprises 45% of the total training output. The rest of those trained are family heads (40%), the disabled (11%) and the distressed (4%). Placement is relatively high at 70%. (d) The Bureau of Rural Workers provides organizational skills to rural workers and assists in value formation objectives through its 4H Clubs. Table 5.1: NUMBER OF CLASSES, ENROLLMENT AND GRADUATES BY REGION (CY1987) Livelihood Skills Development Number Enrollment Graduates of OSY Adults Grand OSY Adults Grand Region classes M F T M F T total M F T M F T total I 1,035 3,697 7,961 11,658 2,994 5,442 8,436 20,094 2,228 5,804 8,030 1,772 3,139 4,911 12,943 II 335 987 1,447 2,434 1,301 3,006 4,307 6,741 957 1,255 2,210 1,262 2,493 3,755 5,967 III 474 2,429 3,762 6,191 788 2,418 3,206 9,397 1,864 2,121 3,980 552 1,595 2,147 6,132 IV 2,178 8,801 21,615 30,146 7,261 12,902 20,163 50,579 1,129 2,134 3,260 595 1,266 1,861 5,124 V 1,176 4,957 7,431 12,388 3,655 5,373 9,028 21,416 3,892 5,317 9,230 2,930 4,243 7,1'7 16,403 VI 1,682 3,662 11,544 15,206 4,500 16,399 20,899 36,105 2,214 6,547 8,760 2,802 6,696 9,498 18,259 VII 7,165 50,272 42,334 92,606 41,722 44,289 86,011 178,617 50,218 40,585 90,800 41,589 44,211 85,800 176,603 VIII 429 2,152 2,275 4,427 2,004 3,235 5,239 9,666 2,036 2,158 4,190 1,928 3,084 5,012 9,206 IX 847 4,025 6,899 10,924 2,166 5,785 7,901 18,825 3,773 6,310 10,080 1,901 5,237 7,138 17,221 X 1,224 3,275 8,431 11,706 7,965 13,884 21,849 33,555 1,531 4,154 5,680 1,501 5,679 7,180 12,865 XI 1,120 4,765 6,905 11,670 4,853 8,424 13,277 24,947 3,997 5,196 9,180 4,073 6,943 11,016 20,209 XII 1,102 2,141 5,975 8,166 3,093 13,444 16,537 24,653 1,251 2,986 4,230 1,749 7,146 8,895 13,132 NCR 2,376 6,090 20,385 26,475 2,709 20,538 23,247 49,722 3,269 12,632 15,900 1,527 5,843 7,370 23,271 Total 21,143 97,253 146,964 244,217 84,961 155,139 240,100 484,317 78,359 97,199 175,570 64,181 97,575 161,756 337,335 Note: Number of Classes 21,143 Number of Enrollment: 484,317 Number of Graduates : 377,335 - 118 - Issues 5.14 Current nonformal training is largely urban-based and aimed at wage- employment. The need is therefore for rural-based and outreach programs. In a recent multisectoral. committee meeting on manpower development, it was reported that "the Nonformal Education system is at present generally charac- terized by unprepared trainers, divergences in standards and curricula, out- dated training equipment, inappropriate training methodologies and unsuitable training environments." This list of deficiencies might be further expanded to include the lack of flexibility in programming, financial support and national policies. 5.15 The problem of inadequately prepared trainers stems from the diffi- culty in attracting experienced, well-trained trainers with the low pay and honoraria rates now offered. Too ofteh, the trainers now hired lack the nec- essary combination of practical and academic expertise, and consequently pro- grams tend to be overly theoretical and do not provide practical "hands-on" training. Aside from higher pay, the critical requirement for improving teaching quality is an innovative trainers' training system, emphasizing cur- riculum planning and design, instructional methods and training materials development and documentation. 5.16 Financing for nonformal skills' training remains inadequate. Gov- ernment appropriations for VTE during the current Plan period (1987-92) amount to a low 2.2% of the total education budget, and in 1987, the VTE system was programmed to reach only 10.6% of the total education clientele. In the area of financing, much might be learned from the experience of other countries with strong NFE vocational systems. Schemes to increase resources include: training levies, wage/payroll deductions from employees' salaries, counterpart contributions from employers who do not wholly finance their own training programs (something similar to the subsidy schemes now being implemented by NYMC), and trade/labor union contributions. These are worth examining. Incentives to generate increased private sector financing of OSY training might also be considered as should an expansion of the current Training Contract Scheme (TCS). Other, somewhat unconventional, modes of NFE financing include the use of proceeds from tharity sweepstakes and from stamp sales featuring the manpower development theme. The identification of measures to increase the overall amount of funding available for vocaticnal training should be complemented by more efficient use of the resources that are available. This would be best promoted through the initiation of periodic monitoring and evaluation of NFE programs. 5.17 Most training institutions also neglect the critical need for job placement. NMYC has, however, taken a lead in this area with its Placement Assistance Centers (PLACER) program. In 1987, some 12,000 graduates trained at the centers were placed in jobs at some 635 firms, indicating a placement rate of about 71%. This, of course, is small in comparison to overall needs and does not address the need of the self-employed for other post-training services and support like start-up capitalization programs which also need to be increased. In general, the problem of job placement should be approached in the larger context of identifying where employment opportunities exist and developing follow-up technical services such as marketing. - 119 - 5.18 As the latter point indicates, systematic measurement of NFE program efficiency is needed to ensure that the programs are responsive to future man- power requirements. This entails an assessment of NFE graduates' success in a very tight labor market and what options they have in wage employment. Evalu- ation and research work of this type is still rudimentary. NMYC, however, has begun an evaluation of the impact of training to give clear information to planners, implementors and management (training administrators) as to the efficiency of training in relation to the labor market experience of the OSY trained. Two of the salient findings generated by the NMYC evaluations are the increasing importance of off-center training and the improved performance of livelihood compared with formal industrial/wage sector training. Recommendations 5.19 Nonformal skills training for OSY is diverse and scattered, serving varied learning needs at different levels. While a number of government as well as private institutions are engaged in nonformal skills training, cover- age is small and data and record keeping inadequate. From fragmented sources and on the basis of experience/expert advice of local professionals, including NMYC staff, the following suggestions are made: (a) A separate study should be made of employment needs, training resources and their development. Terms of reference for the study should include a review of policies to improve the quality of train- ing, the relevance of outputs to national needs, levels of expendi- tures, and enhancement of research and planning capability. (b) Many public and private institutions address the diverse learning needs of unemployed OSYs, but their services must be harmonized and expanded if they are to cover the needs. Existing educational institutions, particularly the state colleges and universities, could be encouraged to offer nonformat courses based on needs of youth in their surrounding localities. (c) Quantitative and qualitative occupational information should be made available to improve decision-making by training institutions in determining the courses to be provided. A better understanding of occupational structures, particularly those levels and skills best learned on or off-the-job, to help develop relevant nonformal courses. (d) New sources of fundirg NFE programs should be explored, particularly training levies. (e) Value formation should be built into nonformal skills training. As a potential strategy to neutralize the "white collar job" bias among out-of-school youth, the Government might accord qualifications to blue collar workers comparable to those given to professional/tech- nical workers. (f) The competencies of NFE trainers/instructors should be developed. - 120 - (g) Placement services should be an integral part of nonformal skills training, in particular for those geared towards wage sector employ- ment, and follow-up services for those going into self-employment. C. School Equivalency Programs cnd Nonformal Education 5.20 School equivalency programs (primarily for elementary schoolin1) are designed for those unable to attend school, who dropped out of school before completion or who later in life wish to resume schooling after having to leave school prematurely. Equivalency programs can cater to learning needs that have not been met through the school, and can sometimes be less costly and more appropriate than learning at a school. Literacy Programs 5.21 In 1980, UNESCO statistics showed the Philippines as one of only five countries in the Asia-Pacific Region to have achieved a literacy rate of over 80%. Illiteracy does exist, however, and one estimate, admittedly only indicative due to a laL-k of data, is that about 4.6 million of the population over 10 years of age are illiterate. This group is being swollen each year by the nearly 5% of elementary school aged children who do not go to school and by the fairly high elementary school dropout rate. In 1985/86, for example, there were over half a million children who dropped out before grade 5 and who were likely to have been functionally illiterate or would have relapsed into illiteracy. The Bank mission's school enrollment projection (Annex Table A4.1), which assumes some improvement in elementary school efficiency and in retaining pupils, suggests about 7.5 million school dropouts by the year 2000 between grades 1 and 4 who would very likely be functionally illiterate and would add to the existing numbers. Clearly, part of the solution to the problem of illiteracy is improvement of elementary schooling efficiency. Nevertheless, between now and the year 2000, a NFE sizable tasl remains if illiteracy is to be eradicated. While many organizations provide classes for illiterates, both governmental, such as the Department of Social Welfare, and nongovernmental, such as church groups, the elementary government agency charged with the eradication of illiteracy is the BNFE. Supported by UNESCO's Asia-Pacific Program of Education for All (APPEAL), the BNFE has integrated functional literacy with the livelihood skills development courses it organizes for illiterate and semiliterate out-of-school youth and adults. 5.22 The quantitative impact of these efforts is small, however. Recent data on DECS literacy classes, enrollments and graduates by region show that in 1987 about 6,600 functional literacy classes were organized in the 13 regions, with an enrollment of about 160,000 (Table 5.2). Of the approxi- mately 95,000 graduates of these classes, some 41,000 were OSYs while about 54,000 were adults. The provision of literacy training varies among regions, and DECS data show that Region VII recorded the highest enrollment followed by Regions XII and X. The lowest enrollment and graduates were reported by the National Capital Region which has the lowest illiteracy rate in the country. In all cases, there were more adult clientele in literacy classes than OSY, and the number of female enrollments and graduates exceeded that of males. Table 5.2: NUMBER OF FUNCTIONAL LITERACY CLASSES, ENROLLMENT AND GRADUATES BY REGION (CY1987) Functional Literacy Number Enrollment Graduates of OSY Adults Grand OSY Adults Grand Region classes M F T M F T total M F T M F T total I 192 465 662 1,127 405 1,774 2,179 3,306 378 537 915 239 931 1,170 2,085 II 119 489 524 1,013 866 973 1,839 2,852 484 518 1,002 800 862 1,86Z 2,664 III 277 2,157 1,730 3,887 1,692 1,872 3,564 7,451 1,089 988 2,077 705 771 1,476 3,553 IV 1,041 8,442 9,051 17,493 1,404 6,367 7,771 25,264 1,894 2,063 3,957 46 172 218 4,175 V 461 4,501 5,747 10,248 2,161 2,634 4,795 15,043 2,161 2,634 4,795 1,117 1,687 2,804 7,599 VI 580 1,845 2,115 3,960 2,430 5,661 8,091 12,051 1,107 1,217 2,324 1,506 3,107 4,613 6,937 VII 1,640 3,390 5,538 8,928 7,273 10,811 18,084 27,012 3,205 5,265 8,470 6,568 10,291 16,859 25,329 VIII 139 506 797 1,303 511 843 1,354 2,657 476 765 1,241 492 819 1,311 2,552 IX 596 2,612 1,968 4,580 4,408 4,115 8,523 13,103 2,046 1,517 3,563 3,510 3,201 6,7i1 10,274 X 205 626 756 1,382 1,464 2,049 3,513 4,895 469 601 1,070 899 1,279 2,178 3,248 XI 394 2,122 2,296 4,418 2,312 2,819 5,131 9,549 1,316 1,394 2,710 1,940 2,364 4,304 7,014 XII 885 8,269 8,643 16,912 9,381 7,879 17,260 34,172 3,488 5,181 8,669 5,169 4,758 9,927 18,596 NCR 94 585 816 1,401 504 205 709 2,110 286 347 633 219 75 294 927 Total 6,623 36,009 40,643 76,652 34,811 48,002 82,813 159,465 18,399 23,027 41,426 23,210 30,317 53,527 94,953 Note: Number of Classes 6,623 Number of Enrollment: 159,465 Number of Graduates : 94,953 - 122 - 5.23 In 1986, BNFE launched a special illiteracy eradication project, the Magbasa Kita. The project was conceived to raise the literacy rate in Regions IX, X, XI and XII where the level. of literacy is well below the national aver- age. The long-range objectives of the project are: (a) to promote national unity to fight against ignorance, poverty and ill health, among others; (b) to improve the quality of life by eradicating illiteracy, and (c) to help augment family incomes through the integration of training in functional literacy and livelihood skills development. A series of orientation meetings for the project were held in the regions, involving key regional officials and field implementors. A total of around 700 teachers/coordinators have been trained in methods of teaching literacy and on how adults learn. After their training, the teachers are expected to organize and teach literacy classes in their respective areas. To date, 782 district schools in the four regions have organized about 740 literacy classes with a total of about 13,000 parti- cipants. Of those enrolled, about 5,000 were reported to have graduated. The new literates have received essential follow-up services through the adapta- tion and translation of reading materials into five Philippine languages (Ilocano, Tagalog, Hiligaynon, Cebuano and Maranao) and field testing. These materials have been favorably evaluated. Overall, this experience indicates that similar projects will be useful in other areas of the country. 5.24 A variety of NGOs, both national and local, also provide literacy programs, supported by both their local membership and BNFE local coordinators in the field. At present, there are no centralized or regionalized data on enrollments in such classes or on achievement. Even the larger NGOs such as the Catholic Church provide for production and distribution of materials and staff training on an ad hoc basis. What evidence there is suggests that efforts to eradicate illiteracy require a fresh review and assessment and that answers do not lie solely in the formal sector through improvements in elementary schools. Current NFE programs are small and underfunded, making little overall progress. More impact could be made through a coordinated effort between Government and NGOs where the machinery is in place to plan, cost and evaluate these programs. One of the objectives of such an effort would be to ascertain and ensure that present resources are being properly deployed and utilized and to identify those programs that have potential for expansion. More important, the use of a national coordinating mechanism would permit the formulation of a clear strategy for the overall literacy program, including the development of adequate support for program infrastructure, such as staff training and materials production, distribution and evaluation. Equivalency Courses 5.25 Literacy is only one aspect of NFE, which indeed includes the whole range of education levels, from basic reading skills to tertiary education. NFE alternatives to basic schooling and to residential universities and other tertiary institutions are common in most countries. Thailand, for example, has developed a comprehensive NFE learning system which permits self-pacing and self-instruction, apparently at reasonable unit costs and with positive results. While efforts made in the Philippines to develop a similar system have had less success, fresh efforts are under way by the BNFE and the Bureau of Secondary Education to develop self-instructional courses. These self- learning modules were prepared as part of a new progLam, Minimum Learning Com- - 123 - petencies for secondary education. The modules developed so far are for first-year and second-year school leavers. 5.26 A total of 90 modules were developed for first-year school leavers and 110 for the second year. The module writers were selected from secondary school department heads, regional/division supervisors and BNFE subject matter specialists. Subject areas include: English, Pilipino, mathematics, social studies, science, biology, home management and technology, values development, as well as health, music and physical education. Due to lack of funds, the printing of the first-year courses was deferred to this year. The first drafts of the second-year modules have been completed and are undergoing review by technical staff of the Bureau of Secondary Education and subject specialists. Having completed the equivalency courses successfully, students can reenter the formal school system by taking the Philippine Education Placement Test. Conclusions and Recommendations 5.27 Data on illiteracy are scanty and unreliable, but indications are that the number of illiterates in the Philippines is probably increasing. BNFE and the NGOs are making the best of their available resources, but the present programs fall far short of needs in terms of staff numbers, quality and materials. Worse yet, although the need for literacy is self-evident in the main urban areas, illiterates in other parts of the country may not even be motivated to overcome their disability. If the illiteracy problem is to be contained rather than exacerbated, a pooling of existing information by those working in the field and a follow-up survey of needs and opportunities are required to provide the groundwork for a national strategy toward illiteracy, which is essential. 5.28 NFE school equivalency programs are somewhat more developed than those geared to literacy, and nonformal schooling equivalency courses already have a constituency, with both a small student body and a committed body of DECS professionals. There is scope, however, for rapid further development of these courses, which have the potential to assist in providing the free secon- dary education which is promised under the Philippine Constitution. A feasi- bility study and a study of, for instance, the Thai or Kenyan school equiva- lency system should be carried out to provide useful lessons for and assist in decision-making on how to proceed further with this mode of education deliv- ery. Similarly, at the tertiary level--notwithstanding the Philippines geo- graphical constraints--there is scope for considering an "open" university type approach to some tertiary-level instruction. Certainly, however, deci- sions must be made and action initiated to clarify lines of responsibility. The lead in managing this development should probably be with those sensitive to out-of-school learning modes and attitudes rather than with formal school managers or subject specialists, though the latter should establish and moni- tor educational standards. Since it is easy foz equivalency courses to become second-best and thus ultimately to cause their own collapse, only insistence on and maintenance of the highest academic standards can ensure their success. - 124 - D. NFE, Poverty and Rural Life 5.29 The symbiotic relationship between education, human resources and economic development has been well documented. For best effect, the three must be closely linked. NFE, with its multiplicity of agencies, programs and approaches, provides a potential means of promoting large-scale human resource development in the Philippines and consequently supporting the process of economic and social development. Poverty Incidence 5.30 The proportion of Filipino families living in poverty grew from about 49% in 1971 to nearly 59% in 1985. This means that about 5.7 million families in 1985 lacked the basic necessities of life, valued at an average of P 2,282 a month for a family of six. In the Philippines, the distribution of income is still highly skewed. Although slight improvements may be noted in the distribution between 1971 and 1985, the poorest 20% of families still earned only 5.2% of total family income in 1985 while the richest 10% of families earned 37%. 5.31 The external shocks to the Philippine economy in the 1970s and early 1980s together with the subsequent economic adjustment policies and programs inflicted a heavy burden on families living in poverty. The structure of prices for agricultural products became increasingly unfavorable and adversely affected the profitability of farm households. The employment and wage situa- tion were also adverse to labor, and increases in the prices of basic commodi- ties, particularly food and fuel, resulted in a continuing deterioration in real incomes. The real income squeeze suffered by low-income families called for significant changes in their consumption patterns, with serious implica- tions on nutrition, health and education. Decreased levels in government expenditures for e-cial services, in the face of constrictions in government spending and the need to commit a larger portion of the national budget to service the national debt, further aggravated the situation. Government efforts to support social development were increasingly constrained by the early 1980s and sufficient help could not be provided to enable the poor to have adequate access to basic services, including education. NFE Programs for Rural Development 5.32 In view of widespread poverty in the rural areas, rural development is a government priority. A variety of both government and nongovernment NFE programs, most locally-based, are being implemented to support rural develop- ment and thereby address the problem of rural poverty. Some of the more significant of these programs are discussed below. 5.33 DELSILIFE (Development of a Learning System for the Improvement of Life) is a project being undertaken in five regions by the BNFE. With the aim of improving the quality of life of the rural poor, it offers locally-based, community education programs for health, nutrition, literacy and handicrafts. The dissemination and implementation of DELSILIFE are carried out through a learning package and cassette program, including booklets on: (a) Improving the Quality of Life of Rural People--an introduction to the - 125 - DELSILIFE educational intervention system; (b) a manual for the initiator; (c) a training manual on the DELSILIFE system; (d) a manual for the community council; and (e) a manual for group leaders. The materials were pilot-tested in Los Banos, Laguna, on a group which included community leaders, selected representatives of government and nongovernment agencies involved in community development work, NFE supervisors and coordinators, and school administrators. 5.34 The Palawan National Agricultural College (PNAC) Bayanihan School Program is an innovative educational program designed to provide better iearn- ing and training experiences as well as earning and saving experiences for youth, especially those who cannot continue further studies. The PNAC program has four major activities: group instruction, supervised farming, on-the-farm and home instruction, and laboratory cooperatives. The PNAC instructors sta- tioned in the Bayanihan centers also serve as extension workers and resource persons for the host community. PNAC provides funds for the salaries of live- in technicians and instructors, while the community, thr3ugh the barrio coun- cil, provides the school buildings, chairs, tables, chalkboards and other classroom equipment. The program content is adapted to the needs of the people in the particular community being reached, so that there close coordi- nation between the school and the community. The program employs the 2-2 sec- ondary education curriculum plan. The academic phase is graded and formal while the vocational part is nongraded. A student can finish the academic phase in one and one-half years provided the prescribed minimum requirements are met. 5.35 The Morong Folk School (Rizal Technical and Polytechnic Institute) provides rural development-related training aimed at providing out-of-school youth with both vocational skills useful in their homes and communities and opportunities for further educational and cultural development so that they may become better citizens. The folk school operates only during the months of April and May when in-school secondary students are on vacation. Its cur- riculum, which is based on the interests, needs and problems of the people and the community, has two components: vocational and academic. The academic component consists of compulsory and optional courses. The compulsory include: applied arithmetic, history and civics, character education, current events and recreational activities. The electives include English, general science, Pilipino and world history. The vocational areas focus on agricultural and practical arts for males and homemaking arts for female students. Admission is limited to out-of-school youth, preferably between the ages of 14 and 20, who have completed the elementary grades. 5.36 The Community Service Program of the University ol Nueva Caceres is an integral part of the Student Teaching Program of the College of Education and is one of many types of university NFE programs. It is designed to encourage volunteerism and to provide would-be teachers with training experi- ences in community life and assistance. The general objective of the program is to mobilize and involve students, the university and the people in commu- nity deveiopment through study-service schemes. The students select communi- ties whece .A1e, wil' l'k a.d an'^e tiri`e work plans during the off-campus training period. Later, they revisit the local communities and establish good relations with the barrio officials and lay leaders. After initial prepara- tions are finalized, a team of three students is assigned to a village. At - 126 - the end of each week, the students report to the university to review their activities. The village assignment is terminated with an evaluation by the municipal and village officials, youth and adult leaders and representatives of cooperating agencies. 5.37 The Cotabato Rural Uplift Movement (CORUM) in North Cotabato is a comprehensive program that integrates health, livelihood, culture, self- government training and education to address rural poverty, disease and ignor- ance through self-help and self-reliance. The movement has the following threefold objectives: (a) to provide nonformal training to adults and out-of- school youth through practical courses in agriculture, health and sanitation, literacy, cooperatives, citizenship and cultural appreciation; (b) to assist the local people address the interrelated problems of poverty, ignorance and disease; and (c) to teach the people to be self-reliant and conscious of their civic rights and duties. 5.38 An interesting and constructive NFE program is the People's School System of the International Institute of Rural Reconstruction (IIRR) in Silang, Cavite. This system features the participation and partnership of a private development agency (the IIRR), local government (municipal and village level) and village development committees known as rural reconstruction com- mittees. IIRR in cooperation with local government officials and technicians provides management and technical expertise and bears the costs of venue and learning materials, while the village development committee shoulders part of the transportation and food costs of the participants. A credit loan fund set aside by IIRR from its pool of production loan funds is available to graduates of the People's School System to finance projects, using low-interest, collateral-free loans. 5.39 Finally, most regions make use of radio broadcasting for nonformal education. The contents of the radio broadcasts focus on nutrition, health, agriculture, livelihood/income generating activities, drug education, land reform and farmer education. Broadcasts last from 30 minutes to one hour and are in Pilipino and the local languages. Recommendation 5.40 As indicated above, a variety of government departments and NCOs are engaged in rural poverty eradication and rural development. Educational institutions, in particular universities, also have outreach programs. How- ever, the effectiveness of these programs is constrained by a lack of: (a) local or national coordination; (b) instructional materials and traired personnel; and (c) supervision and external technical support due to difficul- ties of communication and transport in the islands and mountainous terrain. 5.41 A general shortage of funds and resources is typical of such proj- ects where the client population is "inarticulate." While a number of NGOs, particularly churches, can attract resources from international parent bodies and have the administrative and technical structure to deliver these resources to the rural poor, a national rural education fund is needed to attract and deliver resources and funds to support rural education/training activities. Such a fund (perhaps with a regional presence) would, under the administration - 127 - of a secretariat, make payments directly to groups of rural beneficiaries through village-sponsored self-help schemes that have an educational compo- nent. This kind of support has been used with some success in a Bank-assisted project in the Yemen Arab Republic which might be studied by those in the Philippines concerned with the improvement of the lot of the rural poor. E. Harmonizing Management and Resources Program and Policy Coordination 5.42 Various types of lFE programs sponsored by various organizations are operated at all administrr ive levels in the Philippines, from national to village. The coordination of these programs is, at best, haphazard. In the private sector, the larger NGOs--for instance the churches--shape their NFE programs to support their broader institutional goals (apostolic, in the case of churches) and develop NFE national policies and strategies in line with these goals. The initiative in this policy area is often left to local levels in a "bottom-up" approach which permits programming reflective of locally felt needs and community involvement. Groups of NGOs may, however, come together to harmonize their policies, objectives, programs and resources, forming, for instance, the National Council of Churches or less formal ad hoc consultative arrangements that provide a basis for dialogue, for the concerted pursuit of their individual affairs, even if in parallel, and for mutual help. 5.43 Policy-making for government-sponsored NFE is a responsibility of the individual departments running the programs. In theory, the Social Devel- opment Committee (SDC) under the direct control of the National Economic and Development Authority (NEDA) Board is responsible for coordinating social development programs carried out in the various sectors. The SDC is composed of the Director-General of the NEDA Secretariat, the Executive Secretary, and the Department Secretaries of DECS and the Departments of Labor and Employ- ment, Health, Local Government, Agrarian Reform, Agriculture and Social Wel- fare and Development. Its functions are to: (a) advise the President and the NEDA Board on matters concerning social development, including education, man- power, health and nutrition, population and family planning, housing and human settlements, and the delivery of other social services; (b) coordinate the activities of government agencies concerned with social development; and (c) recommend to the President, government policies, programs and projects on social development consistent with the national development objectives and priorities. To date, however, the SDC has not played a leading role in coordinating NFE. 5.44 DECS has a clear mandate through the BNFE to take the initiative in providing general support to NFE. It has, however, concentrated on line functions with its own operational programs and placed less emphasis on staff fun_tions. DECS's line activities include nonformal vocational training, literacy and values education. Other government departments also play a role in these areas and are usually expected to be coordinated at the district/ divisional level through BNFE field staff. 5.45 Recently, BNFE has taken on more of a leadership role in the nonfor- mal sector. A national survey on the status of nonformal education was initi- - 128 - ated by BNFE in September 1987 with the aim of providing reliable, relevant and up-to-date data upon which nonformal education policies, plans, programs and projects may be based. When completed, the study is expected to provide a BNFE statistical bulletin for dissemination, a monograph on the status of nonformal education in the country, and hopefully the establishment of a BNFE management information system. 5.46 In late 1987, the BNFE also created an Interagency Technical Group on nontraditional and nonformal education. The Group, composed of representa- tives froa, the government and private sectors, addressed two objectives: (a) to set up a resource management system for nontraditional and nonformal educa- tion, and (b) to establish a system of communication for all government and nongovernment agencies involved in these activities. The work of the Group was subcontracted to the Asian Institute of Journalism, with the BNFE serving as secretariat. A small working group, chaired by the BNFE Director, was set up to deal with specific details of the Group's activities, which are still ongoing. 5.47 NFE vocational training was originally to be coordinated by the parastatal NMYC which is under the general mandate of the Department of Labor. It has, however, never fulfilled this role, although originating valuable work on manpower needs research and developing a line activity of regional vocational training centers. The National Industrial Manpower Training Council, under the Department of Trade and Industry, also maintains an overview of various types of industrial, technical and vocational training but is not involved in policy-making. 5.48 In the private or voluntary sector a number of bodies exist charged with harmonizing various nonformal efforts. These include: (a) the Associa- tion for Nontraditional Education in the Philippines (ANTEP) for groups using teaching methods other than the conventional school methods; (b) the Catholic Educational Association of the Philippines (CEAP) for school and out-of-school activities of the Catholic Church; (c) the Philippine Partnership for the Development of Human Resources in Rural Areas (PHILDHRRA), consisting of $7 NGOs which have basic nonformal education activities in rural areas; (d) local groups such as the Laguna Education Foundation to bring together and develop local nonformal programs; and (e) the Association of Foundations. There is, however, no national forum for the general development of policies and pro- grams to provide support to NFE. 5.49 The DECS is currently considering the use of the elaborate facili- ties of the University of Life in Manila, now largely unused, as a home for such a forum and the BNFE has begun an inventory of NFE institutions. Such an inventory would be extremely valuable in view of the present lack of even broad, general data on institutions, programs, coverage, enrollments, achievements, quality, methods and resources. 5.50 The harmonization of NFE should be pursued cautiously, however, since there is some difference of opinion on how much coordination is needed. Some agencies feel that a system of coordination is necessary in order to ensure that there is some standardization in program objectives, strategies and methods. Those who are reluctant to support coordination - 129 - (usually NGOs) feel that the tendency to "standardize" comes close to "centralizing" and "controlling," and makes the notion of coordination unacceptable, and could lead to a decline in activities as responsibilities become bureaucratized. 5.51 There is, however, common ground between the two groups in that all agree it is desirable to have some mechanism permitting those involved in implementing NFE nationally, or in a particular locality, to rationalize their work and ensure that their respective resources are put to best use in carry- ing out NFE by avoiding-duplication. It has also been suggested that NFE beneficiaries participate at the local level in the planning, implementation and even evaluation of NFE programs to ensure the relevance and appropriate- ness of the programs to their needs. In establishing a forum for the many agencies, it might be worthwhile to study the Kenya Board of Adult and Contin- uing Education (and similar institutions in other African countries) which has been particularly successful in harmonizing NFE. One of the key features of the Kenya Board is its Parliamentary statutory powers which ensure its inde- pendence and assist the Board in operating effectively. Resource Needs 5.52 In addition to the need for a central mechanism to bring the NFE agencies together, there is also a need for personnel with formal training in planning/managing/implemention of NFE programs. Only the BNFE and a few other NFE agencies currently have such staff. Thus, the planning and implementation of many NFE programs have been assigned to those whose competencies are not appropriately developed. For instance, school teachers and other personnel trained in teaching children and youth are often called upon to conduct NFE classes for adults, usually with unsatisfactory results. There is a clear need to provide special professional training to those involved in NFE activi- ties and to develop programs for this training in order to develop a core cadre of professional NFE workers. 5.53 As in most other development programs, resources for NFE are inade- quate. As a result, there are not enough full-time NFE implementors, even in the BNFE; facilities, equipment and materials are badly lacking; and pay and emoluments for NFE workers are not high enough to attract and hoid top-rate staff. 5.54 There is also an issue of program sustainability. The need is not simply for enough resources to support current program needs, but a system by which such resources can be generated on a continuing basis so that future program nep.s are also assured of adequate support. 5.55 In addition, some NFE programs may not be truly relevant to benefi- ciary needs because they have been initiated not on the basis of those needs but on the basis of what the program implementators are capable of providing. An example is one where the implementor decided to offer a course in automo- tive repair, not necessarily because there was a market for this skill, but because he himself possessed the skill and felt more comfortable sharing that skill than any other. - 130 - 5.56 A final overarching issue is the dearth of complete, accurate, updated and readily available information on NFE programs and resources on which to base a comprehensive and in-depth review of this field. Where infor- mation (particularly statistics) is available, it is usually too old. Where the information is fairly new, it is normally very incomplete and affords no basis for policy-making or planning. Recommendations 5.57 To address the need for coordination of nonformal education, bit recognizing at the same time the importance of local participation and management, it is recormended that NFE Coordinating Councils be organized at the municipal/city level, composed of representatives from all governmental, nongovernmental and people's organizations involved in NFE at that level either as planners, implementors or beneficiaries. The primary functions of the Councils would be to: (i) assess the needs of the various NFE target groups within their areas and prepare an inventory of NFE programs and resources in order to achieve the best match between the needs of the target groups and the available programs and resources in terms of cost effective- ness, complementarity and resource sharing; (ii) ensure monitoring and evaluation of the major programs with the objective of improving program effectiveness from year to year; (iii) negotiate for additional resources that may be needed; (iv) represent the views and opinions of local NFE implementors and beneficiaries to higher NFE coordinating/policy-making/management bodies; and (v) serve as a clearinghouse of information on NFE programs and resources. 5.58 Similar NFE Coordinating Councils should be organized at the provincial, regional and national levels to provide support to the municipal/ city Councils. The local councils would be expected to prepare and opera- tionalize specific programs responsive to their local needs while the National Council would be concerned with formulating the national policy agenda. The BNFE could be designated as the Secretariat for the National Council and the primary agency responsible for the coordination of NFE programs at the national level. The National Council would need a strong well-trained administrator as Secretary and head of the Secretariat. In line with this, the BNFE and all its subdivisions, units, and personnel at the regional, provincial, city and municipal levels should serve as the secretariats for the councils at their respective levels. As such, their main functions should be to: (i) undertake such staff work as may be required to provide adequate bases for decision-making; (ii) organize and support meetings; and (iii) ensure that decisions are carried out. In addition, the BNFE should continue to be responsible for the planning and management of the school-based NFE program. To perform these functions effectively, the BNFE should be ade- quately funded and staffed, with the required complement of well-trained, full-time staff at all levels. 5.59 To professionalize the cadre of NFE planners, managers and implemen- tors, a new Philippine Center for Nonformal Education could serve as the main training ground for NFE personnel of both government and nongovernment organi- zations. Such a center could also conduct continuing research and develop- ment, including the pilot testing of innovative strategies in collaboration with the local councils. It could organize conferences at the local, regional - 131 - and national levels in order to promote the sharing of experiences and ideas among NFE planners, rmtanagers and implementors, and could organize overseas study tours and exchange programs with other countries in order to provide local NFE personnel with exposure to and knowledge of successful or effective NFE programs elsewhere that may be adaptable to local situations. 5.60 To address the need for additional resources with which to strengthen/expand existing NFE programs, as well as to start new ones, a National NFE Loan Fund should be established. To qualify for a loan from this fund, the NFE implementing agency should be able to show how it can repay the loan from fees or other sources. 5.61 To address the need for good and readily available information to serve as a basis for policy and similar decision-making on NFE, the NFE Councils, perhaps together with the proposed Center, should establish a Man- agement Information System that can generate, monitor and continually update, preferably on a quarterly basis, vital information on NFE programs. - 133 - ANNEX 1 COMPREHENSIVE LIST OF RECOMMENDATIONS - 135 - ANNEX 1 Page 1 of 10 COMPREHENSIVE LIST OF OF RECOMMENDATIONS A. Managing the Education System 1. Policy and Plan Formulation (a) Improve longer-term national education development policy and planning and decide what data and policy research are needed for the purpose. (b) Strengthen the role of OPS in data gathering and sector-wide policy research. (c) Resolve inconsistencies in basic data such as the gap b;tween enrollment growth and population growth rates. (d) Set up a national board of education as a policy advisory bod, to DECS and Congress. 2. Planning and Programming (a) Revise performance indicators and criteria downward from the regional to the divisional level to address intra-regional differences in educational achievement and resource needs. (b) Improve timeliness and accuracy of annual data collection for management information by including only essential and clearly understood data. (c) Prepare manuals which will clarify procedures and inter- and intra- departmental responsibilities and accountability by each level of administration. (d) Experiment in one or two regions on the limits and possibilities of decentralizing planning and budgeting responsibilities together with the introduction of management performance audits. (e) Improve some of the methodologies used for projecting enrollments, teachers and classroom facilities. (f) Intensify computerization of data processing and analysis by ensuring full operation and maintenance of computers. (g) Establish appropriate organizational arrangements for teacher training and -rivate education to serve as focal points in DECS for data collection, analysis and planning. - 136 - ANNEX 1 Page 2 of 10 3. Project Development and Execution (a) Transfer the current role of EDPITAF to DECS proper by improving and expanding research and project development capacities of OPS and the relevant Bureaus, and by creating an office of project services which would take charge of implementation, especially in procurement and disbursement. A committee to coordinate each project should be formed, comprising OPS and the relevant Bureau with the new office as its secretariat. A monitoring function might be placed with the new office. (b) Encourage EDPITAF personnel to be absorbed into DECS proper, particularly in OPS, the Bureaus and the new office/bureau. 4. Staff Development (a) Strengthen DECS recruitment by revising its qualification requirements such as the 18 units of education courses to attract professionals of various backgrounds. (b) Upgrade the status and compensation of the regional planning and budgeting offices to attract and retain well-qualified personnel. (c) Intensify management Lraining, giving priority to principals, supervisors and superintendents. B. Adjusting Cost and Financing Structure 1. Expand the education system modestly, guided largely by demographic considerations. Current returns to investment in education do not call for a massive or rapid expansion of the system. 2. Direct government funds at measures that would reduce dropouts from elementary schools and thereby address social inequities in the system. Preliminary analysis indicates that these measures will include the supply of clothing and school-related amenities such as paper and pencils, social marketing to raise awareness of the importance of completing schooling, and close monitoring and remedial programs for those at risk for failure. Introduce a pilot project in a few disadvantaged school districts that would test the relative effectiveness of these measures. 3. Reduce unit costs at the secondary level by consolidating smaller schools into larger ones where possible, giving priority to the expansion of existing schools and allowing establishment of a new school only when it meets a minimum size; and by maximizing teaching loads and faculty utilization. 4. Reduce unit costs at the tertiary level through consolidation of smaLl universities and colleges and limiting the proliferation of campuses. - 137 - - ~~~~~~ANNEX 1 Page 3 of 10 5. Reduce unit costs of elementary and secondary schools attached to SUCs by separating them into regular national schools. 6. Emphasize greater competition among higher education institutions, public and private, by channeling public funds through direct subsidies to students. Raise fees in public institutions in order to provide scholarships for higher education, targeted to students from lower socioeconomic backgrounds (see Section D for details). 7. Increase financial and other links between schools and local communities to increase accountability of schools, which helps improve efficiency in school operations. 8. Monitor student performance through standardized evaluation at selected points in elementary and secondary education, to identify low-achieving schools for closer supervision by the authorities and to provide feedback to teachers about their effectiveness. 9. Conduct studies on: (a) Inconsistencies in educational indicators. (b) The cost-effectiveness of alternative school inputs for improved achievement in elementary and secondary education. C. Improving Basic Education Quality 1. Give priority to improving the 6 + 4 structure of basic education. Lengthening of the current structure will absorb scarce resources from and delay quality improvement. Preelementary schooling should continue to be supported privately, although consideration could be given to strengthening programs targeted at disadvantaged children through nonformal upport mechanisms. 2. Curriculum - Secondary Education (a) Extend the schedule for introducing the new secondary education curriculum to allow the results of try-out materials and experiments to be fed back into textbooks and training. (b) Focus on cognitive aspects which can be measured, rather than attitudinal or behavioral changes, in the evaluation of students in Values Education. 3. Textbooks and Other Materials (a) Allow longer lead times for manuscript development to ensure timely production of quality texts. Closer coordination is needed between the BEE and BSE curriculum wings and the IMC editorial teams. - 138 - ANNEX 1 Page 4 of 10 (b) Improve textbook distribution by clarifying guidelines about responsibilities and accountability among the offices concerned, and provide transportation or funds for delivery. (c) Train principals in simple accounting and provide them with an annual petty cash fund to purchase instructional materials available locally. (d) Issue guidelines on the minimum instructional materials appropriate to each grade level and subject, so that local authorities can allocate their resources to schools equitably. (e) Encourage language departments in higher education institutions to develop prototype low-cost reading materials. 4. Facilities (a) Give regional authorities full responsibility for selecting schools to be upgraded in disadvantaged districts under SEDP. Supervision should be by Division Superintendents, accountable to the Regional Directors. (b) Clarify the regulations regarding payment for damage to classroom furniture and equipment, and simplify the procedures for reporting deficiencies and for accounting and auditing. 5. Teacher Quality and Supply ta) Continue increasing the NCEE cut-off score for admission to pre- service teacher training programs to raise the quality of entering students. (b) Peview the content and form of preservice training programs on a regular basis, and focus on the upgrading of subject content masterv levels of teachers. Pedagogical skills should be taught in conjunction with specific subject matter. (c) Encourage pupil-centered teaching methods that develop higher-level cognitive skills. (d) Train teachers in the development, teaching and testing of the higher-level skills emphasized in the new curricula. (e) Assign teachers by subject specialization in the fifth and sixth grades only to schools where they can be used efficiently. (f) Revise the provision of the Magna Carta for Public School Teachers limiting the transfer of teachers, and make greater use of temporary appointments which could address specific shortages without committing teachers permanently to a particular locale. -139 - ANNEX 1 Page 5 of 10 6. Ensure that all public schools have a trained school head. To attract high-quality school managers in educationally deprived areas, significantly increase their responsibility and hardship allowances and give accelerated promotion opportunities to principals and head teachers who give outstanding service in these schools. 7. Professional Development (a) Strengthen the school level Learning Action CGlls concept to become a regular feature of the in-service training system. (b) Create basic education curriculum and testing units in selected higher education institutions which would develop trainin, and testing materials. (c) Develop a regular program of professional training for elementary and secondary school principals and senior curriculum specialists. Encourage the Philippine Elementary and Secondary School Principals Associations, the Fund for Assistance to Private Education and other professional associations to participate. 8. Supervision and Administration (a) Clarify the relationship between the Division and Regional Offices in light of the ongoing DECS decentralization. (b) Provide the division with two subject-specialist advisors in each core subject and one specialist for each of the following areas: coordination between elementary feeder schools and high schools, early childhood education, remedial education, curriculum development, tests and examinations, nutrition and health, and short-term training and professional development for school personnel. (c) Continue providing an elementary and a secondary education specialist for assistance to the private schools. (d) Separate control (personnel administration and school inspections) from support functions (school improvement programs and projects) at the district and the division levels. (e) Strengthen district level support with advisors and trainers in regular contact with their schools to assist principals in developing, implementing and evaluating a biennial school improvement program. Appoint new district staff contingent on willingness to travel. 9. Testing and Examinations (a) Develop a program for a national network of testing and research activities by the National Education Testing and Research Center (NETRC). - 140 - ANNEX 1 Page 6 of 10 (b) Upgrade regional testing capacities for curriculum development to enable the regions to eventually conduct their own evaluations and leave the central curriculum units free to monitor overall performance. Provide regional authorities with guidelines on examination content in order to improve interregional comparability. (c) Recruit testing specialists with subject expertise from among trained teachers and college i. :ulty, and assign them to serve on secondment to the NETRC and the proposed Basic Education Curriculum and Testing Units. (d) Delineate school-by-school examination results to increase competition among schools and the accountability of schools to the public. 10. Consider a policy on grade progression at the secondary level to assist all students in completing high school to gain minimal skills in the core subjects of English, Pilipino, mathematics and science, supplemented by frequent diagnostic testing and supplementary instruction for pupils at risk. 11. Assign specially trained supervisors to experimental projects designed to reach the poorest areas via alternative delivery systems. Provide transportation and means of communication to these projects. 12. Require all regions and divisions to institute diagnostic testing, in conjunction with remedial programs for slow learners or those at risk for failure. 13. Introduce language transition courses in elementary schools to facilitate the learning of students whose home language is neither Pilipino nor English. Teachers must also be made fully proficient in the languages of instruction. 14. Data Collection and Research (a) Strengthen DECS collection of annual statistics at all levels. Undertake sample surveys and case studies for policy-oriented analysis. Institutionalize monitoring and evaluation of student achievement at all levels of the education system. Disseminate the results and analysis of these evaluations. (b) Require the private sector to provide a more comprehensive data base, for overall monitoring of sector quality and for policy- making. - 141 - ANNEX 1 Page 7 of 10 D. Rationalizing Tertiary Education 1. ReoLganize existing state colleges and universities into a three-tier system of public higher education: - Tier one to consist of post-secondary institutions which offer one- or two-year terminal vocational programs or general education courses that could be credited towards a four-year degree. Tier One institutions would be subsidized, based on the number of students times the expenditure per student needed with full utilization of facilities, so that schools would have to attract full capacity enrollments to survive; - Tier Two to consist of four-year colleges and universities which would give the BA, the BS and possibly the MA. Tier Two institutions would rely mainly on fee-financing, receiving smaller subsidies per student. Criteria for eligibility would include a size sufficient to allow a variety of courses and a minimum core of faculty, a majority of faculty with master's degrees, and library facilities. - Tier Three to consist of a small number of universities which carry out research and PhD production and are eligible for special grants awarded on a competitive basis for these purposes. Undergraduate education at these institutions would receive no subsidies except for targeted assistance to low-income students. 2. Reallocate public funds as below: - Direct subsidies to Tier One and Two institutions. - Enlarged scholarship program for students to be applied either to public or private institutions. - Grants to postgraduate research and programs in selected fields. - Subsidies to the accreditation process. 3. Set up a revolving, self-financing funl for loans to schools for capital improvement, to faculty for graduate education, and perhaps to students for tuition assistance. Lending to schools must be tied to deregulation which permits both public and private schools to charge higher fees; loans to students will require careful calculation of the administrative and default costs of student borrowing. 4. Move towards further deregulation by: giving private schools greater control over their own curriculum to better respond to labor market signals; and removing price controls rather than granting additional tax concessions to private schools. 5. Make available special funding in the short rur to facilitate and absorb personnel in programs and institutions that might be phased out as a result of restructuring the state system. - 142 - ANNEX 1 Page 8 of 10 6. Simplify the accreditation system to give full autonomy to institutions upon accreditation, subject to periodic reassessment (e.g., every five years). 7. DECS recognition process should encourage: (a) mote general rather than specialized fields to allow greater institutional flexibility and elective options for students; and (b) the teaching of courses that emphasize basic reasoning, communications and quantitative skills to permit the academic market to become more adaptive to the labor market. 8. Scrutinize public institutions of higher learning whose bachelor's degree enrollments are less than 1,000 to see whether they are operating at acceptable cost and quality levels, and if not, whether merger and/or redefinition of mission is desirable. Consider the geographic distri- bution of existing state colleges to address regional disparities in access. 9. Sever ties of colleges to attached elementary and secondary schools when the college reaches a critical minimum size or, preferably, once it acquires degree-granting authority. Until then, increase subsidies directly targeted toward elementary and secondary schools by a contracting out scheme or a simple per capita payment, to distinguish between government policies toward basic and higher education. 10. Once accreditation becomes an explicit tool of public policy (e.g., a criterion for eligibility for public subsidies), form an oversight committee to periodically review accrediting standards and procedures. Consider expanding the technical panels in the various disciplines to serve such a function. 11. Investigate the Australian system of a fixed income tax surcharge for each year of university attendance for all students whose annual net salary exceeds the national median, as a way of making beneficiaries pay for the public system as well as increasing access to the private system. 12. Study how the academic and labor market returns vary with incoming student qualifications and university expenditures to obtain information on alternative public policies to maximize social gains. F. Harmonizing Nonformal Education Institutional Development 1. Coordinate the NFE programs of government, private sector and community organizations by: (a) Instituting NFE coordinating councils at the local and national levels. Their main functions would be to: (i) assess the needs of NFE target groups, and inventory NFE programs and resources; (ii) ensure monitoring and evaluation of NFE programs; (iii) negotiate for additional resources; (iv) transmit views of - 143 - AMPJEX 1 Page 9 of 10 local NFE implementors and beneficiaries to higher Levels; and (v) serve as a clearinghouse for information on NFE programs and resources. The local councils would prepare and operationalize specific programs in response to local needs, while the National Council would formulate the national policy agenda. (b) Designating the BNFE as Secretariat of the National Council and the primary agency responsible for the coordination of NFE programs. Secretariat functions would be to: ti) undertake such staff work as may be required to provide adequate bases for decision making; (ii) organize and support meetings; and (iii) ensure that decisions are carried out. BNFE would continue to be responsible for the planning and management of school-based NFE programs. BNFE will require funding adequate to effectively perform these functions, especially for quality full-time staff at all levels. The local BNFE units and personnel should serve as the secretariats for the local councils. 2. Establish a Philippine Center for Nonformal Education to: (a) train a c-dre of NFE planners, managers and implementors; (b) conduct research and development, including pilot testing of innovative strategies; (c) organize conferences at national and local levels to promote sharing experiences and ideas; and (d) organize overseas study tours and exchange programs. 3. Strengthen and expand the NFE programs by mobilizing additional resources through the establishment of a National NFE Loan Fund, from which agencies can borrow for capital investment. To qual;fy, NFE implementing agencies should be able to show how they can repay the loan. 4. Establish a management information system to generate, monitor and continually update vital information on NFE programs as a basis for policy and decision-making on NFE. Nonformal Skills Training 5. Institute a mechanism to continuously monitor changes in employment needs to improve decision-making in training institutions about courses. 6. Encourage existing educational institutions, particularly the state colleges and universities, to offer extension or continuing education courses. 7. Undertake a study of employment needs and training resource requirements. 8. Explore new sources of funding for skills training programs, including training levies and counterpart contributions from employers or labor unions. 9. Build values formation into skills training, especially with regards to productivity. - 144 - ANNEX I Page 10 of 10 10. Develop the competencies of trainers and instructors. Review existing pay and honoraria rates which are too low to attract trainers who combine both practical and academic expertise. 11. Make placement services an integral part of nonformal skills training, especially for those geared towards wage sector employment, and follow-up services for those going into self-employment. Literacy Programs 12. Develop a national strategy for containing illiteracy. Begin by pooling existing information from those working in the field, and following up with a survey of needs and opportunities. 13. Let school equivalency programs be managed by those sensitive to out-c - school learning modes and atLitudes, although formal school managers and subject specialists must establish and monitor educational standards. - 145 - ANNEX 2 NOTES - 147 - ANNEX 2 Note 1 Page 1 of 11 ON THE PROBLEM OF ELEMENTARY GRADE COMPLETION Introduction 1. While the elementary enrollment rate in the Philippines is high, the extent to whigh Filipino children are completing elementary education remains an issue. The proportion of children with incomplete elementary education, it has often been pointed out, remains substantial, with DECS reporting a cohort survival rate of 66%. To what extent this reflects the proportion of children who ultimately finish grade six is not known, for reasons spelled out below. Consequently, there is a need to examine the issue. To do this we look at data from a survey of households. 2. Abstracting from the numbers game, the question has been raised as to why children fa l to complete their elementary education? What does this imply in terms of government education policy? 3. This note is organized as follows. It first attempts to define the extent of the problem. Then, it looks at the reasons given by mothers why their children stopped going to school. Subsequently, a behavioral analysis is undertaken to test popular hypotheses that have been advanced to explain the problem of elementary school dropouts. Finally, the elementary grade completion issue is examined from a policy perspective by present.ing an illustrative action program to exemplify how one might address the variety of issues surrounding the problem. Extent of Elementary Grade Completion 4. While in principle the definition of an elementary school dropout is straightforward, its measurement in practice is not. The complication comes from the fact that a child who temporary drops out of school may later on return to continue their education. Furthermore, there is the problem of repetition. Consequently, DECS statistics on cohort survival rates may not accurately measure the extent to which Filipino children complete their elementary education since DECS only measures the percentage of a cohort of students in grade one who survives to grade six in exactly the required number of years or, more specifically, as the ratio of grade six enrollments in a given year relative to grade one enrollments five years ago. 5. The HSMS, which is the main source of data for this study, provides information about the age specific distribution of chilaren by educational attainment in school year 1981-82. This will complement the DECS information on cohort survival rates. More importantly, it provides the data base for looking at the distribution of elementary school dropouts by location and socioeconomic class. 6. Table 1 shows the trend in the cohort survival rate over time as estimated by DECS. It is clear that it stagnated between 1978 and 1985, after a consistent rise in previous decades. In this regard, the cohort survival rate is estimated to be about 67% in 1980 compare to 66X in 1986. - 148 - ANNEX 2 Note 1 Page 2 of 11 7. Table 2, on the other hand, presents completion rates from the HSMS, defined as the proportion of children of a given age with at least grade six level of education. If children complete their elementary education after 6 years, everybody started at exactly age 7 and there is no age misreporting, then the two measures should be the same. Due to age misreporting, repetition and temporhry dropping out of school, the two rates need not be -he same. 8. The HSMS data reveal that the proportion of children between 12 and 16 years old are not too far from what the cohort survival rates estimate. In rural areas, the completion rate is 62%, while in the urban areas it is 77%. It is Alsb worth noting that, while at age 13 the HSMS and the DECS rates are roughly in the same order of magnitude, at higher ages the HSMS data reveal a much higher rate of completion. It is close to 90% for urban children 15-16 years old and about 73-83% for their rural counterparts. 9. Assuming that there are no serious problems with the data, the apparent inconsistency may be explained by the fact that children who have not reached grade six in six years tend to continue on or go back to school, and a substantial proportion of them ultimately finish elementary education. This explanation is consistent with the data in Table 2 showing a monotonic increase in elementary grade completion rate with age. It is also consistent with the information in Table 3 showing that among children 12-14 years old with less than grade six education, over half of them are still enrolled in school. Even after age 14, enrollment rates among those children remain substantial in the urban areas. Completion Patterns and Reasons for Dropping Out 10. Table 3 highlights differences in elementary grade completion rate by income class and urban/rural residence. The completion rate is lowest for rural children in the first decile of the income distribution. For these children completion rate is only 58% compared to 90 and 95% for rural and urban children in the tenth decile, respectively. Over 30% of the children aged 13-16 in the bottom 30% have not completed elementary education. In contrast, only roughly 15% have not finished grade six among those in the upper 30%. 11. There are three major hypotheses for the failure to complete elementary education. First, the incentive to graduate from elementary education may be weak. Second. because of their poor quality, the ability of schools to promote student commitment to education may be low. And third, there may be economic barriers arising from market imperfections that prevent children from taking advantage of completing elementary school, even if educational commitment among children and parents is high. 12. Table 5 presents the distribution of mothers' responses according to the reason why their children with less than six grades of education have stopped going to school. According to Table 5 the most salient reason mothers chose is that the "child is lazy or unwilling to go to school," accounting for over a third of the answers. Another third mentions financial difficulty, i.e., the family does not have enough money to send the child to school. Less salient but still worth noting is ill health. It is under 10% for the 12-16 - 149 - ANNEX 2 Note 1 Page 3 of 11 years old but 17-22% for children age 7-11. That the child stops schooling to earn some income for the family is not very salient, though it accounts for 10% of reasons given for children age 11-16 in the rural areas. That the child has to help in household chores appears even less important. Finally, the following factors seem negligible: school inaccessibility, lack of school places, failure/need to repeat, and absence of anything important to learn in school. Behavioral Analysis of Elementary Grade Completion 13.1 Results of regression analysis estimating the effects of school, household, community and personal factors on elementary grade completion are generally consistent with the reasons articulated by mothers. Children from richer households and more educated mothers have a higher probability of completion. In this regard, ability to borrow money to finance education, which is a variable that also captures income effects, is apparently an important factor. Inclusion of household income in the regression equation reveals that it is not significant, while ability to borrow remains an important determinant. Interestingly the rate of interest at which a household thinks it will have to pay for the money it borro-ws to finance a cnild's education does not have an important effect. Similarly, the opportunity cost of schooling distance to the nearest public intermediate elementary school do not appear to be statistically significant. In contrast, mother's perception of the chil-dA's mental ability is positively and significantly correlated with completion. 14. The results also reveal that children in communities with schools of better quality tend to have a higher completion probability, even when other variables are held constant. Finally, the statistical analysis shows that when all other things are held constant, the urban-rural differential disappears. 15. A disaggregated analysis estimating the effects of the aforemen- tioned variables among children in the bottom 30% of the income distribution generally confirm earlier findings. However, the eftect of school quality and borrowing capacity appear to be twice as large. 16. The finding that financial constraint is a critical factor in explaining failure to complete elementary education needs some explanation. Why should it be so important, given that public primary education is free, schools are highly accessible physically, and the opportunity cost of schooling at this level does not seem to matter much? One interpretation is that completing elementary education imposes a relatively heavy burden on poor parents in terms of available cash to purchase school related social amenities (e.g. shoes and clothing for going to school) as well as snacks at school, paper, pencil and other school supplies. 17. The measure of school quality used in the HSMS refers simply to cognitive achievement scores. It may be that schools which do well on achievement tests also tend to do better at the strengthening the educational commitment of school children. This suggests that quality improvements in elementary education, especially of schools serving poor communities, will improve both retention and learning. - 150 - ANNEX 2 Note ' [age A of 11 Policy Discussion 18. Although the infrastructure is solidly in place to support the country's drive towards universal elementary education, the question remains how to achieve a completion rate that is closer to 100%. This issue is importart for several reasons. First, there is historically a strong social consensus that all Filipino children should complete their elementary education. In this connection, there is an apprehension that given the budgetary constraints, the provision in the present constitution mandating the government to provide free public education not only at the elementary but also at the secondary level might jeopardize the attainment of universal elementary education. Second, the problem disproportionately affects the poor, especially those in the rural areas. Hence, an effective effort to address the problem will serve the government's pursuit of greater social equity and mobility among the poor. Third, the rate of return to elementary education appears to improve substantially when the child completes grade six (Tan and Paqueo 1988). Hence, it is desirable to deal with the problem not only for equity but also for efficiency reasons. General Strategy 19. Assuming that universal completion of elementary education is accorded a high priority, a program with the following strategic thrusts should be seriously considered: (a) Improve children's attitude towards schooling, particularly their motivation to graduate from elementary education. (b) Enhance the cognitive achievement of children and improve the perception of their mental ability by themselves and their parents. (c) Increase the ability of extremely poor parents to provide children with necessary school supplies, clothes, shoes and other things associated with going to school. 20. Such a program cannot be developed in detail in this analysis in view of time and information constraints. Moreover, the motivation of children must be tailored to the specific circumstances of the children, their parents and the teachers. Hence, a sound strategy calls for a decentralized approach, which would allow for variety, flexibility and localized planning. This means that the detailed configuration of the program will essentially have to be left to local authorities, teachers and school officials. 21. The effort to strengthen the motivation of children should not solely be the responsibility of teachers nor should it be exclusively limited to programs directly targetted to children. An indirect program which is aimed at strengthening the parents' commitment to child schooling and improving their ability to effectively motivate their children is a thrust that could complement direct approaches. More generally, community involvement, particularly of concerned parents, is important for program sustainability and effectiveness. In view of this consideration a conscious - 151 - ANNEX 2 Note 1 Page 5 of 11 effort to develop and implement a social marketing strategy for universal completion of elementary education should be seriously considered. Use of mass media and other techniques used in social marketing should be explored. 22. Another point relates to the issue of school quality improvement. The improvement of school quality has been dealt with in the main report. This would include such strategies as more group work, greater frequency of testing and evaluating students, and improved feedback. The findings of this analysis call attention to the desirability of framing the issue of school quality in terms not only of raising cognitive achievement but also strengthening the educational commitment of children. 23. From the foregoing remarks it is clear that a key question in improving cognitive achievement or attitudes towards schooling is how to get teachers and principals to do what ought to be done. Most of the proposed measures require greater effort and cooperation from them. Consequently, the need for getting the incentive structure right, in addition to improved supervision of school performance, cannot be overestimated. In this regard, it is commonly observed that the linkage between performance and actual promotion and salary structures in the educational system is quite weak. Hence, it is a critical issue that must be dealt with by the national government, considering that decisions on salaries and finance of elementary education are highly centralized. Illustrative Program of Action 24. How then can the national government improve the incentives structure for school authorities in support of school quality improvement and universal completion of elementary education? How can it get the local communities to develop and implement effective action programs? What financial support could the national government provide? These are the strategic issues that government must address. 25. Given the above caveats, a more concrete strategy is presented here to illustrate an integrated set of programs that addresses those questions. This is not presented as recommendation but rather as a starting point to stimulate discussion. Furthermore, it assumes that there will be a more intensified drive towards improving the cognitive achievement of elementary school children. This is an important assumption inasmuch as school ability has been shown to be a significant factor in elementary grade completion. 26. There are several elements to the program, depending on the actual situation of the communities. First, the least expensive element of the strategy is the social marketing of universal completion of elementary education. It includes as its tactical objectives: mobilizing community support, waging informational campaigns directed to parents, and improving children's motivation through improved student-teacher interaction. As this approach, when implemented alone, might be insufficient, the next strategic thrust might be to reaste a system of honuses for schools. The bonus; which the principal and the teachers would share, should be linked to the number of elementary graduates a school produces each year. Implementation of this system, at least at the outset, should be limited to schools in well targetted - 152 - ANNEX 2 Note 1 Page 6 'v' 11 poor communities. Depending on the experience and the financial condition o'. the government, it could be expanded to less economically depressed areas. 27. This scheme clearly requires a strong quality control system to avoid abuse. If a national system of examinations is implemented at the elementary level in an effort to improve school quality, it would be easy to link the bonus to the number of grade six students who pass the examination. In the absence of such a national system, a special examination should be developed for schools in communities that are being targetted for the universal elementary grade completion program. In assessing the proposal it should be kept in mind that the effect of such a bonus scheme is not simply to increase the number of elementary school graduates but also provide a strong incentive for teachers to upgrade school quality in depressed areas. 28. To stay within budgetary limits, the bonus system can be funded by allocating a certain percentage of future increases in teacher emoluments. In the past year, the education budget was increased by a substantial amount, which went essentially to teacher salaries. Salary adjustments were made across the board to raise morale. In the future, it is important to link part of salary increases to performance to ensure that the additional allocation for teacher remunerations results in greater school effectiveness. This concern is shared by some high government officials. 29. On the side of children and parents, interest in completing elementary education among the poor can be strengthened by creating a more tangible link between completion and the consequent widening of economic and other opportunities. In this regard a scholarship system for poor children from targetted depressed barangays can be fruitfully instituted. Under this program each barangay will offer a few scholarships for those children. The scholarship grants, which should be financially supported by the national government, can be used for vocational, trade, industrial, agricultural or even general academic secondary education, depending on the child's interest. It might even be ised to participate in nonformal training programs or some apprenticeship program that the government and private sector could put up together. Competition for scholarships should be limited to elementary school graduates from poor families within each of the targeted barangays, with the winners selected on the basis of their performance on some standardized achievement test. 30. Finally, depending on the adequacy of the above policy options, the strategy can make use of a scheme that reduces the cost to parents of purchasing school supplies and clothes/sLoes. This scheme, which has been tried in Pakistan, requires greater budgetary support and should, therefore, be carefully targetted. For practical purposes and depending on the financial situation of government, this should be limited to extremely depressed communities, and should be resorted to only when the other aforementioned options prove inadequate. 31. The various elements of our illustrative universal elementary grade completion program are discussed more or less in their order of priority and the need for stronger action. It is, however, important to bear in mind that the program should be designed at the national level in a way that supports - 153 - ANNEX 2 Note 1 Page 7 of 11 pilot testing of the more complicated schemes, even though at the start local initiatives are largely confined to the simpler and less expensive measures. Given that international experience is very limited in this regard, the idea is to develop a knowledge base from which to draw information when the appropriate time comes. Concluding Remarks 32. The suggestions in this paper should be put in its proper perspective. Despite its importance, universal completion of elementary education is only one of the many education concerns of government. In the larger scheme of things, it must deal with, among others the issue of school quality, the implementation of the constitutional mandate regarding free public secondary education, and the democratization of state colleges and universities. The findings of this analysis provides information that must be taken into account in formulating a balanced education strategy that is efficient and equitable. In particular, the fact that an improvement in the quality of elementary schools will probably be accompanied by greater completion rates of students particularly among the poor should add extra weight in favor of a policy that puts relatively greater emphasis on the improvement of elementary education. This should also put the Department of Education, Culture and Sports in a better position to rationally consider political pressures calling for an aggressive but premature expansion of secondary schools. Such a push could ieopardize the development of a reasonably good quality elementary education that every Filipino child will be able and willing to complete. ANNEX 2 - 154 - Note I Page 8 of 11 Table 1: TREND IN ELEMENTARY COMPLETION RATE IN GOVERNMENT AND PRIVATE SCHOOLS, SY 1970/71 TO 1984/85 (Index 1984/85 = 100) SY Government Private 1970/71 85.7 98.9 1971/72 79.9 94.7 1972/73 84.1 99.0 1973/74 83.1 95.1 1974/75 87.3 108.6 1975/76 89.4 107.8 1976/77 95.6 116.4 1977/78 98.5 119.3 1978/79 100.6 116.7 1979/80 99.0 112.0 1980/81 102.5 85.9 1981/82 96.3 92.4 1982/83 97.9 91.1 1983/84 102.1 79.4 1984/85 i00.0 10V.0v Note: Completion rate is the percentage of a cohort of students in Grade I who completed Grade VI in exactly required number of years. Source: MECS, Office of Planning Service. Table 2: PERCENTAGE OF CHILDREN WITH AT LEAST GRADE 5 OR 6 EDUCATION: BY AGE AND URBAN/RURAL Age 12 13 14 15 16 12-16 13-16 Grade 5 or better Urban 82.55 89.12 90.76 92.82 94.83 89.74 - Rural 63.64 77.33 85.37 84.50 87.22 78.77 - Grade 6 or better Urban 46.70 78.51 86.55 87.50 91.67 77.10 85.94 Rural 30.30 60.00 75.07 73.68 82.75 62.53 72.41 Source: Household and School Matching Surveys (HSMS), DECS-EDPITAF. - 155 - ANNEX 2 Note 1 Page 9 of 11 Table 3: AGE-SPECIFIC ENROLLMENT RATE OF CHILDREN WITH LESS THAN GRADE 5 OR 6 EDUCATION Age 12 13 14 15 16 Less than Grade 5 Urban 88.57 63.41 54.84 30.77 18.75 rural 77.40 68.29 41.67 10.20 5.56 Less than Grade 6 Urban 94.98 77.78 60.87 43.48 22.22 Rural 86.46 75.34 53.49 26.74 10.00 Source: HSMS. Table 4: PERCENTAGE OF 13-16 YEAR-OLD CHILDREN WITH LESS THAN GRADE 5 OR 6 EDUCATION: BY INCOME DECILES AND URBAN/RURAL Less Grade 5 Less Grade 6 Decile Urban Rural Urban Rural 1 79.27 72.35 73.17 58.24 2 80.82 75.29 68.49 64.71 3 82.81 79.55 67.19 66.48 4 87.23 81.91 80.85 70.74 5 92.24 85.88 79.31 74.01 6 91.81 86.21 84.21 75.86 7 95.45 87.67 89.61 78.77 8 91.63 92.31 87.92 84.62 9 95.56 95.15 92.89 83.50 10 97.34 95.89 95.44 90.41 Source: HSMS. -156 - ANNEX 2 Note 1 Page 10 of 11 Table 5: PERCENTAGE DISTRIBUTION OF UNENROLLED CHILDREN WITH LESS THAN GRADE SIX EDUCATION BY REASON FOR NOT GOING TO SCHOOL Rural Urban Age 7-11 Age 12-16 Age 7-11 Age 12-16 Ill health 16.98 9.63 21.74 8.51 Child lazy/unwilling to go to school 22.64 35.32 34.78 40.43 Family doesr't have enough money 35.85 32.11 21.74 33.98 Child has to work for income 5.66 10.09 - 2.13 Cnild has to help i.n household chores 1.89 2.29 4.35 5.32 School accessibility/ distance 5.66 3.67 - Not enough school places - Failed a grade/to repeat Children not learning anything important Other 11.32 6.89 17.39 9.63 Source: HSMS. - 157 - ANNEX 2 Note 1 Page 11 of 11 Table 6: DETERMINANTS OF ELEMENTARY GRADE COMPLETION AMONG CHILDREN AGE 13-16 Dependent variable - one, if child completed grade 6; zero, otherwise All Bottom 30% Independent Variable /a AGE 0.049273 ( 6.65)* 0.056603 ( 3.27)* SEX 0.062256 ( 3.82)* 0.112466 ( 2.92)* ABILITY 0.156181 ( 8.44)* 0.200765 ( 4.34)* RURAL -0.012643 (-0.67) 0.043614 ( 1.01) AFFECTED -0.036608 (-2.24)** -0.028278 (-0.69) BORROW 0.034801 ( 6.50)* 0.060451 ( 4.22)* INTEREST -0.000149 (1.33) 0.000006 ( 0.02) EDUC/M 0.017819 ( 7.73)* 0.036385 ( 5.62)* SCH-QUAL 0.002771 ( 2.40)** 0.006619 ( 2.54)* SCH-DIST -0.008317 (-1.53) -0.006522 (-0.63) AD-WAGE 0.002431 (1.88)*** 0.001237 ( 0.46) CH-WAGE 0.000043 ( 0.03) -0.000580 (-0.21) JOB-AVAIL 0.000404 ( 0.13) -0.005449 (-0.74) CONSTANT -0.700996 (-5.58)* -1.325251 (-4.52)' R2 0.193 0.20 F 36.24 9.73 N 1979 499 /a Legend: AGE = child's age (years) SEX = 1 if male, 0 if female ABILITY = mother's perception of child's mental ability RURAL = 1 if rural, 0 if urban BORROW = borrowing capacity INTEREST = interest rate on loans to finance child education EDUC/M = mother's education SCH-QUAL average quality of schools in the community, as measured by the average cognitive achievement test score of grade per pupils SCH-DIST = distance of household to the nearest public school with intermediate education AD-WAGE = average wage rate of adult workers in the community CH-WAGE = average wage rate of child labor in the community JOB-AVAIL = index of job opportunity for children Note: * 1 percent level of significance ** 5 percent level of significance *** 6 percent level of significance Source: HSMS. - 159 - ANNEX 2 Note 2 Page 1 of 4 A MATHEMATICAL MODEL OF THE PRICE-WAGE-QUALITY RELATIONSHIP 1. This will be a model depicting the relationship between some of the variables that matter most to the government and various constituency groups in the Philippine community: educational quantity, quality, productivity and teacher salaries. In private institutions, the net reverue brought in by each teacher must at least cover her salary, or she will be fired. Now, the revenue (R) per teacher is equal to the tuition rate per student per class (T) times the average class size (ACS) times the number of classes taught by the average teacher, i.e., the teaching load (TL). Therefore: R = T-ACS-TL. Now, these revenues must be used to pay the teacher's basic wage (W), the average faculty training costs (or the wage premium for well trained faculty) (FGRAD) that are covered by the institution and the cost of borrowed capital and ancillary supplies used per teacher (rK/L). Any surplus will be distributed as profits (it) which must remain above some minimum acceptable amount (G), as a necessary return on equity, entrepreneurship and risk taking, or the owner will close the school and invest his capital and energy elsewhere. Therefore: T-ACS-TL = W + FGRAD + rK/L + i. In a very rough sense, we may think of FGRAD and rK/L as a proxy for quality and ACS*TL as a proxy for (the non-quality compoLents of) productivity, since it tells us how many students an average faculty member will teach. 2. Now we consider what wili happen wnen price controlS ace irposed. Suppose at first that i > t, i.e., there are surplus profits, as was widely believed to be the case in the Philippines in the early 1970s. Then, price controls can be imposed, reduciag tuition (T) below the equilibrium market level with little effect on the other variables, but bringing i down to t. (These price controls will reduce the incentive for entry and hence quantity, but this discussion abstracts from quantity.) 3. However, once i = i (as it is widely believed to be the case in the Philippines now), any further decrease in T can only be achieved at some serious social cost, requiring cuts in quality (FGRAD and rK/L) or wages (W), or increases in class size (ACS) or teaching load (TL) in order to keep the books in balance. In the Philippine context, given the existence of wage controls, the constraints imposed on ACS by regulations and architecture, and the fact that TL is already very high, the most likely adjustment factor is quality. When price controls are imposed, keeping tuition below the equili- brium level, quality is likely to suffer. And, if enough savings are not achieved, w falls below a and the school eloses, diminishing quantity and setting up political pressures for increased public spending on higher education. 4. We can also use this model to show how tuition must increase faster than the average price level, if teachers want their salaries to increase faster than the price index, i.e., if they want their real income to rise. OU-e _t -! -- --f- ' r-- '-,- a^, °^ba tn hnl o.uirvthine constant in real terms: (1+P)T.ACS.TL = (1+P)W + (1+P) FGRAD + (l+P)rK/L + (1+P)n Now, suppose teachers want their wages to rise faster, say by (P+A)% per - 160 - ANNEX 2 Note 2 Page 2 of 4 year. As before, this may initially be achieved by cutting profits to the minimum acceptable amount (1+P);. But once this has been achieved, W can increase faster than P only if quality deteriorate, productivity improves, or tuition rises faster than P. Since quality is already very low in the Philippines, teaching loads are already very high, and class size is limited by room size, large price increases are the only feasible way to raise real wages in the short run. For similar reasons, real quality improvements also require increases in real tuition fees. 5. In the long run, as new buildings are constructed, large lecture halls can replace small classrooms, so ACS becomes another control variable --if this is permitted by government regulations. While large classes may be deemed undesirable, they may be less undesirable than lower W, FGRAD, rK/L or high TL. For example, this is the judgment of the Japanese and the American higher education community, which uses large classes extensively. 6. Government officials should bear in mind this mathematical relation- ship between price, wages, productivity and quality, as they formulate their regulatory policies, and readers should bear it in mind as they read the following sections that advocate deregulation. The Choice of Organizational Form: Nonprofits Versus For-Profits 7. As part of the shift toward deregulation, rules regarding organiza- tional form have been replacing detailed rules about input and output mix. Tne i98o Educatiounl Act L eV all new schools to be incornorated as non- profit organizations and older established schools are also encouraged to switch to nonprofit status to obtain tax exemptions. In any event, as noted above, they face severe limits on their ability to distribute dividends, which makes them quasi-nonprofit. The implication is that nonprofit organizations (NPOs), i.e., organizations that are not permitted to distribute a monetary dividend, are more trustworthy than for-profits, and are more likely to give consumers the quality for which they have paid. The Philippines is one of the few countries to have a large for-profit educational sector and this shift toward nonprofits makes it more like the rest of the world. 8. Nonprofit Theory: Trustworthiness, Quality and Efficiency. Is this efficient? The theory of nonprofit organizations suggests that the nondistri- bution constraint faced by nonprofits takes away some of their incentive to cheat the consumer and to downgrade the product, hence makes them more trust- worthy, especially in situations where consumers find it difficult to assess the quality of the service and therefore must rely on producer honesty. Con- sequently, nonprofits often predominate in the field of education and health, two areas where producers are deemed to have more information about quality than consumers have. But the same lack of pecuniary motivation may also lead nonprofit managers to be inefficient, unwilling to invest the time and effort needed to economize on costs. We would therefore expect nonprofit schools to spend more per student than for-profits in the short run, but a priori we cannot say whether this is due to higher quality or lower efficiency. 9. Moreover, in a market with free entry, price competition should eventually force hoth nonprofits and for-profits to produce at the lowest - 161 - ANNEX 2 Note 2 Page 3 of 4 possible cost in order to sell at the lowest possible price; otherwise they would not be able to sell their product and would be forced to go out of busi- ness. Thus, in long-run competitive equilibrium, nonprofits and for-profits should behave in very similar ways. The policy preference for NPOs therefore seems to be based on the twin presumptions that we never reach that long-run equilibrium and that in the short run the incentive for higher quality exceeds the incentive for inefficiency among nonprofit enterprises.! 10. Policy also seems to be based on the belief that nonprofits are politically safer than for-profits, less likely to evoke images of greedy businessmen "exploiting" the consumer as tuition fees rise, therefore less likely to lead to student unrest and demonstrations. Thus political safety as well as economic optimality motivate policy efforts to turn for-profits into nonprofits. 11. Nonprofits Versus For-Profits in the Philippines. In the Philippines, we have indeed observed consistent differences between nonprofit and for-profit colleges and universities, that fit the above model. Nonprofit IHLs are likely to be smaller, more selective and higher cost than for- profits, on average. Their incoming students come from wealthier families, have higher NCEE scores, and their outgoing students are morI/ successful on the professional board exams and eventually get better jobs.- They benefit from larger donations and a larger capital stock, probably the result of past donations and reinvested earnings. They are likely to enroll more graduate students than for-profits, which may also mean they do more research. In short, they have, in somewhat lesser degree, the advantages and disadvantages of public institutions, while retaining the voluntarism, choice and fee funding characteristic of the private sector--all of which may make them a desirable compromise. 12. One can infer from their behavior that quality enters into their objective function and that they are shielded from market pressures by dona- tions (of money and labor) and long-term reputation, which enable them to pur- sue this objective even if it implies higher cost. It is less clear, however, whether their objectives and discretionary resources come from their nonprofit status or their religious affiliation since, to a large extent, these two categories coincide. Thus, if secular for-profits were forced to become non- profits, we cannot assume that they will behave like the current religious nonprofits, since they probably would not have access to external donations nor would they suddenly require new objectives. 13. And if they did, the Philippines would lose the low-cost nonselec- tive part of their higher education sectcr, whi-h caters to the mass market. That is, new nonselective low-cost schools would not be started nor would old ones expand, as the college-eligible population expanded; in fact, some private schools might contract or close as the profit motive disappeared. 11 See James and Rose-Ackerma-n (1986R. 2/ See Arcelo and Sanyal (1987) for supporting evidence. - 162 - ANNEX 2 Note 2 Page 4 of 4 Contraction has indeed been occurring in the largest universities over the last few years. But most would probably maintain their institutional life and their market niche, with relatively little change in behavior, since closure is difficult and surviva' strategies few, at least in the short run. 34. In other words, it may be that the shift toward nonprofit legal status matters very little in this highly competitive environment, particu- larly in the short run. But if it does matter, society is faced with a quantity-quality trade-off on which we do not know the optimal noint. Thus, neither do we know the optimal institutional form. Given the ge numbers currently enrolled, it seems unlikely that Filipino higher eduL-tion needs more quantity and less quality, so we would not want to move further toward the for-profit end of the spectrum. On the other hand, the rate of return to schooling and the rate of population growth are sufficiently high so that we may not want to sacrifice quantity to get more quality either. Indeed, in the long run more quantity is probably needed and if this is not forthcoming in the private sector we will likely observe irresistable but dangerous political pressures for more public higher education. 15. To further pursue this issue, which is important not only for the Philippines but for other countries as well, studies should be carried out of the returns to quantity and quality, at the margin; i.e., how do the academic and labor market returns vary with incoming student qualifications and univer- sity expenditures? Such a study would tell us where the greatest social gains lie and would suggest alternative public policies, including choice of insti- tutional form, to get us there. In the absence of this information, we run the risk that government limitatiors on the distribution of dividends, turning for-profits into nonprofits, may make matters worse, rather than better for the country. - 163 - ANNEX 3 TABLES - 165 - Table Al.l: MAIN AREAS OF DECENTRALIZATION Area Authority 1. Recommendations on teacher Principal recruitment 2. School academic supervision Principal 3. Teacher supervision Principal 4. Appointment, transfer of Division Superintendents and Region- teachers and staff al Directors; previously done by the Central Office. 5. Procurement Regional Directors; previously done - Capital outlays by the Central Office. - Recurrent expenses 6. Establishment of elementary Reglonal Directors schools 7. Curriculum/programs/courses Central Office B. Establishment of colleges and Central Office and Congress universities 9. Establishment of high schools Congress 10. Salary determination/distribu- Central Office tion 11. Budgeting In theory, proposed at the division level. In reality, Central Office defines the bottom line. 12. Planning and evaluation At each level, but monitoring and evaluation is weak. - 166 - Table A1.2: DECS MANPOWER COMPONENT Office of the Secretary 47 Secretariat for instructional Materials Council 3 Philippine Institute on Physical Educational and Schools Sports 19 Subtotal 69 Administrative Service Ottice ot the Service Chief 5 Legal Division 15 General Services Division 126 Property Division 16 Cash Division 16 Records Division 16 Teachers Camp 91 Subtotal 291 Financial and Management Service Uttice oF the Service ChieT 5 Budget Division 33 Management Division 22 Accounting Division 161 Systems Division 45 Payroll Services Division 188 Subtotal 454 Human Resource Development Service Uttice ot the Service Uhief 5 Staff Development Division 16 Personnel Division 32 Employees Welfare and Benefits Division 11 Baguio Vacation Normal School 9 Subtotai 73 Planning Service -tFF ce the ervice Chief 5 Planning and Programming Division 26 Project Development and Evaluation Division 30 Research and Statistics Division 32 Computer Unit 16 Subtotal 109 Technical Service Uttice ot the Service Chief 3 Educational Information Division 18 Materials Production ard Publication Division 38 Educational Education Division 18 Subtotal 77 Bureau of Elementary Education Uttice ot the Director 17 Curriculum Development Division 41 Physical Facilities Division 15 Staff Development Division 17 Special Education Division 36 Subtotal 126 Bureau of Secondary Education Uttice of the Director 15 Curriculum Development Division Population Education Unit 42 Physical Facilities Division 13 Staff Development Division Population Education Unit 24 Subtotal 94 - 167 - Table A1.2: (cont'd) Bureau of Higher Educatior, Office of the Director 23 Policy Development and Evaluation Division 41 Staff Deveiopment and Monitoring Division 56 Student Services Division 46 Subtotal 166 Bureau of Technical and Vocational Education Office of the Director 12 Curriculum Development Division 21 Staff Development Division 14 Technical Services Division 14 Subtotal 61 Bureau of Physical Education and School Sports Office cf the Director 27 Curriculum Development Division 21 Facilities and Equipment Standards Development Division 15 Physical Fitness, Sports and Staff Development Division 15 Subtotal 78 Bureau of Non-Formal Education Office of the Director 13 Program Development Division 21 Staff Development Division 14 Learning Research and Development Division 14 Subtotal 62 Health and Nutrition Center Office of the Executive Director 7 School Health Division 14 School Nutrition Division 14 Subtotal 35 National Education Testing and Research Center Office of the Director 34 Test Administration Division 33 Test I)evelopment Division 40 Research Division 35 Subtotal 142 Regional offices National Capital Region 180 Region I 168 Region 11 152 Region III 165 Region IV 183 Region V 152 Region VI 167 Region VII 166 Region Vill 151 Region IX 157 Region X 168 Region Xl 150 Region Xll 154 Cordillera Autonomous Region /a Subtotal 2,113 Total 3,950 /a This was still being organized in 1988. Table At.3: DATA COLLECTION AND PROCESSING Department of Education, Culture and Sports (DECS) External agencies Central office Regional office Division office District office School (1) (2) (3) (4) (5) Allocates and distri- Accounts the distribu- Accounts division allo- A-counts district dis- Completes and submits butes data gathering tion list and conducts cation and conducts div- tribution list for the the data gathering forms (regular annual/ regional orientation. ision orientation. public elementary forms. special/nonannual) to schools. Regional Offices and Distributes forms to Distributes forms to the State Universities; con- Division Offices, non- District Offices and ducts orientation on the chartered and private public and private sec- data gathering system. higher institutions. ondary schools. (10) (6) NEDA, DPWH, DBM, UNESCO, Receives the completed World bank, ADS, Con- forms from the public gress, etc. request and elementary schools. utilize education data and information. (7) Receives the completed forms submitted by the District Offices, public and private secondary schools. (9) (6) Receives and analyzes Receives and processes the regional data bulle- the completed forms sub- tins for purposes of mitted by the Division planning, budgeting, Offices, nonchartered project development and higher institutions, decision-making. private colleges and universities. Prepares data bulletins for the district, divi- sion and region. PILIPPINES MnIIM TE2M PLAN PR2ECTIONS FXR Y"ENTARY AND SEOXARY IIMTS (1980181 - 1992193) USING BASE DATA Actual Actual Actual Actual Actual Projected Projected Projected Projected Projected Projected Projected Projected OF 84185 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 **a*PRITW P EM01MNS* Pop. Growth 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 Medlun Growth Rate Pap. 7 1,352,000 1,385,800 1,420,445 1,455,956 1,492,355 1,529,664 1,567,906 1,607,103 1,647,281 1,688,463 1,730,674 1,773,941 1,818,290 Calculated Crade I/Pop. 7 131.79 130.93 129.25 130.17 128.56 126.78 125.91 126.56 127.14 127.73 3.31 128.91 129.54 Calculated Grar'e I 1,781,850 1,814,442 1,835,966 1,895,178 1,918,597 1,939,340 1,974,142 2,033,888 2,094,414 2,156,605 2,220,674 2,286,870 2,355,443 NEDA Figures Grade I Growth 1.83 1.19 3.23 1.24 1.08 1.79 3.03 2.98 2.97 2.97 2.98 3.00 Calculated Grade II 1,536,560 1,545,085 1,546,676 1,566,529 1,621,225 1,654,356 1,723,888 1,778,040 1,792,441 1,810,896 1,825,953 1,833,319 1,829,968 NEDA. Figures Grade III 1,434,114 1,455,472 1,442,003 1,439,254 1,456,785 1,544,184 1,609,085 1,659,632 1,673,073 1,690,299 1,704,353 1,711,229 1,708,101 NE8A Figures Grade IV 1,319.308 1,365,137 1,364,515 1,364,284 1,358,063 1,406,766 1,465,891 1,511,939 1,524,184 1,539,877 1,552,681 1,558,945 1,556,095 NEA Figures Grade V 1,172,649 1,238,372 1,263,113 1,276,237 1,261,027 1,317,917 1,373,308 1,416,448 1,427,920 1,442,622 1,454,617 1,460,485 1,457,816 NEDA Figures Grade VI 1,045,963 1,099,795 1,138,994 1,175,987 3,178,076 1,202,179 1,207,906 1,232,736 1,283,320 1,310,138 1,335,381 1,370.622 1,423,722 NMA Figures Crude Survival Rate 67.47 66.57 67.14 67.72 68.29 68.86 69.43 70.00 Calculated Total Grades I-VI 8,290,444 8,518,303 8,591,267 8,717,469 8,793,773 9,064,742 9,354,220 9,632,683 9,795,352 9,950,437 10,093,659 10,221,470 10,331,145 Sun is calculated * PUBLIC (94%) 7,793,017 8,007,205 8,075,791 8,194,421 8,266,147 8,520,857 8,792,967 9,054,722 9,207,631 9,353,411 9,488,039 9,608,182 9,711,276 PUBLIC - 94% ' PRIVATE (6%) 497,427 511,098 515,476 523,048 527,626 543,885 561,253 577,961 587,721 597,026 605,620 613,288 619,869 PRIVATE = 6% TOT AGE 7-12 7,414,144 7,617,918 7,683,170 7,796,033 7.864,271 8,106,599 8,365,479 8,614,508 8,759,983 8,898,676 Q,026,759 9,141,061 9,239,143 89.43% ARE 7-12 YRS Pop. Growth Rate 1.94 2.07 2.26 2.46 2.63 2.74 2.53 1.24 1.14 1.00 0.83 0.64 Calculated Populaticr 7-12 7,545,696 7,692,349 7,851,807 8,029,124 8,226,321 8,442,297 8,673,532 8,892,571 9,003,266 9,106,059 9,197,153 9,273,482 9,332,770 NEDA Figures Gross Partic. Rate 109.87 110.74 109.42 108.57 106.90 107.37 107.85 108.32 108.80 109.27 109.75 110.22 110.70 Calculated Net Partic. Rate 98.26 99.03 97.85 97.10 95.60 96.02 96.45 96.87 97.30 97.72 98.15 98.57 99.00 '*~SEOONDARY ENKdXT24TS" Year I/Grade VI 82.55 83.38 8'5.76 85.53 86.61 87.52 88.44 89.35 90.26 91.17 92.09 93.00 Calculated Year I 878,702 863,478 916,998 976,749 1,005,823 1,020,361 1,052,207 1,068,242 1,101,450 1,158,357 1,194,518 1,229,719 1,274,679 N1A Figures Year II 797,688 761,641 794,341 839,167 876,885 909,840 933,596 983,675 1,037,529 1,078,805 1,145,121 1,180,512 1,211,719 NEDA Figures Year III 708,675 698,443 712,606 732,599 768,667 797,555 818,379 862,278 909,485 945,667 1,003,800 1,061,398 1,109,610 NEDA Figures Yr IVlYr III 86.38 93.10 92.06 91.69 93.44 96.57 97.56 94.55 93.05 91.44 89.40 89.49 NE1A Figures Year IV 633,503 612,170 650,274 656,036 671,688 718,239 770,167 798,372 815,268 846,23i 864,742 897,406 949,852 NIMA Figures CrLde Survival Rate 74.66 77.79 78.33 78.85 79.37 79.90 80.43 80.95 81.47 82.00 Calculated Total Year I-IV 3,018,568 2,935,732 3,074,219 3,204,551 3,323,063 3,445,995 3,574,349 3,712,567 3,863,732 4,029,067 4,208,181 4,369,035 4,545,860 Sun is calculated X PUBLIC 53.49 54.21 55.99 57.55 58.90 59.63 59.92 61.00 62.91 64.00 65.09 66.19 67.28 NEIA Flgures a PUBLIC 1,614,632 1,591,460 1,721,255 1,844,219 1,957.284 2,054,847 2,141,750 2,264,666 2,430,674 2,578,603 2,739,105 2,891,864 3,058,455 Calculated PRVATE 1,403,936 1.344,272 1,352,964 1,360,332 1,365,779 1,391,148 1,432,599 1,447,901 1,433,058 1,450,464 1,469,076 1,477,171 1,487,405 Calculated IcL AGE 13-16 2,326,109 2,262,275 2,268,993 2,463,435 2,560,821 2,516,482 2,633,044 2,757,73? 2,893,006 3,039,947 3,198,456 33,677,377 3,544,831 77.06% ARE 13-16 YRS Pop. Growth Rate 2.39 2.25 2.05 1.87 1.80 1.86 2.03 2.27 2.50 2.69 2.82 2.86 Calculated Population 13-16 4,506,307 4,614,094 4,717,783 4,814,423 4,904,595 4,992,949 5,085,842 5,189,241 5,306,837 5,439,549 5,586,105 5,743,566 5,908,C52 NEA Figures Gross Partic. Rate 66.99 63.63 65.16 66.56 67.75 69.02 70.28 71.54 72.81 74.07 75.33 76.07 76.94 Calculated Net Partic. Rate 51.62 49.03 50.21 51.17 52.21 50.40 51.77 53.14 54.51 55.89 57.26 586.35 60.00 Calculated 0 o ~ D ALTENATIVE PDJECTICNS FMR ELENEARY AND SENDARY ENIMfLMS (1980181 - 2000/01) Actual Actual Actual Actual Actual Estimated Estimated Estimated Projected Projected Projected Projected Projected 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 ***PPR ENMS Pop. Growth 2.80 2.80 2.70 2.65 2.60 2.55 2.50 2.50 2.50 2.50 2.50 2.50 Pop. 7 1,352,000 1,389,856 1,428,772 1,467,349 1,506,234 1,545,396 1,584,803 1,624,423 1,665,034 1,706,660 1,749,326 1,793,059 1,837,886 Grade I/Pop. 7 131.79 130.55 128.50 129.16 127.38 126.14 125.21 124.85 124.48 124.24 124.12 124.12 124.24 Grade I 1,781,850 1,814,442 1,835,966 1,895,178 1,918,597 1,949,295 1,984,382 2,028,038 2,072,655 2,120,326 2,171,214 2,225,494 2,283,357 Grade I Growth : 1.83 1.19 3.23 1.24 1.60 1.80 2.20 2.20 2.30 2.40 2.50 2.60 Grade II : 1,536,560 1,545,085 1,546,676 1,566,529 1,621,225 1,653,831 1,686,140 1,721,451 1,764,393 1,807,355 1,853,165 1,901,983 1,953,984 Grade III 1,434,114 1,455,472 1,442,003 1,439,254 1,456,785 1,515,845 1,549,639 1,583,285 1,619,886 1,663,823 1,707,951 1,754,947 1,804,982 Grade IV 1,319,308 1,365,137 1,364,515 1,364,284 1,358,063 1,378,119 1,437,021 1,472,157 1,507,288 1,545,371 1,590,615 1,636,217 1,684,749 Grade V 1,172,649 1,238,372 1,263,113 1,276,237 1,261,027 1,262,999 1,285,785 1,345,052 1,380,884 1,418,358 1,457,285 1,503,131 1,549,497 Grade VI 1,045,963 1,099,795 1,138,994 1,175,987 1,178,076 1,179,060 1,184,693 1,209,923 1,269,729 1,307,697 1,347,440 1,3R5,878 1,427,974 Crade Survival Rate: 66.17 65.29 65.90 67.00 68.16 69.12 69.84 70.41 Total Gradea I-VI : 8,290,444 8,518,303 8,591,267 8,717,469 8,793,773 8,939,148 9,127,660 9,359,908 9,614,834 9,862,930 10,127,669 10,407,651 10,704,545 * PUM.IC (94%) 7,793,017 8,007,205 8,075,791 8,194,421 8,266,147 8,402,799 8,580,000 8,798,313 9,037,944 9,271,154 9,520,009 9,783,192 10,062,272 * PRIVAME (6X) 497,427 511,098 515,476 523,048 527,626 536,349 547,660 561.594 576,890 591,776 607,660 624,459 642,273 Pesnt ae 7-12 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 89.43 MMAL AGE 7-12 7,414,144 7,617,918 7,683,170 7,796,033 7,864,271 7,994,280 8,162,866 8,370,565 8,598,546 8,820,418 9,057,174 9,307,562 9,573,074 Pop. Growth Rate 2.20 2.40 2.60 2.55 2.50 2.45 2.45 2.45 2.45 2.45 2.45 2.45 Ptpulatic 7-12 : 7,652,000 7,820,344 8,008,032 8,216,241 8,425,755 8,636,399 8,847,991 9,064,767 9,286,853 9,514,381 9,747,484 9,986,297 10,230,961 1 Gros, Partic. Rate 108.34 108.92 107.28 106.10 104.37 103.51 103.16 103.26 103.53 103.66 103.90 104.22 104.63 Net Partic. Rate 96.89 97.41 95.94 94.89 93.34 92.56 92.26 92.34 92.59 92.71 92.92 93.20 93.57 O ***SR Y ARY MX12bES* Year I/Grade VI 82.55 83.38 85.76 85.53 87.00 88.50 91.00 92.50 92.00 92.50 93.10 93.20 Year I 878,702 863,478 916,998 976,749 1,005,823 1,016,361 1,043,468 1,078,070 1,119,179 1,168,151 1,209,619 1,253,119 1,291,638 Year I Growth -1.73 6.20 6.52 2.98 1.05 2.67 3.32 3.81 4.38 3.55 3.60 3.07 Year II 797,688 761,641 794,341 839,167 876,885 922,340 937,085 966,252 1,002,605 1,045,313 1,098,062 1,143,090 1,190,463 Year III : 708,675 698,443 712,606 732,599 768,667 809,365 853,164 869,615 899,580 936,433 979,459 1,033,276 1,077,934 Year IV 633,503 612,170 650,274 656,036 671,688 707,942 747,044 789,177 806,133 835,710 874,629 917,753 971,280 Crude Survival Rate 74.66 77.79 77.20 76.48 78.46 79.32 80.09 81.13 82.00 83.15 Total Year I-IV : 3,018,568 2,935,732 3,074,219 3,204,551 3,323,063 3,456,008 3,580,761 3,703,114 3,827,498 3,985,608 4,161,769 4,347,238 4,531,315 Z PUIBLIC : 53.49 54.21 55.99 57.55 58.90 59.63 59.92 61.00 62.91 64.00 65.09 66.19 67.28 * PMNIC: 1,614,632 1,591,460 1,721,255 1,844,219 1,957,284 2,060,817 2,145,592 2,258,899 2,407,879 2,550,789 2,708,895 2,877,437 3,048,669 * PRIVATE : 1,403,936 1,344,272 1,352,964 1,360,332 1,365,779 1,395,190 1,435,169 1,444,214 1,419,619 1,434,819 1,452,873 1,469,801 1,482,646 Percent Aw are 13-16: 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 77.06 IOrAL AGE 13-16 2,326,109 2,262,275 2,368,993 2,469,427 2,560,752 2,663,200 2,759,335 2,853,619 2,949,470 3,071,309 3,207,059 3,349,982 3,491,831 Pcp. Grwth Rate : 2.00 2.00 2.00 2.00 2.20 2.40 2.45 2.45 2.45 2.45 2.45 2.45 Populaticn 13-16 : 4,604,000 4,686,000 4,770,000 4,855,000 4,946,000 5,028,000 5,138,000 5,268,000 5,423,000 5,604,000 5,798,000 5,989,000 6,159,000 Gross Partic. Rate 65.56 62.65 64.45 66.01 67.19 68.74 69.69 70.29 70.58 71.12 71.78 72.59 73.57 Net Partic. Rate 50.52 48.28 49.66 50.86 51.77 52.97 53.70 54.17 54.39 54.81 55.31 55.94 56.69 OQ a, 0 P~ (8 :D. A.THwY PEcIBns FM ELNUl Hf ARYD SMI) M ER LINTS (1980181 - 2000101) (Contimed) : Projected Projected Projected Prjected Projected Projected Prjected Projected : 1993-94 1994-95 1995-96 1996-97 1997-9% 1998-99 1999-2000 20Cl01 ***P~RI?A EfftLn*** Ptp. Growth 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 Mmdl--GrowthRate Pap. 7 : 1,883,833 1,930,929 1,979,202 2,028,682 2,079,399 2,131,384 2,184,669 2,239,285 Calculated Grade IIPop. 7 124.36 124.48 124.60 124.72 124.85 124.97 125.09 125.21 Calculated Grade I : 2,342,724 2,403,635 2,466,130 2,530,249 2,596,036 2,663,533 2,732,784 2,803,837 Based cz Awml Growth Grade I Growth 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 Variable Irqxt Grade II 2,004,788 2,057,381 2,111,353 2,166,742 2,223,583 2,284,511 2,344,441 2,405,943 Calculated Grade III : 1,854,331 1,902,944 1,953,277 2,004,941 2,057,971 2,112,404 2,170,743 2,228,157 Calculated Grade IV : 1,733,144 1,780,899 1,827,968 1,876,709 1,926,748 1,978,122 2,030,S65 2,087,386 Calculated Grade V : 1,595,795 1,641,981 1,687,580 1,732,548 1,779,120 1,826,943 1,876,051 1,926,479 Calculated Grade VI 1,472,332 1,516,643 1,560,867 1,604,551 1,647,654 1,692,299 1,738,153 1,785,250 Calculated Cnrde Survival Rate 71.04 71.53 71.89 72.10 72.16 72.24 72.31 72.39 Calculated Total Grades I-VI :11,003,114 11,303,484 11,607,176 11,915,740 12,231,112 12,557,811 12,893,038 13,237,052 Sun is calculated * PUBLIC (94%) :10,342,927 10,625,275 10,910,745 11,200,796 11,497,245 11,804,343 12,119,456 12,442,829 PLULIC - 94% * PRrVATE (6%) : 660,187 678,209 696,431 714,944 733,867 '53,469 773,582 794,223 PRIVATE = 6% Percent who are 7-12 : 89.70 90.00 90.15 90.30 90.45 90.60 90.75 90.90 Variable InFTx TOMALGE 7-12 : 9,869,793 10,173,135 10,463,869 10,759,914 11,063,041 11,377,377 11,700,432 12,032,480 7-12 Yr Olds Pap. Growth Rate : 2.45 2.45 2.45 2.45 2.45 2.45 2.45 2.45 Mbdiun Growth Rate Polation 7-12 :10,481,620 10,738,420 11,001,511 11,271,048 11,547,189 11,830,095 12,119,932 12,416,870 Calculated Gross Partic. Rate 104.98 105.26 105.51 105.72 10i.92 106.15 106.38 106.61 Calculated Net Partic. Rate 94.16 94.74 95.11 95.47 95.81 96.17 96.54 96.90 Calculated ***S E YARY W Year IlGrade VI : 93.25 93.30 93.35 93.40 93.45 93.50 93.55 93.60 Variable loput Year I : 1,331,586 1,373,686 1,415,786 1,457,850 1,499,453 1,540,556 1,583,146 1,626,912 Calculated Year I Growth : 3.09 3.16 3.06 2.97 2.85 2.74 2.76 2.76 Calculated Year II : 1,227,315 1,265,539 1,305,826 1,34b,130 1,386,415 1,426,280 1,465,685 1,506,521 Calculated Year III : 1,122,845 1,157,849 1,194,163 1,232,439 1,270,747 1,309,053 1,346,979 1,384,486 Calculated Year IV : 1,013,474 1,055,923 1,089,072 1,173,469 1,159,725 1,196,027 1,232,342 1,268,315 Calculated Crude Survival Rate : 83.78 84.26 84.32 84.37 84.42 84.48 84.53 84.59 Calculated Total Year I-IV : 4,695,219 4,852,997 5,004,848 5,159,886 5,316,339 5,471,916 5,628,152 5,786,234 Sun is calculated X PUBLIC : 68.32 69.43 70.51 71.60 72.71 73.82 74.91 76.02 Vaziable IVut * PUBLIC : 3,207,774 3,369,436 3,528,918 3,694,479 3,865,510 4,039,368 4,216,048 4.398,695 Calculated * PRIVATE : 1,487,445 1,483,561 1,475,930 1,465,408 1,450,829 1,432,547 1,412,103 1 381,539 Calculated Percent who are 13-16 : 77.25 77.45 77.65 77.85 78.05 78.25 78.45 78.65 Variable Input IUAL AGE 13-16 : 3,627,057 3,758,646 3,886,264 4,016,972 4,149,403 4,281,774 4,415,285 4,550,873 13-16 Yr Olds Pop. Growth Rate : 2.45 2.45 2.45 2.45 2.45 2.45 2.45 2.45 Mediun Growth Rate Populaticn 13-16 : 6,159,000 6,159,000 6,159,000 6,159,000 6,159,000 6,159,000 6,159,000 6,159,000 Calculated Gross Partic. Rate 76.23 78.80 81.26 83.78 86.32 88.84 91.38 93.95 Calculated Net Partic. Rate 58.89 61.03 63.10 65.22 67.37 69.52 71.69 73.89 Calculated -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ o r 4:.. (D - 172 - Table Al. 4 Page 4 of 9 PHILIPPINES MEDIUM TERM PLAN TEACHER DEMAND PROJECTIONS (1987188 - 1992/93) 1987/88 1988/89 1989190 1990/91 1991192 1992193 ~ --_--= -===e========e-=========== ELEMENTARY LEVEL: Total Projected Enrollments /1 9,633,000 9,795,000 9,950,000 10,094,000 10,221,000 10,331,000 Public Enrollments 9,055,020 9,207,300 9,353,000 9,488,360 9,607,740 9,711,140 Private Enrollments 577,980 587,700 597,000 605,640 613,260 619,860 ***Teacher Demand - Public*** Total Teachers Needed 277,109 284,796 297,938 331,002 323,864 336,331 Student/Teacher Ratio 32.68 32.33 31.39 28.67 29.67 28.87 Incremental Teachers 7,687 4,800 4,592 4,267 3,763 3,259 Teachers to decongest classes /2 8,342 8,472 8,595 8,704 8,798 Replacement at 1.55X 4,295 4,414 4,618 4,821 5,020 5,213 Total New Teacher Demand 11,982 17,556 17,682 17,683 U1,487 17,270 ***Teacher Demand - Private*** Total Teachers Needed 13,349 13,946 14,578 15,222 15,845 16,418 Student/Teacher Ratio 43.30 42.14 40.95 39.79 38.70 37.75 Incremental Teachers 597 632 644 623 573 589 Replacement at 2X 267 280 293 305 316 328 Total Teachers Demand 864 912 937 928 889 917 Public + Private Teacher Demand 12,846 18,468 18,619 18,611 18,376 18,187 SECONDARY LEVEL: Total Projected Enrollments 3,713,000 3,864,000 4,029,000 4,208,000 4,339,000 4,600,00u Public Enrollments 2,227,800 2,318,400 2.417,400 2,524,800 2,603,400 2,760,000 Nationally Funded High Sch. 747,575 778,299 811,534 847,587 873,975 926,546 Locally Funded High Sch. 1,480,225 1,540,101 1,605,866 1,677,213 1,729,425 1,833,454 Private Enrollments 1,485,200 1,545,600 1,611,600 1,683,200 1,735,600 1,840,000 ***Teacher Demand - Public*** Nationally Funded: Total Teachers Needed 26,225 27,105 29,414 31,789 34,213 36,375 Student/Teacher Ratio 28.51 28.71 27.59 26.66 25.55 25.47 Incremental Teachers 880 809 875 924 660 1,314 Teachers to decongest classes 1,500 1,500 1,500 1,500 1,500 Replacement at 1.66X 435 450 488 528 368 604 Total New Teachers 1,315 2,759 2,863 2,952 2,728 3,418 Locally Funded: Total Teachers Needed 38,448 39,822 42,898 46,129 49,458 52,263 Student/Teacher Ratio 38.50 38.67 37.43 36.36 34.97 35.08 Incremental Teachers 1,374 1,576 1,731 1,829 1,305 2,601 Teachers to decongest classes 2,000 2,000 2,000 2,000 2,000 Replacement at 1.66X 638 661 720 782 846 901 Total New Teachers 2,012 4,237 4,451 4,611 4,151 5,502 Total Public New Teachers 3,327 6,996 7,314 7,563 6,879 8,920 ***Teacher Demand - Private*** Total Teachers Needed 40,108 41,920 43,885 45,911 48,035 50,261 Student/Teacher Ratio 37.03 36.87 36.72 36.66 36.13 36.61 Incremental Teachers 1,812 1,965 2,026 2,124 2,226 2,333 Replacement at 2X 802 841 882 924 969 1,016 Total Private New Teachers 2,614 2,806 2,908 3,048 3,195 3,349 Total Public + Private Teacher Demand 5,941 9,802 10,222 10,611 10,074 12,269 /1 Enrollments projections based on Hedium Term Plan. /2 Teachers needed to decongest classes with more than 50 students. ALTE ATIVE TEACE 0EP ND PRicCNS (1986187 - 2000101) : Actual Actual Actual Actual ActuaLL Actual Projected Projected Projected Projected Projected Projected Projected : 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 199r2-93 *_ ~~EU1NIR TACER DEMAND * ***YPUBUC**- Total Gd I-VI Er:ollmnec 8,290,444 8,518,303 8,591,267 8,717,469 8,793,773 8,939,148 9,127,660 9,359,908 9,614,834 9,862,930 10,127,669 10,407,651 10,704,545 Public Fnollrnt (94%) 7,793,017 8,007,205 8,075,791 8,194,421 8,266,147 8,402,799 8,580,000 8,798,313 9,037,944 9,271,154 9,520,009 9,783,192 10,062,272 Stx1entlTeacher Ratio 30.52 30.83 30.61 30.59 30.54 30.54 30.50 30.40 30.00 29.80 29.60 29.40 29.30 Total Teachers Needed 2.55,343 259,758 263,849 267,845 270,693 275,123 281,311 289,418 301,265 311,113 321,622 332,762 343,422 Inreffnral Teachers 255,343 4,415 4,091 3,996 2,848 4,430 6,188 8,107 11,847 9,848 10,509 11,140 10,661 Peplacemnt at 1.55% 0 3,958 4,026 4,090 4,152 4,196 4,264 4,360 4,486 4,670 4,822 4,-35 5,158 Tatal New Teacher Dnarid 255,343 8,373 8,117 8,086 7,000 8,626 10,453 12,467 16,333 14,517 15,332 16,125 15,818 **IVA:E** Private EnrolLmmt (6%) 497,427 511,098 515,476 523,048 527,626 536,349 547,660 561,594 576,890 591,776 607,660 624,459 642,273 Studert/Teacer Ratio 44.54 44.18 42.91 42.33 41.33 41.00 40.50 40.00 39.50 39.00 38.50 38.00 37.70 Total Teachers Needed 11,167 11,568 12,013 12,356 12,765 13,082 13,522 14,040 14,605 15,174 15,783 16,433 17,036 Incremtal Teachers 11,167 401 445 343 409 317 441 517 565 569 610 650 603 Replac.wnt at 2% 0 223 231 240 247 255 262 270 281 292 303 316 329 Total New Teacher Duiand 11,167 624 676 583 656 572 702 788 846 861 913 965 932 * ***** PnLIC + PRIVATE **I Total Teacbers 266,510 271,326 275,862 280,201 283,456 288,205 294,834 303,458 315,870 326,286 337,405 349,195 360,459 Total New Teacher Demurd 8,997 8,794 8,669 7,656 9,198 11,155 13,255 17,178 15,378 16,245 17,090 16,750 -J … ----…---- -- ----- --------- ----…-------------- - - ~ - S E Y SCXM T7EA DE4- ** PnLc **** * PtBLIC YR I-IV 1,614,632 1,591,460 1,721,255 1,844,219 1,957,284 2,060,817 2,145,592 2,256,899 2,407,879 2,550,789 2,708,895 2,877,437 3,048,669 % NATIGALLY EUND) 33.40 33.72 42.34 42.91 43.34 46.00 100.00 100.00 100.00 100.00 100.00 NATIAIALY FUN9M 574,899 621,871 828,714 884,297 929,900 1,039,094 2,407,819 2,550,789 2,708,895 2,877,437 3,048,669 LOCALY FUNDI 1,146,356 1,222,348 1,128,570 1,176,521 1,215,692 1,219,806 0 0 0 0 0 StuIent/Teadbr Ratio 30.60 30.80 31.00 31.00 30.80 30.60 30.40 30.20 30.00 29.80 29.60 Total Teachers Needed 52,435 54,555 56,257 59,876 63,138 66,478 69,662 73,820 79,207 84,463 90,297 96,558 102,996 Iammtal Teachers 2,120 1,702 3,619 3,262 3,340 3,184 4,158 5,386 5,257 5,833 6,262 6,437 Replaoset at 1.66% 870 906 934 994 1,048 1,104 1,156 1,-25 1,315 1,402 1,499 1,603 Total New Teacher Dana-d 2,990 2,608 4,553 4,256 4,388 4,288 5,315 6,612 6,571 7,235 7,761 8,040 *** PRVATE me Prlvate lnr1oinmAts 1,403,936 1,344,272 1,352,964 1,360,332 1,365,779 1,395,190 1,435,169 1,444,214 1,419,619 1,434,819 1,452,873 1,469,801 1,482,646 Student/Teacher Ratio 34.00 33.00 32.80 32.60 32.40 31.80 31.60 31.40 31.30 31.20 Total Teachers Needed 40,010 41,387 42,536 44,024 44,575 44,642 45,406 46,270 46,959 47,521 Izareazal Teachers 40,010 1,377 1,149 1,487 551 68 764 864 689 562 Replacemen, at 2X 0 800 828 851 880 891 893 908 925 939 TotaL New Teacher Darnd 40,010 2,178 1,977 2,338 1,431 959 1,656 1,772 1,614 1,501 ***frA**A*** PUBLIC + PRIVATE * Total Teachers 99,886 104,525 109,014 113,686 118,395 123,849 129,869 136,566 143,517 150,516 e lb Total New Teahers 6,434 6,365 6,626 6,746 7,571 8,228 9,008 9,375 9,542 00 I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~mE 0 ALTERNATIIE TE4A DEM'AND PRaSIONS (1986/87 - 2000101) (Cont nxed) : Projected Projected Projected Projected Projected Projected Projected Projected : 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 _******e*E LEMENTA TEAC DDE4ND ****PUBLIC*wa* Total Gd I-VI Enrollmtent 11,003,114 11,303,484 11,607,176 11,915,740 12,231,112 12,557,811 12,893,038 13,237,052 Public Enrollnent (947) 10,342,927 10,625,275 10,910,745 11,200,796 11,497,245 11,804,343 12,119,456 12,442,829 Ccnstant 94% StudentlTeacher Ratio 29.60 29.90 30.20 30.40 30.50 30.55 30.60 30.60 nput fran 1986/87 Total Teachers Needed 349,423 355,360 361,283 368,447 376,959 386,394 396,061 406,628 Teachers Inrcremmtal Teachers 6,001 5,937 5,923 7,164 8,512 9,435 9,666 10,568 r=ial Needs Replac tiacet at 1.55% 5,323 5,416 5,508 5,600 5,711 5,843 5,989 6,139 Attritica at 1.55% Total New Teacher Denand 11,324 11,353 11, 3l 12,764 14,223 15,278 15,656 16,707 (Attrition + Akrnal Needs) ***PRIVATE** Private Enrollwant (6%) 660,187 678,209 696,431 714,944 733,867 7S3,469 773,582 794,223 Crostant 6% Student/Teacher Ratio 37.40 37.10 36.80 36.50 36.20 35.90 35.80 35.70 Irput fro3 1986187 Total Teachers Needed 17,652 18,281 18,925 19,588 20,273 20,988 21,608 22,247 Teachers Incremental Teachers 616 629 644 663 685 715 620 639 Arkmal Needs Replaca2unt at 2X 341 353 366 378 392 '05 420 432 Attrition at 22 Total Nw Teacher Deanad 956 982 1,010 1,041 1,077 1,11 1,040 1,071 (Attrition + Aeial Needs) - PUBLIC + PRD7ATE *- 3, Total Teachers 367,075 373,641 380,208 388,035 397,231 407,382 417,669 4228876 Teachers Total New Teacher Demad 12,280 12,335 12,440 13,805 15,299 16,399 16,696 17,778 (AttrLtian + Anuaml Needs) -S}A R YOMM TECER DEMAND PUBL.IC **** * PUBIC YRt I-IV 3,207,774 3,369,436 3,528,918 3,694,479 3,865,510 4,039,368 4,216,048 4,398,69. Public Secaary % NACIKALLY FUNDED 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Variable NAICNALLY FUNDE 3,207,774 3,369,436 3,528,918 3,694,479 3,865,510 4,039,368 4,216,048 4,398,695 Calculated LCAUY EVNDD 0 0 0 0 0 0 0 0 TOTAL - NAS.FUNCED Student/Teadher Ratio 29.60 29.70 29.80 29.90 30.00 30.;00 30.00 30.00 Iput fron 1984/85 Total Tpachers Needed 108,371 113,449 118,420 123,561 128,850 134,646 140,535 146,623 Calculated Increental Teachers 5,375 5,078 4,971 5,141 5,289 5,795 5,889 6,088 Anual Needs Replacament at 1.66Z 1,710 1,799 1,883 1,966 2,051 2,139 2,235 2,333 Attriticn at 1.66% Total New Teacher Demand 7,085 6,877 6,854 7,107 7,340 7,934 8,124 8,421 (Attriticn + AmuaL Needs) *** PRIVATE ** Private fnrolLun±its 1,487,445 1,483,561 1,475,930 1,465,408 1,450,829 1,432,547 1,412,103 1,387,539 Student/Teacher Ratio 31.10 31.00 31.00 31.00 31.00 31.00 31.00 31.00 Dput fran 1985/86 Total Teachers Needed 47,828 47,857 47,611 47,271 46,801 46,211 45,552 44,759 Calculated Incremental Teachers 307 29 (246) (339) (470) (590) (659) (792) Anmal Needs Replacuinit at 22 950 957 957 952 945 936 924 911 Attritian at 22 Total New Teacher DJnmd 1,258 986 711 613 475 346 265 119 (Attritian + Amnal Needs) *ee*e*a**-* PUBLIC + PRIVATE I*'*d *e9 totaL Teacher 156,199 161,306 166,031 170,832 175,651 180,857 186,087 191,382 Teadwcrs t 1> Total Nenw Teacher:s 8,342 7,863 7,565 7,720 7,815 8,280 8,389 8,540 (Attritit + Arsal Needs) CD CD O t" - 175 - Table A1.4 Page 7 of 9 COMPARISON OF TEACHER SUPPLY AND DEMAND PROJECTIONS 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 = =_==-===3=====_7=_====7 = n =-==== == ========c====3======= D-=============~ TEACHER SUPPLY: Number of Graduates /1 29,680 32,710 36,100 39,910 44,190 46,310 TEACHER DEMAND: Phillipines Medium Term Plan Projections - Total Elementary 12,846 18,468 18,619 18,611 18,376 18,187 Public 11,982 17,556 17,682 17,683 17,487 17,270 Private 864 912 932 928 889 917 Total Secondary 5,941 9,802 10,222 10,611 10,074 12,269 Public 3,327 6,996 7,314 7,563 6,879 8,920 Private 2,614 2,806 2,908 3,048 3,195 3,349 Grand Total: 18,787 28,270 28,841 29,222 28,450 30,456 Alternattve Projections - Total Elementary 13,255 17,178 15,378 16,245 17,090 16,750 Public 12,467 16,333 14,517 15,332 16,125 15,818 Private 788 846 861 913 965 932 Total Secondary 6,746 7,571 8,228 9,008 9,375 9,542 Public 5,315 6,612 6,571 7,235 7,761 8,040 PrLvate 1,431 959 1,656 1,772 1,614 1,501 Grand Total: 20,001 24,749 23,606 25,253 26,465 26,292 /1 Teacher supply is based on outputs of g.aduates from private and public teacher training institutions and university Schools of Education. - 176 - Table A1.4 Page 8 of 9 PHILIPPINES MEDIUM TERM PLAN PUBLIC SECONDARY SCHOOL BUILDING PROGRAM (1988/89 - 1992193) :Notes 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 Enroll. Yr. I-IV /1 2,257,903 2,432,262 2,622,286 2,828,630 3,050,977 3,288,235 Enroll. Increase 174,359 190,024 206,344 222,347 237,258 Total Classrooms 28,224 30,403 32,779 35,358 38,137 41,103 Clrms for Enrol.Inc. /2 2,179 2,375 2,S79 2,779 2,366 Replacement /3 678 855 520 617 '718 Backlog made good /4 2,258 2,258 2,258 2,258 2,258 Repair/Completion /5 1,186 1,496 1,300 1,234 1,435 Annual New Classrooms 6,301 6,984 6,657 6,888 7,377 Total Science Labs 7,056 7,601 8,195 8,839 9,534 10,276 Labs for Enrol.Inc. 1 /6 545 594 645 695 741 Replacement /7 30 63 49 66 85 Backlog made good /8 1,115 1,115 1,115 1,115 1,114 Repair/Completion /9 104 220 243 264 337 Annual New Sc. Labs 1,794 1,992 2,052 2,140 2,277 Total Workshops 7,056 7,601 8,195 8,839 9,534 10,276 WkShp for Enrol.Inc. /10 545 594 645 695 741 Replacement /11 45 75 53 70 86 Backlog made good /12 960 960 960 960 958 Repair/Completion /13 158 264 266 277 343 Annual New Sc. Labs 1,708 1,893 1,924 2,002 2,128 Classroom Cost P'000 /14 0 877,860 953,040 922,280 966,500 1,022,470 Sc. Lab Costs P'000 /15 0 432,900 465,000 476,550 495,400 518,950 Workshop Cost P'000 /16 0 558,300 596,550 606,900 631,450 659,400 TOTAL CAPITAL COST 0 1,869,060 2,014,590 2,005,730 2,093,350 2,200,820 /1 Enrollment projections from Philippines Medium Term Plan Projection Model. 12 40 students per class and two classes per classroom. /3 Replacement of 4% of stock in first two yea,s and 2% thereafter. /4 The backlog of classrooms (28,224 - 16,934 = 11,290) is slowly reduced over 5 years. /5 7% of stock in first two years, 5% for third year, 4% thereafter. 16 320 students per science laboratory. 17 Replacemint of 2% of stock in first two years ana 1X thereafter. 18 The backlog of laboratories (7,056 - 1,482 = 5574) is slowly reduced over 5 years. 19 7% of stock in first two years, 5% for third year, 4% thereafter. /10 320 students per workshop. I11 Replacement of 2% of stock in first two years and 1% thereafter. 112 The backlog of workshops (7,056 - 2,258 - 4,798) is slowly reduced over 5 years. /13 7% of stock in first two years, 5% for thLrd year, 4% thereafter. 114 Cost/Classroom = P 160,000 : Repair/Completion = P 50,000 in 1987 prices. /15 Cost/Sc.Lab = P 250,000 i Repair/Completion = P 100,000 ln 1987 prices. /16 Cost/Workshop = P 350,000 ; Repair/Completion = P 100,000 in 1987 prices. P3LTNATIVE P JCTIOM FM PHYSICAL RYUIE32 AND CAPITAL CUTLAY (988189 - 2CDOOi' :Notes 1986-87 1987-88 1988-89 .989-90 3990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-200 2000-01 ?`ublic Elan. Fa,r.ll. 11 8,5a0,000 8,79S,313 9,037,944 9.271.154 9,520,009 9,783.192 10,062,272 10,342,927 10,625,275 10,910,745 11,200,796 11,497.245 11,804,343 12,119.45612,442,829 Total Clasro : 12 219,958 225,949 231,779 238,000 244,580 251,557 258,573 265,632 272,769 280,020 287,431 295,109 302,986 311,071 Cl1n for El.Inc. : 5,991 5,830 6,221 6,580 6,977 7,016 7,059 7.137 7,251 7,411 7,677 7,878 8,084 Replacpn : 13 10,998 11,297 11,589 11,900 12,229 12,578 12,929 13,282 13,638 14,001 14,372 14,755 15,149 Axual Nev Classrwm 16,989 17,128 17,810 18,480 19,206 19,594 19,987 20,418 20,890 21,412 22,049 22,633 23,234 CLassronCost P'000 : 4 1,274,150 1,284,575 1,335,774 1,385,968 1,440,450 1,469,567 1,499,051 1,531,377 1,566,728 1,605,917 1,653,675 1,697,494 1,742,524 Enroll. Yr. I-IV : /5 2,145,592 2,258,899 2,407,879 2,550,789 2,708,895 2,877,437 3,,48,669 3,207,774 3,369,436 3,528,918 3,694,479 3,865,510 4,039,368 4,216,048 4,398,695 En2ro11. Inrease 113,307 148,979 142,910 158,106 168,542 171,232 159,105 161,662 159,482 165,561 171,032 173 858 176,680 182,647 StudentClass- :/6 80 80 78 75 73 70 68 66 64 62 59 56 53 50 Total Classroom .2,236 30,098 32,702 36,119 39,417 43,552 47,173 51,uS2 55,139 59,588 65,517 72,132 79,548 b,,974 Clms for Enrol.Inc. 1,862 1,832 2,108 2,309 2,446 2,340 2,449 2,492 2,670 2,899 3,105 3,334 3,653 RepIt : /7 1,693 2,032 2,032 2,032 2,032 1,524 1,651 1,787 1,930 2,086 2,293 2,525 2,784 Bakl mode d :/8 2,261 2,261 2,260 2,260 2,260 0 0 0 0 0 0 0 0 Auial Now Classrom : /9 5,817 6,125 6,400 6,601 6,738 3,864 4,100 4,279 4,600 4,984 5,398 5,858 6,437 Stiult/Sc. Lab : 320 320 320 320 320 320 320 320 320 320 320 320 320 320 Total Scie Labs : 7,059 7,525 7,971 8,465 8,992 9,527 10,024 10,529 11,028 11,545 12,080 12,623 13,175 13,746 Labs for Enrol.Inc. : 466 447 494 527 535 497 505 498 517 534 543 552 571 1 Replact : /10 148 178 178 17P 178 191 200 211 221 231 242 252 264 '. Backoeg made d :111 1,115 1,115 1,115 1,115 1,115 0 0 0 0 0 0 0 0 Arial New Sc. Labs : 1,729 1,739 1,787 1,820 1,M28 688 706 709 738 765 785 805 834 Studert/Wokshxp : 320 320 320 320 320 320 320 320 320 320 320 320 320 320 Total Worskshps . 7,059 7,525 7,971 8,465 8,992 9,527 10,024 10,529 11,028 11,545 12,080 12,623 13,175 13,746 lS for Enrl. .Inc. : 466 447 494 527 535 497 505 498 517 534 543 552 571 Replaaowrt : (12 226 271 271 271 271 238 251 263 276 289 302 316 329 Backlcsg gk cod :113 960 960 960 960 960 0 0 0 0 0 0 0 0 kAral 1 e Sc. Labs : 1,651 1,678 1,725 1,758 1,766 735 756 762 793 823 845 868 900 Clasaroan Cost P'OOC : 114 0 930,663 980,042 1,024,026 1,056,139 1,078,120 618,258 656,078 684,597 736,033 797,509 863,632 937,312 1,029,939 Sc. Lab Costs P'OOO : /15 0 432,190 434,859 446,731 454,883 456,985 171,936 176,420 177,243 184,484 191,345 196,225 201,147 208,568 Workshop Cost P'OOO : /lb 0 577,976 587,144 603,765 615,178 618,121 257,383 264,531 266,567 277,576 288,087 295,854 303,696 315,052 SLIM CAPr, OlS' .T 0 1,940,829 2,002,044 2,074,522 2,126,201 2,153,225 1,047,578 1,097,029 1,128,407 1,198,093 1,276,941 1,355,712 1,442,154 1,553,559 EEM.+ SEC. CAPITAL COS 3,214,980 3,286,619 3,410,295 3,512,169 3,593,675 2,517,144 2,596,080 2,659,784 2,764,820 2,882,858 3,009,387 3,139,648 3,296.084 11 Enrollmt projmbtios fran alternative mxlel. /9 CLassroxm for enrollmxke increase plus rep lants plus backlo. /2 40 students per elemnary classroman. /10 10 for 19S8/89 i 12X of the 1986 stock of 1,482 science labs are replcd arxzally till 1992193. ;3 Replaoaent of SX of stock of classrowos. Fran 1993/94, replace 2X of previous year's stock. 14 Cost/Clasaroan = P 75,000 in 1987 prices /11 1Th backlog of science labs (7,059 - 1,482 - 5,577) is slowly re&xed oer 5 years. (ftwsical FacilLties Division estimte). 112 1OX for 1988189 & 122 of the 1986 stock of 2,258 workshops are replaced aznaLly till 1992193. t5 &Erollmnt proj-ctions fran alternative mxdel. Fran 1993/94, replace 2% of previous year's stock. /6 40 students per class and 1002 double shift in 1987188 reduced /13 The backlog of workshops (7,(59 - 2,258 = 4,801) is slowly redued oer 5 years. ,0 to 752 by 1992/13 :rd 25X by 2000101. /14 Cost/Classroan - P 160,000 In 1987 price. (Starards fran Physical Facllities p /7 102 for 1988/89 & 12X of the 1986 stock of 16,934 clasarocm are replaced 115 Cost/Sc.Lab - P 250,000 in 1987 price. Division of the Bureau of Secdary OQ annally till 1992/93. Fran 1993/1, replace 3 52 of pLevious year's stock. /16 Cost/Workshcp = P 350,000 in 1987 price. Eucation, DEZS) (D /8 The backlog of :lasroans (28,236 - 16,934 - 11,302) 3s slowly reduced over 5 years. W . '0 - 179 - Table A2.1: ENROLLMENTS BY LEVEL OF EDUCATION, 1965-86 (Thousands) Year Elementary Secondary Higher 1965 5,815 1,173 527 1970 6,855 1,591 638 1975 7,453 2,073 7i2 1980 8,227 2,767 1,209 1981 8,290 3,019 1,254 1982 8,518 2,935 1,307 1983 8,591 3,074 1,349 1984 8,700 3,204 1,391 1985 8,794 3,323 1,504 1986 8,897 3,269 Sources: MECS (1986) for 1965-85; and DECS Statistical Bulletins for 1986. - 180 - Table A2.2: GROWTH OF OVERALL ENROLLMENTS, 1965-86 (Percent per year) 1965-75 1975-80 1980-83 1983-86 Elementary 2.5 2.0 1.4 1.2 Secondary 5.7 5.8 3.5 2.1 Higher 3.0 10.6 3.7 5.4 Sources: World Bank (1986b) and Table A2.1. - 181 - Table A2.3: ENROLLMENT RATIOS, 1960-86 (Percent) Elementary Secondary Higher Year Gross Net Gross Net Gross 1960 92 - 27 - 13 1965 109 - 35 - 18 1970 108 95 46 - 20 1975 107 94 54 - 18 1980 113 94 65 46 26 1981 111 93 64 45 27 1982 109 92 66 46 29 1983 109 88 67 50 32 1984 107 88 68 51 34 1985 94 90 65 50 38 1986 99 89 65 50 Note: The gross enrollment ratio is defined as the ratio of the school popu- lation to the eligible-age population; the net enrollment ratio is the ratio of the school population of eligible age to the eligible-age pop- ulation. Sources: Government of the Philippines (1970) for 1960 and 1965; DECS Statistical Bulletins for 1985 and 1986; UNESCO Statistical Yearbooks (1985, 1987) for 1970-85. - 182 - Table A2.4: ENROLLED POPULATION BY AGE, 1986 Population Enrolled population ('000) Age ('000) Elementary Secondary Total X enrolled ((6 - 61 0 61 - 7 1,460 1,289 0 1,289 88.? 8 1,440 1,462 0 1,462 101.5 9 1,425 1,419 0 1,419 99.6 10 1,400 1,306 0 1,306 93.3 11 1,400 1,290 8 1,298 92.7 12 1,350 1,172 133 1,305 96.7 13 1,310 504 519 1,023 78.1 14 1,280 211 680 891 69.6 15 1,240 89 714 803 64.7 16 1,190 37 604 641 53.9 17 - 27 315 343 - 18 - 0 143 143 - 19 -0 154 154 Total - 8,897 3,269 12,166 - Sources: Enrollment data are from DECS Statistical Bulletin 1985i86; population data are based o mlssion estimates. - 183 - Table A2.5: ENROLLMENT RATIOS BY LEVEL OF EDUCATION$ PHILIPPINES AND WORLD REGIONS (1980) (Percent) Primary Secondary Higher Philippines 113 65 26.0 Anglophone Africa 77 17 1.2 Francophone Africa 46 14 2.4 South Asia 71 19 4.4 East Asia and Pacific 87 43 9.1 Latin America 90 44 12.0 Middle East and North Africa 82 36 9.4 Developing countries 75 23 6.9 Developed countries 100 80 21.0 Sources: For the Philippines, lable A2.3; for other regions, World Bank (1986a). - 184 - Table A2.6: SHARE OF PRIVATE-SECTOR ENROLLMENTS, 1965-85 (Percent) Year Elementary Secondary Higher 1965 4.5 62.3 88.8 1970 4.9 57.5 89.8 Ł975 5.2 54.7 86.2 1980 5.0 46.2 84.8 1981 4.3 46.5 85.3 1982 5.2 45.8 86.3 1983 5.0 44.0 85.6 1984 5.6 49.5 84.9 1985 6.0 42.6 84.7 1986 5.7 40.4 Sources: MECS (1986) for 1965-1985; DECS Statistical Bulletins for 1986, - 185 - Table A2.7: AN INTERNATIONAL COMPARISON OF THE SHARE OF PRIVATE ENROLLMENTS (Percent) Country/region Elementary Secondary Higher Philippines 5.0 46.2 84.8 Africa 28.1 37.2 Asia 11.3 30.8 Middle East and North Africa 6.1 7.4 Latin America 15.0 35.2 22.9 Developed countries 26.2 30.0 - Note: Data for the Philippines refer to 1980; for the other regions, Lhey refer to varying years between the middle to the late 1970s. Sources: For the Philippines, Table A2.6; for Africa, Asia, Middle East and North Africa, and Latin America, World Bank (1986a), except for higher education in Latin Ameri^a; fur developed countries and higher education in Latin America, James (1985). - 186 - Table A2.8: AN INTERNATIONAL COMPARISON OF RECURRENT PUBLIC SPENDING ON EDUCATION, EARLY 1980s (Percent) As share of total public As share recurrent spending in GNP Philippines /a 17.0 1.4 East Africa 20.7 4.2 West Africa 25.0 4.1 East Asia and Pacific 15.1 3.7 South Asia 8.8 1.9 Latin America 18.8 4.1 Europe, Middle East and North Africa 13.7 4.2 Western industrial countries 13.8 5.5 /a Data for the Philippines refer to the average for 1983-86. Sources: For the Philippines, Table 2.2; for other regions, World Bank (1986a). - 187 - Table A2.9: DISTRIBUTION OF RECURRENT PUBLIC SPENDING ON EDUCATION, PHILIPPINES (1980-88) AND WORLD REGIONS (1980) (Percent) Primary Secondary Higher Philippines 1980 66 13 21 1985 64 16 20 1988 61 23 17 East Africa 56 22 22 West Africa 47 31 23 East Asia and Pacific 46 35 19 South Asia 44 34 22 Latin America 51 26 24 Europe, Middle t and North Africa 46 32 22 Developed countries 37 44 19 Note: Row figures may not add up to 100 percent due to rounding errors. Sources: As in Table 2.2 for the Philippines; World Bank (1986a) for the other regions. - 188 - Table A2.10: SOURCES OF DIFFEkENCES IN THE UNIT OPERATING COSTS OF PUBLIC AND PRIVATE ELEMENTARY SCIOOLS, 1982 Public Private Ratio (1) (2) (2)/(1) Average monthly teacher pay 1,021 821 0.80 Pupils per class 39.7 39.6 1.05 Hours of instruction a week: Students (A) 31.8 32.8 1.03 Teachers (B) 25.3 30.8 1.22 Ratio (A)/(B) 1.25 1.08 0.86 Overall difference in teacher cost per pupil /a - - 0.72 /a Calculated as 0.80 x 1.05 x 0.86 a 0.72. Source: DECS-EDPITAF (1983). - 189 - Table A2.11: ESTIMATED OPERATING COSTS IN PUBLIC ELEMENTARY SCHOOLS, PHILIPPINES, 1983-88 Annual operating cost per pupil Year Current Pesos As % of per capita GNP 1983 428 5.9 1984 540 5.5 1985 630 5.8 1986 884 8.0 1987 1,008 8.3 1988 1,176 8.5 Source: Estimated from data on teacher salaries (Table 2.3), pupil-teacher ratios (MECS, 1986), and share if salaries in total cost (DECS-EDPITAF, 1983). - 190 - Table A2.12: SALARIES OF PUBLIC SCHOOL TEACHERS, PHILIPPVXS AND OTHER WORLD REGIONS (Ratio to capita GNP) Primary Secondary Philippines ].985 1.6 1.7 1988 2.2 2.4 West Africa 10.8 East Africa 5.5 Asia 2.6 Latin America 2.4 OECD countries 2.5 Sources: Tables 2.4 and 2.6 for the Philippines; for other world regions, World Bank (1987). - 191 - Table A2.13; DISTRIBUTION OF ENROLLMENTS IN SECONDARY EDUCATION BY TYPE OF SCHOOL, 1986 Share of enrollments (%) Type of school Enrollments In public sector All schools Nationally-funded National schools 715,916 36.7 21.9 Schools attached to SUCs /a 92,183 4.7 2.8 Locally-funded Provincial 98,858 5.1 3.0 City 261,4i0 13.4 8.0 Municipal 170,837 8.8 5.2 Barangay 610,298 31.3 18.7 Tota:. public schools 1,949,542 100.0 59.6 Private schools 1,319,892 - 40.4 Total all schools 3,269,434 - 100l0 /a SUCs refer to state universities and colleges, Source: DECS Statistical Bulletin 1985/86. - 192 - Table A2.14: SOURCES OF DIFFERENCES IN THE UNIT OPERATING COSTS OF PUBLIC AND PRIVATE SECONDARY SCHOOLS, 1982 Average Share of teacher teacher salaries salary per Pupils per Weekly hours of instruction in overall month (Pesos) class Teachers Students Ratio unit cost Type of school (1) (2) (3) (4) (4)/(3) (M) National 1,034 52 20.3 31.6 1.56 60.4 Province/city 1,122 49 18.2 32.0 1.76 74.5 Municipal 1,035 52 26.0 31.6 1.22 77.3 Barangay 661 45 20.8 30.7 1.48 82.8 Private 816 51 25.7 31.1 1.21 61.9 Sourcet DECS-EDPITAF (1983). - 193 - Table A2.15: ESTIMATED UNIT COSTS IN NATIONAL SECONDARY SCHOOLS, 1983-88 Annual operating cost per pupil Year Current Pesos As % of per capita GNP 1983 6u1 8.3 1984 752 7.6 1985 938 8.6 1986 1,226/a 11.1 1987 1,400 11.5 1988 1,628 11.8 /a The slight discrepancy between this estimate and that reported in Table 2.5 reflects differences in the basic data. Source: Estimated from data on teacher salaries (Table 2.6) and data for national schools (Table A2.14). - 19'. - Table A2.16: DISTRIBUTIUN OF ENROLLMENTS IN HIGHER EDUCATION, 1985 Shiare of total Type of institution Number enrolled enrollments (%) Government sector Chartered institutions 135,302 8.8 Non-chartered institutions 101,862 6.6 Community colleges 21,321 1.4 Private sector Sectarian institutions 385.914 25.0 Non-sectarian institutions 900,126 58.3 Both Sectors 1,544,525 100.0 Source: DECS Bureau of Higher Education, Data Bulletin on Higher Education 1984/85. - 195 - Table A2.17: AGGREGATE NATIONAL EXPENDITURE ON RECURRENT EDUCATIONAL COSTS, 1986 Elementary Secondary Higher 986 1 986 1988 1986 Aggregate Operating Costs (millions of pesos) 8,221 3,215 4,520 3,734 Share (%) of contribution from: National government 92 41 79 50 Local government 3 22 0 1 Private sources /a 5 37 21 49 All Sources 100 100 100 100 Aggregate Direct Social Costs (millions of pesos) 9,445 4,353 5,805 5,345 Share (%) of contribution from: National government 80 30 61 36 Local government 2 16 0 1 Private sources /a 18 54 39 64 All Sources 100 100 100 100 /a The bulk of contribution from private sources consists of fees. Source: Mission estimates based on data referred to in Tables 2.3, 2.5 and 2.7. - 196 - Table A2.18: AGGREGATE RECURRENT SPENDING ON EDUCATION, PHILIPPINES 71983-88) AND SELECTED WORLD REGIONS EARLY 1980s (Percent of GNP) Central government Expenditure from Country/region/year expenditures only all sources Philippine 1983 1.6 - 1986 1.8 2.5 1988 2.4 2.8 East Asia and Pacific 3.7 Latin America 4.1 Developed countries 5.5 Sources: Mission estimates based on government budget and audit reports for the Philippines, and World Bank (1986a) for the other world regions. - 197 - Table A2.19: GOVERNMENT EXPENDITURE PER STUDENT ON PUBLIC 9WUCATION, PHILIPPINES (1988) AND WORLD REGIONS (CIRCA 1980s) (Percent of per capita GNP) Country/region Primary Seccndary Higher Philippines 9 12 104/a Anglophone Africa 18 50 920 Francophone Africa 29 143 804 South Asia 8 18 119 East Asia and Pacific 11 20 118 Lattn America 9 26 88 Middle East and North Africa 2 28 150 DevAloping countries 14 41 370 Developed countries 22 24 49 /a Datum refers to unit costs in chartered institutions in 1986. Sources: For the Philippines, Tables A2.11, A2.15 and 2.7; for other regions, World Bank (1986a). - 198 - Table A2.20: COHORT SURVIVAL RATES IN ELEMENTAR.Y EDUCATION, 1980-86 Region/year Cohort survival rate (%) Philippines (1980) 67 (1986) 66 Region (1986) NCR 87 I 78 II 60 III 77 IV 75 V 63 VI 60 vII 56 vIII 55 IX 48 X 57 AI 59 XII 46 Note: The cohort survival rate refers to those enrolled in grade VI in the reference year as a proportion of those enrolled in grade I five years ago. - 199 - Table A2.21. OLS REGRESSION RESULTS USING DIVISIONAL COHORT SURVIvIAL RATES AS THE DEPENDENT VARIABLE, 1985 Independent variables (1) (2) Sample Average household income of .479* .292* 24,256 division ('000 Pesos) (4.26) (2.30) Regional dummies: Region I - -4.67 - (0.60) Region II - -12.98 - (1.64) Region III - -5.26 - (0.72) Region IV - -3.92 - (0.52) Region V - -7.87 - (0.92) Region VI - -10.52 - (1.35) Region VII - -10.99 - (1.26) Region VIII - -19.59 - (2.18) Region IX - -26.71* - (3.22) Region X - -10.09 - (1.31) Region XI - -18.47* - (2.25) Region XII - -24.52* - (3.05) Constant 51.07 68.03 - (14.42) (7.78) Number of observations 88 88 - R2 0.17 0.43 _ Note: An asterisk (*) denotes that the coefficient is significant at the 5% confidence level; the NCR is the omitted regional dummy variable. Source: Based on data supplied by DECS. - 200 - Table A2.22: PREDICTED COHORT SURVIVAL RATES IN ELEMENTARY EDUCATION, 1985 Average household National income per year Capital Pegion Region IX 15,000 72.4 45.7 25,000 75.3 48.6 45,000 81.2 54.5 Source: Calculated from regressions reported in Table A2.21. - 201 - Table A2.23: COHORT SURVIVAL RATES IN SECONDARY EDUCATION, 1986 Cohort survival rate (%) Public Schools Nationally funded 89 Locally funded 78 Barangay 66 Private NCR 67 Non-NCR 79 All Schools 78 Source: DECS. - 202 - Table A2.24: SCIENCE ACHIEVEMENT IN THE PHILIPPINES AND OTHER COUNTRIES, MID-1980s 10-year-old population/a 14-year-old population/a Mean Standard Mean Standard Country ' score deviation score deviation Philippines 9.5 4.5 11.5 4.6 Australia 12.9 4.5 17.8 4.9 Canada 13.7 4.3 18.6 4.7 England 11.7 4.5 16.7 4.9 Finland 15.3 4.0 18.5 4.2 Hong Kong 11.2 4.2 16.4 4.5 Hungary 14.4 4.5 21.7 4.7 Italy 13.3 4.7 16.7 5.0 Japan 15.4 4.0 20.2 5.0 Korea 15.4 4.2 18.1 4.6 Netherlands - - 19.8 5.1 Norway 12.7 4.1 17.9 4.7 Poland 11.9 4.5 18.1 5.2 Singapore 11.2 4.1 16.5 4.9 Sweden 14.7 4.0 18.4 4.9 Thailand - - 16.5 4.1 United States 13.2 4.6 16.5 5.0 /a The maximum possible score is 24 for the 10-year-old populatlon, and 30 for the 14-year-old pouplation. Source: IEA (1988). - 203 - Table A2.25: OLS REGRESSION ESTIMATES OF TOTAL SCHOOL EXPENDITURE IN NATIONAL HIGH SCHOOLS, 1986 (I) (II) Sample mean Enrollments 0.684 0.721 1,200 (49.5) (55.8) Quality /a - -758.6 0.93 (5.59) Agriculture /b - 413.2 0.09 (7.3) Fisheries - 320.9 0.11 (6.1) Crafts - 516.1 .Q01 (3.7) Trades - 379.8 0.10 (7.1) Mixed vocational - 298.9 0.15 (6.5) Constant 391.38 890.5 - (16.2) (6.5) No. of observations 497 497 R2 0.832 0.879 /a The quality variable is defined as the proportion of ordinary teachers (in contrast to master teachers) in the total teaching force. /b Comprehensive schools are the omitted school type for this and subsequent school-type dummy variables. - 204 - Table A2.26: AVERAGE UNIT COSTS AND SIZE OF ENROLLMENTS IN DIFFERENT TYPES OF NATIONAL SCHOOLS, 1986 Average unit cost Average school size (Pesos) Comprehensive 828 1,603 Agriculture 1,878 536 Fishery 1,497 664 Crafts 1,376 1,061 Trade 1,436 852 Mixed vocational 1,380 756 Average, all types 1,010 1,200 Source: Mission estimates based on regressions reported in Table A2.25. - 205 - Table A2.27: ESTIMATED UNIT COSTS OF HIGHER EDUCATION IN STATE UNIVERSITIES AND COLLEGES, 1987 (Thousands of Pesos) Total number of Number of campuses students enrolled 1 3 5 200 32.8 44.5 56.2 500 14.6 19.3 24.0 ^,000 8.6 10.8 13.3 1,500 6.6 8.1 9.7 2,000 5.5 6.7 7.9 3,000 4.5 5.3 6.1 5,000 3.7 4.2 4.7 10,000 3.1 3.4 3.6 Source: Predicted from estimated regression relating unit cost to enrollment and number of campuses. - 206 - Table A2.28: DISTRIBUTION OF CUMULATIVE PUBLIC SPENDING ON EDUCATION BY TERMINAL LEVEL OF SCHOOLING, PHILIPPINES (1986) AND MAJOR WORLD REGIONS (AROUND 1980) No schooling and priwmry Higher education Gini % popu- Cumulative % popu- Cumulative coeffi- Country/region lation % spending lation % spending cient Philippines 35 21.0 38.0 53.6 0.19 East Asia & Pacific 57 19.3 9.1 39.6 0.50 Latin America 56 16.3 12.0 42.1 0.50 Developing countries 71 22.1 6.4 38.6 0.60 Developed countries 20 8.3 21.0 36.7 0.22 Source: Mission estimates for the Philippines; Mingat and Tan (1985) for che other regions. - 207 - Table A2.29: TRANSITION RATES, 1986 Z grade 1 entrants surviving to grade 6 66.4 Z graduating from grade 6 95.2 Z grade 6 graduates entering form I 90.1 Z form I entrants surviving to form IV 72.7 Z form IV students passing the NCEE 50.0 % college entrants graduating from college 80.0 Source: DECS Statistical Bulletins. - 208 - Table A2.30: SCHOLARSHIPS AND STUDENT LOANS, 1988 Average amount of No. of beneficiaries grant/loan a year Scholarships /a State scholarship program 1,560 8,000 National integration study grant 4,300 7,000 Selected ethnic group educational assistance 700 7,000 Study grant program for southern Philippines 3,744 7,000 Other programs 248 7,800 Student loans /b Degree programs 5,000 Non-degree programs 16,427 3,500 TOTAL 26,979 - As % of total tertiary enrollment 1.5 /a Selection for scholarships is based on two criteria: (1) family income below P 30,000 a year; (2) NCEE score at least at the 85th percentile. /b Student loans are guaranteed by the Central Bank. There are five private banks participating in the scheme (two have temporarily stopped because of liquidity problems). Under the scheme, students borrow a fixed amount. They repay after one year's grace period over a ten-year period at 6% interest rate. The scheme has a default rate of 20%. - 209 - Table A2.31: GROWTH OF POPULATION AND ENROLLMENTS IN ELEMENTARY EDUCATION, 1965-86 (Percent) Elementary Population enrollments 1965-75 2.9 2.5 1975-80 2.7 2.0 1980-83 2.5 1.4 1983-86 2.5 1.2 Sources: World Bank (1986b). - 210 - Table A2.32: COHORT SURVIVAL RATES, AVERAGE FAMILY INCOME AND LIFE EXPECTANCY BY REGION 1986 1985 1980 Cohort survival Average income per Life expectancy Region rate (%) family (P'000) (years) NCR (1) 86.9 (1) 57.2 (1) 66.1 I (2) 78.4 (3) 31.5 (5) 63.0 II (6) 60.5 (6) 27.4 (8) 58.3 III (3) 76.5 (2) 38.8 (2) 65.1 IV (4) 74.8 (4) 30.0 (3) 64.3 V (5) 63.3 (12) 20.2 (7) 61.2 VI (7) 60.0 (8) 24.8 (6) 62.2 VII (10) 55.9 (11) 20.8 (4) 63.9 VIII (11) 54.8 (13) 17.8 (9) 58.3 IX (12) 47.9 (10) 23.8 (13) 51.3 X (9) 56.9 (7) 27.4 (10) 55.0 XI (8) 59.0 (5) 28.2 (11) 54.4 XII (13) 45.8 (9) 24.4 (12) 51.5 Note: Figures in parentheses are ranks. - 211 - Table A3.1: PUBLIC AND PRIVATE PRE-ELEMENTARY SCHOOLS BY REGION SY 1985-86 Schools Public Private /a Region Total Total Total A B C D NCR 544 202 342 146 79 89 28 I 188 127 61 16 15 21 9 II 0 0 0 0 0 0 0 III 206 91 115 28 37 30 20 IV 412 216 196 96 45 44 11 V 82 51 31 3 6 15 7 VI 338 263 75 12 14 22 27 VII 88 46 42 16 2 12 12 VIII 75 63 12 1 3 1 7 IX 40 22 18 4 2 6 6 X 74 20 54 4 36 5 9 XI 42 1 41 41 0 0 0 XII 165 155 10 2 0 7 1 National 2,254 1,257 /b 997 369 239 252 137 ia A - Purely pre-elementary B - Attached to elementary C - Attached to secondary D - Attached to tertiary /b Includes eight schools attached to state universities and college. Source: DECS Statistical Bulletin 1985-86. - 212 - Table A3.2: GROWTH OF PRE-ELEMENTARY EDUCATION, SY 1981-82 to 1985-86 Enrollments Z Annual Enrollments Z Annual Enrollments Z Annual SY Total growth Public growth Private growth 1981-82 152,262 52,048 100,214 1982-83 153,884 1.07 62,521 20.12 91,363 (8.83) 1983-84 181,726 18.09 68,190 9.07 113,536 24.27 1984-85 177,593 (2.27) 74,136 8.72 103,457 (8.88) 1985-86 165,000 (7.09) 60,000 (19.07) 105,000 1.49 Note: Figures in parentheses denote negative growth. Source: DECS Statistical Bulletins. - 213 - Table A3.3: PRE-ELEMENTARY ENROLLMENTS AND SCHOOLS BY REGION AND SECTOR, SY 1986-87 Schools Pupils Region total Public Private total Public Private NCR 651 229 422 70,519 17,394 53,125 I 188 127 61 7,035 3,095 3,940 II 101 66 35 3.058 2,760 1,107 III 283 95 188 23,314 9,731 13,583 IV 416 216 200 19,645 2,447 17,198 V 257 206 51 13,709 9,450 4,259 VI 338 263 75 9,096 6,405 2,693 VII 68 42 26 6,396 2,082 4,314 VIII 74 63 11 2,585 1,407 1,178 IAX 32 14 18 2,885 941 1,944 X 74 20 54 4,659 1,529 3,130 xI 42 1 41 3,040 27 3,013 XII 165 155 .0 3,110 2,324 786 National 2,689 1.497 1,192 169.952 59,592 110,360 Note: Incomplete data for pupils in Regions VI and VII and also for private schools in Region II. Source: Office of Planning Services. - 214 - Table A3.4: PUBLIC AND PRIVATE ELEMENTARY SCHOOLS BY REGION SY 1985-86 Public Schools Attached Private /b Region total Total to SCU la Total 1 2 3 NCR 697 442 2 255 94 108 53 I 2,934 2,833 5 101 39 38 24 II 2,199 2,147 0 52 52 0 0 III 2,507 2,371 0 136 63 38 35 IV 3,948 3,740 1 208 92 65 51 V 2,884 2,805 2 79 27 27 25 VI 3,316 3,121 2 195 59 109 27 VII 2,597 2,543 2 54 14 24 16 VIII 3,209 3,183 4 26 12 6 8 IX 2,216 2,181 1 35 18 9 8 X 2,369 2,305 5 64 37 8 19 xI 2,236 2,146 0 90 35 33 22 XII 2,044 2,000 3 44 29 4 11 National 33,156 31,817 27 1,339 571 469 299 /a State universities and colleges. lb 1 - Purely elementary 2 - Attached to secondary 3 - Attached to tertiary Source: DECS Statistical Bulletin 1985-86. - 215 - Table A3.5: ENROLLMENT TRENDS AND PROJECTIONS IN PUBLIC AND PRIVATE ELEMENTARY AND SECONDARY SCHOOLS SY 1939-40 to 2000-01 (thousands) Z Growth School Year Public Private Total total Elementary 1939-40 850 63 916 1948-49 3,693 114 3,807 315.6 1960-61 4,003 196 4,200 10.3 1970-71 6,628 341 6,969 65.9 1980-81 7,931 359 8,290 19.0 1985-86 /a 8,403 536 8,939 7.8 1995-96 /a 10,910 696 11,607 29.8 2000-01 /a 12,443 794 13,237 14.0 Secondary 1939-40 91 64 155 1948-49 193 220 413 166.5 1960-61 192 418 610 47.7 1970-71 763 956 1,719 181.8 1980-81 1,615 1,404 3,019 75.6 1985-86 /a 2,960 1,395 4,355 44.3 1995-96 /a 3,529 1,476 5,005 14.9 2000-01 /a 4,399 1,388 5,788 15.6 /a Projected Source: Postlethwaite and Thomas (1980); DECS Statistical Yearbook 1974; Mission projections (Table A1.4). Table A3.6: DISTRIBUTION OF SECONDARY SCHOOLS BY REGION, BY SECTOR AND BY TYPE SY 1986-86 Notionally Funded Totl Not'l/ Vocational/Tech. Locally Funded public A Total SUC coOp. Trade/ Total Region private public Total Main Branch science Agri. HIC Lb Fishery Total Prow'l City Mun. Brgy. private NCR 340 119 14 6 - 6 - 2 - 105 - 78 24 3 221 I 833 422 82 7 13 48 11 10 6 840 4 2 11 323 211 II 270 156 76 7 - 27 17 19 5 el 3 - 12 66 114 rII 466 260 48 8 6 20 5 12 3 212 11 2 13 166 196 IV 766 474 82 8 - 39 8 14 13 392 9 4 19 A80 281 V 427 287 62 2 - 24 6 11 9 236 9 - 5 221 1401 VI 531 882 112 8 1 67 11 18 a 270 12 1S 15 228 149r' VII 864 197 24 4 9 a 8 4 6 173 8 3 17 145 167iO VIII 363 289 82 9 - 11 26 25 11 207 4 1 16 186 741 XI 241 173 49 7 1 22 6 9 6 124 - 1 a 120 66 X 378 226 46 5 - 23 6 9 4 180 4 11 a8 180 162 XI 8S7 202 36 1 2 12 7 10 6 166 8 4 16 136 1SS XII 26o 170 31 3 2 15 5 6 2 139 - 1 29 109 90 National total 6.376 3.367 733 75 33 322 110 149 77 2.624 72 122 217 2.213 2.018 / State universities and colloeg. Branches are not included In the total. lb HIC - Ho. Industries & Craftaranship Source: DECS Statistical Bulletin 1965-88. Table A3.7: EDUCATION INDICATORS OF SELECTED EAST ASIAN COUNTRIES 1960-85 Enrollment as % of School Age Population. 1960-84 GNP per capita Population Ave. growth Ave. growth 1985 Primary Secondary Tertiary Literacy Rates 19B6-85 1986 1965-85 (mill.) 1960 1984 Increase 1960 1984 Increase 1960 1984 Increass 1960 1980 Increase (X) US' (X) Indonesia 4.8 530 2.2 182.2 71 118 47 28 39 11 1 7 6 39 82 23 Japan 4.7 11,300 1.1 120.8 100 100 0 82 95 18 13 38 25 98 99 1 Korea 6.6 2,160 1.7 41.1 94 99 5 27 91 64 6 28 21 71 93 22 Malaysia 4.4 2,000 2,6 16.6 96 97 1 19 63 34 1 6 6 63 80 7 Philippines 2.3 S80 2.8 64.7 96 109 14 28 88 42 13 29 16 72 76 3 Singapore 7.6 7,420 1.4 2.6 1il 1lS 4 82 71 39 8 12 8 88 83 0 Thailand 4.0 800 2.4 51.7 83 97 14 13 30 17 2 23 21 68 88 18 Source: World Development Reports. - 218 - Table A3.8s ENROLLMENT TRENDS IN SECONDARY SCHOOLS SY 1965-66 to 1986-87 (thousands) Total z School Year Enrollments Public Private Private 1965-66 1,173 442 731 62.3 1975-76 2,240 1,010 1,230 54.9 1986-87 3,395 2,034 1,361 40.1. Note: Preliminary data for 1987-88 shows a continued decline in the private share to 35.6Z. Source: DECS Statistical Bulletins. - 219 - Table A3.9: ACHIEVEMENT TEST PERFORMANCE OF GRADE V AND VI PUPILS BY TYPE OF SCHOOLS, 1986 Barrio Central Private Subjects schools schools schools Grade VI Reading 13.70 16.70 21.62 Science 21.23 24.87 22.42 Mathematics 13.27 14.50 17.03 Social Studies 13.13 14.91 16.96 Language 24.77 28.29 35.43 Pagbasa 20.46 23.40 27.18 Wika 28.35 31.45 35.35 Work Education 11.12 12.22 14.02 Home Economics 13.20 15.31 16.17 Grade V Reading 11.60 15.90 15.12 Science 18.73 23.57 29.72 Mathematics 11.57 12.70 11.03 Social Studies 10.53 13.21 10.46 Language 23.67 28.49 30.63 Pegbasa 17.46 22.60 19.78 Wika 25.95 30.55 29.95 Work Education 8.52 11.32 10.12 Home Economics 9.20 13.21 10.47 Source: SOUTELE, Vol. 1 (Technical Report), Table 66, pp. 300-1, and Vol. 2, Table 3.4. - 220 - Table A3.10: GRADE LEVEL EQUIVALENT OF ENROLLED STUDENTS AGED 11-15, BY GRADE LEVEL AND SECTOR NATIONAL PRIVATE PUBLIC Grade Level Grade Level Grade Level Equivalent Equivalent Equivalent Mean S.D. N Mean S.D. N Mean S.D, N Grade 1 - - - Grade 2 1.7 .9 63,136 - - - - - (38) Grade 3 2.0 1.2 170,665 - - - - (91) Grade 4 2.4 1.0 462,933 3.33 1.19 4,530 2.99 1.13 81,002 (264) Grade 5 2.9 1.3 809,085 4.05 0.97 18,904 3.42 1.39 180,234 (544) Grade 6 3.4 1.5 970,087 4.71 1.39 23,795 4.05 1.57 210,978 (667) 1st year H.S. 3.9 1.9 527,986 5.08 2.06 62,998 4.81 1.96 155,536 (413) 2nd year H.S. 4.7 2.4 293,253 5.73 2.39 133,492 S.05 2.32 73,672 (217) 3rd year H.S. 5.5 2.1 107,965 6.34 1.94 49,158 6.47 2.33 36,998 4th year H.S. 7.2 2.2 23,118 8.99 1.95 7,502 8.46 1.75 3,992 (19) Note: Figures in parentheses represent the unweighted sample. Source: Household and School Matching Surveys, DECS-EDPITAF. - 221 - Table A3.11: GRADE LEVEL EQUIVALENT OF ENROLLED STUDENTS AGED 11-15, BY GRADE LEVEL AND TYPE OF COMMUNITY NATIONAL URBAN RURAL (a) Grade Level Grade Level Grade Level Equivalent Equivalent Equivalent Mean S.D. N Mean S.D. N Mean S.D. N Grade 1 - - - - - - - - Grade 2 1.7 .9 63,136 2.04 .73 14,666 1.54 .96 43,273 (38) Grade 3 2.0 1.2 170,665 2.37 1.94 20,706 1.89 .98 132,148 (91) Grade 4 2.4 1.0 462,933 2.98 1.13 81,002 2.27 .86 324,957 (264) Grade 5 2.9 1.3 809,085 3.41 1.39 180,234 2.66 1.14 541,398 (544) Grade 6 3.4 1.5 970,087 4.05 1.57 210,978 3.18 1.44 656,158 (667) 1st year H.S. 3.9 1.9 527,986 4.81 1.96 155,536 4.02 1.77 321,073 (413) 2nd year H.S. 4.7 2.4 293,253 5.05 2.32 73,672 4.73 2.38 190,905 (217) 3rd year H.S. 5.5 2.1 107,965 6.47 2.33 36,998 5.19 1.39 61,435 (96) 4th year H.S. 7.2 2.2 23,118 8.46 1.74 3,992 6.10 2.59 12,419 (19 Note: Figures in parentheses relzesent the unweighted sample. Source: Household and School Matching Surveys, DECS-EDPITAF. - 222 - Table A3.12: COMPARISON OF MEAN SCORES OF GRADE VI PUPILS ON 1975 AND 1986 SOUTELE TESTS Mean percentage scores Mean Subject 1975 1986 difference Reading 38.75 43.42 4.67 Language 38.94 42.10 3.16 Pagbasa (Filipino language) 42.24 51.91 9.67 Wika (Filipino reading) 47.27 59.56 12.32 Elementary mathematics 35.17 44.16 8.99 Elementary science 47.39 50.80 6.41 Araling panlipunan 46.19 53.72 7.53 Work education 40.08 47.58 7.50 Overall mean 41.97 48.75 6.78 Note: Soutele is the Survey of Outcomes of Elementary Education. The data does not include Regions IV, X, XI, XII and NCR Source: Bureau of Elementary Education. - 223 - Table A3.13: TRENDS IN PUPIL ACHIEVEMENT AT SECONDARY LEVEL 1982-85 (Percentage Mean Scores on BSE Achievement Test by Subject Area) Subject Area 1981-82 1983-84 1984-85 English 37.4 43.8 46.8 Science 37.0 36.4 41.1 Mathematics 38.7 43.4 44.0 Filipino 51.9 53.1 53.8 Social Studies 43.2 40.5 42.8 Youth Development Training 43.4 44.5 43.0 Total Country 41.9 43.6 45.2 Source: Bureau of Secondary Education. - 224 - Table A3.14: CUT-OFF SCORES OF THE NATIONAL COLLEGE ENTRANCE EXAMINATION. 1973-87 (Percentile Rank) NCEE Teacher Medical School year year General Education Nursing technology required 1973 25 25 25 25 1974-75 1974 30 30 30 30 1975-76 1975 30 30 30 30 1976-77 1976 30 30 30 30 1977-78 1977 30 30 30 30 1978-79 1978 Voided 1979 35 45 35 35 1980-81 1980 35 45 35 35 1981-82 1981 40 50 40 40 1982-83 1982 45 50 45 45 1983-84 1983 45 55 45 45 1984-85 1984 45 55 60 45 1985-86 1985 45 55 60 60 19d6-87 1986 50 55 60 60 1987-88 1987 50 60 60 60 1988-89 Source: DECS Order No. 17, 1988. - 225 - Table A3.15: TRENDS IN PUPIL PERFORMANCE AT THE SECONDARY LEVEL BY REGION, 1983-87 (National College Entrance Examination Mean Test Scores) Region 1983 1984 1985 1986 1987 Philippines 499.59 498.76 499.70 499.74 499.91 77.45 77.13 78.04 74.74 77.69 National Capital Region 544.80 531.76 534.67 532.58 523.17 96.68 93.08 96.26 94.35 90.16 I (Ilocos Region) 492.83 495.06 491.94 491.86 498.69 72.60 72.61 71.47 69.58 74.36 II (Cagayan Valley) 488.80 489.79 492.71 495.52 496.55 68.96 70.58 69.96 72.31 73.92 III (Central Luzon) 501.60 499.15 504.96 499.74 514.60 72.95 73.08 74.81 73.85 75.93 IV (Southern Tagalog) 503.34 507.07 509.57 501.47 506.13 72.42 72.82 74.27 72.10 73.79 V (Bicol Region) 487.74 484.99 485.04 487.68 495.12 69.01 68.82 68.35 68.74 75.26 VI (Western Visayas) 479.84 482.38 485.81 480.71 485.33 66.89 60.03 71.42 69.51 74.67 VII (Central Visayas) 496.99 497._., 503.96 496.18 500.69 68.47 72.59 74.95 77.70 77.59 VIII (Eastern Visayas) 478.18 479.53 482.60 479.27 479.82 62.17 63.73 62.34 62.65 67.34 IX (Western Mindanao) 478.52 487.46 472.58 482.00 486.76 60.66 65.83 70.24 68.72 72.01 X (Northern Mindanao) 480.50 481.62 485.38 482.13 488.27 63.90 65.37 66.90 63.04 69.06 XI (Southern Mindanao) 493.27 487.39 484.46 484.53 482.24 69.16 67.86 69.77 65.35 71.11 XII (Central Mindanao) 480.74 488.55 484.87 489.47 488.03 64.08 71.98 72.89 67.41 75.85 Source: Research Division, National Education Testing and Research Center. - 226 - Table A3.16: TRENDS IN PUPIL PERFORMANCE AT THE SECONDARY LEVEL BY SCHOOL TYPE, 1983-87 (National College Entrance Examination Mean Test Scores) Type of school 1983 1984 1985 1986 1987 Public National 497.93 491.96 492.90 498.76 - Provincial 484.39 495.58 502.46 510.40 - Municipal/City 504.65 500.83 497.90 510.23 - Barangay/Community 467.84 469.04 472.33 471.66 - Private Sectarian 549.16 545.08 550.94 553.22 - Non-Sectarian 504.70 503.72 506.82 513.41 - Vocational 492.15 500.67 519.19 538.51 - Philippines 499.59 498.76 499.70 499.74 499.91 Source: Research Division, National Education Testing and Research Center. - 227 - Table A3.17: SURVIVAL RATES IN PUBLIC AND PRIVATE SCHOOLS BY LEVEL OF EDUCATION SY 1963-64 to SY 1985-86 (percent) Grades Elementary Secondary School Year 1 2 3 4 5 6 1 2 3 4 1963-64 100 1964-65 100 83.29 1965-66 100 83.21 77.78 1966-67 100 84.54 78.86 71.81 1967-68 100 82.52 79.52 72.05 63.97 1968-69 100 84.91 78.77 74.37 64.97 57.56 1969-70 100 83.51 80.06 72.27 66.20 57.93 38.72 1970-71 100 82.99 77.53 73.39 64.87 58.67 40.55 33.12 1971-72 100 82.74 76.83 70.55 64.93 57.05 41.89 35.15 29.59 1972-73 100 84.87 76.20 66.63 62.40 57.33 40.21 35.18 35.18 29.89 1973-74 100 87.11 76.67 70.67 63.44 56.90 41.65 34.80 31.53 27.55 1974-75 100 87.33 82.28 75.18 65.28 59.34 43.19 37.77 32.12 29.74 1975-76 100 88.39 82.40 78.42 69.59 60.43 45.78 39.51 34.91 30.37 1976-77 100 88.60 82.64 78.09 73.20 65.61 49.35 42.36 36.41 33.16 1977-78 100 85.79 82.64 78.64 70.35 66.41 54.32 44.52 38.20 33.84 1978-79 100 87.74 83.08 79.13 71.85 67.47 56.18 48.26 39.84 34.96 1979-80 100 85.35 81.34 77.78 71.56 66.58 52.38 47.61 41.06 33.65 1980-81 100 85.34 79.78 76.38 71.26 65.10 55.30 49.60 45.87 40.16 1981-82 100 86.71 80.84 75.94 71.70 66.83 53.74 47.93 43.42 39.56 1982-83 100 85.24 80.93 75.78 70.27 65.95 55.73 49.44 44.84 40.43 1983-84 100 85.15 79.17 76.40 70.70 65.29 56.55 51.00 44.52 41.28 1984-85 100 85.71 79.35 74.85 70.77 65.43 55.95 51.15 46.09 42.19 1985-86 100 85.80 78.93 74.65 69.13 65.47 53.64 48.28 44.71 40.12 Source: DECS Statistlcal Bulletin 1985-66. - 228 - Table A3.18: ENROLLMENT INDICATORS IN PUBLIC ELEMENTARY SCHOOLS SY 1985-86 Net Participation Rate Cohort-Survival Rate Population Enrollment Grade I Grade VI Region 7-12 7-12 Rate SY 1980-81 SY 1985-86 Rate NCR 842,204 671,542 79.74Z 122,374 106,307 86.87Z T 596,696 554,020 92.85Z 113,660 89,159 78.442 II 406,972 375,954 92.38Z 84,768 51,276 60.49X III 852,365 774,536 90.872 158,514 121,265 76.50X IV 1,117,387 1,032,359 92.39X 205,051 153,405 74.81Z V 666,984 612,286 91.80% 139,709 88,492 63.34% VI 803,867 700,855 87.19Z 179,778 107,786 59.96Z VII 648,002 523,975 80.86X 135,185 75,528 55.87Z VIII 516,397 437,132 84.65Z 107,734 59,017 54.78Z IX 463,069 423,461 91.45Z 105,940 50,692 47.85% x 496,808 444,889 89.55% 111,565 63,421 56.85% xI 598,239 547,425 91.512 129,559 76,461 59.02% XII 417,542 392,415 93.98% 114,692 52,524 45.80% Total 8,426,532 7,490,849 88.90Z 1,708,529 1,095,333 64.11Z Source: DFCS Statistical Bulletin 1985-86. - 229 - Table A3.19: ENROLLMENT INDICATORS IN PUBLIC ELEMENTARY SCHOOLS BY REGION SY 1984-85 Repetition Rate Drop-out Rate Enrollment Region Repeaters (1983-84) Rate Drop-outs Enrollment Rate NCR 8,470 693,088 1.22 7,401 693,134 1.07 I 11,968 599,483 2.00 7,849 596,947 1.31 II 6,334 392,322 1.61 6,103 393,848 1.55 III 5,198 827,928 0.63 10,855 821,616 1.32 IV 19,776 1,094,203 1.81 18,969 1,094,315 1.73 V 15,977 666,764 2.40 16,347 668,443 2.45 VI 15,420 826,968 1.86 23,172 840,396 2.76 VII 20,435 593,119 3.44 5,849 613,038 0.95 VIII 10,181 490,161 2.08 17,276 502,669 3.44 IX 10,435 441,052 2.37 14,794 446,950 3.31 X 10,962 504,442 2.17 13,043 513,714 2.54 xI 10,044 614.581 1.63 14,885 612,503 2.43 XII 4,112 466,459 0.88 10,424 472,252 2.21 Total 149,312 8,210,570 1.82 166,967 8,269,825 2.02 Source: DECS Statistical Bulletin 1984-85. - 230 - Table A3.20t DROPOUT TREND IN PUBLIC ELEMENTARY SCHOOLS BY GRADE (Z) SY 1980-81 to 1984-85 Grade 1980-81 1981-82 1982-83 1983-84 1984-85 1 4.0 3.4 3.1 2.8 2.3 2 3.1 2.6 2.5 2.6 1.7 3 3.3 2.7 2.6 2.5 1.9 4 3.4 2.7 2.6 2.7 1.9 5 4.1 3.2 3.0 3.0 2.3 6 3.8 2.8 2.7 1.9 2.1 Average 3.6 2.9 2.8 2.6 2.0 Source: DECS Statistical Bulletin 1984-85. - 231 - Table A 3.21: AGE GROUP 7-12 YEARS IN PUBLIC ELEMENTARY SCHOOLS BY GRADE SY 1983-84, 1985-86 (percent) Grade 1983-84 1985-86 1 90.5 96.7 2 93.1 97.8 3 89.6 85.7 4 83.2 91.4 5 75.0 82.1 6 51.0 60.9 Average 80.4 85.8 Source: DECS Statistical Bulletins. - 232 - Table A3.22: OVER AND UNDER AGE PUPILS BY SELECTED GRADES IN PUBLIC ELEMENTARY SCHOOLS SY 1983-84, 1985-86 (percent) 1983-84 1985-86 UNDER AGE Grade (Age) 1 (under 7) 5.4 2.6 5 (under 11) 9.1 7.4 6 (under 12) 9.9 9.4 OVER AGE Grade (Age) 1 (over 7) 38.8 36.4 5 (over 11) 48.2 42.8 6 (over 12) 49.0 39.1 APPROPRIATE AGE Grade (Age) 1 (7 yrs.) 55.8 61.0 5 (11 yrs.) 42.7 49.7 6 (12 yrs.) 41.1 51.6 Source: DECS Statistical Bulletin 1984-85. - 233 - Table A3.23: PROPORTION OF SAMPLE BARANGAY AND VOCATIONAL TECHNICAL HIGH SCHOOLS COMPLYING WITH SELECTED MINIMUM STANDARD CRITERIA BHSA BHSB BHC AHS T-IHS FHS C NC C NC C NC C NC C NC C NC Education qualification Administrators 8 92 8 92 0 100 50 50 67 33 42 58 Teachers 100 0 97 3 85 15 98 2 99 1 98 2 Civil service eligibility teachers 10OZ complied Student teacher ratio 1002 complied - average ratios lower than criteria Student enrollment 42 58 42 58 33 67 92 8 83 17 67 33 Teacher/ administrator ratio 100Z complied, range = 6-32 Book/student ratio 100? complied if based on total number of books without considering titles or textbooks. Income Generating project 100% complied Campus area 33 8 33 33 67 17 58 0 58 0 58 17 Project area 100Z complied Classroom Space per student 25 25 33 8 33 8 33 8 58 25 58 8 C = Complied NC = Not complied BHS A = BARANGAY HIGH SCHOOLS, GROUP A AHS = AGRICULTURAL HIGH SCHOOL BHS B = BARANGAY HIGH SCHOOLS, GROUP B T-IHS = TRADES-IND. HIGH SCHOOL BHS C = BARANGAY HIGH SCHOOLS, GROUP C FHS = FISHERIES HIGH SCHOOL Source: The Development and Validation of Minimum Standards for Barangay and Vocational- Technical High Schools in the Philippines, III, Bureau of Secondary Education, 1987. - 234 - Table A3.24: PERCENT OF SAMPLE HIGH SCHOOLS MEETING AND NOT MEETING ENROLLMENT RANGES BaranRay HiRh Schools Enrollment range A B C Agriculture Trades/industry Fishery Below 320 58 58 67 8 17 33 320-500 0 17 25 50 33 17 Beyond 500 33 8 0 42 50 50 No answer 8 17 8 0 0 0 Total 99 100 100 100 100 100 Note: Minimum Standard = 320. Source; The Development and Validation of Minimum Standards for Barangay and Vocational Technical High Schools in the Philippines, III, Bureau of Secondary Education, 1987. - 235 - Table A3.25: NEW ELEMENTARY SCHOOL CURRICULUM (NESC), 1982 Weekly Time Allotment (minutes) Learning Areas I II III IV V VI Character Building Activities 100-150 100-150 100 100 100 100 Filipino 300 300 300 300 300 300 English 300 300 300 300 300 300 Mathematics 200 200 200 200 200 200 Civics and Culture History/Geography/Work Ethic 200 200 200 History/Geography/Civics 200 200 200 Science and Health 200 200 200 200 Arts and Physical Education 200 200 200 200 Home Economics and Livelihood Education 200 300 300 Minutes per week 1,100-1,150 1,100-1,150 1,500 1,700 1,800 1,800 Minutes per day 220-230 220-230 300 340 360 360 Hours per day 3'40"-3'500 3'40"-3'500 5 5'40n 6 6 Source: MECS Order No. 6, 1982. - 236 - Table A3.26: NEW SECONDARY SCHOOL CURRICULUM (PILOT), 1986 Number of Minutes/Week Unit Credits First Second Third Fourth 1st 2nd 3rd 4th Subjects year year year year X X X X To:;al English 200 200 200 200 1 1 1 1 4 Science 200 200 300 300 1 1 14 14 5 Math 200 200 200 200 1 1 1 1 4 Home Management and Technology 200 200 200 200 1 1 1 1 4 Filipino 200 200 200 200 1 1 1 1 4 Social Studies 200 200 200 200 1 1 1 1 4 Health, P.E. & Music 200 200 200 200 1 1 1 1 4 Values Education 200 200 200 200 1 1 1 1 4 Work Experience 300 300 300 300 14 14 14 14 6 Research & Study Skills 94 94 10 10 39 Source: MECS Order No. 6, 1986. - 237 - Table A3.27: EFFECT OF TEACHER TESTING AND SMALL GROUP INSTRUCTION ON PUPIL PERFORMANCE Number of Teaching practice Classrooms Mean score /a Testing 124 11.7 No testing 307 8.5 Small groups 45 12.5 No small groups 390 9.1 /a The maximum possible score is 24. Source: Preliminary results from Philippines Grade 5 population in Second International Science Study, International Associ&tion for the Evaluation of Science Achievement. - 238 - Table A3.28: MEAN SCORES OF PHILIPPINE SCIENCE HIGH SCHOOL (PSHS), NATIONAL CAPITAL REGION (NCR), REGION III, REGION IX AND OTHER REGIONS IN SEVEN NCEE SUBTESTS, 1973-83 Mean Scores Region Region Region Other ten NCEE Subtest PSHS NCR III IX regions (range) Vocabulary 23.59 16.92 16.29 12.39 13.81 - 15.93 Verbal Rel. 31.13 23.04 21.98 16.62 19.32 - 21.38 Reading Comp. 35.86 27.64 26.19 18.97 21.52 - 25.17 Logical Org'n 21.09 16.26 15.88 11.90 12.81 - 15.61 Mathematics 45.06 33.08 30.48 22.62 24.79 - 28.39 Comm. Skills 38.27 29.18 28.62 22.38 25.35 - 28.53 Abstract Reas. 24.77 20.56 19.07 16.55 17.86 - 19.44 Total test 219.77 166.70 158.51 121.43 137.36 - 154.97 Source: Milagros Ibe. unpublished MS thesis. See also related articles in the NETRC Journal for Policy Studies in Education, 1:1 (January- March 1988). - 239 - Table A4.1: ELEMENTARY SCHOOLS AND ENROLLMENTS, 1903-85 Schools Enrollments ('000) Year Public Private Total % private Public Private Total % private 1903 2,000 n.a. n.a. n.a. 279 80 359 22 1910 4,493 14 4,507 1 607 n.a. n.a. n.a. 1918 4,886 206 5,092 4 665 99 764 13 1929 7,482 n.a. n.a. n.a. 1,097 48 1,145 5 1936 7,820 n.a. n.a. n.a. 1,208 52 1,260 4 1946 13,396 190 13,586 1 2,387 69 2,456 3 1955 25,245 1,150 26,395 4 3,355 144 3,499 4 1965 21,053 824 21,877 4 5,554 261 5,815 4 1975 29,854 1,108 30,962 4 7,284 399 7,683 5 1985 31,440 1,369 32,809 4 8,270 524 8,794 6 n.a. = not available Sources: 1903-55 from Handbook of Philippine Statistics, 1903-59 (1960). 1965-85 from Philippine Education Indicators, 1965-85 (1986). - 240 - Table A4.2: SECONDARY SCHOOLS AND ENROLLMENTS, 1903-85 Schools Enrollments ('000) Secondary/ Year Public Private Total % private Public Private Total primary % Private 1903 35 n.a. n.a. n.a. n.a. 9 n.a. n.a. n.a. 1910 38 n.a. n.a. n.a. 3 n.a. n.a. n.a. n.a. 1918 50 n.a. n.a. n.a. 16 7 23 3 30 1929 120 n.a. n.a. n.a. 75 37 112 10 33 1936 118 n.a. n.a. n.a. 58 30 88 7 34 1946 151 n.a. n.a. n.a. 155 132 287 12 46 1955 360 1,260 1,620 78 219 361 580 17 62 1965 924 1,613 2,537 64 442 731 1,173 20 62 1975 2,883 2,025 4,908 41 1,010 1,230 2,340 30 53 1985 3,354 2,076 5,430 38 1,909 1,414 3,323 38 43 n.a. = noL available Source: As in Table A4.1. - 241 - Table A4.3: HIGHER EDUCATION INSTITUTIONS AND ENROLLMENT Schools Enrollments ('000) Higher/ Year Public Private Total % private Public Private Total secondary % private 1903 n.a. n.a. n.a. n.a. n.a. 20,000 Total Public Chartered 20 13 35 7 1 2 Nonchartered 164 13 4 0 0 0 Total Public 184 26 39 7 1 2 259 Private Catholic 72 32 66 7 4 1 182 Protestant '9 4 6 2 0 0 31 Secular nonprofit 7 9 20 7 0 0 133 Total Nonprofit 188 45 92 16 4 1 346 Stock 140 21 43 15 10 2 231 Proprietary 119 6 15 5 1 0 146 Total For-Profit 259 27 58 20 11 2 377 Total Private 447 72 150 36 15 3 723 GRAND TOTAL 631 98 189 43 16 5 982 /a These numbers do not include nondegree vocational-technical students or graduate students. Graduate enrollments were less than 500 at practically all institutions excepc for UP. Source: Higher Education Survey 1984/85 (see comments in Table 4.5). The Mendoza Report (DBM, 1988) was used to augment data on chartered IHLs. - 247 - Table A4.9: TUITION, SIZE AND PRIVATE COLLEGE TYPE IN MANILA, 1987 <1,000 1-5,000 5-10,000 10-20,000 >20,000 Total Sectarian High tuition 5 11 1 0 0 17 Low tuition 0 1 1 1 1 4 Total Sectarian 5 12 2 1 1 21 Nonsectarian High tuition 2 6 3 2 0 13 Low tuition 3 9 7 4 3 26 Total Nonsectarian 5 15 10 6 3 39 Total High tuition 7 17 4 2 0 30 Low tuition 3 10 8 5 4 30 Total 10 27 12 7 4 60 Note: "High Tuition" means tuition was above median of P 44 per unit per semester; "Low Tuition" was below median. This data source did not distinguish between nonprofits and for-profits but most of the nonsec- tarian institutions are for-profit and sectarians are virtually all nonprofit. Source: Calculated from Parents' and Students Guide to Colleges and Universities of Metro Manila (1987). These enrollment figures probably include nondegree and graduate students. - 248 - Table A4.10: FACULTY AND STAFF % full-time % full- Student/ faculty time % part- Adjusted admin. with only faculty time S/F S/F staff Bachelor's with PhD faculty ratio /a ratio /a ratio /a Public UP 31 22 1 9 9 54 Other chartered 66 3 11 16 17 141 Nonchartered 75 1 28 15 17 70 Total Public 63 6 16 15 16 108 Private Catholic 72 4 41 31 39 258 Protestant 71 3 27 40 44 186 Secular nonprofit 79 2 45 34 44 145 Total Nonprofit 74 4 41 32 40 208 Stock 79 2 45 41 53 335 Proprietary 89 2 45 46 56 186 Total For-Profit 80 2 45 42 54 291 Total Private 77 3 43 38 48 249 GRAND TOTAL 71 4 34 30 37 202 /a In calculating the S/F ratio, Students (S) are defined as all tertiary students but exclude secondary students. Faculty (F) is defined as head count faculty, i.e. as all full-time plus all part-time faculty. In calculating the adjusted S/F ratio, F is defined as all full-time faculty plus 0.5 part-time faculty. Source: UP faculty data are from University of the Philippines, 1987 (a UP publicatton). All other data are from Higher Education Survey 1984/85, collated by FAPE. The S/F ratios are consistent with those given in Ables, Valera and Ocampo (1987). However, the Mendoza Report (iBM, 198E) lists the S/F ratio as 20/1 at chartered colleges (excluding UP) and 40/1 at private colleges. The Report also gives 40/1 as the student/nonteaching staff ratio at cha7tered IHLs, apparently includitig many support personnel other than administrators in the denominator. - 249 - Table A4.11: EXPENDITl1RES, TUITION AND ASSETS PER TERTIARY STUDENT, 1984-85 (1) (2) (3) (4) (5) (6) (7) Total Total Total assets Expendi- current Capital assets per Tuition t tures pcc expendi- outlays per student: Tuition expendi- student on tures per per student: outside per tures per personnel student student Manila Manila student student Public Chartered 2,618 3,627 908 n.a. n.a. 570 0.2 Unchartered 2,228 3,096 875 n.a. n.a. 208 0.1 Total Public 2,530 3,492 899 n.a. n.a. 478 0.1 Private Sectarian nonprofit 1,135 2,005 934 2,700 1,200 1,842 0.9 Secular noopzofit 671 1,160 688 1,100 2,100 1,164 1.0 For-profit 680 1,120 380 1,300 500 1,245 1.1 Total Private 839 1,418 603 1,600 900 1,418 1.0 GRAND TOTAL 1,098 1,748 649 n.a. n.a. 1,278 0.7 n.a. - not available. Source: Columns 1-3 and 6 compiled from Higher Education Survey 1984/85. Columns 4-5 are from "The Financial Structure and Performance of Metro Manila Private Schools" and "The Financial Structure and Performance of Non-Metro Manila Private Schools," FAPE Review (1979). - 250 - Table A4.12: SES INDICATORS, MANILA IHLs, 1987 Father's % Fathers mean /a % Fathers % Fathers clerical monthly finished professional sales, % Fathers salary college % Own car or admin. service in prod. Public UP 4,038 58 61 77 10 3 Other public 2,378 18 9 22 36 20 Private Catholic 3,956 45 37 48 23 10 Protestant 3,925 35 22 35 20 16 Sec. nonprofit 1,594 17 12 !? 35 21 For-profit 2,924 31 23 34 28 13 Average 3,086 33 24 36 28 14 /a For comparison, the median annual family income in the Philippines in 1987 was P 20,000 or P 1,667 monthly (MECS, 1987a). Undoubtedly, the median annual family income in Manila was substantially higher, but still not as high as father's mean salary in the public or private sector. Source: Survey of Manila IHLs 1987. - 251 - Table A4.13: PRIVATE COSTS OF HIGHER EDUCATION PER STUDENT, PER SEMESTER, 1987 Tuition & Books & Transport Tuition as fees supplies & other Total % of total Public UP 1,077 429 823 2,329 46 Other 429 368 700 1,497 29 Private Catholic 2,039 526 809 3,374 60 Protestant 1,204 448 704 2,356 51 Secular nonprofit 899 379 526 1,804 50 For-profit 1,223 468 809 2,500 49 Average 1,227 457 775 2,459 50 Source: Survey of ManIla IHLs 1987. These tuition fees are higher than those presented in Table A4.11, since these are for Manila, for a later year, and from a different data source. - 252 - Table A4.14: CURRENT EXPENDITURES ON HIGHER EDUCATION BY SOURCE, 1987 (in billion pesos) Books, supplies, Income of lHLs transport From From Other Total expenditures government tuition sources income by students Total Public IHLs 2.2 0.2 0.1 2.5 0.5 3.0 Private IHLs - 2.3 0.2 2.5 2.3 4.8 Total 2.2 2.5 0.3 5.0 2.8 7.8 Source: Government appropriations and other sources of income for current expenditures at public IRLs were derived from the rendoza Report (DBM, 1988) and the national budget. Tuition rates and other income sources of private institutions were taken from the Higher Education Survey 1984/85 and were assumed to increase 20% by 1987. Tuition rates for 1987 were corroborated by Parents' and Students Guide to Colleges and Universities of Metro Manila (1987); rates outside Manila were assumed to be 10% lower. Total income was assumed to equal total expenditure. According to Survey of Manila IHLs 1987, books, supplies and transport costs per student at public and private IHLs are roughly equivalent to private tuition costs, adding another P 2.8 billion (see Table A4.13). Total institutional expenditures were then P 5.0 billion, of which half was spent in public colleges and universities. Total current higher educational expenditures were P 7.8 billion, of which 72% came from private sources. - 253 - Table A4.15: SOURCES OF INCOME IN THE PRIVATE SECTOR Average Other Donations Total Total tuition income per per income per income t per student student /a student student tuition Catholic 1,894 142 149 2,185 1.2 Protestant 1,427 678 106 2,211 1.5 Secular nonprofit 1,164 93 20 1,277 1.1 Total Nonprofit 1,656 171 112 1,939 1.2 Stock 1,313 45 5 1,363 1.0 Proprietary 967 57 3 1,027 1.1 Total For-Profit 1,245 47 5 1,297 1.0 Total Private 1,418 100 50 1,568 1.1 /a Canteen, dormitory, bookstore and investment income. Source: Higher Education Survey 1984/85, collated by FAPE. Table A5.1: GOVERNMENT AGENCIES INVOLVED IN NONFORMAL EDUCATION Agency Implementing unit Thrust Department of Education, Culture and Bureau of Nonformal Education Literacy, basic vocational/technical skills training Sports (DECS) Department of Labor and Employment National Manpower and Youth Cot.incil Industrial occupational skills (DOLE) Bureau of Rural Workers Rural organization and basic labor education Other executivu departments of govern- Individual bureaus ment e.g. Department of Social Welfare and e.g. Bureau of Women's Welfare Integrated development along health, education, Developmet,t (DSWD) livelihood, self-enhancement and community partici- pation Department of Agrarian Reform (DAR) Bureau of Agrarian Reform Informa- Awareness raising on land reform tion and Education Department of Health (DOH) Health Manpower Development and Primary health care with emphasis on community par- Training Service ticipation Departmeni. of Agriculture (DA) Agricultural Training Ins:itute Farming systems development; farm and aquatic pro- duction skills, small-scale agriproduct processing; meat, vegetables and other crop utilization for home consumption and income generation, youth leadership training; out-of-school youth skills training, coun- try program for children; rural women in selective crop production Note: Also, a number of state colleges and universities engage in nonformal education (NFE) through their respective community extension units/ offices, e.g., University of the Philippines, Palawan National Agricultural College, Mindanao State University. In the private sector, there are more or less 16,000 NGOs involved in various kinds of NFE (e.g., Philippine Business for Social Progress, People's Action for Cultura. Ties, Philippine Rural Reconstruction Movement), not to mention a score of private colleges and universities doing their own NFE through their community extension units/offices, e.g., St. Joseph's College, Xavier University, De La Salle University. Table A5.2: DIRECTORY OF TRAINING INSTITUTIONS Name and location of training institution Types of training program/activity Clients/beneficiaries Aaian NOO Coalition (AIIGOC) To promote NGO involvement in rural development and to initiate selected programs for Rm. 47 Msafrin4o Bldg. strengthening the capabilities of NGOs and grassroots communities. Its training programs 2178 Pasong Tcmo, Makati came in the form of intercountry development education field visits which promote linkages Netro Manila on people-to-people level. ANGOC also organizes NCO management training for supervisors which focuses on project development orleotation. Actioan Researo:h Group for Social Development, To train local people on simple diagnosis; and treatment (primarily health care) and first Inc. aid. To provide information ab,ut the principles of good health, the nature and causes of 8 Gregorio del Pilar diseases. San Fratncisco del Monte, Quezon City Bicol University Extension Service Center To provide short-term and nondegree courses to out-of-school youth and adults. Programs. Out-of-school youth and adults (BUSEC) farmers' training classes; short-term skills training; model farm demonstration; and Bicol University inland and marine fishermen's training. Legeapi City Center for Coturnity Services (CCS) CCS undertakes relevant scientiftc and simplified studies of problems and issues in rural Ateneo de Mewnila University communities as well as documents people's efforts in attaining genuine social, economic Quezon City and political self-reliance. Its major concerns are education, organization and training. CCS units include the following office for social concern and involvetent, office for rural development, worker's college and LtRAS, for primary health care. Center for th,o Development of Human Resources in CENDtRRA collaborated with ANGOC and SEARSOLIN in the training program on NGO supervision Rural Asia (CI;NDHBBA) of rural development initiatives in Asia. 2230 Narra St United Farsfiatfue I ParaRaque, Metro Manila Cominunication Foundation for Asia (CFA) In the Philippines and other Asian countries, it seeks to serve the development of the Asian people 4427 Interior St. people in need through an innovative learning process utilizin, all forms of comciunication Old Sta. Mesa,, Manila and of media technology. Cotmsnity Manpower Developmuent, Inc. (COMMAND) To train unskilled, unemployed or underemployed out-of-school youth and family heads from Villoante, Be.colod City low-income groups to acquire income-producing skills. To motivate trainees so that they Negros Occiderital will be able to develop positive attitudes toward training and work. Council of Welfare Agencies Foundation CWAFPI aima to assist and facilitate the efforts of its member agencies to effectively and Philippines (NAPFPI) collaboratively attain social development through study and analysis, advocacy, project c/o Philippinils Band of Mercy demonstrations, staff training, clearingbouse services and information dissemination as 22 Zart Avenugii, Quezon City well as other measures within the context of its function as an interagency representative body. Davao Medical School Foundation, Institute of Aims to improve the quality of life of tbhe rural and urban underserved communities through Primary Health Care (DUSF-IPHC) a holistic development approach, develop the comunity approach, develop the commnity P.O. box 251 residents' capabilities to plan, implement, monitor and evaluate their own development Davao City, 2801 activities through volunteer training of volunteer health workers, farmers and comewnity leaders; and to forge strong and sustained linkages between government, nongovernment and local cogmmnity organizations to foster cooperation and understanding as well as maximize utilization of each other's resources. Econodic Developmant Foundation (EDP) To provide the training necessary to upgrade knowledge, attitudes and skills towards the 8th Floor, BaStken Bldg., Ayala Avenue, full development of the person as an individual and community member. Makati, Metro Manila Rcuvnical De .elopment Center for Youth Founda- To vork toward the total development of out-of-school youth and unemployed adults through Out-of-school youth and unemployed adults tion, Inc. vocational skills training, entrepreneurial development, commnity building and spiritual Reman, Ieabela nurture. Table A5.:!: (cont-d) Name and location of training institution Types of tra'niiig program/activity Clients/beneficlaries International rraining for Rural Development IIRR is basically a research and training center whose mission is to generate and dissemi- Rural people in developing countries International Institute for Rural Reconstruction nate knowledge among rural people in deve:,.oping countries to enable them to release and (1IRR) use their inherent potentials and capabil:'.ties in improving their livea. To fulfill its Silang, Cavite! mission, lIRR pursues three major program:I2 field operational research, international training and international extension. On training, it offera different types of training courses every year. These include two regular on-campus international training :ourses. off-campus collaborative training with rural development agencies in other count ries and special local courses as requested by various organizations and groups. Lay Information Institute Provide training services for the formatirn, education and training of community lay lead- Religious congregations, sesinaries and Parish of the Holy Sacrifice ers who will collaborate with their parisai priests in building Christian comwnities. social developuev.t University of the Philippines Diliman, (Zuezcn City Mindanao Development Center (MDC) To implement programs that would induce e:tive participation/involvement of workers, and Operates a training center especially 740 Quezon BovI1evard, slum dwellers in particular, towards commAnity building and development. MDC also has a geared for use of low-1ncone groups P.O. Box 13 reach-out program for trainers and organiters who have had at least a year's immersion Davao City with the poor. National Association of Training Centers for To assist the center in the conduct of training programs and in such areas as staff devel- Cooperatives INATCCO) opment and development of training materials. Major programs: promotion of ecnouic Suite 74 Zeta Bldg. integration among cooperatives in the field of banking, intertrading and insurance. 191 Salcedo St., Legaspi Village, Makati, Metro Manila Organization for Training Research and Develop- Community organization and education; cotmunity self-reliance and jelf-sufficiency; and ment, Inc. (OTRADEV) development of leadera through participation, education, mobilization, participatory 41 Mabait Stretet, Teachers Village. research planning and implementation. O1RADEV conducts the following: Diliman. Quezon City - Organizational development and leadersbip training: emphasizes the development, enhancement and promotion of collective leadership through sectoral and community organization. - Agriculture development: provide orgarizational technical assistance with emphasis on appropriate agriculture atrategi4a. - Nonformal education: focuses on a protlem identification/problem-solving methodology in literacy and skills learning process. Philippine Buiiiness for Social Progress (PBSP) PBSP has established the Social Developmrnt Management Institute (SM4I) to upgrade social SDMI is a training resource available to 4th Floor, Yulivo Bldg., Dasmarinas St. development management capabilities. The institute's training courses are based on the local, provincial, regional and national Binondo, Manila theories and principles of social develolment as well as practical experience of social nongovernmental organizations and govern- development practitioners. Among the cotrses offered are: Social Development Management, ment organizations Cooperatives Development, Organizational Development, Management Reporting and Accounting System, Basic Training for Technical Aslsstant/Loan Officer, Community Organizing Resource Management, Appropriate Agricultural Technical Training and Specialized Training Programs. Philippine Rui-al Lffe Center (PRLC) Training for rural development and livestock dispersal. Programs: training in livestock Farmers Palapala, Dasmaerinas Cavite production. P.O. Box 841 Manila Philippine Partnership for the Development of The major intention of the program is the training of NGO heads or officers who shall, NGO representatives from Luzon. Viasyas Human Resources in Rural Areas (PHLDRRA) after their training, implement en organizational development and management program suit- and Mindanao Rm. 24. Matrit:o Bldg. able to their organizaiton. The program has three phases: Makati, Metro Manila - Phase 1 covers a two-week classroom training or theoretical inputting. Training phase covers seven modules touching on the following major concerns: role of NGOs in Philippine development, valtes and organization, objectives setting, and developing pro- grams and strategies. - Phase II covers a four-onth practicum whereby participants implement action plans developed in Phase 1. - Phase Ill covers a one-week integration at the end of the practicum. Table A5.2: (contd) Name and locatlon of traintng institution Types of training program/activity Clients/beneficiaries Sacred Heart S,::hool of the Society of Jesus, To assist the government in extending the benefits of the manpower training program to PooT but desesving students Inc. poor but deserving students. Sacred Heart S:.hool for Boys Mango Avenue, Cebu City Seashang Katarungang Panjipunan, Inc. (SAKAP) To serve as a central organization for the promotion of productive ecmployment for the un- Depressed communities of San Isidro and Deo St., San A,tonio Village employed, develop vocational and technical skills, and promote social and economic secur- Guadalupe Nuevo in Mtakti, Malibay in Makati, Metro llanila ity among the workers. Program: vocatioral training such as woodcrafts-aking, bookbind- Pasay and Barrio Magasaysay in Tondo ing, sewing and dressmaking. Sillmen Univeraity Extension Program (SUEP) Education for the service of others and tc. promote income-producing and scif-supporting Farmers, fishermen, women, rural youth/ Sillimen Univei:sity projects. Major programs: women's study project; community mental health; education for children Dumaguete City 6501 the handicapped children; community health project; children's nutrition programs; children's community theater; village extension program; rural publication center. Social Action Poundation for Rural and Urban Total human development toward self-reliance and liberation. Mtajor programs: health and Rural poor, women Development. Iic. (SAFRUDI) nutrition; education training; skills training; sectoral organizing; socioeconomic handi- 2611 Lammyan St:. crafts. Sta. Ana, Manila South East Asia Rural Social Leadership Insti- Specialized training institute committed to training rural leaders in the development of Farmers, rural families, students, labor- tute (SEARSJLiIt) competencies in helping their people help themselves. era, fishermen, teachers, women workers, Manresa Farm tribal people. parishioners, businessmen, Cagayan de Oro City plantation workers Southern Philippines Educational Cooperative To provide cooperative training program to affiliates. Major programs: Cooperative Lead- Cooperative leaders Center, Inc. (SPECC) ership Development Program. 67 Ilano Bros., Pacans St. Cagayan de Oro City Tagalog Cooperative Training and Education To strengthen cooperative primaries through education and training, auditing, management Leaders of cooperative primaries Center, Inc. (TAGCOTEC) consultancy. 300 Dofla Aurora. St., Poblacion Ibaba Angono, Rizal Technical Assistance Center for the Development To assist and train low-income groups and individuals to organize and set up economic Low-income groups of Rural and Uzban Poor (TACDRUP) activities as a means of Increasing their income. To provide technical services, train- 2nd Floor, Aledia Bldg. Ing, organizatirnal development and other Integrated services for project proponents and 95 L. Ma. Guerero St. their staff in their planning and implementation of social development programs designed Davao City to improve the quality of life of the poor. University of the Philippines - InsaLtute for The UP-ISSI has worked on numerous consulting and training assignments in the Philippines Small-Scale Indastries (UP-ISSI) and the whole of Asia, in cooperation with TECHNONET ASIA's participating organizations, Virata Hall, UF Campus, the ILO and other international development agencies. The programs cover all aspects of Diliman, Quezon City entrepreneurship and management development and vary in length from short program of ten days to full-length six-month training courses. Visayas Cooperative Training Center, Inc. Promotion and development of cooperative societies to become truly democratic inst::_cXons (VICTO) ef the people who help tbemselves improve their quality of life. Building of cooperative 2nd Floor, G.V. Bldg. institutions as a catalyst for development of urban-rural poor communities. Promotion and P. del Rosario it. deve±,pment of integration of cooperative societies with the vtew of strengthening them Cebu City both socially and economically and enhancing their capabilities to develop the Philippine economy. Major programs: leadership management; training programs; consultancy and auditing prtSrams; banking cooperatives. Workers' College Students Activities Center To help the workers organize true and effective labor union and/or association. To enable Workers In the Metro Manila areas and two Center for Commuinity Services the workers to be aware of their rights and conditions in order to motivate them to unite other areas in the neighboring province of Ateneo de Manila University and mobilize for effe-tive action. To train the workers to be more effective and effi- Bulacan. Loyola Heights, Quezon City cient labor leaders. Table A5.3: SAMPLE PROFILE OF NONFORMAL EDUCATION PROGRAMS Department/implementing unit Mandated function Prcgram/services Clientele Education, Culture and Sports - Bureau of Nonformal Education - Eradication of illiteracy - Basic literacy - Out-of-school youth - Increasing level of functional literecy - Functional literacy - Unemployed adults - Proviston of appropriate technical/voca- - Livelihood skills training - Illiterates tional skills - Integration of values development in - Literates who need continuing literacy - Development of proper values and atti- functional literacy and livelihood skills classes tudes training - Department staff - Staff development AEgricultur e - Agricult u re Training Institute - Promotion of innovative, self-reliant and - Institutional development - Farmer beneficiaries of agrarian reform participative farm and fishing families - Values formation - Subsistence fishermen - Capability building of the department's - Food production technologies - Cultural minorities extension workers, particularly in areas - Income-generation projects - Diiadvantaged youth and adults of technology transfer - Resource conservation - Staff development Labor - National Manpower and Youth Council - Formulation of policies, plans and pro- - Trainer's training - Out-of-school youth grams for manpower development - Outreach program - Unemployed adults - Trade tests - Skilled and unskilled workers - Trainers - Bureau of Rural Workers - Organization and training of rural work- - Training in rural organiZation and basic - Sugar workers ers for self-reliance labor education - Coconut workers - Implementation of socioeconomic projects - Fishermen for employment and increased income - Rice and corn workers - Collaborative ventures with other agen- - Livestock raisers cies, including international agencies - Philippine Overseas Employment Admir>s- - Development of skills and careful selec- - Entrepreneurial training - Overseas workers and their dependents tration tion of Filipino workers for overseas - Language education - Contract workers employment ' Social Welfare snd Development - Bureau C,7 Women's Welfare - Provision of a comprehensive and integra- - Maternal and child care - 3.3 million marginalized/disadvantaged ted preventive and developmental program - Nutrition education women to targeted 3.3 million marginalized/dis- - Safe water facilities advantaged women all over the country - Sanitary toilet facilities - Environmental sanitation - Herbal gardens - Backyard/comunal gardens - Functional literacy - Practical skills development/skills upgrading - Sessions on women's rights and responsi- bilities related to health, education and livelihood - Personality development sessions - Leadership training and organizational development Agrarian Rleform -Bureau e;f Agrarian Reform Information and - Comunity information, education and com- - General public (e.g. religious, media Education munication professionals, local government offi- - Clientele development cials, teachers) - Personnel development - Farmers, landowners - Department staff Table A5.3: (cont'd) Departmsent/i;4nementing unit Mandated function Program/services Clientele Sci nce and Techno -mTpTfea -r r%search Institute - Technology transfer on: - Transfe- of results to end-users, includ- - Out-of-school youth - food production and processiag ing technical, extension and training - Unemployed adults - aqusculture techuologies services - ceramics - herbal plants - industrial salt production University of the Philippines - Uoliege or grihculture Small and low-cost farm technologies - Small farmers r~~~~~~~~~~~~~~~~~~~~ Building of strong farmers organizations - College of Social Work and Community - Community organization - Farmers Development - Leidership development - Villagers with potentials for people- - Problea-solving oriented leadership Palawa n Matiotnal 4gricultural C4'llege - uepsrtont c,t Axtenalout - Vocational development program - Poor rural youth - Sustained school system Capiz Institute of TechnologY Mobile school - training on courses like - Poor rural youth handicrafts (fibercrafts. ahellcraft, etc.), horticulture, fish culture, fish- ing, food preparation and processing, imshroom growing, handmade weaving, susi- cal instrument waking, flower making, dress saaklng, eabroidery, metalcraft, general mechanics, hollow block making Summr Institute of Linguisties - Basic literacy - Cultural minorities - Functional literacy - Integration of values and concepts bene- ficial to the comuanity in text such as health promotion and agricultural dqvel- opment - Training of indigenous members of the t community as teachers, supervisors, g trainers, producers People's Action for Cultural Ties - Strengthenig of the sense of coainity - Alternative education - Cultural minorities and Identity .aong minority groups in - Functiontal literacy within the context of solidarity vith other oppressed people comnity organization - Prolmotion of education for social justice - Tribal Filipino consultations among national minorities, church circles - People's forums and local, national and international - Cross-cultural exchange support groups Philippine Association for Intercultural - Helping tribal Filipinos retain their - Land rights organizing - Tribal Filipinos (57 separate tribal com- Jevelopment. sili. ~ancestral lands, seek rpdress of their iunities, 13,000 families) grievances, and acquire resources for their coeunity projects Agency for Community Educational Services - Liberation against exploitation and - Functional literacy within the context of - Farmers oppression community organization - IWmen - Practical skills development - Cooperative marketing - Mushroom culture Diocesan Adult Training Center - Integrated approach to human development - Functional literacy - Illiterates - Comtunity education - Marginal group tribals - Manpower skills - Training - coounity organization and leadership developnent Organization fnr Training and Development - Agroforestry - Iraya Mangyan, tribe of Mindoro - Bealih and nutrition - Adult literacy - Integrated training and organizing Basic Christian Community (of Catholic - Total human development combined with - Consciousness raising - Parishioners, with preferential programs chnurch mariabea faith experiences - Organizing and leadershiP for the poor - Conmunity developmaent - Social action - 261 - ANNEX 4 REFERENCES - 263 - REFERENCES Ables, H., J. 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James, E. and E. Neuberger. (1981). 'The Academic Department as a Nonprofit Labor Cooperative.' Public Choice. James, E. and S. Rose-Ackerman. (1986). The Nonprofit Enterprise in Markec Economies. New York: Harwood Academic Publishers. Jimenez, E. and V. Paqueo. (1988). 'Student Performance and School Costs in Private and Public High Schools in the Philippines." World Bank Working Paper. Jimenez, E., V. Paqueo and M. L. de Vera (1987a). 'The Relative Efficiency of Private and Public High Schools in the Philippines." Washington, DC: Population and Human Resources Department, The World Bank. Mimeographed. Jimenez, E., V. Paqueo and M. L. de Vera (1987a). 'Does Local Financing Make Public Primary Schools More Efficient? The Philippine Case.' Washington, DC: Population and Human Resources Department, The World Bank. Mimeographed. Joyce, B. R. (1983). The Structure of School Improvement. New York: Longman. Laya, J. and Co. Ltd. (1987). Philippine Secondary Education: Financing and Rate of Return, 4 vols. Manila: Department of Education, Culture and Sports. Lockheed, M. and K. Gorman. (1987). 'Sociocultural Factors Affecting Science Learning and Attitudes." In A. Champagne and L. Hornig (Eds.), This Year: School Science 1987: Students and Science Learning. Lockheed, M. and E. Hanushek. (1988). 'Improving Educational Efficiency in Developing Countries.' Compare, 18(1). - 267 - MECS. (1986). Philippine Education Indicators, 1965-1985. Manila: Instructional Materials Corporation. MECS Task Force to Study State Higher Education. (1987a). Report on State Universities and Colleges in the Philippines, 3 vols. Manila. MECS Task Force to Study State Higher Education. (1987b). Report of the Task Force Panel on Engineering. Manila. Mingat, A. and J. P. Tan. (1985). 'On Equity In Education Again: An International Comparison." Journal of Human Resources, 20(2), 298-308. Ministry of Education (Japan). (1975). Educational Standards in Japan. Tokyo. Monroe, Paul. (1925). On behalf of the Board of Educational Survey, Philippine Islands. A Survey of the Educational System of the Philippine Islands. Manila: Bureau of Printing. Ordonez, V. (1988). The Pearl of Great Price: An Environmental Analysis for Values Education. Manila: MECS. Paderanga, C. (1987). 'Exploring the PRODED Results: Preliminary Report on the HSMS Project." Manila. Mimeographed. Paqueo, V. 1985. "Econometric Analysis of Educational Attainment Among Elementary School Aga Children.' HSMS Series III-A. Manila: DECS-EDPITAF. Parents' and Students' Guide to Colleges and Universities of Metro Manila. (1987). Manila: Atis Palimbagan. Philippine Association of State Universities and Colleges. (1987). PASUC In-House Study of State Universities and Colleges. Manila. Postlethwaite, T. N. and R. M. Thomas. (1980). Schooling in the ASEAN Region. Oxford: Pergamon Press. Psacharopoulos, G. (1985). "Returns to Education: A Further International Update." Journal of Human Resources, 20(4), 584-604. Purkey, S. and M. Smith. (1983). "Effective Schools: A Review." The Elementary School Journal, 83(4), 427-52. Richards, P. and M. Leonor. (1981). Education and Income Distribution in Asia. London: Croon Helm. Rosas, Nilo. (n.d.) 'The Role of Government in the Philippine Higher Educational System.' Mimeographed. - 268 - Smith, H. L. and P. P. L. Cheung. (1986). "Trends in the Effects of Family Background on Educational Attainment in the Philippines." Asian Journal of Sociology, 91(6), 1387-1407. Survey of Manila IHLs. (1987). Tan, J. P. and V. Paqueo. (1988). 'The Economic Returns to Education in the Philippines." Washington, DC: Asia Technical Department, The World Bank. Mimeographed. UNESCO Regional Office for Education in Asia and the Pacific. (1984). Diagnostic Studies on Educational Management. Country Studies: Philippines. Bangkok: UNESCO. UNESCO. VarJous Years. Statistical Yearbook. Pariss UNESCO. UNESCO-UNICEF Co-operative Programme. (1987). School Clusters in the Third World: Making Them Work. Paris University of the Philippines. (1987). UP. U.P. Business Research Foundation, Inc. (1981). Report on MECS Management Improvement Project. University of the Philippines, BRF, Inc. World Bank. (1987). The Philippines: Selected Issues in Public Management. Report No. 6887-PH. Washington, DC. World Bank. (1986a). Financing Education in Developing Countries: An Exploration of Policy Options. Washington, DCs The World Bank. World Bank. (1986b). The Philippines: A Framework for Economic Recovery. Report No. 6350-PH. Washington, DC. World Bank. (1984). The Philippines: Public Expenditures and their Financing. Report No. 4919-PH. Washington, DC. - 269 - LIST OF WORKING PAPERS Currin, Charles. 'Teachers and Teacher Education in the Philippines." Dove, Linda A. 'The Quality of Elementary and Secondary Education." Franco, Ernesto. "Strategy for Management Reforms in Education." Guillermo, Virgilio. "Nonformal Skills Ty:aining for Out-of-School Youth." James, Estelle. "Higher Education." Navarro, Conrado. "A Study of Nonformal Education in the Philippines: Issues and Recommendations. Nazareth, Anita. "Review of Institutional Arrangements and Projection Methods for Enrollment and Resource Requirements." Paqueo, Vicente. "On the Problem of Elementary Grade Completion." Prosser, Roy. "Nonformal Education and Training." Tan, Jee-Peng and Alain Mingat. "The Cost and Financing of Education in the Philippines: A Documentation and Assessment of Policy Issues."