Of Promises and Percentages: A Second Look at Two Proposals in Harapan

Herisadel P. Flores is an Assistant Professor at the UP National College of Public Administration and Governance, UP Diliman. He teaches Public Fiscal Administration; Local Government and Regional Administration; Public Administration and the Economic System; Introduction to Public Administration.

Last April 28, Harapan presented to us another batch of senatorial candidates and their respective plans should they be elected to office.  I would like to commend the candidates for coming up with concrete suggestions to address social issues instead of resorting to broad and motherhood statements.  Some of the proposals mentioned, however, may be new to mainstream public discourse.  Thus, in line with our commitment to inform and enlighten our readers, I picked some of the concepts mentioned during the program that the public might be interested to know more about.

One such idea is the Tuition Fee Voucher Fund proposed by Greco Belgica. School vouchers attempt to improve students’ access to education, by transferring government funds either to the student or directly to the private school that the student would be attending.  The amount transferred may cover the tuition fee in full or in part.  This is in contrast to direct government provision of education through public elementary and secondary schools or state universities and colleges (SUCs). 

It should be noted that in our country education is provided for free by public schools at the elementary and secondary levels, while tertiary education offered by SUCs is subsidized.  Despite this, access to secondary and tertiary education is quite low, especially among those who are from low-income households.  A study made by Luz (2009) showed that only 58% of children who enroll in Grade 1 are eventually able to enter high school and that only 42% would eventually finish secondary education.

Certainly, a school voucher will benefit those who will be able to receive it.  It was not mentioned by the proponent if the scheme will cover only tertiary education or even elementary and secondary education.  At this point, it is also not clear whether this program will only be intended for a certain sector of prospective students – perhaps those who come from low-income households – or for universal application (i.e. everyone who wishes to study) like what is being done in Chile.  Should the former be adopted, an effective system and criteria for targeting beneficiaries will be a key factor to its successful implementation.  Without which, the scheme may just further worsen the inequity of access to education.

Even universal application of the school voucher system may have a blunted impact on improving access to tertiary education in as much as most private institutions of higher learning are located in Metro Manila and other urban areas across the country.  While the voucher may cover the tuition fee, the student may still have to spend for rent, transportation, living allowance, and books among other things.  Access to private universities and colleges is not automatic even if the student has enough money to spend for all these, as some have entrance examinations and other admission restrictions.  

It should also be pointed out that a voucher system will, in effect, re-channel government resources to private institutions that could have been used to fund public schools.  Considering the scant resources being received by our public education system at all levels, it may yet have to compete with the private schools for public funds.  To illustrate, it should be noted that the voucher system is proposed to be funded from government resources that will be freed should the PDAF be abolished (which is also advocated by Belgica).  At present, the meager resources being received by public schools and SUCs are augmented by the PDAF of some concerned lawmakers.   

Another proposal, this time by Christian Señeres, is the legislated increase of public sector health spending to 5% of GDP.  Just how much are we talking about here?  In 2011, the country’s GDP was estimated to be approximately PHP 9.74 trillion. (Figure from NSCB’s official website http://www.nscb.gov.ph)  If we have adopted the proposal in 2011, this would have equated to around PHP 490 billion spent for public health and medical services.  This amount is more than 3.5 times the public sector spending for health in the same year. 

Not the entire public sector health spending is borne by the national government, however.  In fact, local government units (LGUs) bear around 60% of the total government health expenditure annually due to decentralization.  However, a legislated increase in health spending would be most likely lodged with the national government.  If this were implemented in 2011, this would have pushed the national government health spending to around PHP 400 billion, which is roughly 25% of total national government expenditure in the same year.  With this huge proportion allocated to health, what would be left to use for other government expenditure items?     

In the first place, what is the basis for the proposed 5% public sector health spending for health?  The World Health Organization (WHO) was cited as having recommended this.  However, Savedoff (2007) challenged the claim that the WHO has ever endorsed this level.  Further, in 2011, the public health spending of our neighbors in Southeast Asia, with levels of development roughly similar to our country, did not even come close to 5% of GDP.  Thailand, Vietnam, and Indonesia spent 3.1%, 2.7%, and less than 1% of GDP, respectively.  How much did the Philippines spend?  A measly 1.4% of GDP.  (Figures are the author’s own estimates based on World Bank data available  at http://data.worldbank.org/indicator/SH.XPD.PUBL/countries.)

While the country’s capacity to meet its Millennium Development Health Goals by 2015 has suffered due to the perennially low public spending on health, increasing government health expenditures to 5% of GDP may have serious implications on its ability to address equally pressing concerns.  Further, while indicative benchmarks for public spending may give us convenient yardsticks for assessing health, education, or infrastructure expenditure performance, more conscientious planning (i.e. evidence-based and participatory) may lead to more optimal levels of proposed budgets for the development of these sectors.

In conclusion, while the merits and demerits of the two proposals discussed above are still open to debate (you, the voter, will ultimately decide), we cannot discount the fact that their proponents have succeeded to make you and me interested about these very important topics – topics that would have otherwise been drowned by mind-numbing campaign jingles.  They were not afraid to propose novel yet untested solutions to old problems despite the criticisms they may receive, which is a quality that we look for in our legislators in the first place.


Sources and Reference Materials for Further Reading:

Luz, Juan Miguel.  “The Challenge of Governance in a Large Bureaucracy (Department of Education):  Linking Governance to Performance in an Underperforming Sector.”  HDN Discussion Paper Series 2008/2009 no. 1.  Available at http://hdn.org.ph/wp-content/uploads/2009/05/dp01_luz2.pdf.

Mizala, Alejandra and Florencia Torche.  “Bringing the Schools Back In:  The Stratification of Educational Achievement in the Chilean Voucher System.”  International Journal of Educational Development (2010).  Available at http://www.captura.uchile.cl/bitstream/handle/2250/16714/Mizala_Alejandra.pdf?sequence=1.

Republic of the Philippines.  Progress Report on the Millennium Development Goals. (2010).  Available at http://www.neda.gov.ph/econreports_dbs/MDGs/4thProgress2010/MDG%20National%20Report%202010.pdf.

Savedoff, William D.  “What Should a Country Spend on Health Care?.”  Health Affairs 26, no. 4 (2007):  962-970.  Available at http://content.healthaffairs.org/content/26/4/962.full.html.