By Krista Angela M. Montealegre
National Correspondent

PHILIPPINE CONGLOMERATES are stepping on the gas on the expansion of their education business in Southeast Asia, taking advantage of the expertise developed at home to serve the region’s young demographics amid uncertainties at home.
Phinma Education Holdings, Inc. President Chito B. Salazar said in an interview last week the company is scouting for acquisition opportunities in Vietnam and Indonesia, hoping that a deal will be completed by next year.
The Ayala group, on the other hand, expressed its openness to venture overseas after being approached by various players in the region, Alfredo I. Ayala, chief executive officer of Ayala Education, Inc. (AEI), said in a briefing last week.
“I believe it is because of Southeast Asia’s young population,” Mary Jade Roxas-Divinagracia, managing partner for deals and corporate finance at PwC Philippines, said in a mobile phone message when asked to explain why local players are drawn to expand in the region.
“Also, other Southeast Asian countries still have very low enrolment ratios which again means that there are growth opportunities.”
Both firms are confident that their business model of delivering quality affordable education to low-income learners will find a market in Southeast Asia.
“We do believe we hit on a formula that significantly improves the employability, skills and career opportunities of Filipinos… This human capital formula is applicable throughout the region,” Mr. Ayala said.
The conglomerates are becoming bolder in their expansion plans after building their expertise at home.
Phinma operates six schools in the Philippines and a training center in Myanmar that offers care-giving courses in partnership with Victoria Hospital, one of the largest private health care service providers in the latter country.
Enrolment is expected to increase to 74,000 in the coming school year from 62,000 in the prior year.
The goal of Phinma, which is eyeing to go public by 2020-2021, is to become “the primary provider of high-quality low-cost education to lower income families of Southeast Asia,” Mr. Salazar said.
“Groups who are looking to list their education business at some point look at a regional play as a good opportunity for elevating their brands and also for attracting regional investors. Both of course leading to better valuations,” Ms. Divinagracia said.
Since entering the education business in 2014, AEI has established a chain of private high schools under the brand Affordable Private Education Center (APEC) and acquired University of Nueva Caceres in Bicol and National Teachers College in Manila.
AEI is in the process of merging with listed iPeople, Inc., with the latter as the surviving entity. The expanded entity will combine the Yuchengcos’ Mapua University with the Ayala’s growing portfolio of schools, equivalent to about 50,000 students.
Ayala Chairman Jaime Augusto Zobel de Ayala said the intent is for both parties to reach an agreement after failing to close the deal in the first quarter of 2018.
Local firms’ overseas foray comes at a time the local education industry is facing a crucial year, as the upcoming school year is expected to see a surge of college freshmen following full implementation of the K-12 program in 2016. The last two years saw a drought for universities due to the additional two years of senior high school required of all students.
Competition is also expected to heat up because of the first year of implementation of the Universal Access to Quality Tertiary Education Act, which offers free education in state-run universities and colleges and publicly run technical vocational institutions.
“There are a lot of unknowns right now that are shaking up the sector but we are still very bullish because historically in the world, every time the basic education sector improves, the demand for higher education goes up,” Mr. Salazar said.
The educator sector is also working to respond to the demands of the future workplace, as emerging disruptive technologies threaten to displace workers.
“We’re not investing in education for education’s sake. We are trying to bridge what we believe is an increasing gap between the education sector and employability,” Mr. Zobel said.
More businesses must be involved in the education sector, Mr. Salazar said, pointing out that a “melting between workplace and systems of learning” must take place.
“The world of education today must not be content-driven anymore… We should be driven by skills and competency,” Mr. Salazar said.
“We should not be teaching our kids what to know. We should be teaching them how to know.”