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Education reform and the Philippine economy

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As “Asia’s Rising Tiger,” the Philippines has gained a reputation for rapid economic growth that has stayed on course no matter the circumstances. Despite recent tensions in the global economy, the country has managed to remain competitive, posting a respectable 5.6% gross domestic product (GDP) growth in the first quarter of the year.

Much of this is attributable to the country’s sound economic fundamentals. Due to a relatively young, educated population, the Philippines has become one of the best destinations for business process outsourcing (BPO).

In fact, when the National Economic and Development Authority of the Philippines published the Philippine Development Plan, 2017-2022, detailing the country’s aspirations for the next five years, human capital was listed as a key driver for the country’s growth. The plan, which envisions the Philippines becoming an upper-middle income country by 2022, aims to develop inclusive economic growth that will reduce inequalities and poverty, particularly in rural areas.

The development of human capital is a key element in this strategy, hence a push for more accessible and more relevant educational programs is needed. Recent education reforms, such as the K to 12 program and the Universal Access to Quality Tertiary Education, among others, have sought to boost enrollment levels, graduation rates, and mean years of schooling in elementary and secondary education, and to improve the quality of higher education.

Such reforms have the goal of revitalizing the country’s current education system. A report made by the United Nations Educational, Scientific and Cultural Organization in 2008, which assessed the education systems of Southeast Asian countries, found that participation and achievement rates in basic education in the Philippines had fallen dramatically due to chronic underfunding. After strong results of 85.1% in 1991 to 96.8% in 2000, net enrollment rates at the elementary level, for instance, had fallen to 84.4% by 2005. At the same time, elementary school dropout rates had dropped back to levels last seen in the late 1990s. The completion rate in elementary school was estimated to be below 70% in 2005.

The problems persisted even at the secondary level of education, with net enrollment rate in 2005 dropping down to 58.5% after increasing from 55.4% to around 66% between 1991 and 2000. Even the country’s youth literacy rate, while still being high by regional standards, fell from 96.6% in 1990 to 95.1% in 2003, making the Philippines the only country in Southeast Asia with declining youth literacy rates in the early 21st century.




The World Education News & Reviews (WENR), run by the World Education Services, a not-for-profit organization specializing in the evaluation of foreign academic credentials, found that the deficiencies in Filipino education were reflected in the poor performance of students in international assessment tests, such as the Trends in International Mathematics and Science Study.

“In 2003, the last year the Philippines participated in the study, the country ranked only 34th out of 38 countries in high school Mathematics and 43rd out of 46 countries in high school Science,” WENR wrote.

“Education spending as a percentage of overall government expenditures, meanwhile, declined from 18.2% in 1998 to 12.4% in 2005. Between 2003 and 2005 alone, average annual spending per public elementary and secondary school student fell from P9,500 (US$182.7) to P8,700 (US$167.3) in real terms.”

Since then, the government has made massive commitments to make structural changes to the country’s education system in an effort to make the Filipinos more globally competitive. The opportunities in the then-burgeoning BPO sector were starting to become clear, and human capital had become the country’s most important asset.

Education spending was increased, and between 2005 and 2014, government spending on basic education more than doubled. According to data from the World Bank, spending per student in the basic education system reached P12,800 (US$246) in 2013, far above what was recorded in 2005.

In 2017, allocations for the Department of Education were increased by 25%, making education the largest item on the national budget. In 2018, allocations for education reached P533.31 billion (US$10.26 billion), or 24% of all government expenditures — the second largest item on the national budget. The higher education budget, likewise, was increased by almost 45% between 2016 and 2017. Meanwhile, 86,478 classrooms were constructed, and over 128,000 new teachers hired between 2010 and 2015.

WENR noted that such investments in education have led to substantial advances in standard indicators of learning conditions, such as student-teacher and student-classroom ratios, both of which improved significantly from 2010 to 2013, from 38:1 to 29:1 and from 64:1 to 47:1, respectively. Elementary school completion rates also climbed from the 2005 low of under 70% to more than 83% in 2015. Net secondary school enrollment rates, meanwhile, increased from under 60% in 2005 to 68.15% in 2015.

However, the Philippines still trails its neighbors in the ASEAN in a variety of education indicators.

“Strong disparities continue to exist between regions and socioeconomic classes — while 81% of eligible children from the wealthiest 20% of households attended high school in 2013, only 53% of children from the poorest 20% of households did the same. Progress on some indicators is sluggish, if not regressing: completion rates at the secondary level, for example, declined from 75% in 2010 to 74% in 2015, after improving in the years between,” WENR reported.

“Importantly, the Philippine government continues to spend less per student as a share of per-capita GDP than several other Southeast Asian countries, the latest budget increases notwithstanding. It also remains to be seen how the K to 12 reforms will affect indicators like teacher-to-student ratios.”

Data showed that in October 2015, it was estimated that the government still needed to hire 43,000 teachers and build 30,000 classrooms. This was worsened by the continued growth of the country’s birth rates, among the highest in Asia. The government expects the population to grow to 142 million people by 2045, and if the Philippines is to become a developed nation by then, a much more effective system of education is needed. — Bjorn Biel M. Beltran