Commercial costs of education
Unless an amicable settlement is reached, the controversy over control of Philippine Women’s University (PWU) will most likely be decided by the courts.
For the present generation of PWU’s founders, the Benitez family, it’s an emotional issue. They stand to lose the family heirloom if they fail to come up with an acceptable solution to their P928-million debt to businessman Eusebio Tanco’s STI Holdings.
For Tanco, it’s a debtor-creditor issue. His company lent money to the Benitez family in 2011 to stave off the school’s foreclosure by a bank after it failed to pay its loan.
As part of the bailout deal, the family agreed that in case of failure to pay the debt within the stipulated period, it would be converted to equity and result in Tanco acquiring the majority ownership of the school.
When the family failed to pay three years after the debt fell due, Tanco sought to enforce their agreement.
Instead of quietly re-negotiating the terms and conditions of the debt, the Benitezes went public to criticize him for his alleged unreasonable and oppressive action.
They described the agreement he earlier entered into with Ayala Land Inc. for the commercial development of a portion of PWU’s property as an infringement of the school’s objective to be a non-stock, non-profit corporation that provides quality education to its students.
Purposes
The Benitez family cannot be faulted for its interpretation of the “non-stock, non-profit” status of PWU.
On its face, the corporate description could be taken to mean that PWU should be looked at as engaged in the mission of educating (as its charter provides) young Filipino women, rather than in the business of education.
By common standards, “business” connotes earning profits for investments in a commercial activity.
The traditional concept of non-stock, non-profit corporations has, however, evolved. Without denigrating the noble purposes for which they are organized, our laws have, for decades, already liberalized the rules on what they can and cannot do.
The days when contributions or donations of members of these corporations were sufficient to sustain their operations are long gone. There are limits to man’s generosity.
The firms can engage in profit-making activities as long as the revenues they earn are used to promote or accomplish their objectives.
Thus, for example, charitable corporations may manufacture and sell products or offer services to the public for a fee provided their proceeds (or a substantial portion) are channeled to their operations.
Requirements
In the ideal world, education is the government’s responsibility. But the reality is there is only so much taxpayer money to go around to meet the various requirements of governance.
For all their economic wealth, even developed countries rely on the private sector to fill up their shortcomings in providing quality education to their people.
In the alternative, when feasible, governments make available to publicly funded learning institutions the opportunity to raise additional revenue to accomplish their mission, including the improvement of physical facilities.
The latter scheme has been applied by the University of the Philippines when it entered into a joint venture agreement in 2006 with Ayala Land for the establishment of the UP-Ayala Land TechnoHub within its property.
The complex, which seats on 20 hectares of land adjacent to the Diliman campus and houses IT-related companies, has been providing UP with extra revenue to help meet its funding requirements.
Initially criticized as a “commercialization of education,” the project has proven its worth and has been replicated in UP’s other underutilized property.
So far, there are no reports about the quality of education in UP being adversely affected by the alleged commercialization.
Improvements
The Benitez family should look at Tanco’s plan to convert a portion of PWU’s premises in Quezon City into a commercial area with an open mind.
It presents an opportunity, like that of the UP-Ayala TechnoHub, to raise additional funds for the improvement of the quality of PWU’s teaching staff and physical facilities.
A tertiary level school (and any privately-owned school for that matter) can raise its tuition and other charges only so much without inviting resistance from the students’ parents or, worse, losing student patronage.
Tapping wealthy alumni or foreign educational foundations for donations or grants to boost the school’s coffers is out of the question.
The likes of John Gokongwei, Alfonso Yuchengco and Manuel Pangilinan who have made generous endowments to their alma mater to fund fellowship chairs and construct specialized teaching facilities are rare in this country.
And perish the thought of incurring debts to keep the school above financial waters. No bank worth its salt will lend to a school without the assurance that it will be able pay its debts on time.
Of course, to prevent the claimed commercialization of education, PWU can opt to maintain the status quo and rely on existing sources of income to sustain its operations.
If it does, it should be prepared to see the exodus of its faculty and students to schools that offer higher compensation and better physical facilities.
Quality education in our country does not come cheap. The school that wants to accomplish its objectives should think outside the box in ensuring the revenue inflow needed for that purpose.
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