Business of education

WHAT IS it about schools that attracts some of the country’s business tycoons into investing in them?

Recently, Ayala Education Inc., a member of the Ayala business conglomerate, announced that it has invested P450 million in University of Nueva Caceres in Naga City, the first university established in Southern Luzon outside Manila, to gain majority control over the school.

Last year, Ayala Corp. entered into a joint venture with an international education provider to make available affordable high school education to deserving but financially challenged students.

In earlier years, several Chinese-Filipino businessmen took under their wings, through affiliate companies, some colleges and universities that had some financial problems.

Mapua Institute of Technology, one of the country’s best engineering schools, is majority owned by Alfonso Yuchengco. University of the East, the alma mater of many of the country’s top accountants, has Lucio Tan as its benefactor and administrator.

National University, the first private non-sectarian school in the country, is now part of the SM (or Henry Sy) Group of Companies. Centro Escolar University, a by-word in dentistry and health care studies, enjoys the patronage of the family of the late Manila Bulletin and PhilTrust bank chair Emilio Yap.

Operation

The operation and management of private schools have been traditionally looked at as a form of public service, or something done for noble purposes and less for private gain.

It’s no joke running a school in this country, more so a college or university. Educational institutions are tightly regulated by the government. Tuition and other school charges have to go through a myriad of regulatory processes before they can be increased.

And even if the requisite approvals are obtained, the increase will most likely not sit well with the parents and students and may even result to court litigation.

That’s the easy part. What’s more challenging is managing the demands and expectations of the faculty and students, and the collective actions to express their grievances, without being accused of violating their human rights.

Except perhaps for the so-called diploma mills, schools can hardly be considered cash cows. At best, the profits from their operation are meant to reasonably compensate their owners for their financial investment and management efforts.

If the millions of pesos spent to acquire learning institutions were invested by the business magnates in their businesses or other profitable ventures, they would undoubtedly rake in more profits.

So what’s behind the interest in educational institutions? For money, love of country, or both?

Objectives

Properly managed, a school can bring decent returns on the investments of its owners or shareholders without compromising the quality of the students’ education or the welfare of the faculty and non-academic staff.

In a way, the investment on education may be viewed as an exercise of corporate social responsibility (or giving back to the community where a business operates) by the companies owned or controlled by the business tycoons.

A Chinese-Filipino businessman told me that, in traditional Chinese culture, teachers and scholars are held in high esteem and accorded utmost respect by the community.

Drawing from Confucian influence, the promotion of education is considered a virtue worthy of commendation and emulation. A Chinese who has contributed to the education of the young honors his ancestors and country.

Although this observation may not be conclusive, it may somehow explain the reason behind the enthusiasm of some Chinese-Filipino business bigwigs in buying into highly regarded learning institutions in the country.

This should not be taken to mean, however, that the payback in investments in education is merely “psychic” or without any material value.

Without being conscious about it, the involvement of business conglomerates in colleges and universities adds prestige to their image or reputation which, in the long run, redounds to the benefit of their businesses.

Cooperation

Regardless of the motives—altruistic or commercial—behind the foray of Big Business in educational institutions, it should be looked at as beneficial to the country.

In spite of the yearly increase in budgetary allocations to our public schools, the government simply cannot cope up with the demand for more schools and teachers to meet the educational needs of our people.

For all the criticisms about private schools, in particular, in regard to tuition and charges, it cannot be denied they help the government fulfill its obligation to provide proper education to its citizens.

It is in tertiary or college education that the positive effects of the entry of Big Business in education are felt the most. The majority of state colleges and university, the University of the Philippines included, suffer from poor or inadequate teaching facilities.

Lack of funds and the strict provisions of the procurement laws prevent these schools from upgrading their facilities and the skills of their teaching staff.

With the financial resources at Big Business’ command, the colleges and universities under their wings are more favorably situated in regard to facilities upgrade and skills development compared to their counterpart in the public sector.

If the physical improvements in the schools taken over by some business tycoons are used as barometer, their entry may be described as commendable.

Whatever may be the motivation behind the investments in private schools, it cannot be denied that, so far, they’ve been favorable. Hopefully, it remains that way for good.

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