Public-private partnership in education

The business of business is not just making profits but also uplifting the lives of people.

Ramon del Rosario Jr., chair and CEO of Phinma Corp., a conglomerate that has interests in education, construction materials, property development and hospitality businesses, gave that statement in a recent forum on the state of education in the Philippines.

A World Bank study in June 2022 showed that 91 percent of Filipino children of late primary age (10 years old) suffer from learning poverty as they cannot read or understand a simple story.

That learning poverty rate was higher by 56.4 points and more than double the regional average of 34.5 percent.

The forum’s main speakers called for, among others, the use of public-private partnerships (PPP) to make access to education at all levels universal, safe and equitable.

The idea is raising the country’s standards and quality of education would redound to the improvement of the lives of Filipinos.

That call is timely in light of pronouncements by the government’s economic managers that the PPP system shall be tapped for the construction and operation of much-needed infrastructure projects.

This is a sharp departure from the Duterte administration’s initial plan to fund those projects from loans from China or internally generated funds to the exclusion of the PPP system.

As things turned out later, those two sources of funds miserably failed to materialize.

But would big business be interested in projects for the construction of climate change-resilient school buildings, provisioning of adequate teaching materials, payment of commensurate compensation to teachers and sponsorship of development courses for the academic personnel?

It is doubtful if local companies with deep pockets or have CSR (corporate social responsibility) programs in their charter would take a look at any of those projects.

The reality on the ground is any interest in PPP projects proceeds from the assumption or expectation that the costs of the investment could be recovered after a certain period of time and that the profits would pour in during the term of the contract.

There’s nothing wrong with that approach because the companies concerned are organized for profit and their executives have the fiduciary obligation to see to it that their stockholders get a fair return on their investments.

Unlike infrastructure projects already built under PPP auspices that have established procedures, PPP projects relating to education would be a novelty.

That being the case, they can be challenging because, first, they would be under the supervision of the Department of Education or the Commission on Higher Education, as the case may be; and, second, they would involve the paying capacity of the school children’s parents.

The operational side of the projects may be manageable as far as the two education regulators are concerned, but the financial aspect (or the mechanism that would assure a fair return on the investment and sufficient operating funds) could be tricky.

Sourcing payments to the investors from tuition fees and other school charges could be problematic in light of the existing regulations on the processes that have to be followed before any increases in those collections can be effected.

But the bigger headache would be the expected opposition of the parents to any such upward adjustments which, as shown in past experiences, may result in public rallies, social media rantings and, worse, congressional investigation by grandstanding lawmakers.

Given these possible circumstances, it may be a long shot to expect interest by the private sector in an education-related PPP project.

But wait, isn’t the provisioning of quality and affordable education to Filipinos an obligation of the government? And that under our Constitution, education should be given the highest priority in the allocation of government resources? INQFor comments, please send your email to “[email protected].”