Iffy foreign interest in education
One of the economic provisions in the Constitution that the two chambers of Congress want to amend is the nationality requirement for educational institutions.
At present, all educational institutions, except those established by religious groups and mission boards, should be owned solely by Filipino citizens or corporations that are 60-percent owned by Filipinos.
The proposed amendment reads: “The control and administration of educational institutions shall be vested in citizens of the Philippines, unless otherwise provided by law.”
If the amendment is approved and ratified, Congress can enact a law that will reduce the 60-percent ownership requirement to a level that would enable foreigners or foreign-owned corporations to gain control of any of the country’s educational centers.
This proposal had been opposed by former chief justice Hilario Davide Jr., who said in a Senate hearing that “… foreign control or dominance in our basic education would put asunder the noble patriotic and nationalistic virtues which are constitutionally mandated to be a part of the curricula of all educational institutions.”
A similar apprehension had been expressed by Fr. Albert Delvo, chair of the Coordinating Council of Private Educational Associations of the Philippines. He said allowing foreigners to control our educational institutions “may be prejudicial to our Filipino culture, values, morals and spiritual matters.”
Their opposition are primarily based on nationalistic, social and cultural reasons. The commercial aspect of the proposed amendment had not been mentioned.
In light of the objective for which the economic provisions are sought to be amended, i.e., to attract more foreign investments, the proposal to open our schools to foreigners assumes that education in the Philippines is a lucrative business activity that would interest foreign investors.
Note that foreign investments are made solely for the money or to earn profits. If in the process some collateral benefits accrue to the host country, fine. But those are only incidental or byproducts, not intended objectives.
But the moment doing business has ceased to be profitable, expect them to quickly pack up and leave, and all sentimental feelings that may have developed in the course of their business can go bust.
Except for a few schools that cater to wealthy students, the country’s private schools can hardly be considered cash cows that would encourage foreign investors to take a second look at the Philippine educational system as a possible area of sound investment.
Besides, it does not make good business sense for education-oriented foreign investors, if any, to aspire for management control of any school, in particular, colleges and universities that impose high tuition and therefore liquid enough to be able to declare dividends, when they can simply ride on the coattails of Republic Act No. 11448, or the Transnational Higher Education Act.
The law allows foreign higher educational institutions to engage in the business of providing educational services in the Philippines through various modes or by making arrangements with a local higher education institution.
They can offer undergraduate, graduate and postgraduate degrees, and establish branch campuses in the Philippines through local partners.
In other words, a foreign investor who may be interested in engaging in the education business in the Philippines does not have to go through the trouble of subscribing to the stocks of a local school to gain management control over it by simply entering into a partnership or any other similar arrangement with it pursuant to that law.
And that agreement can include provisions that would allow the foreign investor to get satisfactory returns from its investment through financial schemes that, among others, can take advantage of the tax-free privileges that some local educational institutions are entitled to.
But let’s be frank, would investing in education in the Philippines be really worth it for foreign investors? INQ
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