It can be done

Conclusion

A Public-Private Partnership option can be introduced nationwide by allowing for a line item under the Maintenance and Other Operating Expenses (MOOE) of the government’s education budget.

This can be done through a rent-to-own scheme (i.e. Build-Lease-Transfer scheme under the BOT Law).

Large and small construction firms in all urban and far-flung areas can participate and earn acceptable returns on investment. The school buildings will be constructed on school or government-owned lands.

Assuming that 50 percent of the budget is allotted for rent-to-own projects for the period 2012-2013, a total of 93,750 classrooms can be available in two years’ time.

Turn-key scheme

The Department of Education has a proposed budget for an additional P5 billion a year for the next five years (or P25 billion in total) to be solely used for the PPP program using the Design-Build-Transfer (or turnkey) scheme.

Through this approach, the provision of new classrooms is also being front-loaded. The P25 billion can be advanced by the private sector in the period 2012-2013, which can finance more than 30,000 classrooms.

Pork barrel

Another source of fund is the Priority development assistance fund (PDAF), or “pork barrel” of legislators. Each congressman is allocated P70 million per year, while each senator is allocated P200 million.

Assuming that 30 percent of the total PDAF is allocated by legislators for classrooms in the next two years, 19,000 classrooms can be delivered to the education system. This is equivalent to the entire annual capability of DepEd in the past.

Special education fund

The local school boards in the country annually receive, through automatic appropriation, one percent of the total real estate tax collections of local government units.

Called the Special Education Fund (SEF), it is allocated pursuant to the Local Government Code for the operation and maintenance of public schools, as well as construction and repair of school buildings, facilities and equipment, apart from other education spending.

In 2008, the total SEF stood at P15 billion. The SEF is expected to increase yearly as real estate values appreciate.

Like the internal revenue allotment (IRA) of local governments, the SEF can and should be used as loan collateral with financial institutions in order to frontload the financing of school buildings.

A portion of the SEF (say, 50 percent, or P7.5 billion) can be earmarked as annual debt service for a seven-year loan at 10 percent interest per annum.

WB-ADB assistance

The government has, in the past, tapped loans from World Bank (WB) or Asian Development Bank (ADB) as budget support for the school building projects.

International development assistance agencies (IDAAs) have also shown keen interest in supporting projects that help improve the quality of both educational facilities and services. In fact, school building construction serves as one of the focal points of foreign support.

WB and ADB have expressed interest in restoring loans for purposes of building schools at past levels of P3 billion to P6 billion.

Donations and aid

Through donations in kind from the private sector and civil society organizations, the Department of Education has successfully been generating a good number of new classrooms every year.

In fact, a number of institutions (e.g., Philippine Business for Social Progress and Fil-Chinese Chamber of Commerce) have expressed their intention to continue helping the government address the classroom backlog in the country.

Several successful education department programs (e.g., Brigada Eskwela, Adopt-a-School Program) will also continue to register contributions to this effort.

Similarly, classrooms haved been donated by USAID, AUSAID, Spain, UNICEF and other foreign donors.

Now is the right time

Perhaps, this is the right time to wage the decisive battle against the nagging classrooms shortage problem.

There is a government that enjoys an unprecedented popularity to wield the necessary political will. And there is a financial system that enjoys unprecedented excess liquidity eager to invest in the future of the country.

Many of the recommended solutions are not new ideas. Some have been presented to Congress, to the Cabinet, to the League of Provincial Governors, and discussed in PPP workshops on various occasions in the past. Though generally favorably received, the needed concerted and determined implementation in its entirety has not been done.

These non-exclusive approaches utilize existing and available resources under doable schemes. The government’s education budget and SEF financial leveraging coupled with motivated private sector investments are the main lynchpins.

With the government’s strong political will and the private sector’s commitment, these solutions can be adopted and executed well within the term of President Aquino.

Indeed, we need not be told what we already know—there is a huge backlog in classrooms that begs for urgent and innovative action. This paper is an attempt to assert that it is also a reality that it can be done.

(The author is chairman of the MAP Task Force on Education, chairman of Manila Tytana Colleges Inc., and a member of the Board of Trustees of Asian Institute of Management. Feedback at [email protected]. For previous articles, visit .)