State Universities and Colleges - Philippines

Kabataan reveals cover-ups, deceptions in P37.1-B proposed SUCs budget for 2013

Despite President Benigno Aquino III’s pronouncement that the country’s 110 state universities and colleges (SUCs) will receive a hefty increase in their budget next year, Kabataan Partylist Rep. Raymond Palatino pointed out “cover-ups” and “deceptions” in the P37.1-billion SUCs budget proposed by the Department of Budget and Management (DBM) next year.
During the congressional budget deliberation for the proposed allocation for the Commission on Higher Education (CHED) and SUCs today, Palatino said that the P37.1 billion budget is still “grossly insufficient” and is actually driving state schools to further commercialization schemes, including tuition increases and other income-generating activities.
In his 2013 budget message, Aquino said “Hindi po pinababayaan ng aking administrasyon ang ating mga pampublikong pamantasan, at higit sa lahat, ang mga iskolar ng bayan,” explaining that DBM increased the allocation for SUCs by almost 44 percent or P11.3 billion, to P37.1 billion from the current P25.8 billion.
“At first glance, it seems that the government is shifting its earlier pronouncement that it will gradually reduce state funding for SUCs to force them to utilize their internal income. Such move is a direct response to the clamor of students who have arduously fought for greater state subsidy in the past years. However, instead of being all praises for the Aquino administration, students remain unimpressed and dismayed, as the 2013 budget is a cover-up budget full of potholes and deceptions,” Palatino said.
Cover-up budget
Palatino said that not the whole P37.1 billion will go to SUCs. “If we remove the automatic appropriations for employees’ pension and the funds that are actually part of the Miscellaneous Personnel Benefits Fund (MPBF), we would see that SUCs will actually get only P32.7 billion,” the youth solon explained. (See Table 1)
Of the P37.1 billion proposed budget for SUCs, P2.1 billion is allotted for retirement and life insurance premiums (RLIP), the fund for pension and other benefits of retired employees. “This is an automatic obligation of the government and is actually not part of the operating budget for SUCs,” Palatino said.
Meanwhile, P2.2 billion is set aside and is part of the MPBF, which is the fund for unfilled positions in SUCs. DBM withholds this budget not unless SUCs request for its utilization given proper documentation. “As we pointed out before, this fund is like DBM’s own pork barrel, which it can dispense at its whim,” the youth solon explained.
Table 1. Details of the 2013 DBM-proposed budget for SUCs
Direct to SUCs₱ 32,771,509,000
Miscellaneous Personnel Benefit Fund₱ 2,203,235,000
Retirement and Life Insurance Premiums₱ 2,153,221,000
TOTAL₱ 37,127,965,000
Source: DBM
Sans RLIP and MPBF, SUCs will only receive P32.7 billion, up by only 37 percent from the current P23.8 billion budget.
“There might be a nominal increase, but if we consider how much SUCs actually need, it is still grossly insufficient,” Palatino said.
According to DBM, SUCs requested a total of P54.6 billion for 2013. However, only P37.1 billion, or almost 68 percent was approved by DBM for inclusion in the National Expenditure Program (NEP). (See Table 2)
Table 2. Proposed versus DBM-approved 2013 SUCs budget
Proposed by SUCs
Recommended by DBM
Percent approved
₱31.149 B
 ₱27.333 B
₱ 8.506 B
 ₱6.429 B
₱14.958 B
 ₱3.365 B
₱54.613 B
 ₱37.127 B
*Includes funds for RLIP
Source: DBM 
Without the fund for RLIP, the fund for salaries and benefits of teachers and employees of SUCs which falls under the personal services (PS) component, there is a P2.35 billion or an 11 percent increase to P22.97 billion from the current P20.62 billion budget. “However, this increase only corresponds to the implementation of the fourth tranche of the Salary Standardization Law III next year,” Palatino said.
Meanwhile, the fund for maintenance and other operating expenses (MOOE) is set to increase by P3.42 billion or over 88 percent, to P6.43 billion from the current P3 billion budget. Bulk of the increase or P1.3 billion will go to the University of the Philippines, while the remaining P2.1 billion increase will be shared by over 100 SUCs.
However, Palatino revealed that three SUCs (see Table 3) are set to receive hefty cuts in the MOOE component, due to CHED’s Normative Funding Formula, which rationalizes the MOOE budget allocation for SUCs based on performance indicators, including enrollment and passing rates.

Table 3. SUCs with cuts in MOOE
2012 MOOE2013 MOOEPercent
Aurora State College of Technology ₱ 28.4 M ₱11.5 M -59.50
Cebu Technological University
 (Cebu State College of Science
and Technology)
₱ 209.5 M ₱93.4 M

Adiong Memorial Polytechnic
State College
₱3.1 M₱1.5 M

Meanwhile, a large portion of the increase in the budget of SUCs is due to the allocation of funds for capital outlay (CO), the budget for building infrastructure, for all SUCs next year. This year, only UP received funding for CO worth P190 million. Next year, the budget for CO ballooned to P3.17 billion.
However, Palatino pointed out that the P3.17 billion DBM-proposed budget for CO is only 23 percent of the total P14.95 billion requested by SUCs. “If one considers the fact that the national government has not given any CO for the past two years, the P3.17 billion only attempts to cover up the cuts in the past in a very poor manner,” the youth representative said.
In fact, the Philippine General Hospital under UP, will not receive any CO for next year. “Clearly, this is a cover-up budget meant to appease the growing dissent of students and administrators,” Palatino added.
Tuition increases
According to DBM’s Budget of Expenditures and Sources of Financing, the budget agency expects an almost P1-billion increase in the internal income of SUCs, to P14 from the current P13.1 billion.
Part of the projected increase in income, or P500 million will come from tuition payments, which is expected to increase to P6.76 billion from the current P6.26 billion. Also, DBM projects that income from other fees would increase by P200 million, to P3.2 billion from the current P3 billion.
“This is a clear indication that behind the supposed increase in the budget of SUCs, spiralling tuition rates will remain and would even intensify. DBM’s projections are already telling,” Palatino said.
Continued misprioritization
The P37.1 billion proposed budget for SUCs is only 0.31 percent of the country’s gross domestic product  (GDP) for 2013, a far cry from the 16.8 billion budget allotted for debt servicing, Palatino said. The P275.9 billion total budget allotted for the Department of Education and SUCs, meanwhile, is only 2.3 percent of the country’s GDP, far from the United Nation’s six-percent recommendation for education.
According to the Congressional Policy and Budget Research Department, the Philippines remains to be one of the countries with the smallest per capita spending for higher education. The said study revealed that the government spends only $625 per college student per year, less than the budget allotted by neighbouring countries like China ($2,728), Malaysia ($11,790) and Indonesia ($666).
“It is clear that the nominal increase for SUCs does not change the government’s policy on higher education. Access remains a challenge, and funding remains inadequate,” Palatino said. “In this light, the youth will continue and even intensify the fight for sufficient government funding for an education sector that truly serves the nation,” Palatino ended