NPM and public education in the Philippines

By Wilfredo B. Prilles, Jr.

FIFTEEN years after the decentralization movement took off in the Philippines by
virtue of the Local Government Code of 1991, public education remains a
centrally managed service. This period also coincides with the time during which
the quality of education declined markedly.

This is indicated by the 1999 and 2003 Trends in International Math and Science
Survey (TIMSS) where the country placed among the tailenders. In the next
edition of the survey that is supposed to take place this year, education officials
of the Arroyo administration declined to participate.

In a recent report of UNESCO, the Philippines ranked 74th in terms of the

Education Development Index or EDI, falling below Mongolia (61st), Vietnam
(65th), Indonesia (58th) and China (38th). The index is a composite measure that
is based on enrollment ratio, literacy rate, gender-specific index and quality
(survival rate up to grade 5).

Public education in the Philippines

Public basic education in the Philippines is centrally managed through the
Department of Education (DepEd). The department covers elementary (Grades 1
to 6) and secondary (1st to 4th year) levels, pursuant to the constitutional mandate
of providing free public education up to high school.

At the local level, the DepEd maintains schools divisions and districts
corresponding to the three biggest local government units – provinces, cities and
municipalities. Schools divisions, headed by a superintendent, exist at the
provincial and city levels. Depending on its size, a province can have more than
one division, which in turn comprise of a cluster of school districts at the
municipal level. Headed by a public school supervisor, a school district can exist
in a town depending on its size, or cover two or more municipalities.

The DepEd is the national government’s biggest bureaucracy. As of 2005, its

505,000 workforce represents 46% of the total. Over the last two years, more
than 20,000 teachers were added to its payroll to help serve the need of 17
million students enrolled in public schools (12 million in elementary, 5 million in
secondary), bringing the teacher-student ratio to 1:34. In spite of this, class size
still averaged 41 at the elementary and 50 at the secondary level.

In terms of budgetary allocation, education has been getting the highest share in
the national budget in recent years (around 18% of the total, exceeded only by
debt servicing); this year, it was allocated P162 billion, which is 11% higher than
2006. Of that amount, P133 billion will go to the DepEd, representing 82% of the
total allocation for the education sector. Of that budget however, 83% pays for
salaries; the balance is divided between maintenance and other operating
expenses (or MOOE, 15%) and capital outlay (excluding school building
construction, 2%). The Government Assistance to Students and Teachers in
Private Education (GASTPE), a voucher program for the secondary level, is
embedded in the MOOE, accounting for 12%.

The Local School Board

The Local School Board is a special body created under the 1991 Local
Government Code that exists at the provincial, city and municipal levels. This
agency is the institutional provision through which local communities interface
with the DepEd in the delivery of public education services.

In the case of a city, the code provides for an eight-man LSB that is chaired by
the city mayor, co-chaired by the schools division superintendent, and made up
of the following members: the chair of the education committee of the
Sangguniang Panlungsod (the city legislature), the city treasurer, a
representative of the Sangguniang Kabataan (city youth council), and duly
elected representatives of the city parents teachers association (PTA) league,
the city teachers' organization, and the non-academic personnel of city public
schools.

The LSB’s main duty is to allocate the Special Education Fund (SEF) to meet the
supplementary needs of the local public school system. The SEF is an additional
1% levy that is collected together with real property taxes paid to the local
government. It varies greatly depending on the locality – from as much as P1
billion in the richest cities in the national capital to as low as P500,000 in the
poor, marginal towns. In Mindanao, it is not uncommon to find zero SEF as
landowners hardly pay real property taxes to the municipal government.

Problems facing the public school system

What problems ail the Philippine public school system? In a presentation before
the cabinet sometime in 2003, then Education Secretary Edilberto de Jesus
reduced these into two: (1) underinvestment in education and (2) poor
management of the public school system.

Helped by the imposition of the 12% value-added tax (VAT), the national
government has been able to increase its education spending in recent years but
it still falls short both in real terms and compared to its Asian neighbors. An
analysis of the 2007 budget prepared by the Congressional Planning and
Budgeting Department showed that the annual average growth rate of the DepEd
budget from 2001-06 actually shrank by 3.5% in real terms. And its total
education spending as a percentage of GDP (2.9%) is lower than the average of
developing countries worldwide (4.5%) and neighboring countries like Malaysia
and Mongolia (both exceeding 8%), and Thailand and India (both exceeding 4%).
Our experience in reinventing the LSB in Naga City over the last five years
validates and expounds on the two major problems identified by De Jesus.
ƒ Deteriorating quality of basic education. The performance of Naga school
children largely tracks the national average, which ranges between a mean
percentage score of 50-60%.
ƒ General lack of awareness on the current state of public education. At
the outset, parents did not realize the gravity of the problem, as report cards
of their children show passing marks. Achievement test results are not
thoroughly discussed among local officials.
ƒ Weak “soft infrastructure” support to facilitate learning. Local funds are
usually earmarked for physical infrastructure, at the expense of textbooks,
workbooks, lesson plans and other instructional materials.
ƒ Weak mechanisms for meaningful parent participation in public
education. PTA meetings usually end up focusing on raising money to cover
operating shortfalls of the school.
ƒ Underperforming LSB reduced to a mere budgeting entity for local
education funds. Beyond preparing and approving its annual budget, the
LSB becomes largely useless.
ƒ Weak planning and budgeting practices and processes. The lack of a
consolidated education budget at the local level, genuine needs assessment
and consultation/engagement with stakeholders (a) produces unresponsive
budgets that do not address actual needs of public schools, and (b)
contributes to poor collection efficiency. Nationwide, only 54% of the total
SEF tax estimated at P16 billion are actually collected. This reduces the SEF
to a heavily underutilized “hidden wealth” at the local level.
ƒ Lack of transparency and accountability in the public school system.
Notwithstanding recent efforts – like DepEd’s Basic Education Sector Reform
Agenda (BESRA) and private sector-led initiatives to improve the public
school system – the centralized nature of the system has not improved
accountability over education service delivery. School heads and staff feel
more accountable vertically (to their superiors up the line) than horizontally
(instead of the local communities they serve). Security of tenure makes it
difficult to separate non-performing staff from the service. An “old-boy”
protectionist mindset prevents punishment of erring school heads. And in
spite of DepEd guidelines promoting meritocracy, the lack of transparency as
well as political intrusion in teacher recuitment and hiring remains a pervasive
practice.

NPM-oriented reforms
To be sure, the Philippine decentralization experience is a mixed bag of success
stories and unfulfilled expectations. This underscores the fact that some
localities, like Naga City, are more prepared than most in the decentralization of
public education service delivery. It will be a disservice to the Constitutional
provision mandating local autonomy (Sec. 2, Article X) and encouraging local
education planning (Sec 5, Article XIV) if progressive localities remain
encumbered by a one-size-fits-all policy.

Factoring in this reality, New Public Management (NPM) values, philosophy and
elements can shape this long overdue reform effort, centered on the calibrated
decentralization of basic education in localities that (a) will demand for it, (b)
have the financial wherewithal, and (c) administrative expertise to ensure its
success. This way, the DepEd can focus its attention to localities that do not live
up to these criteria.

These considerations will also inform the design of the reform package, which
will be built around the following features:
ƒ “Lean state,” separate decisionmaking. A local education authority (LEA)
autonomous of the DepEd and built around the LSB will serve as the highest
education policymaking entity in the locality, including the authority to hire and
fire the division superintendent. Its members will be elected sectorally and will
serve for a fixed term. This way, the superintendent becomes accountable to
the LEA Board, and the Board members to their respective constituencies, in
regard to the performance of the public school system.
If it so decides, the LEA Board can opt to implement an expanded voucher
system that will take advantage of existing unused capacities in private high
schools in the locality.
ƒ Lean management. A consolidated budget comprising of the national
allotment representing the cost of devolved education services and the SEF
tax money of the local government will enable the LEA to offer much higher
but performance-based pay to school-based administrative and teaching staff
who need not have security of tenure.
ƒ Scorecard system, results-based management. Allocation of the annual
budget will be driven by key education outcomes that the LEA will define for
the locality. A balanced scorecard system will be implemented to drill these
targets down to the classroom level.
ƒ Customer orientation. Divisionwide and school-level periodic reports on the
state of public education will be held to inform parents and community leaders
on the progress of each school vis-à-vis its annual targets.