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Enriching Public Private Partnership
in Education
Francisco M. Varela
Undersecretary for Finance and Administration
August 30, 2012
Rationale /Considerations for PPP
• Expands access to basic education,
especially in areas not reached by the public
school system
• Promotes the provision of quality basic
education
• Offers cost effective solution for government
• Must cater to target clientele of government
Public Private Partnership for School
Infrastructure Project • Build-lease-transfer contract for the design,
construction, and maintenance of 9,300 classrooms with toilets and furniture in Regions I, III and IV-A for a period of 10 years
• Distinct features: – Bidding in large scale regional portfolios vs. single,
separate projects under regular procurement
– Open to new technology vs. use of conventional technology only
– Payment terms stretched over a period of 10 years vs. payment upfront
Elementary Enrollment Trends
(8-10% Private)
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Public 11,983,554 12,083,661 12,304,207 12,562,272 12,788,197 13,005,459
Private 1,015,961 1,048,554 1,092,781 1,112,137 1,134,222 1,146,921
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Public Private
Secondary Enrollment Trends
(20% Private)
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Public 4,978,435 5,026,823 5,126,459 5,378,756 5,415,498 5,530,370
Private 1,285,035 1,290,792 1,332,846 1,342,296 1,340,103 1,374,710
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Public Private
Elementary and Secondary Enrolment Trends
(Public vs. Private)
12.9 13.3 13.9 14.2 14.80 15.4 15.6 15.9 16.4 16.8 17.1 17.1 17.0 17.1 17.4 17.9 18.2
2.32 2.33 2.37 2.33 2.34 2.29 2.20 2.17 2.22 2.21 2.23 2.31 2.30 2.34 2.43 2.45 2.50
-
5,000
10,000
15,000
20,000
25,000
Public Private
Ave 1993-97 Public: 85.6% Private: 14.4%
Ave 1998-2003 Public: 87.9% Private: 12.1%
Ave 2004-09 Public: 88.0% Private: 12.0%
7
Public Private Partnership
• Relationship where government contracts out to private providers the supply of a particular service of a defined quantity and quality at an agreed price for a specific period of time.
• Win-win arrangement: – Private sector: maximizes the use of its skills,
resources and capacities to deliver services in a more efficient manner; generates new business
– Government: enables public sector to focus on delivering other critical functions and services; promotes certainty and predictability in spending
Education Service Contracting
• Largest and longest-running example of PPP in Philippine education: government provides a fixed annual subsidy for students who wish to pursue secondary education in certified private schools.
– Non-NCR: PhP6,500 starting Gr.7 of SY 2012-2013
– NCR: PhP10,000
• Aim: democratize and improve access to secondary education, reduce class size in crowded public secondary schools
The number of ESC grantees has increased
by 40% since School Year 1996-1997.
210.63 209.12 212.50 238.09
264.43 274.01 277.93 278.09
316.86
384.19
429.48
477.11 509.06
536.91
598.88
637.79
724.06
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Number of ESC Grantees from SY 1996-1997 to SY 2012-2013 in thousands
Source: Fund for Assistance to Private Education, 2012.
The number of ESC participating schools
has doubled in the last decade.
1,538 1,533 1,518 1,677
1,843 1,949
2,566 2,737
2,813 2,901 2,879 2,881
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Growth in Number of Participating Schools
Source: Fund for Assistance to Private Education, 2012.
Funding for the ESC program has increased
progressively.
674 689 691
1,228
1,515 1,718
2,386 2,568
2,737
3,087
3,626
4,271
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
ESC Budget from SY 2001-2002 to SY 2012-2013
Source: Fund for Assistance to Private Education, 2012.
2013 GASTPE Budget
• Php 7.0 billion in 2013 vs. Php 6.3 billion in 2012.
• 2013 budget sufficient for 1 million grantees.
Issues in the Expansion of GASTPE
• Demand vs. Supply Issues
• Distribution Among Schools
• Appropriate Grantee Selection Process
• Will it Increase Enrollment in Private Schools?
Government Objectives in Expanding GASTPE
• Decongest public schools
• Minimize cost of expanding education services
• Improve quality of education for beneficiaries
• Improve quality of education for non-beneficiaries by improving conditions in the public schools.
Wrong Grantee Selection Will Not Help Private Schools
• Inappropriate grantees are those students who would have enrolled in a private school, even without government subsidy.
• If subsidy is given to these students, the enrollment in private schools will not increase.
• The revenue to the school will remain the same. Govt. subsidy will be enjoyed by private households.
Win – win Solution
Proper Grantee Selection Additional Enrollment
for Private Schools
Decongest Public Schools
Increased Revenues for
Private Schools
Critical Factors for Success
• Quality Advantage of Private Schools
• Appropriate Amount of Grant
– Calibrated to target households belonging to certain income groups.
Secondary Average NAT Scores, Private
Schools
49.12
51.17
41.17
37.04
51.71
50.26
46.47
0.00 10.00 20.00 30.00 40.00 50.00 60.00
Filipino
Araling Panlipunan
Mathematics
Science
English
Critical Thinking
Over-all
NAT Year 4, SY 2011-2012
Source: National Education Testing and Research Center, Department of Education, 2012.
Elementary Average NAT Scores, Private
Schools
61.00
46.64
58.90
55.47
48.43
54.09
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00
Filipino
Math
English
Science
HEKASI
Overall
NAT Gr.6, SY 2011-2012
Source: National Education Testing and Research Center, Department of Education, 2012.
Senior High School Budget Estimates – Low
Enrolment Growth Scenario
39.5
51.7
33.6 35.2 36.1 1.10
2.07 2.13 2.16 2.16
0.00
0.50
1.00
1.50
2.00
2.50
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2016 2017 2018 2019 2020
Gro
wth
Rat
e in
En
rolm
en
t (i
n m
illio
ns)
Bu
dge
t (i
n b
illio
ns)
Source: Medium-Term Spending Plan 2012-2017 (April 14, 2012).
Senior High School Budget Estimates – High Enrolment Growth Scenario
Source: Medium-Term Spending Plan 2012-2017 (April 14, 2012).
41.3
56.6
40.5 44.4
48.3
1.15
2.24 2.42
2.58 2.73
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2016 2017 2018 2019 2020
Gro
wth
Rat
e in
En
rolm
en
t (i
n m
illio
ns)
Bu
dge
t (i
n b
illio
ns)
PPP Objectives
• Minimize the burden for expanding the public schools.
• Provide opportunity for HEI’s to make use of available capacity that would be underutilized as a result of the loss of college students during the transition years.
• Provide opportunities for other private schools to expand programs and increase enrollment.
• Allow for greater diversity in program offerings, particularly in the context of the varied curriculum tracks for senior high school.
PPPs and the K to 12 Reform
• Senior High School Program
– Projected enrolment: 1.1 million by 2016 • Projected participants in a PPP arrangement: 300-400,000
students
– Offer Senior High School license: enables not only private secondary schools but also private higher education institutions to participate • Some public Junior High Schools will expand to offer
Senior High School
• Some public Junior High Schools will become stand alone Junior High Schools
• Some public Junior High Schools will be developed into stand alone Senior High Schools
Issues to be Resolved
• Which schools can participate? How will they be selected?
• Which students would be entitled to benefit from the program? Among those who will enroll in private senior high schools, who among them will receive government support?
• How will the students be divided between those who will remain in the public schools and those who will be encouraged to go to the public schools?
• What price will we set for these arrangements? Will this price be the same for all or will it vary depending on the place, type of school, and income background of the beneficiary?
• What will happen to the current GASTPE program?
• How do we ensure that the participating private schools deliver high quality programs?
Critical consideration: Expected beneficiaries will come from different income backgrounds, when compared
to existing GASTPE beneficiaries
Possible PPP Schemes
• Continuation and Expansion of Current GASTPE ESC program.
• Voucher System
– Variant: tiered vouchers
• Individualized contracts with schools, where government provides lump sum capital and operating funds, and schools commit to deliver certain enrollment and quality targets.
Tiered Voucher System
Advantages
• Simplifies grantee selection. Everyone receives a voucher.
• Avoids individual negotiations with schools.
• Avoids problem of allocating resources among school participants.
• Quality monitoring, while still needed, would be aided by the free exercise of market choice by students and their families.
Disadvantages
• Administrative complexity of setting the tiered amounts and determining who receives how much.
• Policing the selling and transfer of vouchers.
• Policing the use of unutilized vouchers.
Success in the implementation of PPP for Senior High School could broaden the horizon for PPP in
education in the Philippines, and could lead to further expansion and the adoption of new modes for the private sector to get involved in the delivery
of public services
Region 1
Region 2
Region 3
Region 4A
Region 4B
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Region 11
Region 12
Region 13
NCR CAR ARM
M
SY 2011-2012 49,695 35,598 70,745 72,978 21,707 37,907 58,794 45,915 27,655 18,023 32,706 30,760 43,756 19,151 26,203 24,840 21,361
SY 2012-2013 53,140 37,255 87,822 88,039 24,082 42,650 59,252 56,584 28,405 19,924 37,085 34,727 46,283 20,312 37,845 25,878 24,776
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Table 2: Regional Distribution of ESC Grantees SY 2011-2012 vs SY 2012-2013
SY 2011-2012 SY 2012-2013
190,536
178,195
144,894
123,880
250,761
173,131 163,495
136,672
-
50,000
100,000
150,000
200,000
250,000
300,000
First Year Second Year Third Year Fourth Year
Table 3: ESC Enrollment by Year Level SY 2011-2012 to SY 2012-2013
SY 2011-2012 SY 2012-2013
194
111
338
435
84
140
214 193
99
71
173
146 149
79
315
77 61
0
50
100
150
200
250
300
350
400
450
500
Table 6: Number of ESC Participating Schools by Region SY 2011-2012
305.88
209.19
507.51 516.59
137.20
243.90
330.10 318.48
161.03
106.31
213.76 198.30
254.19
116.97
368.55
147.54
120.25
0.00
100.00
200.00
300.00
400.00
500.00
600.00
Table 8: ESC Budget by Region SY 2012-2013 (in thousand Pesos)
10.59 9.80
13.29
17.26
9.65 9.18
13.78
11.27
9.36
11.18 9.28
12.90
9.81
8.53
26.98
10.48
8.37
11.41 10.57
14.17
17.91
10.70 9.99
15.13
11.53
9.85
11.57
9.98
13.46
10.45 9.31
27.45
11.35
8.82
0
5
10
15
20
25
30 R
egio
n 1
Regio
n 2
Regio
n 3
Regio
n 4
A
Regio
n 4
B
Regio
n 5
Regio
n 6
Regio
n 7
Regio
n 8
Regio
n 9
Regio
n 1
0
Regio
n 1
1
Regio
n 1
2
Regio
n 1
3
NC
R
CA
R
AR
MM
Th
ou
san
ds
Table 9: Average Private Secondary School Tuition Fees
SY 2010-2011 to SY 2011-2012
2010-2011 2011-2012
64,069
90,142
108,769
128,215
91,712
59,914
35,370
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Table 10: Number of EVS Grantees from SY 2006-2007 to SY 2012-2013
Region 1
Region 2
Region 3
Region 4A
Region 4B
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Region 11
Region 12
Region 13
NCR CAR ARM
M
SY 2011-2012 1,60 1,83 8,19 8,83 1,65 2,62 1,00 3,68 1,55 1,00 1,98 2,11 2,12 1,08 15,8 576 4,14
SY 2012-2013 1,037 751 5,128 5,895 1,010 1,447 514 2,336 534 477 1,043 1,016 1,138 615 8,949 343 3,137
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Table 12: EVS Enrollment by Region SY 2011-2012 to SY 2012-2013
SY 2011-2012 SY 2012-2013
1.94
1.03
3.14 3.20
0.60
1.13
2.24
1.73
0.61 0.51
1.23 1.37
1.04
0.44
2.26
0.94
0.36
0
1
1
2
2
3
3
4 R
eg
ion
1
Re
gio
n 2
Re
gio
n 3
Re
gio
n 4
A
Re
gio
n 4
B
Re
gio
n 5
Re
gio
n 6
Re
gio
n 7
Re
gio
n 8
Re
gio
n 9
Re
gio
n 1
0
Re
gio
n 1
1
Re
gio
n 1
2
Re
gio
n 1
3
NC
R
CA
R
AR
MM
Th
ou
sa
nd
s
Table 16: Teacher Salary Recipients SY 2011-2012
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