Education Ph1

EDUCATION, POVERTY AND DEVELOPMENT
IN THE PHILIPPINES:
FROM QUANTITY TO QUALITY AND BEYOND
Backgroun !a!"r #or $%" Philippines Poverty Assessment 2004
Jose Garcia Montalvo
A&&r"'(a$(on) an Acron*+)
ADB Asian Development Bank
APIS Annual Poverty Incidence Survey
CHED Commission of Higer !ducation" Gov# of Pilippines#
D"!E Department of !ducation" Gov# of Pilippines#
LSF $a%or &orce Survey
PCER Presidential Commission on !ducation 'eform#
HELM Higer !ducation and $a%or Market Study#
HEI Higer !ducation Institution#
FIES &amily Income and !(penditure Survey
TESDA )ecnical !ducation and Skills Development Autority
NEDA *ational !conomic and Development Autority
PIDS Pilippines Institute for Development Studies
TVET )ecnical and +ocational !ducation and )raining
PESS Pilippines !ducation Sector Study
PPA Previous Pilippines Poverty Assessment ,-../0
SUC State 1niversity2College
LUC $ocal 1niversity2College
CSI CH!D Supervised Institution
VAR +ector Autorregression
P%P Pilippines3 pesos
TABLE OF CONTENTS
/# Introduction
-# Inputs" outputs and te 4uality of education
-#/# International comparisons5 education and productivity
-#-# Basic indicators of education in Pilippines5 efficiency and effectiveness
-#-#/# Primary and secondary education
-#-#-# Higer education
-#-#6# Inputs" outputs and efficiency5 te regional dimension
6# !ducation and la%or market outcomes
7# 'egional socks and 8orkers education
7#/# Persistence of geograpical differences in unemployment rates %y skill level#
7#-# Ho8 do 8orkers 8it different skill levels ad9ust to socks:
;# !4uity in te access to education
;#/# Basic e(penditure indicators
;#-# !ducational attainment and enrolment
;#6# !4uity in te access to iger education
;#6#/# !ducation e(penditure and access
;#6#-# 'easons for not %eing enrolled in education
;#6#6# Benefit incidence analysis of pu%lic e(penditure in education
<# )e return to education in Pilippines
<#/# Previous studies on te return to education in Pilippines
<#-# )e return to education in Pilippines using te APIS -..-#
=# Conclusions
'eferences
)ecnical note I#
,- INTRODUCTION
!ducation is a %asic factor in economic development# At te microeconomic level
education as an important role in social mo%ility" e4uity" pu%lic ealt" %etter
opportunities for employment ,lo8er unemployment and iger 8ages0" etc# In te case
of te Pilippines te previous Poverty Assessment ,>orld Bank -../0 so8ed clearly
tat te educational attainment of te ead of te ouseold 8as ?te single most
important contri%utor to te o%served variation in ouseold 8elfare#@
Ho8ever it is also 8ell kno8n tat te 8orkers of Pilippines ave one of te igest
levels of education of Asia" specially 8en considering its level of development#
Pro%a%ly Pilippines is te most typical case of 8at is called te ?education puAAle@#
)erefore te level of poverty of te Pilippines is difficult to %e e(plained %y te level
of education of teir 8orkers#
>e could summariAe te caracteristics of te education system in Pilippines as
follo8s5
a# Hig 4uantity" in terms of average level of education of te population#
%# $o8 4uality of education and small contri%ution of te 4uality of education to
te gro8t of )&P#
c# Hig degree of mismatc and over4ualification in te la%or market#
d# $ack of e4uity in te access to iger education#
)e o%9ective of tis report is to analyAe and propose recommendations for te situation
of te educational system of Pilippines" specially 8it respect to te sector of tertiary
education" digging into te contri%ution of education to economic gro8t in te
Pilippines as 8ell as te factors tat can e(plain 8y education is not translated into
development#
Bur metodological approac is to deal analytically 8it all te issues" trying to find te
most recent evidence on te diagnostic and trends# )e o%9ective is to o%tain te
relevant information to complement te last Pilippines Poverty Assessment and cover
te period of time since it 8as 8ritten
/
#
/
In terms of statistical information te previous Poverty Assessment stops in /CC=DCE#
)e organiAation of te report is guided %y te relevant issues and not %y te level of
education# )erefore" instead of dividing te sections in primary" secondary and iger
education 8e segment te report %y issues and deal 8it te relevance of tem for eac
level of education inside eac section# )e plan of te report is te follo8ing# Section /
contains tis introduction# Section - presents an analysis of te efficiency and
effectiveness of education in terms of inputs" outputs and 4uality# Section 6 considers
te efficiency of education in terms of outcomes# Section 7 discusses te likeliood of a
preventive effect of education against negative socks# Section ; analyAes te e4uity of
te education system# Section < presents an analysis of te rate of return of education in
Pilippines and its recent evolution# &inally section = summariAes te %asic diagnostic
and recommendations offered %y te report#
.- INPUTS, OUTPUTS AND THE QUALITY OF EDUCATION
In tis section 8e revie8 te %asic indicators of inputs" outputs and 4uality of te
education system of Pilippines# &irst of all 8e present some international comparison
of inputs" outputs and 4uality of education for countries in Sout !ast and te Pacific
area of Asia# Secondly" 8e discuss inputs" outputs and 4uality of education in
Pilippines %y level of education# )irdly 8e present a preliminary discussion of te
regional dimension of education in Pilippines#
.-,- In$"rna$(ona/ co+!ar()on)-
)e level of education of population of te Pilippines is muc iger tan te one tat
corresponds to its level of development# *ot only tat %ut 8ould score ig even in
comparison 8it many developed countries# )a%le -#/ so8s as very ig gross
enrolment rates in secondary and tertiary education# It is interesting to notice tat te
enrolment rate in tertiary education is very ig in Pilippines#
)a%le -#/# Gross enrolment rates ,-../0
Primary Secondary Tertiary
Cambodia 123.4 22.2 2.5
Korea 100.1 94.2 82.0
China 113.9 68.2 12.7
Indonesia 110.9 57.9 15.1
Lao 114.8 40.6 4.3
Malaysia 95.2 69.6 26.0
Mongolia 98.7 76.1 34.7
Myanmar 89.6 39.3 11.5
Philippines 112.1 81.9 30.4
Thailand 97.7 82.8 36.8
Vietnam 103.4 69.7 10.0
Source5 !dStats" >orld%ank ,-..60#
&igure -#/ so8s tat te enrolment in secondary education in Pilippines is clearly
over te regression line of enrolment on G*I per capita# )is implies tat Pilippines
scores muc iger tan countries in its geograpical area 8it a similar level of
development#
F(gur" .-,- Enro/+"n$ (n )"conar* "uca$(on an 0NI !"r ca!($a-
PHI
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0 2000 4000 6000 8000 10000
'NI ,er ca,ita -.S/ 20010
(ec 1itted 2a*+e(
Source: Authors calculations with Worldbank data.
)e same is true for te gross enrolment in tertiary education as so8n in figure -#-#
F(gur" .-.- Enro/+"n$ (n $"r$(ar* "uca$(on an 0NI !"r ca!($a-
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0 2000 4000 6000 8000 10000
'NI ,er ca,ita -.S/ 20010
ter 1itted 2a*+e(
Source: Authors calculations with Worldbank data.
B%viously te good educational indicators of Pilippines are supported" are least
partially" %y an important effort in pu%lic e(penditure in education# )a%le -#- so8s tat
Pilippines is te tird country of te region in terms of pu%lic e(penditure in education
over GDP reacing a 7#-F in /CCC# Bnly Malaysia and )ailand ave a iger
proportion of pu%lic e(penditure on education over GDP#
Ta&/" .-.: Pu&/(c "1!"n($ur" on "uca$(on 2,3345.6667-
P+3. &d+c4'P P+3. &d+c4,+3. &5,.
Malaysia 6.2 26.7
Thailand 5.4 31.0
Philippines 4.2 20.6
Korea 3.8 17.4
LAO 2.3 8.8
China 2.1 6
Cambodia 1.9 10.1
Indonesia 1.3 7.0
Source: UNESCO (latest figure for eriod !""#$%&&&'.
E(cet )ndonesia (A*+'.
)e proportion of pu%lic e(penditure on education over total pu%lic e(penditure is also
ig reacing -.#<F in /CCC# )is said te recent evolution of te proportion of pu%lic
e(penditure in education over GDP so8s signs of stagnation and" even 8orse" a
decreasing pattern# Since te data of 1*!SCB do not cover te most recent period 8e
use te data of te ADB# *otice tat te pu%lic e(penditure in education in te ADB
includes only te central government and" terefore" it is not totally compara%le to te
1*!SCB data# &igure /#6 so8s te decreasing pattern of central government
e(penditure in education over GDP in te case of Pilippines" )ailand and Indonesia#
By contrast Malaysia is increasing te pu%lic effort in financing education#
F(gur" .-8- R"c"n$ "'o/u$(on o# !u&/(c "1!"n($ur" on "uca$(on o'"r 0DP-
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1998 1999 2000 2001 2002
P hi l i ppi nes
T hai l and
Mal aysi a
I ndonesi a
Source: A*+ (%&&,'#
)erefore in recent years te differences ave %een reduced %y te improvement of
oter countries in te region and %y a certain stagnation in te educational sector of
Pilippines# )e latest data compile %y te Asian Development Bank so8s several
important trends5
a# Countries like Malaysia and )ailand are catcing up very 4uickly in terms of
iger education enrolment# In fact in /CC< only Gorea ad a iger gross
enrolment in tertiary education# By -../ Mongolia" and specially" )ailand"
ave overtaken Pilippines in gross enrolment in tertiary education# See also
ta%le - at te end of te document#
%# Higer education in te Pilippines stopped te convergence process to8ards
developed economies %y te middle of te C.3s#
Anoter important issue in te international comparisons of pu%lic e(penditure on
education is its distri%ution across educational levels# >e 8ill see later tat te inputs
involved in eac level of education are very different in Pilippines# )a%le -#6 compares
te tree countries 8it te igest level of pu%lic education e(penditure over GDP in
te area# It is interesting to notice tat despite te ig level of enrolment in tertiary
education in Pilippines te pu%lic e(penditure is lo8 compare 8it te oter t8o
countries#
Ta&/" .-8 Pu&/(c "uca$(on "1!"n($ur" &* /"'"/ o# "uca$(on
Primary Secondary Tertiary !t7er(
Malaysia 36.0 27.1 24.1 12.8
Thailand 34.4 19.9 31.9 13.8
Philippines 57.9 20.9 15.4 5.8
Source: A*+ (latest figures a-ailable !""#$%&&&'.
Other includes -ocational and other e(enditure not assigned b. le-el.
At first it seems difficult to make compati%le te ig level of educational acievement
of Pilippines 8orkers 8it teir lo8 level of income per capita and productivity# )a%le
/#- so8s te productivity of several countries of Asia calculated as gross domestic
product divided %y num%er of employed persons# )e ta%le so8s tat after te crises
some countries like Singapore or Gorea ave returned slo8ly %ack to te level of
productivity previous to te crisis# Ho8ever in te case of Pilippines tere is at most a
very slo8 recovery pat# In addition te comparison of te levels so8s Pilippines
lacking %eind oter Asian countries#
Ta&/" .-9- Prouc$('($* co+!ar()on acro)) (##"r"n$ coun$r(")-
COUNTRY 1997 1998 1999 2000 2001 2002 Ave.
SINGAPORE
(1990 prices)
44215 38409 39806 38720 37813 448537 398857
MALAYSIA
(1987 prices)
8160
5400
5756 5910 5801no data 58717
THAILAND
(1988 prices)
2956 2064 2357 2255 2056 2190 2184
INDONESIA
(199 prices)
1026 535 603 526 441 500 521
PHILIPPINES
(198! prices)
1087 768 810 778 645 670 734
"OREA
(199! prices)
21068 14087 18155 19990 17877 18918 178805
Source: Asian *e-elo/ent +ank. )n US dollars.
B%viously te previous ta%le is a crude and simplistic approac to productivity %ut it
give us a preliminary indication# Cororaton ,-..-0 finds tat te contri%ution of la%or
4uality to total factor productivity in te period /C<=D=- 8as -#//F" 8ile in te period
/CC/DC6 8as only .#/<F rising to .#;-F in /CCED-... ,see figure -#70#
F(gur" .-9- Con$r(&u$(on o# /a&or :ua/($* $o TFP gro;$%-
0
0.5
1
1.5
2
2.5
1967-72 1973-82 1983-85 1986-90 1991-93 1994-97 1998-2000
Source: Cororaton (%&&%'.
)e reason for te decline in te contri%ution of la%or 4uality to total factor productivity
are diverse and comple(# Ho8ever tere are at least t8o sources of pro%lems5
a# $o8 and deteriorating 4uality of education#
%# Migration of igly 4ualified 8orkers#
)erefore tere are several reason 8y te ig educational acievement of Pilippines3
la%orers as not %een translated into ig productivity and a large impact on total factor
productivity %eing te 4uality of te educational system in general and" in particular" te
university sector" one of te most prominent#
)a%le -#; present several indicators of te 4uality of te educational services in te
Pilippines# )a%le -#; so8s tat te Pilippines ave te second igest ratio of pupils
%y teacer in primary education ,only %elo8 Cam%odia0 and te igest ratio of pupils
%y teacer in secondary among te Asian countries considered in ta%le 7# More
important tat tis fact 8e 8ill see in ne(t section tat %ot ratios are increasing in
Pilippines 8ile in oter countries like Gorea" Indonesia" Cina" Malaysia and +ietnam
tese ratios are decreasing#
In addition te proportion of students of science and tecnology is lo8 and te
percentage of university students 8o graduate is also lo8 compared 8it oter
countries#
Ta&/" .-<- Qua/($* (n(ca$or) I-
P+,i*( ,er teac7er -20010 Tertiary ed+cation -19960
Primary Secondary S9T (t+dent( : ;rad+ate(
China 19.6 18.9 na 35
Korea 32.1 21.0 32.1 38
Mongolia 31.8 21.9 24 na
Indonesia 20.9 13.6 39.2 27
Malaysia 19.6 17.9 na 32
Philippines 35.4 38.3 13.7 28
Thailand 19.1 22.3 18 18
Viet Nam 26.3 26.9 na na
Cambodia 56.3 21.6 13.2 na
LAO 29.9 24.1 na na
Myarmar 32.6 31.2 55.7 30
Source: UNESCO (se-eral .ears'.
Anoter indicator of te 4uality of education is te performance of students in
international comparison tests# Altoug Pilippines ranks num%er / in terms of data
availa%ility in support of te Millenium Development Goals among te // countries of
SoutD!ast Asia te participation of te country in different international studies to
measure te performance of students is disappointing# )e Pilippines3 students did not
participate in te 'eading $iteracy Study -../ not in te Second Information
)ecnology in !ducation Study ,/CCCD-..-0# Bne of te fe8 standards for international
comparison of te students of Pilippines is te )rends and International Matematics
and Science Study
-
# Since te tird 8ave ,-..60 is not still availa%le 8e can look at te
first t8o 8aves ,/CC; and /CCC0# 1nfortunately" altoug Pilippines participate in te
/CC; 8ave te results are not compara%le to oter countries %ecause of pro%lems 8it
te sampling design# In particular5
a# 'egions E" /- and te autonomous region of Muslim Mindanao 8ere removed
from te sample coverage#
%# Some scool divisions sample %ased on te advice of te Department of
!ducation instead of randomly#
c# Sampling 8eigts could not %e computed since te selection pro%a%ilities 8ere
unkno8n#
&or all tese reason 8e can only rely on te second 8ave# )e results in ta%le -#< so8
tat te level of science and matematics of te E
t
degree students of Pilippines is
disappointing# *ot only tey are %elo8 te international average %ut te Pilippines
-
In te Pilippines" )IMSS -..6 is 9ointly implemented %y te Department of Science and )ecnology
,DBS)0" troug te Science !ducation Institute ,S!I0" and te Department of !ducation ,Dep!d0#
stands at te last position in te ranking of countries of Asia# In fact Pilippines is
ranked in te position previous to te last among all te countries tat participated in
tis international survey ,6E0# Bnly Morocco and Sout Africa 8ere %elo8" altoug
only te second country ad a score significantly smaller tan te one of te students of
Pilippines# )is is o%viously a %ad sign of te 4uality of te educational system#
Ta&/" .-=- Qua/($* (n(ca$or) II-
Mat7 Science
Singapore 604 568
Korea 587 549
China 585 569
Hong Kong 582 530
Malaysia 519 492
International average 487 488
Thailand 466 482
Indonesia 403 435
Philippines 345 345
Source: 0)1SS !""".
)ere are some oter surprising results tat locate Pilippines in an e(treme 8it
respect to te performance of te students# )a%le -#E so8s tat in general %oy
outperform girls" less in matematics tan in sciences
6
# Ho8ever in te case of te
Pilippines girls outperform %oys %y a uge difference# *otice tat if te average
advantage of girls respect to %oys in mats is /#-; in Pilippines tis differential score
reaces /; points# In te case of science te difference is even more evident# )e
average of te countries included in ta%le < is H//#/ in favor of %oys# Ho8ever
Pilippines is te only country 8ere girls outperform %oys in science and te difference
is again uge#
Ta&/" .-4: D(##"r"nc" &"$;""n
0(r/) an &o*) (n )cor")-
Mat7 Science
China 64 617
Hong Kong 2 614
Korea 65 621
Indonesia 65 617
Malaysia 5 69
Philippines 15 12
Thailand 4 63
Singapore 62 620
Source: 0)1SS !""".
6
A positive sign implies tat girls ave a iger score tan %oys# A negative sign implies te opposite#
Some oter indicators also point to8ards pro%lems 8it te 4uality of iger education
in Pilippines5
a# )e academic %ackground of te faculty ,-../0# )e ma9ority of te faculty
,;EF0 as only a %accalaureate degree# Bnly EF of te professor ave a P#D# It
seems tat te lo8 4ualification of te faculty may %e related 8it te upgrade
of lo8 level institutions to te university sector#
%# )e average passing rate of te professional %oar e(amination ,PB!0 as %een
over many years" around te 7.F
7
# )is implies tat <.F of te graduates 8ill
not %e a%le to practice te profession for 8ic tey ave %een preparing for#
.-.- Ba)(c (n(ca$or) o# "uca$(on (n P%(/(!!(n"): "##(c("nc* an "##"c$('"n"))-
In tis section 8e revie8 te recent evolution of te %asic indicator of inputs" outputs
and te 4uality of education in Pilippines separating %asic education from iger
education#
-#-#/# Primary and secondary education#
)e num%er of indicators on te efficiency of te different levels of education in te
Pilippines is over8elming# )e participation of Pilippines in te pro9ect !&A
,!ducation &or All0 as ave a very important influence in te num%er of indicator of
efficiency for te education sector# )a%le -#C contains some of te most important
indices# )e main caracteristics are te follo8ing5
a# In te elementary level pu%lic scools are te over8elming ma9ority of
institutions of te sector# Private scools represent only te /.#CF of te total
num%er of scools# Ho8ever private elementary scools are increasing at a
muc faster rate tan pu%lic elementary scools#
%# Bpposite to 8at appen in te elementary grade" te proportion of secondary
private scool is ig" reacing 7/#6F of te total secondary scools in te
course -..-D.6#
7
&or instance in -... te passing rate 8as 6=#;F#
Bo1 ,
S$ruc$ur" o# $%" "uca$(on )*)$"+ (n P%(/(!!(n")
/# Compulsory education#
Age of entry5 <
Age of e(it5 /-
a. 2ri/ar.
$engt of te program in years5 7
Age5 from < to /.#
b. )nter/ediate
$engt of te program5 -
Age5 from /. to /-#
-# Secondary education
$engt of te program in years5 7
Age5 from /- o /<#
Secondary education usually lasts for four years# Compulsory su%9ects include
!nglis" &ilipino" Science" Social Studies" Matematics" Practical Arts" Iout
Development )raining and CitiAens Army )raining# )e cycle culminates in te
e(aminations for te Hig Scool Diploma# )e *ational Secondary Aptitude
)est is taken at tis time# It is a prere4uisite for university admission
6# Higer education#
a. 2ost$secondar. studies (technical3-ocational'
)ecnical or vocational courses 8ic last %et8een tree monts and
tree years lead to skills proficiency 8ic are mostly terminal in nature#
)ey are Certificate" Diploma and Associate programs#
b. Uni-ersit. studies.
i# Bacelor3s degree
A BacelorJs Degree is generally conferred after four yearsJ
study# )e minimum num%er of credits re4uired for fourDyear
BacelorJs Degrees ranges from /-. to /C.# In some fields"
suc as Business" )eacer !ducation" !ngineering and
Agriculture" one semesterJs 8ork e(perience is re4uired#
ii# 1niversity second stage5 Certificate" diploma and master
degree#
Certificates and Diplomas are conferred on completion of one
or t8o years of study %eyond te BacelorJs Degree# )o %e
admitted to te MasterJs Degree" students must ave a general
average of at least E; or B or - in te undergraduate course#
iii# 1niversity tird stage5 P# D#
)o %e admitted to a Doctorate program" students must ave an
average of at least /#=; in te MasterJs Degree# )e PD
re4uires a furter t8o to tree yearsJ study ,minimum0
follo8ing upon te MasterJs degree and a dissertation#
iv# )eacers education5 preDprimary" primary and secondary
,%acelor0# )ertiary5 master degree#
v# *onDformal iger education#
)8oD to treeDyear programs are offered to train iglyDskilled
tecnicians" office staff" ealt personnel# Candidates are
a8arded Diplomas" Certificates or Certificates of Proficiency#
Bo1 .
L"ga/ )"$5u! an organ(>a$(on o# $%" "uca$(on )"c$or
/# Basic la8s#
a# !ducation Act of /CE-#
%# 'epu%lic Act ==-- of /CC7# Creation of te Commission of Higer
!ducation ,CH!0#
c# 'epu%lic Act ==C< of /CC7# Creation of te )ecnical !ducation and
Skills Development Autority ,)!SDA0#
d# 'epu%lic Act E-C- of /CC=# Higer education moderniAation act#
e# 'epu%lic Act C/;; of -../# Governance of Basic education act# It
provides te overall frame8ork for ,i0 scool ead empo8erment %y
strengtening teir leadersip roles and ,ii0 scoolD%ased
management 8itin te conte(t of transparency and local
accounta%ility# )e goal of %asic education is to provide te scool
age population and young adults 8it skills" kno8ledge" and values
to %ecome caring" selfDreliant" productive and patriotic citiAens#
-# $egal %odies governing education
a# *eart/ent of Education (*eEd'# PreDprimary" primary" secondary
and nonDformal education#
%# Co//ission of 4igher Education (C4E'. Higer education#
c# 0echnical Education and Skills *e-elo/ent Authorit. (0ES*A'. In
carge of postDsecondary" middle level manpo8er training and
vocational education#
6# Structure of te Department of !ducation# )e Department operates 8it
four 1ndersecretaries in te areas of5 ,/0 Programs and Pro9ectsK ,-0
'egional BperationsK ,60 &inance and AdministrationK and ,70 $egal AffairsK
four Assistant Secretaries in te areas of5 ,/0 Programs and Pro9ectsK ,-0
Planning and DevelopmentK ,60 Budget and &inancial AffairsK and ,70 $egal
Affairs# )ree staff %ureaus provide assistance to formulate policy and
standards5 Bureau of !lementary !ducation ,B!!0" cont#
c# In recent year te gro8t of private ig scools as %een similar to te gro8t
of te num%er of pu%lic ig scools
d# Ho8ever as a conse4uence of te Asian crisis many student s8itced from
private ig scools to secondary ig scools# &or tis reason enrolment in
pu%lic ig scools is increasing fast 8ile enrolment in private ig scools is
decreasing#
Ta&/" .-3- Sc%oo/), "nro/+"n$ an $"ac%"r): "/"+"n$ar* an )"conar* "uca$(on-
&*ementary Secondary
1997698 2002603 Crec. 1997698 2002603 Crec.
SCHOOLS 388395 418288 7.53 68690 78890 17.94
Pbli! 358272 368759 4.22 38956 48629 17.01
Private 38123 48529 45.02 28734 38261 19.28
"N#OLM"NT 1282258038 1289798628 6.17 580228830 680778851 21.00
Pbli! 1182958982 1280508450 6.68 386168612 487938511 32.54
Private 9298056 9298178 0.01 184068218 182848340 68.67
T"ACH"#S 3548063 3378082 64.80 1448662 1198235 617.58
Pbli! 3248039 3378082 4.03 1058240 1198235 13.30
Private 308024 6 398422 6
Source: *eart/ent of Education of 2hiliines.
)a%le -#/. presents te evolution over time of several performance indicator of te
Pilippines elementary and secondary system# )e coort survival rate is te proportion
of enrolees at te %eginning grade or year level 8o reac te final grade or year level
at te end of te re4uired num%er of years of study
;
# >e can see in ta%le -#/. tat
around t8o tirds of students complete elementary scool in te e(pected time period#
)e coort survival is even iger in secondary education# )e completion rate captures
a similar indicator# It is te percentage of first year entrants in a level of education 8o
complete te level in accordance 8it te re4uired num%er of years of study# )e
proportions are similar to te coort survival rates# )e dropDout rate is te proportion
of students 8o leave scool during te year as 8ell as tose 8o do not return to
scool te follo8ing year to te total num%er of students enrolled during te previous
scool year# )e trend of te dropDout rate is increasing over tese years 8ic is
8orrisome#
;
)e particular version presented in te ta%le is from 1*!SCBS3s !&A ,!ducation &or All0 program#
Ta&/" .-,6- E'o/u$(on o# $%" &a)(c !"r#or+anc" (n(ca$or #or "/"+"n$ar* an
)"conar* "uca$(on-
1997698 1998699 1999600 2000601 2001602 2002603
Cohort srvival rate $"%A &ormla'
"lementary 64.96: 64.09: 69.48: 67.21: 67.13: 6
Se!ondary 6 70.31: 69.50: 6 6 6
Completion rate
"lementary 67.67: 68.99: 68.38: 66.13: 66.33: 6
Se!ondary $based on %irst year' 69.09: 69.98: 69.89: 70.62: 71.01: 6
(rop ot rate
"lementary 7.39: 7.57: 7.72: 9.03: 6 6
Se!ondary 9.93: 9.09: 9.55: 10.63: 6 6
A!hievement rate
"lementary) N"AT 50.78: 50.08: 49.19: 51.73: 6 40<
Se!ondary) NSAT 48.66: 46.12: 54.34: 53.39: 6 28.5<
Ppil*tea!her ratio
"lementary 34 35 35 36 36 36
Se!ondary 34 35 35 36 39 40
No s!hools
+arangays ,ithot pbli! elementary
s!hool 48231 48819 48710 48569
Mni!ipalities ,ithot a high s!hool 26 13 5 3 6 6
Source: Authors co/ilation fro/ the *eEd. 5NEA0 and NSA0 were not ad/inistrated in %&&!$&%. )n
%&&%$&6 there were two diagnostic tests: in grade )7 for ele/entar. and in !st .ear for secondar..
)e acievement rate measures te performance of student in regular tests# )e *!A)
,*ational !lementary Assessment )est0 is te national e(amination 8ic aims to
measure learning outcomes in te elementary level in response to te need tof
enancing 4uality of education as recommended %y te Congressional Commission in
!ducation# It is designed to assess a%ilitites and skill of grade +I students in all pu%lic
and private scools# )e *SA) ,*ational Secondary Assessment )est0 is a national
e(amination to assess te skills of fourt year ig scool students# )ere are no clear
trends in terms of te performance of te students in tis tests
<
# &inally" as 8e
mentioned %efore" te ratio of students to teacer is 8orsening over time" specially in
secondary education#
>itout pretending to %e e(austive ta%le -#// presents a selection of performance
indicator for elementary and secondary education for te course -..-D-..6#
<
>it tose punctuations te percentage of passers is around =;F among te elementary students and
C7F in secondary#
Ta&/" .-,,- Ba)(c !"r#or+anc" (n(ca$or): "/"+"n$ar* ? )"conar* "uca$(on 26.5
687-
IN(ICATO#S
&$&M&NTA#= S&C!NA#=
Tota* -M10 Ma*e -M0 1ema*e -10 Tota* -M10 Ma*e -M0 1ema*e -10

-"# in "CC( 9.86: 9.60: 10.14:
. o& -r/0 ,1 "C( "2p/ 51.95: 51.31: 52.68:
App/ Inta3e #ate $AI#' 125.52: 131.26: 119.50:
Net Inta3e #ate $NI#' 43.59: 41.90: 45.38:
-ross "nro #atio $-"#' 100.41: 101.17: 99.61: 65.66: 62.96: 68.41:
Net "nro #atio $N"#' 83.30: 82.58: 84.04: 45.56: 41.76: 49.44:
CS# $-rade VI 1 4ear IV' 69.47: 65.49: 73.90: 63.88: 56.71: 71.22:
Completion #ate 66.94: 62.77: 71.56: 58.62: 51.11: 66.38:
Coe&&i!ient o& "&&i!ien!y 81.03: 77.75: 84.47: 70.69: 64.12: 77.04:
4ears Inpt Per -radate 7.41 7.72 7.10 5.66 6.24 5.19
-radation #ate 95.89: 95.17: 96.58: 90.62: 88.41: 92.58:
Ave/ Promotion #ate 93.42: 92.32: 94.58: 83.82: 78.49: 88.97:
Ave/ #epetition #ate 2.25: 2.91: 1.56: 2.81: 4.35: 1.32:
Ave/ S!hool Leaver #ate 7.45: 8.60: 6.21: 13.91: 17.14: 10.70:
Transition #ate 97.58: 96.71: 98.48: 92.95: 96.80: 89.30:
Ave/ %ailre #ate 5.24: 5.99: 4.44: 9.60: 12.59: 6.72:
#etention #ate 93.82: 92.46: 95.27: 88.18: 84.39: 91.91:
Ave/ (ropot #ate 1.34: 1.69: 0.98: 6.58: 8.92: 4.31:

Source: +E)S (%&&,'.
)e most interesting fact from tis ta%le is te consistent %etter situation of 8omen 8it
respect to men# >e already o%served %efore o8 te performance of 8omen in te
)IMSS 8as muc %etter tan te performance of men of te same age
=
# In ta%le -#// 8e
can see tat 8omen ave a iger net enrolment rate" graduation rate" promotion rate"
completion rate and retention rate tan men# In addition 8omen ave a smaller
repetition rate" years input per graduate" scool leaver ratio" failure rate and dropout
rate# )is is true for elementary and secondary education#
>it respect to te 4uality of pu%lic and private scool tere are not very many
indicator since most of te !&A indicator distinguis %et8een men and 8omen %ut not
%y te o8nersip of te scools# Indicator // presents te calculation of te
student2teacer ratio separating pu%lic and private scools# In elementary scools te
ratio of pu%lic scools is 6;#= 8ile in private scools is 6.#/# In ig scools te ratio
is 6;#C for pu%lic scools and 66#< for private scools
E
# )erefore it seems tat in terms
of te student2teacer ratio private scools are %etter e4uipped to produce ig 4uality
education tan pu%lic scools#
=
$atter 8e 8ill so8 tat te return to education is also muc iger for 8omen tan for men#
E
Ho8ever 8e sould notice tat tere is a very ig varia%ility across regions#
Anoter piece of information tat may %e important in rating pu%lic versus private
scools is te level of satisfaction of te users# In a recent report
C
te >orld Bank asked
&ilipino
/.
families for teir level of satisfaction 8it pu%lic and private scools# Bverall
te level of satisfaction 8it pu%lic and private scools 8as very similar even tougt
rating 8ere iger for private scools in te 4uality items and for pu%lic scools in te
costs items# )e present rating of pu%lic scools 8as /#7C ,past rating /#;.0 8ile for
private scools it 8as /#;/ ,past rating /#=/0#
)e igest satisfaction 8it pu%lic scools 8as associated 8it its convenient location"
conse4uence of te longstanding policy ?oneD%arangay" one pu%lic scool@# )e rating
of pu%lic scools 8as lo8 in class siAes" te(t%ooks and facilities# Class siAes are larger
not %ecause of a simple sortage of teacer %ut also %ecause of a poor policy of teacer
deployment caused %y te restrictive regulation on deployment of teacer in Pilippines#
In addition real students to teacer ratios in pu%lic scools are iger tan te num%er
so8n %y aggregate statistics due to many teacers doing clerical or administrative
functions# 'eal ratios are close to 7;#
In private scools te igest degree of satisfaction corresponds to teacers3 attendance
to scools" and availa%ility of %ooks# )e lo8est satisfaction is associated 8it te
tuition carged %y private scools#
)e &ilipino 'ecord Card study provides also estimates for te cost of pu%lic and
private scools# )a%le -#/- so8s tese findings#
Ta&/" .-,.- Annua/ !"r )$u"n$ co)$ #or "/"+"n$ar* "uca$(on 2(n P%P7
&ees )e(t%ooks 1niforms )ransport Mean
Pu&/(c 77; 6E ;-- /"./= -".-6
Ur&an <<< <C </- /"7/. -"=<=
Rura/ -6. C 76E <;/ /"6-C
Bo$$o+ 86@ -.7 = 67/ 7/C C/=
M(/" 86@ 6-; /= 7.; =C7 /"-..
To! 86@ =;= E7 =E; /"=.< -".<;
Pr('a$" -."<;E
Source: 8iliino reort card on ro$oor ser-ices (%&&!'
SummariAing 8e can say tat ouseold 8ould prefer to send teir cildren to private
scools if tey did not ave any financial constrain# A simple indication of tis is tat
%et8een /7F and -=F of ouseolds currently sending teir cildren to a pu%lic scool
rated pu%lic scools %etter tan private scool# Ho8ever from <6F to C6F of
C
>orld Bank ,-../0" &ilipino report card on proDpoor services#
/.
'atings are calculated as te average of a ;Dpoints $ickert scale5 - +ery satisfiedK / some8at satisfiedK
. undecidedK D/ some8at dissatisfiedK D- very dissatisfied#
ouseolds sending teir cildren to private scools rate tem %etter tan pu%lic
scools#
-#-#-# Higer education#
)e iger education sector of Pilippines is one of te most interesting cases of iger
education in te 8orld# >it /"7=C institutions of iger education Pilippines ranks
second in te a%solute num%er of H!Is# Bpposite to primary and secondary education in
te iger education sector te large ma9ority of te centers are private institutions# By
/C<; private H!I 8ere C7F of te total num%er of H!Is# )e proportion decreased until
te end of te E.3s 8ere it reaced around =-F and increased again during te C.3s# )e
proportion of private institutions in te course -..-D.6 8as EE"-F# &igure -#; so8s
tat most of te recovery of te private H!Is during te C.3s comes from te
contri%ution of te nonDsectarian institutions#
F(gur" .-<- Nu+&"r o# (n)$($u$(on) &* $*!"-
0
200
400
600
800
1,000
1,200
1990-1991 1991-1992 1992-1993 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-03
Seca! i an
"on-seca! i an
P #$l ic
Source: C4E*.
1sually H!Is are divided in pu%lic" private sectarian and private nonDsectarian# )e
sectarian institutions are mostly religious and nonDprofit# )ey represent te ig end of
4uality in te private sector# Ho8ever most of te private H!I are nonDsectarian
,=;"/F0" for profit scools 8it large classes" scarcely selective admission processes
and lo8 tuition# )e pu%lic institutions can %e divided in S1Cs ,state and university
colleges0" CHIs ,CH!D supervised institutions0 and $1Cs ,local universities2colleges0#
Pu%lic institutions carge lo8 tuition fees " selective process of admission and very ig
unit costs# )a%le -#/6 presents te recent evolution of te num%er of H!I classified %y
groups#
Ta&/" .-,8- H(g%"r "uca$(on (n)$($u$(on) (n P%(/(!!(n")-
Se!tor1Instittional Type 19986991999600200060120016022002603

PHILIPPIN"S $,ithot satellite !ampses' 18382 18404 18380 18428 18479
PHILIPPIN"S $,ith satellite !ampses' 18495 18563 18603 18665

P5+LIC $,ithot satellite !ampses' 264 232 166 170 174
P5+LIC $,ith satellite !ampses' 377 391 389 407
State .ni2er(itie(4Co**e;e( -S.C(0
Main 106 107 107 111 111
Sate**ite Cam,+( 113 159 223 237
CH& S+,er2i(ed In(tit+tion( -CSI(0 2
Main 102 71 3 1
Sate**ite Cam,+(
$oca* .ni2er(itie(4Co**e;e( -$.C(0 39 37 40 42 44
!t7er 'o2ernment Sc7oo*( 12 12 11 12 12
S,ecia* Hi;7er &d+cation In(tit+tion( 5 5 5 4 5

P#IVAT" 18118 18172 18214 18258 18305
Non6Sectarian 818 866 902 938 980
Sectarian 300 306 312 320 325
Source: C4E*.
)e total enrolment is 6..= student per /..#... population# )is locates Pilippines
close to te -.
t
position in te 8orld in terms of iger education student over
population# )is ig num%er is te result of an e(traordinary ig transition rate from
secondary to iger education# Close to C.F of te ig scool graduates continue into
iger education#
)a%le -#/7 presents te distri%ution of students %y disciplines# )e largest proportion
corresponds to %usiness administration and related disciplines ,-;#CF0 follo8ed %y
education and teacing ,/=#EF0 and engineering and tecnology ,/;#6F0# Matematics
and computer sciences is te coice for /.#<F of te students# )e trends are also
interesting# In recent years teacers training as reduced its proportion in te num%er of
students 8ile %usiness administration as sta%iliAed and tecnology" matematics and
computer science are gro8ing#

Ta&/" .-,9- D()$r(&u$(on o# )$u"n$) &* ()c(!/(n"-
(is!ipline -rop 199861999 199962000 200062001 200162002 : 01602
Agri!ltral6 %orestry6
%isheries6 Vet Med/
75847
5
85826
6
87849
2
94890
0

3.85
Ar!hite!tral and To,n
Planning
23834
6
22839
4
23845
9
25820
5

1.02
+siness Admin/ and #elated
635839
8
632876
0
645897
0
640831
5
2
5.97
"d!ation and Tea!her Training
407896
6
447818
3
469801
9
439854
9
1
7.82
"ngineering and Te!hnology
344803
9
359831
3
369817
5
377840
9
1
5.30
%ine and Applied Arts 98778 98809
10813
8 88967

0.36
-eneral
55863
0
55889
0
68822
3
43862
7

1.77
Home "!onomi!s 78167 78513
10806
0 68460

0.26
Hmanities
21861
7
21834
3
21867
1
29866
5

1.20
La, and 7risprden!e
18862
9
20809
9
20809
7
19864
6

0.80
Mass Commni!ation and
(o!mentation
24820
6
45842
1
21862
2
30863
8

1.24
Mathemati!s and Compter
S!ien!e
221866
0
220886
0
239893
1
262813
4
1
0.63
Medi!al and Allied
155886
8
150863
4
141877
1
164800
0

6.65
Natral S!ien!e
25893
2
28885
6
29821
5
30845
1

1.23
#eligion and Theology
10853
8
10885
6 98507 78828

0.32
Servi!e Trades
12853
2
13836
9
14848
6
15842
1

0.63
So!ial and +ehavioral S!ien!e
63818
4
62811
3
62886
0
80807
7

3.25
Trade6 Cra&t and Indstrial 982 640 988 48651

0.19
Other (is!iplines
165836
7
179816
7
185815
8
185811
3

7.51
-rand Total
28279831
4
28373848
6
28430884
2
28466805
6

Source: C4E*.
)a%le -#/; presents te recent evolution of graduates from eac discipline# Half of te
graduates ave ma9ored in %usiness administration or education#
Ta&/" .-,<- 0raua$") &* ()c(!/(n"-
(is!ipline -rop 199962000 200062001 200162002< 200262003<

Agri!ltral6 %orestry6 %isheries6
Vet Med/
12820
3
13817
2
13820
9 138356
Ar!hite!tral and To,n
Planning 28235 28541 28542 28570
+siness Admin/ and #elated
104855
5
106855
9
106892
4 1088117
"d!ation and Tea!her Training
60841
5
71834
9
71848
0 728277
"ngineering and Te!hnology
44855
8
45804
1
45826
3

458768
%ine and Applied Arts 18560 18323 18326 18340
-eneral 58970 58238 58494 58556
Home "!onomi!s 820 957 960 970
Hmanities 38953 48236 48243 48290
La, and 7risprden!e 28134 28214 28204 28229
(o!mentation 48747 58140 58152 58210
Mathemati!s and Compter
S!ien!e
34801
5
33805
9
32895
3 338320
Medi!al and Allied
30805
3
27829
6
27838
0 278686
Natral S!ien!e 48283 48770 48824 48878
#eligion and Theology 18435 18052 18056 18068
Servi!e Trades 28369 28342 28366 28392
So!ial and +ehavioral S!ien!e
12826
6
13839
5
13842
8 138578
Trade6 Cra&t and Indstrial 391 712 714 722
Other (is!iplines
22884
5
23824
4
23804
3 238300
TOTAL
350881
8
363865
1
364856
3

3688628
Source: C4E*.
As in many oter countries tere as %een an important de%ate in Pilippines over te
need to forecast te demand for iger education graduates %y fields and favour tose
discipline from te pu%lic sector# Ho8ever te international e(perience on manpo8er
needs forecasting as %een very disappointing# In addition is seems tat in Pilippines
te signal from te market are understood %y potential students ,see te recent surge in
tecnology and computer science students0 even tougt te speed of tis
transformation may%e too slo8#
)a%le -#/< present several indicators of te intensity of graduation over num%er of
students %y disciplines# )e igest proportion of graduates over students is found in
%usiness administration" mass communication" medical disciplines and social and
%eavioural sciences# Arcitecture and la8 ave te lo8est ratios#
Ta&/" .-,A- Ba)(c !ro!or$(on) an ra$(o) &* ()c(!/(n") 2.66,5.66.7-
(is!ipline -rop : (t+dent( : ;rad+ate( ratio ;rad4(t+d
Agri!ltral6 %orestry6 %isheries6 Vet
Med/ 3.85 3.62 0.14
Ar!hite!tral and To,n Planning 1.02 0.70 0.10
+siness Admin/ and #elated 25.97 29.33 0.17
"d!ation and Tea!her Training 17.82 19.61 0.16
"ngineering and Te!hnology 15.30 12.42 0.12
%ine and Applied Arts 0.36 0.36 0.15
-eneral 1.77 1.51 0.13
Home "!onomi!s 0.26 0.26 0.15
Hmanities 1.20 1.16 0.14
La, and 7risprden!e 0.80 0.60 0.11
(o!mentation 1.24 1.41 0.17
Mathemati!s and Compter S!ien!e 10.63 9.04 0.13
Medi!al and Allied 6.65 7.51 0.17
Natral S!ien!e 1.23 1.32 0.16
#eligion and Theology 0.32 0.29 0.13
Servi!e Trades 0.63 0.65 0.15
So!ial and +ehavioral S!ien!e 3.25 3.68 0.17
Trade6 Cra&t and Indstrial 0.19 0.20 0.15
Other (is!iplines 7.51 6.32 0.12
Source: Authors calculations using C4E* data.
)e ratios in te previous ta%le are affected %y te differential gro8t in te num%er of
student in eac discipline and" terefore" it is difficult to interpret outside a steady state#
)a%le -#/= presents aggregated indicators not su%9ect to tis pro%lem#
Ta&/" .-,=- Ou$!u$ (n(ca$or) o# $%" %(g%"r "uca$(on )"c$or-
A!ademi! 4ear
Indicator
'ro(( &nro**ment #atio
4Partici,ation #ate
'ro(( S+r2i2a* #ate 'rad+ation #ate
0889*088: 19.95: 66.18: 45.70:
088:*088; 19.53: 70.15: 45.90:
088;*088< 18.64: 71.68: 45.98:
088<*0888 20.79: 71.67: 46.41:
0888*=>>> 21.22: 63.79: 46.69:
=>>>*=>>0 21.63: 67.72: 46.48:
=>>0*=>>= 21.94: 65.18: N4A
Source: C4E*. 9ross Enrol/ent :atio32articiation :ate $ ; of re$baccalaureate and baccalaureate
students o-er the schooling age oulation of !<$%! .ears old. 9ross Sur-i-al :ate $ ; of !st .ear
baccalaureate students who were able to reach ,th .ear= >th .ear and <th .ear le-el= 6$= ,$ and >$.ears
ago= resecti-el.. 9raduation :ate $ ; of !st .ear baccalaureate students who were able to graduate.
As 8e so8n %efore te gross enrolment in iger education as continue to gro8
during recent years reacing --F of te relevant group age# Ho8ever te survival rates
and" specially" te graduation rates are very disappointing# Bnly 7<#;F of te student
graduate# )is pro%lem is compounded %y te fact tat only around 7;F of tose tat
graduate are a%le to pass te Professional Board !(aminations# )is is a national test
8ic covers most of te fields of study# Among te large discipline te only e(ception
is %usiness and commerce# >e sould also notice tat not all graduates take te e(am
,te 8eakest graduates do not take te e(am0 8ic means tat te effectiveness of te
iger education system of Pilippines is even 8orse tan 8at nominal rates of failure
in te e(am 8ould suggest#
&igure -#< so8s te recent evolution of te percentage of graduates passing te e(am#
!ven tougt in recent years te proportion of graduates failing te e(am as %een
slo8ly decreasing tere is a suspicion tat te difficulty of te e(am is going do8n#
F(gur" .-A- E'o/u$(on o# $%" !a))(ng !"rc"n$ag" o# /(c"n)ur" "1a+(na$(on-
0%
10%
20%
30%
40%
50%
60%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Source: 2rofessional :egulation Co//ission and C4E* 0ask 8orce !"">
Anoter interesting source of information is te passing percentage %y disciplines# )a%le
-#/E presents te average of tese percentages %y periods# It is distur%ing to see te lo8
passing rate in accountancy ,/EF0 or la8 ,-=#;F0#

Ta&/" .-,4- Pa))(ng ra$") &* ()c(!/(n")-
(is!ipline A2er. 85689 A2er. 92697 A2er. 98601
A!!ontan!y 21.50: 15.91: 18.61:
Aeronati!al "ngineering 6 22.52: 26.28:
Agri!ltral "ngineering 6 42.90: 52.76:
Ar!hite!tre 6 30.49: 35.71:
Chemi!al "ngineering 6 38.84: 40.45:
Chemistry 27.30: 37.58: 41.22:
Civil "ngineering 31.60: 30.75: 30.62:
Criminology 6 43.90: 46.87:
Cstoms Administration 6 11.26: 9.10:
(entistry 45.30: 25.07: 33.84:
"le!tri!al "ngineering 52.60: 35.85: 40.50:
"le!troni!s ? Comms "ng@g 43.80: 45.09: 47.43:
"nvironmental Planning 6 77.78: 68.23:
%orestry 6 35.44: 43.75:
-eodeti! "ngineering 6 45.74: 41.05:
-eology 6 53.43: 72.73:
Interior (esign 6 37.45: 50.75:
Lands!ape Ar!hite!tre 6 67.06: 59.60:
Library S!ien!e 6 50.12: 52.39:
La, 6 24.89: 27.49:
Marine Transportation 6 23.62: 44.59:
Marine "ngineering 6 34.91: 50.28:
Me!hani!al "ngineering 55.90: 30.45: 44.41:
Medi!al Te!hnology 6 44.16: 51.53:
Medi!ine 69.00: 77.80: 65.04:
Metallrgi!al "ngineering 6 56.93: 60.96:
Mid,i&ery 6 51.65: 49.61:
Mining "ngineering 6 38.21: 76.50:
Naval Ar!hi/ ? Marine "ng@g/ 6 40.11: 51.67:
Nrsing 59.40: 57.99: 52.20:
Ntrition and (ieteti!s 6 41.66: 53.46:
Optometry 6 49.51: 26.25:
Pharma!y 57.90: 65.41: 65.98:
O!!pational Therapy 6 6 39.43:
Physi!al Therapy 6 6 24.59:
Physi!al and O!!p/
Therapy 67.00: 39.12: 23.30:
"lementary1Se!ondary
"d!/ 6 27.06: 31.56:
Tea!her*"lementary 6 6 34.33:
Tea!her*Se!ondary 6 6 35.40:
#adiologi!1A*#ay
Te!hnology 6 42.77: 39.87:
#adiologi! Te!hnology 6 6 32.69:
Sanitary "ngineering 6 52.08: 50.87:
So!ial Bor3 6 49.99: 55.64:
Veterinary Medi!ine 6 44.81: 48.90:
Source: C4E* and 2rofessional :egulation Co//ission
-#-#6# Inputs" outputs and efficiency5 te regional dimension#
)e previous sections present a unifying vie8 of inputs" outputs and efficiency in te
educational system of Pilippines# Ho8ever tere are large regional differences in
inputs and outputs# In tis section 8e only scratc te surface of tis pro%lem# )a%le
-#/C presents te %asic data on inputs %y regions# As e(pected net enrolment is
negatively correlated 8it te level of development of eac region# )is effect is more
evident in secondary education tan in primary education#
)e relationsip %et8een inputs ratios ,pupil2teacer ratio" pupil2seats ratio" etc0 and
poverty is more comple(# In te less developed regions tose ratios are ig %ut tey are
also 4uite ig in te most developed areas of te country ,like *C'0" at least in
elementary scool# In ig scool te correlation %et8een average poverty and inputs
ratios is again 4uite clear# &igure -#/C present a map 8it te ratio students2teacer in
secondary education %y region# >e sould again empasiAe tat tese are nominal ratios
in te sense tat te denominator included all te teacers# Since many of tem are
doing clerical 9o%s te real ratios are suspected to %e iger tan tose in te map#
)a%le -#-. contains te outcomes of te primary and secondary education system %y
regions# As e(pected dropout rates" survival rates and scores are positively correlated
8it te level of development of te regions#
Ta&/" .-,3: Ba)(c (n(ca$or) &* r"g(on)- E/"+"n$ar* an )"conar*- SY .66.5.668-
Nationally Net Pupil Pupil Pupil
REGION Enrolment Funded Enrolment. Teacher Instructional Seats
Teachers Ratio Ratio Room Ratio Ratio
2000
ELEMENTAR

Region I 613,611 20,836 97.52 29.45 28.01 1.00
Region II 442,765 14,087 96.53 31.43 29.78 1.03
Region III 1,193,556 32,401 99.88 36.84 35.69 1.07
Region IV-A 1,355,802 32,644 99.88 41.53 43.75 1.14
Region IV-B 429,349 11,919 98.90 36.02 35.84 1.31
Region V 879,636 26,076 95.78 33.73 34.62 1.35
Region VI 1,010,647 31,874 96.48 31.71 32.06 1.13
Region VII 918,766 24,244 99.96 37.90 37.81 1.08
Region VIII 656,356 20,710 95.62 31.69 31.78 1.07
Region IX 527,988 15,731 92.08 33.56 36.47 1.17
Region X 616,844 16,974 95.84 36.34 36.57 1.17
Region XI 603,772 16,017 92.44 37.70 39.07 1.26
Region XII 540,682 13,776 93.13 39.25 40.57 1.30
CARAGA 369,596 11,006 92.65 33.58 34.10 0.98
ARMM 543,623 13,490 93.57 40.30 47.54 1.91
CAR 217,313 7,509 94.09 28.94 27.15 0.98
NCR 1,141,369 28,303 99.08 40.33 78.16 1.77
Total !"#$%!#%&' ((&#')& )%.)' ('.&( (&.%* !.!)

SE+ON,AR

Region I 305,338 8,302 77.72 36.78 49.72 1.34
Region II 195,404 4,759 68.20 41.06 48.33 1.50
Region III 500,602 11,228 69.47 44.59 62.17 1.41
Region IV-A 584,907 11,976 74.87 48.84 72.43 1.60
Region IV-B 170,693 4,266 70.20 40.01 57.38 1.85
Region V 339,176 8,811 65.82 38.49 56.46 1.77
Region VI 470,632 12,620 74.20 37.29 52.30 1.47
Region VII 379,215 7,289 65.13 52.03 65.35 1.62
Region VIII 240,574 5,891 55.41 40.84 51.87 1.39
Region IX 193,549 4,827 54.19 40.10 58.94 1.67
Region X 220,829 5,097 42.92 43.33 62.40 1.78
Region XI 246,719 5,853 56.96 42.15 66.99 1.74
Region XII 224,133 4,972 60.17 45.08 63.71 1.62
CARAGA 149,513 3,379 50.77 44.25 59.57 1.68
ARMM 121,994 2,291 28.92 53.25 60.42 1.43
CAR 92,165 2,637 71.11 34.95 47.88 1.32
NCR 591,806 16,492 75.15 35.88 81.56 1.73
Total '#$"&#"-) !"$#%)$ %'.-( -!.%' %$.)% !.'&

Source: +asic Education )nfor/ation S.ste/ (+E)S'. *eart/ent of Education.
F(gur" .-=- Ra$(o !u!(/?$"ac%"r &* r"g(on)- S"conar* "uca$(on-
$e;end
6 24.99
25.00 6 29.99
30.00 6 34.99
35.00 6 39.99
40.00 6 44.99
45.00 6 49.99
50.00 >
No Teac7er(
No ata
A#MM
ST# ? 53.25
CA#
ST# ? 34.95
NC#
ST# ? 35.88
#e;ion I
ST# ? 36.78
#e;ion II
ST# ? 41.06
#e;ion III
ST# ? 44.59
#e;ion I%6A
ST# ? 48.84
#e;ion %
ST# ? 38.49
#e;ion %I
ST# ? 37.29
#e;ion %II
ST# ? 52.03
#e;ion %III
ST# ? 40.84
#e;ion I@
ST# ? 40.1
#e;ion @
ST# ? 43.33
#e;ion @I
ST# ? 42.15
#e;ion @II
ST# ? 45.08
CA#A'A
ST# ? 44.25
#e;ion I%6A
ST# ? 40.01
Ta&/" .-.6- Ba)(c ou$!u$ (n(ca$or) &* r"g(on)-
,rop out rate Sur.i.al rate Scores Scores Scores
REGION in in in tests
tests tests ran/in0
NEAT NEAT NEAT
ELEMENTAR 1995 1999 1999

Re0ion I 3.84 76.84 48.10 44.91 13
Re0ion II 6.07 70.26 45.50 47.43 8
Re0ion III 4.90 75.48 44.80 45.43 12
Re0ion I1 6.29 68.78 49.20 48.06 7
Re0ion 1 6.87 66.09 42.30 50.77 3
Re0ion 1I 8.09 65.40 44.80 44.26 14
Re0ion 1II 5.32 73.12 45.80 40.24 16
Re0ion 1III 9.51 57.79 52.90 62.78 1
Re0ion I2 12.03 49.37 42.70 49.39 4
Re0ion 2 8.51 60.59 45.50 48.63 5
Re0ion 2I 9.85 55.36 43.80 46.51 11
Re0ion 2II 10.67 55.04 42.00 42.54 15
+ARAGA 9.47 56.57 47.36 10
ARMM 20.34 26.05 48.80 47.38 9
+AR 9.31 56.90 49.40 48.23 6
N+R 6.79 66.66 52.80 55.64 2

SE+ON,AR NAT NAT NAT
1995 1999 1999

Re0ion I 6.40 78.47 47.10 54.59 8
Re0ion II 7.77 74.76 44.70 53.51 9
Re0ion III 9.61 69.50 46.60 54.92 5
Re0ion I1 8.47 71.61 46.40 55.83 3
Re0ion 1 9.26 70.80 40.70 52.54 11
Re0ion 1I 10.31 69.71 41.40 50.25 14
Re0ion 1II 9.16 70.61 43.00 50.10 15
Re0ion 1III 12.52 61.04 45.60 62.65 1
Re0ion I2 10.38 65.25 43.90 54.84 6
Re0ion 2 10.43 66.38 45.00 53.12 10
Re0ion 2I 11.96 62.26 40.70 51.25 12
Re0ion 2II 12.34 65.05 42.20 48.63 16
+ARAGA 12.44 62.18 41.00 54.77 7
ARMM 13.61 69.98 47.30 58.69 2
+AR 7.52 76.31 47.50 55.28 4
N+R 8.71 69.98 49.30 51.22 13

Source: +E)S and authors calculations.
8- EDUCATION AND LABOR MARBET OUTCOMES-
&rom an individual point of vie8 te accumulation of uman capital in form of
education provides t8o %asic %enefits in te la%or market5 it reduces te likeliood of
unemployment and it increases te e(pected salaries# In most of te countries te
relationsip %et8een education and unemployment rates is negative5 te iger is te
level of education te lo8er is te pro%a%ility of %eing unemployed# In Pilippines3
la%or market tis simple relationsip %reaks do8n# In fact tere are a series of
mismatces" specially among college graduates and undergraduates#
&igure 6#/ so8s te recent evolution of te unemployment rate
//
%y level of education#
It so8s tat college graduates ave an unemployment rate as ig as ig scool
graduates and iger tan elementary graduates# In figure 6#- 8e see tat not only te
unemployment rate is iger %ut it is also more volatile in ig levels of education#
B%viously te most volatile level of unemployment is o%served among te group of
undergraduates for eac level of education#
>at could %e te reason for tis ig level of unemployment among university
graduates and undergraduates: Bne possi%ility is tat te reservation 8ages for
university graduates and undergraduates is ig and" terefore" tey can afford to searc
for long periods of time# !sguerra et al ,-...0 ave argued tat tis is te case %ecause
8orkers 8it university education come from families 8it ig income" in many cases
supported %y foreign remittances# Peraps since productivity is lo8 and te reservation
8age of educated yout is ig ten tey 8ill look for a 9o% for longer tan graduates
from oter educational levels# Bn te oter and lo8 education 8orkers cannot afford
not to 8ork for a long period of time and" terefore" tey ave to accept a situation of
underemployment 8en tere is a negative sock#
Ho8ever if tis is te case ten 8e sould o%serve tat te unemployment of educated
8orkers is concentrated in te young and it decreases 8en productivity increases# In
addition" and even more importantly" 8e sould o%serve a very lo8 mismatc %et8een
ig education 8orkers and 9o%s and a very lo8 incidence of underemployment in
university graduates# As 8e 8ill see 8at 8e o%serve is 9ust te opposite#
//
)e annual unemployment rate is calculated as a simple average of te 4uarterly unemployment rates#
)e definition for unemployed is te one used %y te *SB# 1sing te I$B definition provides very
similar conclusions#
F(gur" 8-,- Un"+!/o*+"n$ ra$" &* /"'"/ o# "uca$(on-
.
0
5
.
1
.
1
5
.
2
.
0
5
.
1
.
1
5
.
2
1996 1998 2000 20021996 1998 2000 20021996 1998 2000 2002
&* ementary .nder;rad+ate &* ementary 'rad+ate Hi ;7Sc7oo* .nder;rad+ate
Hi ;7Sc7oo* 'rad+ate Co* * e;e .nder;rad+ate Co* * e;e 'rad+ate
+
n
e
m
,
*
o
y
m
e
n
t

r
a
t
e
year
'ra,7( 3y ;rade
F(gur" 8-.- Un"+!/o*+"n$ ra$" &* :uar$"r an /"'"/ o# "uca$(on-
.
0
5
.
1
.
1
5
.
2
.
0
5
.
1
.
1
5
.
2
1996 1998 2000 20021996 1998 2000 20021996 1998 2000 2002
+
n
e
m
,
*
o
y
m
e
n
t

r
a
t
e
year
'ra,7( 3y ;rade
1sing te )racer Study
/-
of te CH!D ,/CCC0 8e can understand a little %etter te
reasons for te unemployment of te college educated active population#
Ta&/" 8-,- R"a)on) #or un"+!/o*+"n$ o# co//"g" "uca$" !o!u/a$(on-
:
No Cob opening in my &ield o& spe!ialiDation 10.9:
No Cob opening &or anyone 9.6:
No !onne!tion to get a Cob 9.6:
La!3 o& pro&essional eligibility $e/g/ board e2ams' 10.7:
No Cob opening in the area o& residen!y 9.1:
La!3 o& e2perien!e 9.1:
%amily sitation prevents me &rom ,or3ing 9.8:
Starting salary is too lo, 10.5:
No interest in having a Cob 10.6:
The !ollege ,here I stdies is not prestigios 10.2:
Source: 0racer Stud..
Some interpretations of tis ta%le point out tat as muc as 7.F of te unemployment
of te college educated population is due to voluntary unemployment# *everteless 8e
ave to %e careful in accepting suc an interpretation since te items of tis 4uestion are
not properly constructed to e(tract precise conclusions a%out te voluntary or
involuntary nature of college unemployment# It is clear" for instance" tat te /.#;F of
college educated individuals tat are unemployed %ecause te starting salary is too lo8
can %e considered as voluntary unemployed# Ho8ever te individuals 8o recogniAe
tey are not interested in aving a 9o% or tat family situation prevent tem from
8orking are not part of te unemployed since tey do not participate in te la%or force#
)e alternative e(planation for te ig unemployment of university graduates is tat
te supply of university graduates increases muc faster tan its demand and" in
addition" te 4uality of education is lo8 8ic does not elp in spurring demand for
university graduates# )e ans8ers of te investment climate 4uestionnaire ,see report on
investment climate0 seems to favour tis second interpretation#
In terms of te 4uarterly volatility of te indicators 8e can see in figure 6#7 tat again
te undergraduates of ig scool and college are te ones 8it te igest degree of
%et8eenD4uarter volatility# )e rest of te levels of education present a very narro8
difference across 4uarters#
/-
)e )race study is a continuous survey on te situation of graduates from iger education institutions#
Altoug te representativeness of te sample is not clear ,students can fill te 4uestionnaires using
Internet 8it all te sampling pro%lems tat tis strategy generates0# *otice also tat tis study refers
%asically to recent college graduates and undergraduates#
)erefore te first type of mismatc is te ig level of unemployment of college and
iger education 8orkers in comparison 8it lo8er levels of education# )e second
type of mismatc is te increasing lack of relationsip %et8een te field of study and
te field of 8ork# )e )racker Survey confirms tat te percentage of graduates
8orking in 9o%s re4uiring te field studies tey ave as decreased over time# A tird
type of mismatc is te 4uestion of over4ualification# )ere as %een an artificial
demand for iger education since tere is an increasing nominal demand for college
graduates
/6
%y employers# )is effect 8ould correspond to te credentialist vie8 of
education5 since tere is imperfect information a%out te a%ility of 8orkers employer
use credentials as pro(y for productivity# Ho8ever" tis does not guarantees tat
8orkers 8ill 8ork in 9o%s for 8ic teir level of education is re4uired# )a%le 6#-
so8s te distri%ution of te primary occupation of college educated 8orkers in te
Bcto%er round of te -..- $&S# >e can see tat te proportion of clerks" sales 8orkers"
pan operators and elementary occupation is very ig# In fact te level of
over4ualification reaces te ;;#CF ,assuming tat te tecnicians and associated
professionals need to %e college educated0#
Ta&/" 8-.- Pr(+ar* occu!a$(on o# co//"g" "uca$" ;ork"r)- .66.-
Percent
Legislator6 senior o&&i!ials and manager 18.37
Pro&essionals 18.20
Te!hni!ians and asso!iated pro&essional 6.92
Cler3s 13.26
Servi!e ,or3ers and mar3et sales ,or3er 12.18
S3illed agri!ltral and &ishery ,or3er 6.36
Cra&t and related trade ,or3ers 6.58
Plant and ma!hine operators 6.43
"lementary o!!pations 11.09
Others 0.61
Source: Authors calculations using the ?8S %&&%.
>e can compare te distri%ution of occupations %y college educated 8orkers in -..-
8it te same distri%ution in /CC<# Bne pro%lem 8it tis comparison is te fact tat
te Pilippines $&S canged te classification of occupations %et8een /CC< and -..-#
It 8ent from te International Standard Classification of Bccupations ,ISCBD<E0 to te
ne8 ISCBDEE# )is cange makes te comparison more callenging since te
classifications are not e(actly te same# >e ave included as administrative and
managerial 8orkers te managers of te different sectors ,service" trade" etc0 8ic
/6
Most advertisement for vacancies ,as muc as <EF follo8ing a recent study0 re4uire a minimum of
college education#
appear in te ISCBD<E as part of tose sectors# It 8ould not %e reasona%le to include a
manager of services among te service 8orkers ,group ;0 8en in te ISCBDEE 8ould
appear as a manager ,group /0#
>it all tis precautions taken and reclassifying te /CC< occupations according to te
ISCBDEE 8e so8 in ta%le 6#6 te result of te distri%ution of college educated 8orkers
%y occupations# It is also noticea%le" like in -..-" te ig proportion of college
educated 8orkers in clerical occupations" sales and services as 8ell as elementary
occupations# )e fact te proportion of over4ualified college educated 8orkers in /CC<
8as ;=#E7F" very similar to te proportion found in -..-# )is means tat te
Pilippines la%or marker is not a%le to create 4uality 9o%s at te same rate at 8ic te
iger education sector produce graduates# Ho8ever tis fact could also %e interpreted
as te effect of lo8 4uality college educated 8orkers not %eing a%le to get a 9o% 8it
appropriate caracteristics for teir nominal level of education#
Ta&/" 8-8- Pr(+ar* occu!a$(on o# co//"g" "uca$" ;ork"r)- ,33A-
:
Pro&essional6 te!hni!al and related ,or3ers 23.89
Administrative and managerial ,or3ers 18.27
Cleri!al and related ,or3ers 13.03
Sales ,or3ers 10.20
Servi!e ,or3ers 7.21
Agri!ltral6 animal hsbandry6 &orestry 11.05
Prod!tion ,or3ers 2.57
Cra&t and related ,or3ers 4.97
"lementary o!!pations 8.82
Source: Authors calculations using the ?8S !""<.
&inally anoter form of mismatc is te e(istence of many college educated 8o do not
participate in te la%or force# )is as %een an argument in several recent report#
Ho8ever looking at te participation rates of college educated people 8e can see tat
college graduates" as e(pected" ave a iger la%or force participation rate tan any
oter educational level# *everteless if 8e aggregate graduates and undergraduates te
picture is 4uite different since college undergraduates ave very lo8 rates of la%or force
participation rates and" as in te case of ig scool undergraduates" very volatile
,figures -#6 and -#70#
F(gur" .-8- La&or #orc" !ar$(c(!a$(on ra$") &* /"'"/ o# "uca$(on-
.
5
.
6
.
7
.
8
.
5
.
6
.
7
.
8
1996 1998 2000 20021996 1998 2000 20021996 1998 2000 2002
*
a
3
o
r

B
o
r
c
e

,
a
r
t
i
c
i
,
a
t
i
o
n
year
'ra,7( 3y ;rade
F(gur" .-9- Par$(c(!a$(on ra$") &* gra" an :uar$"r-
.
5
.
6
.
7
.
8
.
9
.
5
.
6
.
7
.
8
.
9
1996 1998 2000 20021996 1998 2000 20021996 1998 2000 2002
Hi ;7Sc7oo* 'rad+ate Co* * e;e .nder;rad+ate Co* * e;e 'rad+ate *
B
,
year
'ra,7( 3y ;rade
9- RE0IONAL SHOCBS AND CORBERS EDUCATION-
)is section investigates differences in responses to regional socks in la%or market
%et8een groups 8it different levels of education# )e metodology is %ased on Mauro
,/CCC0" 8ic in turn takes as reference frame8ork te model developed %y Blancard
and GatA ,/CC-0# )e main result from tis e(ercise is tat 8orkers 8it ig scool
education take more time to adapt to a negative sock to employment ten college
educated 8orkers and teir response is stronger# )e surprising result is te %eaviour in
te group of 8orkers 8it primary education" 8o recover from te sock faster tan
college educated 8orkers and teir response magnitudes are muc lo8er# )e analysis is
%ased on 4uarterly data from te $a%our &orce Survey" %et8een /CC- and -..-#
9-,- P"r)()$"nc" o# 0"ogra!%(c D(##"r"nc") (n Un"+!/o*+"n$ Ra$") &* Sk(// L"'"/
)e analysis splits te population of 8orkers into tree groups5 8orkers 8it education up
to primary graduatesK 8orkers 8it ig scool education and finally te tird group are
8orkers 8it college education#
)ere is evidence tat te pattern of unemployment across groups as persisted for many
years# Scatter plots of te unemployment rates in first 4uarter of /CC6 and last 4uarter of
-..- for te /7 regions in Pilippines reveal a remarka%le correlation %et8een te
provinces tat ave iger unemployment rates in te -..- and tose tat ad iger
unemployment rates in te /CC6 ,&igure 6#/ H &igure 6#70# )e degree of persistence of
geograpical differences in unemployment varies depending on te la%or force
participantsJ skill levels# >orkers 8it primary and ig scool education display iger
unemployment persistence ten college educated 8orkers" as can %e seen in te scatter
plots of te unemployment rate in /CC6 and -..-#
>at is a %it surprising is tat te primary education 8orkers display lo8er persistence of
unemployment ten tose ig scool educated" altoug te difference is small# )a%le 6#/
reports" for eac educational group" te coefficient of correlation %et8een unemployment in
/CC6 and unemployment in -..-#
)a%le 7#/# 1nemployment Persistence %y !ducational Group" /CC6D.-
!ducation
Coefficient of
Correlation
Population
Sare /CC6
Population
Sare -..-
All groups .#E6 /..F /..F
Primary
!ducation
.#E/ 7.F 6-F
Hig scool .#EC 6=F 6CF
College .#;/ -6F -CF
Sources5 estimates %y autor#
F(gur" 9-,- P"r)()$"nc" o# r"/a$('" un"+!/o*+"n$ acro)) r"g(on)-
F(gur" 9-.- P"r)()$"nc" o# un"+!/o*+"n$ ra$") &* "uca$(on: !r(+ar*-
F(gur" 9-8- P"r)()$"nc" o# un"+!/o*+"n$ ra$") &* "uca$(on: )"conar*-
F(gur" 9-8- P"r)()$"nc" o# un"+!/o*+"n$ ra$") &* "uca$(on: un('"r)($*-
1sual picture
/7
is tat te iger educated group te lo8er persistence in unemployment#
)us te results reported in te )a%le 7#/ are te first indicator tat tings look a %it
different in Pilippines# )e ne(t section analyAes o8 8orkers 8it different skill levels
ad9ust to socks#
9-.- Ho; Do Cork"r) ;($% D(##"r"n$ Sk(// L"'"/) ADu)$ $o S%ock)E
>en la%or market e(periences a negative employment sock" 8orkers in a given region
can %asically react in tree 8ays5 tey can remain unemployed" drop out of te la%or force
,%ecome discouraged 8orkers0" or migrate# )ere are several reasons
/;
to e(pect different
responses 8itin groups 8it different level of education# In te follo8 up 8e investigate
tose differences estimating a +A' system and confront tem 8it tose tat usually
e(ist in developed countries#
)e relative speed and strengt of te ad9ustment mecanisms descri%ed a%ove is
estimated using a panel vector autoregression ,+A'0 system of employment gro8t" te
employment rate" and la%or force participation" for te /7 regions in Pilippines /CC6D-..-#
)e frame8ork adopted is identical to tat developed %y Blancard and GatA ,/CC-0# )e
system is te follo8ing5
8ere all varia%les are differences %et8een province i and te national average" in order to
focus on developments at te provincial level tat are not due to nation8ide developments#
i
e
/<
is te first difference of te logaritm of employmentK
i
le
is te logaritm of te
ratio of employment to te la%or forceK and
i
l
is te logaritm of te ratio of te la%or force
/7
Compare Mauro ,/CCC0
/;
&or e(ample opportunity cost of not 8orking is iger for te igly skilledK more discussion in Mauro
,/CCC0
/<
Given tat 8e don3t ave te level of unemployment 8e o%tained tis varia%le in te follo8ing 8ay5
it t i i t i i t i i i it
iut t i i t i i t i i i it
iet t i i t i i t i i i it
l ? le ? e ? l
l ? le ? e ? le
l ? le ? e ? e

+ + + + =
+ + + + =
+ + + + =

/ " 66 / " 6- " 6/ 6.
/ " -6 / " -- " -/ -.
/ " /6 / " /- / " // /.
0 , 0 , 0 ,
0 , 0 , 0 ,
0 , 0 , 0 ,
to te 8orkingDage population# )ere is one lag for eac rigtDand side varia%le" to allo8
for feed%ack effects from la%or force participation and te employment rate to employment
gro8t# )e system is estimated %y pooling all o%servations" toug allo8ing for different
provinceDspecific constant terms in eac e4uation" using te data for eac educational
group#
As 8e can see in te impulse response graps ,&igures 7#;D7#=0 %ased upon te
estimated parameters of te system a%ove" in general a negative sock to la%or demand
produces te follo8ing effects5 immediately after te sock te participation rate decreases"
unemployment increases and te level of employment drops#
F(gur" 9-<- D*na+(c r")!on)" $o a n"ga$('" )%ock: !r(+ar* )$u(")-
=
F(gur" 9-A- D*na+(c r")!on)" $o a n"ga$('" )%ock: %(g% )c%oo/-
+ =
/
/ "
/
/
/ "
/ "
ln ln ln ln ln ln
t
t i
t
t
t i
t i
t
it
t
t
it
it
i
W
W
W
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W
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e " 8ere
it
W and
it
E are
te 8orkingDage population and te num%er of employee in state i" in time t" respectively and te varia%le
8itout te su%script i represent te corresponding national aggregation#
F(gur" 9-=- D*na+(c r")!on)" $o a n"ga$('" )%ock: un('"r)($* "uca$" ;ork"r)-
)ere are differences in te immediate responses among te various groups"
particularly 8it respect to te participation rate and migration# In response to a .#.;
percentage point fall in employment" te unemployment rate practically does not react#
*otice also tat in case of all tree education groups te effect on employment is permanent5
te employment level does not return to its presock level even after /- 4uarters# It sta%iliAes
o8ever on a different level for eac of te education groups 8it te %iggest negative
permanent effect in te case of college educated 8orkers# )e participation rate drops %y
.#..;Dpercentage point in te case of ig scool and college graduates or a%out alf of tat
num%er in te case of primary educated 8orkers# Participation rate returns to it3s presock
level after four 4uarters in te case of ig scool educated 8orkers and sligtly a%ove tree
4uarters in te case of college educated 8orkers# )is part of te results is consistent 8it te
vie8 tat te less educated are more likely to %ecome Ldiscouraged 8orkers#L
Ho8ever te %eaviour in te group of primary educated 8orkers is not consistent
8it 8at 8ould usually %e o%served in developed country# Mauro reports for Spain" tat
te responses 8itin te least educated group 8ould %e muc stronger and te process of
returning to te presock levels 8ould take far more time in tis case ,compared to iger
educated groups0# >at 8e o%serve in te case of Pilippines3 least educated group of
8orkers is" tat reaction in terms of unemployment increase or participation rate decrease
is muc milderK at te same time te pace at 8ic systems returns to it3s presock level
is muc 4uicker ten %ot5 ig scool and college educated 8orkers# )is result could %e
interpreted as greater mo%ility of te least skilled 8orking force in Pilippines or a iger
pro%a%ility of accepting underemployment#
Bn te oter and te reduction on te employment of college educated 8orkers
caused %y te sock is larger tan te o%served in te oter educational levels#
Ta&/" 9-.- I+!u/)" r")!on)" #unc$(on) &* /"'"/ o# "uca$(on-
Impulse 'esponses to an !(ogenous !mployment Sock
+aria%le !mployment Participation 'ate 1nemployment 'ate
Grade Step 'esponse S#!# 'esponse S#!# 'esponse S#!#
Primary / D#.6=;C<7/ #../--EEE D#..-=-<-- #...6-;;; D#...=<7<E #...7-E<=
- D#.-E/C=7 #../EE=-E D#../...EC #...6/<=6 D#...=7C/7 #...6=C7;
6 D#.-=;/C;< #../7=.C; #....-7-E #.../7<C7 #...7=-<= #.../77=C
7 D#.-=E;<;C #../7677< D#.../;=E; #....7C/C #....< #....7==;
; D#.-=;C;=< #../7=6=< D#....=E;/ #....-C/= #....-E;< #....-7-7
< D#.-=;-.;; #../7=/7< D#....67; #..../==; #....-E<= #..../-C7
= D#.-=7EC<E #../7=6=C D#....-/7- #..../.6; #..../-= =#-E=eD.<
E D#.-=7<</E #../7=<-= D#....//;C <#-E=eD.< <#EC.eD.<M 7#6-/eD.<
C D#.-=7;76; #../7==// D<#-//eD.< 6#E-6eD.< 6#C<.eD.< -#;C=eD.<
/. D#.-=77E.6 #../7==<7 D6#767eD.< -#-CEeD.< -#/-/eD.< /#;7-eD.<
// D#.-=7777E #../7==C< D/#E=<eD.< /#6=7eD.< /#/;CeD.< C#/7<eD.=
/- D#.-=77-;; #../7=E/6 D/#.-7eD.< E#/=CeD.= <#6<7eD.= ;#7.<eD.=
Hig Scool / D#.76.6<76 #../7.<<C D#..7;=;EC #...6C-CC D#...;=-7/ #...6;-67
- D#.-6-6E.7 #../C;/-= D#...<<C./ #...6=/.E #...E;;7/ #...6/=-<
6 D#.-<C-.-C #../7--;7 D#...;7CC7 #.../C7/6 #...;=;-E #.../C;7E
7 D#.-7<-/./ #../;==CC D#...-E-=6 #....C6.E #...-/=6= #....=-C;
; D#.-7</.7= #../;7<;6 D#.../7C7< #....;=<; #.../7C;C #....7;7;
< D#.-7-<-/ #../;E<=- D#....E/7< #....67; #....=..6 #....-<E;
= D#.-7/=.;/ #../;C7;; D#....76-/ #....-/C< #....7.; #..../=6-
E D#.-7.C;.E #../<.7EE D#....-66/ #..../67 #....-.EE #..../.=-
C D#.-7.</C #../<.C/ D#..../-7< E#/<7eD.< #....//76 <#</;eD.<
/. D#.-7.7-// #../</-.E D<#<C/eD.< 7#EE7eD.< <#.<6eD.< 6#CCEeD.<
// D#.-7.6-.; #../</6;C D6#;E;eD.< -#ECEeD.< 6#-<CeD.< -#6C;eD.<
/- D#.-7.-<; #../</77C D/#C-6eD.< /#=.6eD.< /#=7EeD.< /#7/EeD.<
College / D#.7C;6C; #../</C-; D#..6<6/E #...677.; #.../E77; #...;<-=
- D#.6.E6.-7 #..-6/<6E D#../--;E< #...6;E6; D#../7E<.; #...;.=<=
6 D#.67//6C/ #../;EE; D#...7<..6 #.../<E; #....E.</ #...-.;76
7 D#.6-;<-C7 #../=<C6= D#...-.6E/ #....=<.- D#.../-6- #....;.EE
; D#.6-<EEE< #../=../ D#....E=<E #....76-= D=#;-/eD.< #....-</C
< D#.6-;-E<; #../=-C6C D#....6C-; #....--E- D#..../;6; C#<=-eD.<
= D#.6-;/;7C #../=-767 D#..../=-< #..../-/7 D6#;-EeD.< 7#/67eD.<
E D#.6-7C7-- #../=-E// D=#<E-eD.< <#-<7e .< D-#76/eD.< /#EC;eD.<
C D#.6-7EEC/ #../=-=CC D6#6C<eD.< 6#/ECeD.< DE#7;.eD.= E#-7/eD.=
/. D#.6-7E;7< #../=-E; D/#;.EeD.< /#;C=eD.< D7#6<<eD.= 7#./6eD.=
// D#.6-7E7-6 #../=-E;< D<#<=;eD.= =#C.=eD.= D/#=<CeD.= /#E7/eD.=
/- D#.6-7E6< #../=-E<7 D-#C</eD.= 6#E=7eD.= DE#-E;eD.E E#C<EeD.E
<- EQUITY IN THE ACCESS TO EDUCATION-
In tis section 8e revie8 te availa%le information on te total e(penditure in education
,including private contri%utions0 and te e4uity in te access to education 8it special
reference to te educational attainment and enrolment rates %y deciles of income and
rural2ur%an location#
<-,- Ba)(c "1!"n($ur" (n(ca$or)-
In section - 8e provided some indicator of te importance of te e(penditure in
education in te pu%lic %udget# A summary of te recent distri%ution of pu%lic
e(penditure %y agencies is presented in ta%le ;#/#
Ta&/" <-,- Pro!or$(on o# "uca$(on an $ra(n(ng &ug"$ &* ag"nc*-
Ag"nc* -... -../ -..-
D"!E E-#7 E/#/ E-#E
CHED /#E /#<C .#;
SUC) /6#= /;#-C /7#-
TESDA -#/ /#C -#;
Source: 9AA.
)e recent completion of te *ational !ducation !(penditure Accounts ,*!NA0 of
Pilippines elps te researcers to ave a %etter understanding of te financing and use
of education e(penditure including pu%lic and private sources# Bnly a fe8 countries
ave suc a e(austive accounting of education e(penditures# )e *!NA of Pilippines
covers te period /CC/DCE# It includes e(penditure for all kinds of education tat satisfy
te definition of te 1*!SCB ,?organiAed and sustained communication process design
to %ring a%out learning@0 and te revised ISC!D classification# )a%le ;#/#a present te
recent evolution of education e(penditures follo8ing te *!NA accounting#
Ta&/" <-,a- Euca$(on "1!"n($ur" 2,33<5347
Tota* -c+rrent ,rice(0 'roCt7 rate Tota* -1985 ,rice(0 'roCt7 rate -1985 ,rice(0
0889 1398290 19.1 608332 10.2
088: 1628940 17.0 648704 7.2
088; 2098543 28.6 788606 21.5
088< 2438190 16.1 838159 5.8
Source: National Statistical Coordination +oard (%&&6'. 1illions of esos
)e *!NA descri%es te sources of funds for education as 8ell as te uses of te funds#
>it respect to te sources of funds *!NA uses te typology of economic transactions
in te /CC6 1* System of *ational Accounts" adopted %y te Pilippines System of
*ational Accounts# )e institutional units distinguis five resident institutional sectors5
general government" ouseolds" financial corporations" nonDfinancial corporations and
nonDprofit institutions serving ouseolds ,*PISH0#
Ta&/" <-.- Sourc") o# #un) #or "uca$(on "1!"n($ur"-
4ear
A**
So+rce(
'enera*
'o2ern6
ment
Ho+(e6
7o*d(
1inancia*
Cor,ora6
tion(
Non6
Binancia*
Cor,ora6
tion(
Non6,roBit
In(tit+tion(
Ser2in;
Ho+(e6
7o*d(
#e(t oB t7e
Dor*d
0889 1398290 638454 678401 28013 58335 112 975
088: 1628940 738118 788629 38818 68587 157 631
088; 2098543 1018097 948296 58345 78905 109 792
088< 2438190 1168997 1118381 58900 88306 118 487
Average
annal
gro,th
rate
$80*8<' 17.1 17.3 17.7 28.8 10.2 127.6 16.2
Source: National Statistical Coordination +oard (%&&6'.
1illions of esos.
)a%le ;#- so8s tat an important proportion of te funds for e(penditure in education
come from te ouseolds# In addition *!NA contains a classification of education
e(penditure %y use of te funds# )is is presented in ta%le ;#6
/=
# &rom tis ta%le is clear
tat most of te e(penditure is e(pend in %asic education#
Ta&/" <-8- D()aggr"ga$(on o# "uca$(on "1!"n($ur" &* u)" o# #un)-
4ear Aa(ic Midd*e *e2e* Hi;7er Eo36re*ated Anci**ary !t7er +(e( Tota*<
0889 468314 18665 38950 18502 98173 18920 648524
088: 478356 28464 78474 18479 128810 28310 738893
088; 708620 28397 98947 18614 158230 28181 1018988
088< 838363 38116 98024 18130 198136 18818 1178586
Source: National Statistical Coordination +oard (%&&6'.
1illions of esos. 5 Onl. includes e(enditure with disaggregation b. use of funds.
)a%le ;#7 so8s te aggregate e(penditure in education %y items calculated from te
&amily Income and !(penditure Survey# )e first ting to notice in ta%le /#E is te large
discrepancy %et8een total e(penditure in /CC= calculated from te &I!SC= ,;E"-
/=
*otice tat te proportions %y level of education do not coincide 8it te ones presented in ta%le /#-
%ecause of differences in definitions#
%illions of Pesos
/E
0 and te value of te ouseold e(penditure in education tat appears
in te *!NA education accounting ,C7"- %illions0# Ho8ever 8e sould notice tat te
accounting of *!NA includes many levels of education and items of e(penditure tat
are not considered in te &amily Income and !(penditure Survey#
Ta&/" <-9- Fa+(/* "1!"n($ur" (n "uca$(on 2+(//(on) o# !")o)7-
2000 1997 'roCt7
C+rrent Pe(o( 1997 ,rice(
"d!ation 568078 628359 528836 18.02
%ees 538429 438793 348761 25.98
Allo,an!e 138990 118467 108791 6.26
+oo3 38550 28909 28605 11.67
Other spplies 48314 38536 38822 67.48
Other ed!/ spplies 793 650 854 623.89
Source: Authors calculations fro/ 8)ES !""@ and %&&&.
)e gro8t rate from /CC= up to -... 8as /EF in constant prices# &ees are te fastest
gro8ing item of education e(penditures# )is is important since fees represent C;#6F of
te total education e(penditure %y families# *otice tat since GDP gre8 /7F in
constant prices during te same period it looks as if families ave increase teir
education e(penditure faster tan te gro8t rate of te economy#
Ta&/" <-<- A'"rag" #a+(/* "1!"n($ur" (n "uca$(on-
2000 1997 'roCt7
C+rrent Pe(o( 1997 ,rice(
"d!ation 68894 58651 58297 6.68
%ees 58113 48191 38809 10.03
Allo,an!e 58853 48798 48772 0.54
+oo3 18392 18141 18094 4.30
Other spplies 399 327 395 617.22
Other ed!/ spplies 540 443 499 611.22
Source: Authors calculations fro/ 8)ES !""@ and %&&&.
Ho8ever te figures in ta%le ;#7 refer to te total e(penditure# )a%le ;#; presents te
average family e(penditure in education
/C
# )e average family e(penditure in education
as gro8t only ;#<F during te period /CC=D-..." 8ell %elo8 te gro8t rate of te
economy# As %efore te fees are te item tat gre8 faster#
/E
)is includes te sum of educational e(penditure in cas and in kind#
/C
>e 8ill analyAe te per capita e(penditure in education in te section on te incidence of pu%lic
su%sidies in education#
)a%le ;#< present te average ouseold e(penditure in education and te average
proportion over total e(penditure for families tat e(pend any positive amount on
education# Houseolds are classified in function of teir decile in income per capita#
Since education is a normal good 8e see tat te average proportion of e(penditure on
education increases 8it income per capita#
Ta&/" <-A- E1!"n($ur" &* "c(/"
(e!ile Mean Pro,ortion
%irst (e!ile 726 1.97:
Se!ond (e!ile 18029 2.16:
Third (e!ile 18430 2.72:
%orth (e!ile 18810 2.96:
%i&th (e!ile 28311 3.34:
Si2th (e!ile 38092 3.67:
Seventh (e!ile 48547 4.51:
"ight (e!ile 68548 5.28:
Ninth (e!ile 108177 6.37:
Tenth (e!ile 188870 7.64:
Source: Authors calculations fro/ 8)ES %&&&.
<-.- Euca$(ona/ a$$a(n+"n$ an "nro/+"n$-
Bne 8ay of looking at access to education %y income and caracteristics of te family is
to analyAe te educational attainment and enrolment# &or tis purposes 8e are going to
use te latest information availa%le to calculate tese rates 8ic is te APIS -..-#
&igure ;#/ so8s te educational attainment of population aged /; to /C years old#
&rom te grap 8e see tat primary education is almost universal in Pilippines"
someting tat 8e ad already o%served using aggregated data# Ho8ever te rate
decreases 4uickly as 8e move for8ard in secondary education#
F(gur" <-,- Euca$(ona/ a$$a(n+"n$- Ag" ,<-,3-
"d!ational attainment/ Age 09*08/ -eneral/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
I II III I% % %I4%II S&C I S&C II S&C III S&C I%
-rade
P
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o
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o
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t
i
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Source: Authors calculations using A2)S %&&%.
&igure ;#- so8s te educational attainment of te same age group %y income per capita
of te family# >e can see tat te educational attainment of te individuals coming from
te poorest 7.F families is muc lo8er tan te attainment of te ricest -.F#
F(gur" <-.- Euca$(ona/ a$$a(n+"n$ &* "c(/" o# (nco+" !"r ca!($a- Ag"): ,<5,3
"d!ational attainment/ Age 09*08/ +y in!ome per !apita/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
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p
o
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i
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n
#ic7e(t 20:
Midd*e 40:
Poore(t 20:
In figure ;#- it is noticea%le te ig negative slope of educational attainment for te
poorest families in secondary education# &igure ;#6 so8s educational attainment %y
gender# As 8it many oter education indicators 8omen perform muc %etter tan men
aving iger educational attainment at all te levels#
F(gur" <-8- Euca$(ona/ a$$a(n+"n$ &* g"n"r-
"d!ational attainment/ Age 09*08/ +y gender/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
P
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i
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Ma*e
1ema*e
Anoter interesting source of differences in te attainment of young &ilipino is set %y
te ur%an2rural dicotomy# &igure ;#7 so8s tat te educational attainment of ur%an
young &ilipino is clearly iger tan for rural youngsters# In fact te difference is
similar to te one o%served in te educational attainment %y gender# Bnly 6.F of rural
youngsters ave reaced te 7
t
grade of secondary 8ile among ur%an youngsters tis
rate is close to 7<F#
&igures ;#; and ;#< analyAe educational attainment %y group age and income per capita
decile# )e iger level of educational attainment %y older groups in secondary may %e
due to a late enrolment in tose courses#
F(gur" <-<- Euca$(ona/ a$$a(n+"n$ &* ag" grou!-
"d!ational attainment/ +y age/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
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i
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n
15619
20629
30639
F(gur" <-A- Euca$(ona/ a$$a(n+"n$ &* ag" grou! an (nco+" !"r ca!($a "c(/"-
"d!ational attainment/ +y age and in!ome per !apita/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
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n15619. #ic7e(t 20:
20629. #ic7e(t 20:
15619. Poore(t 40:
20629. Poore(t 20:
&igure ;#< so8s tat te gap in educational attainment %et8een te ricest and te
poorest decile in per capita income as %een reduced in te latest generation ,/;D/C year
old0 8it respect to te previous one ,-.D-C year old0" even toug it continues to %e
4uite important# )e reduction on tis gap is also very significant in te difference
%et8een educational attainment of ur%an versus rural youngsters as so8n in figure ;#=#
F(gur" <-=- Euca$(ona/ a$$a(n+"n$ &* ag" an rura/?ur&an ()$(nc$(on-
"d!ational attainment/ +y age and rban1rral/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
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r
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i
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n15619. .r3an
20629. .r3an
15619. #+ra*
20629. #+ra*
Ho8ever tis effect of reduction in te difference of educational attainment %et8een
recent generations is less evident if 8e analyAe educational attainment %y gender as it is
so8n in figure ;#E# )e /. points difference for te last year of secondary education
o%served among te -.D-C age group is similar to te C points difference o%served in te
/;D/C age group#
F(gur" <-3- Euca$(ona/ a$$a(n+"n$ &* g"n"r an ag" grou!-
"d!ational attainment/ +y age and gender/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
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i
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n15619. Ma*e(
20629. Ma*e(
15619. 1ema*e(
20629. 1ema*e(
F(gur" <-,6- Euca$(ona/ a$$a(n+"n$ &* *"ar-
"d!ational attainment/ Age 09*08/ -eneral/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-rade
P
r
o
p
o
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t
i
o
n
2002
1998
1993
Source: 8il/er and 2ritchett (!""6= !""#' and authors calculations using A2)S %&&%
&igure ;#/. considers te evolution over time of te educational attainment of te /;D/C
age group# )e calculations for /CC6 and /CCE are taken from te educational
attainment pro9ect of te >orld Bank
-.
# )e improvement %et8een /CCE and -..- is
small %ut noticea%le# &igure ;#// so8s te same evolution over time of educational
attainment %ut dividing %y decile in income per capita# )e cange %et8een /CC6 and
/CCE 8as very small in te gap %et8een te educational attainment of te cildren of
te poorest and te rices families# In -..- te gap as gone do8n very muc despite
te fact tat te cildren from poor families ave still a muc lo8er level of educational
attainment tan teir ricest counterparts#
F(gur" <-,,- Euca$(ona/ a$$a(n+"n$: "'o/u$(on &* (nco+" !"r ca!($a "c(/"-
"d!ational attainment/ Age 09*08/ +y in!ome per !apita/
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
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#ic7e(t 20:. 2002
Poore(t 20:. 2002
#ic7e(t 20:. 1998
Poore(t 40:. 1998
#ic7e(t 20:. 1993
Poore(t 40:. 1993
Anoter interesting set of e(ercises to understand te access to education in Pilippines
is to analyAe enrolment rates# &igure ;#/- present te enrolment rate of cildren < to /7
years old# )e proportion of enrolment is very ig# Ho8ever" if 8e distinguis te
cildren %y te income per capita of teir family ten 8e can o%serve significant
differences ,figure ;#/60#
F(gur" <-,.- Enro/+"n$ ra$" o# c%(/r"n o# A $o ,9 *"ar) o/-
-.
*otice tat te source of information for tose years is te Demograpic and Healt Survey ,DHS0 and
not APIS# Ho8ever tere are not good reasons to %elieve tat te difference in te source of data sould
produce any effect on te comparison# *otice tat &ilmer and Pritcett only consider educational
attainment up to te tird grade of secondary#
Proportion o& : to 0E years olds in s!hool
Proportion !rrently enrolled
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
6 7 8 9 10 11 12 13 14
Age
P
r
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o
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i
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F(gur" <-,8- Enro/+"n$ ra$" &* (nco+" !"r ca!($a-
Proportion o& : to 0E years olds in s!hool by in!ome per !apita
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
6 7 8 9 10 11 12 13 14
Age
P
r
o
p
o
r
t
i
o
n
#ic7 20:
Midd*e 40:
Poore(t 40:
Source: Authors calculations using A2)S %&&%
>e can also o%serve significant differences in te enrolment rate of cildren < to /7
years old if 8e divide tem %y gender or ur%an2rural location as so8n in figures ;#/7
and ;#/;# In %ot cases te effect corresponds 8it results already o%served in te
educational attainment# Girls present iger levels of enrolment tan %oys" specially in
te latest grades of secondary education# )e difference" as 8e 8ill see" is kept in iger
education enrolment#
F(gur" <-,9- Enro/+"n$ &* g"n"r-
Proportion o& : to 0E years olds in s!hool by gender
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
6 7 8 9 10 11 12 13 14
Age
P
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o
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i
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Ma*e
1ema*e
&igure ;#/; so8s tat rural cildren ave a muc lo8er enrolment rate tan ur%an
cildren# )is is o%served not only for te final courses of secondary education %ut it
can %e traced even to te first year of elementary education#
F(gur" <-,<- Enro/+"n$ &* ur&an?rura/ /oca$(on-
Proportion o& : to 0E years olds in s!hool by rban1rral
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
6 7 8 9 10 11 12 13 14
Age
P
r
o
p
o
r
t
i
o
n
.r3an
#+ra*
F(gur" <-,A- Enro/+"n$ &* *"ar-
Proportion o& : to 0E years olds in s!hool
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
6 7 8 9 10 11 12 13 14
Age
P
r
o
p
o
r
t
i
o
n
2002
1998
1993
&igure ;#/< so8s an amaAing improvement in te enrolment rate of < and = years old
from /CC6 to -..-# In only /. years te enrolment rate of < years old ave gro8n from
;F to =<F# )e improvement is less noticea%le" altoug also visi%le" for iger age
groups#
F(gur" <-,=- Enro/+"n$ ra$" &* *"ar an (nco+" !"r ca!($a-
Proportion o& : to 0E years olds in s!hool by in!ome per !apita
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
6 7 8 9 10 11 12 13 14
Age
P
r
o
p
o
r
t
i
o
n
#ic7e(t 20:. 2002
Poore(t 40:. 2002
#ic7e(t 20:. 1998
Poore(t 40:. 1998
#ic7e(t 20:. 1993
Poore(t 40:. 1993
&igure ;#/= so8s te enrolment rate %y year and income per capita# )e improvement
in te general rate of enrolment %y age covered clear differences in te rates %y income
per capita# &or instance if in /CC6 < years old cildren of %ot" ric and poor people"
ad a very lo8s levels of enrolment te improvement over te last decade as %een
muc more pronounced for cildren in ric families tan for cildren in poor families#
At te oter end" te igest grades of secondary education" 8e can o%serve te same
effect# )e general improvement on enrolment as %enefit muc more cildren from
ric families# If 8e look at te difference of rate %et8een cildren of ric and poor
families in /CC6 8e o%serve a smaller gap tan in -..-#
<-8- E:u($* (n $%" acc")) $o "uca$(on-
>e can look at tis pro%lem from at least from t8o more alternative perspectives5 te
e(penditure on education of te ouseolds and scool attendance %y income group#
;#6#/# !ducation e(penditure and access#
)e evolution of e(penditure %y te level of income of te ouseolds so8s tat
ine4uality in te average e(penditure %y decile as increased# &or instance te lo8est
decile spend in -... a%out 7 times more tan in /CEE# Ho8ever te igest decile as
increase its e(penditure in education %y a factor of ;#E# )is is particularly important if
8e take into account te reduction in social e(penditure during te C.3s#
Ta&/" <-=- Hou)"%o/ "uca$(on "1!"n($ur" &* (nco+" "c(/"-
1988 1994 2000
de!ile : tota* A2era;e : tota* A2era;e : tota* A2era;e
0 1.4 181 1.4 347 1.8 713
= 1.3 216 1.8 533 2 947
F 1.5 281 2 721 2.3 1316
E 1.9 398 2.1 847 2.6 1707
9 2 466 2.7 1257 2.9 2284
: 2.4 642 3.2 1780 3.1 2897
; 2.7 856 3.4 2251 3.8 4358
< 3.3 1266 3.7 3050 4.4 6054
8 3.5 1733 4.6 4900 5.2 9692
0> 3.9 3412 5 9326 5.6 19855
Orbeta (%&&%'. 8)ES !"##= !"", and %&&&.
)an ,-..-0 as pointed out tat even in State Colleges and 1niversities ,SC10 less tan
6.F of te students come from te lo8 deciles of te distri%ution#
Some teories argue tat 8at matter is not only te average level of education %ut also
its distri%ution# )e une4ual distri%ution of education tend to ave a negative impact on
income per capita# )a%le ;#E so8s te Gini inde( of education acievement# Altoug
te inde( of Pilippines is lo8er tan te oter countries" 8it te e(ception of Gorea"
te reduction during te decade of te C.3s as %een very slo8#
Ta&/" <-4- 0(n( (n"1 o# "uca$(on-
1970 1975 1980 1985 1990 1995
China 0.45 0.452 0.447 0.442 0.411 0.379
Korea 0.439 0.382 0.351 0.296 0.242 0.189
Malaysia 0.445 0.439 0.426 0.413 0.398 0.383
Philippines 0.368 0.32 0.314 0.313 0.309 0.305
Thailand 0.378 0.369 0.268 0.327 0.348 0.37
Source: ?oeA= 0ho/as and Wang (!""#'
)e coefficient of varia%ility so8s very similar trends in education ine4uality ,see
ta%le /#/.0#
Ta&/" <-3- Co"##(c("n$ o# 'ar(a&(/($* o# "uca$(on-
Po!u/a$(on o/"r $%an ,<-
1970 1975 1980 1985 1990 1995
China 0.45 0.452 0.447 0.442 0.411 0.379
Korea 0.439 0.382 0.351 0.296 0.242 0.189
Malaysia 0.445 0.439 0.426 0.413 0.398 0.383
Philippines 0.368 0.32 0.314 0.313 0.309 0.305
Thailand 0.378 0.369 0.268 0.327 0.348 0.37
Source: ?oeA= 0ho/as and Wang (!""#'
;#6#-# 'eason for not %eing enrolled in education#
In tis section 8e analyAe te 4uestions in te APIS on te reasons 8y a cild is not
attending scool# )e APIS of /CCE and -..- include a 4uestion on te reasons 8y a
cild in a particular ouseold is not attending scool# )e ans8er to tis 4uestion can
elp to understand te pro%lems for access to education of important groups of
population# )a%le ;#/. presents te proportion for eac reason for all te individuals in
te surveys# )e comparison of /CCE and -..- so8s tat te percentage tat gro8s te
most is te ina%ility to pay te ig cost of education# Bn te contrary te reasons tat
fall te most are ousekeeping and te lack of personal interest#
Ta&/" <-,6- R"a)on) #or no$ &"(ng "nro//"-
1998 2002C7an;e
S!hools are &ar1No s!hool ,1n brgy 1.09 1.26 0.17
No reglar transportation 0.33 0.29 60.04
High !ost o& ed!ation 19.25 22.7 3.45
Illness1(isability 2.80 2.75 60.05
Hose3eeping 10.27 7.56 62.71
"mployment1Loo3ing &or ,or3 26.87 26.77 60.10
La!3 o& personal interest 21.55 19.17 62.38
Cannot !ope ,ith s!hool ,or3 2.50 2.23 60.27
%inished s!hooling 6.91 10.05 3.14
Others 8.43 7.22 61.21
Source: authors calculation using A2)S !""# and A2)S%&&%
>e can also analyAe te effect of tese reason %y te teoretical level of education tat
te cild 8ould %e attending# &or tis purpose ta%le divides te proportions %y age of
te cild# It is interesting to notice o8 te percentage of importance of ig cost of
education increases up to ig scool and decreases a little %it for iger education#
)a%le ;#// so8s also tat te fact of not aving an educational institution close is
important for preDprimary and elementary education %ut it is not considered as a
pro%lem for ig scool and university#
Ta&/" <-,,- R"a)on) #or no$ &"(ng "nro//"-
066 7612 13617 18622
S!hools are &ar1No s!hool ,1n brgy 8.89 8.28 1.67 0.46
No reglar transportation 1.08 1.08 0.21 0.25
High !ost o& ed!ation 11.21 21.06 32.46 24.29
Illness1(isability 2.43 11.43 4.33 2.14
Hose3eeping 0.32 2.4 3.95 8.05
"mployment1Loo3ing &or ,or3 0.2 2.44 18.5 30.15
La!3 o& personal interest 24.89 34.26 31.68 17.15
Cannot !ope ,ith s!hool ,or3 13.35 9.63 2.48 1.37
%inished s!hooling 0.31 0.06 0.37 10.61
Others 37.34 9.37 4.35 5.54
Source: authors calculation using A2)S %&&%.
)e proportions o%served in -..- are similar to te ones o%served in /CCE as ta%le
so8s# Peraps it is noticea%le te increase in te importance of te cost of education as
a deterrence for scool attendance from /CCE to -..-# >e sould point also out tat for
preDprimary and elementary te difficulty of studies as increased its importance for
cildren not to attend scool#
Ta&/" <-,.- R"a)on) #or no$ &"(ng "nro//"-
066 7612 13617 18622
S!hools are &ar1No s!hool ,1n brgy 6.97 7.69 1.35 0.05
No reglar transportation 0.5 0 0.45 0.36
High !ost o& ed!ation 4.48 18.55 31.63 19.98
Illness1(isability 1.99 9.5 3.9 2.34
Hose3eeping 2.99 3.17 4.05 11.26
"mployment1Loo3ing &or ,or3 1.49 1.36 14.39 32.75
La!3 o& personal interest 22.39 39.37 36.43 18.63
Cannot !ope ,ith s!hool ,or3 7.96 5.88 3.75 1.61
%inished s!hooling 0 0 0.15 7.27
Others 51.24 14.48 3.9 5.76
Source: authors calculation using A2)S !""#.
&inally ta%le ;#/6 presents te reason for not attending scool divided %y te income of
te family# As e(pected te pro%lems associated 8it te ig cost of education are
%asically concentrated among te poorest 7.F# In tis group close to 6.F of te
cildren do not attend scool %ecause of te cost of education# )is means tat te
targeting of su%sidies to education for te poor are not 8orking properly# )e fact tat
te proportion of te motive associated 8it te lack of personal interest is so ig
among te cildren of te poorest families implies tat tere are also cultural factors
tat sould %e overcome to increase te enrolment of cildren from poor families#
Ta&/" <-,8- R"a)on) #or no$ &"(ng "nro//" &* (nco+"-
#ic7 20: Mid 40: Poor 40:
S!hools are &ar1No s!hool ,1n brgy 0.12 0.35 2.31
No reglar transportation 0.04 0.4 0.32
High !ost o& ed!ation 10.82 22.07 28.18
Illness1(isability 1.8 2.57 3.27
Hose3eeping 7.03 8.95 6.92
"mployment1Loo3ing &or ,or3 36.36 32.27 19.25
La!3 o& personal interest 9.11 16.19 25.32
Cannot !ope ,ith s!hool ,or3 0.96 1.66 3.12
%inished s!hooling 28.5 8.99 2.83
Others 5.27 6.54 8.48
Source: authors calculation using A2)S %&&%
;#6#6# Benefit incidence analysis of pu%lic e(penditure in education#
Anoter 8ay of looking at te relationsip %et8een poverty and education is to look at
te %enefit incidence of pu%lic e(penditure in education
-/
# &rom te previous indications
it seems clear tat e(penditure in elementary and secondary scooling at least is not
regressive# )e previous PPA so8ed tat overall pu%lic e(penditure in education 8as
mildly progressive# Ho8ever it 8as noticed tat 8ile e(penditure in elementary
education 8as proDpoor" e(penditure in secondary education 8as neutral and
e(penditure in iger education 8as 4uite regressive# )e data in te APIS -..- do no
allo8 to make tese calculations since it as eliminated te 4uestion on te type of
scool from te individual 4uestionnaire# )e calculation using te APIS /CCC lead to
te same conclusions as te previous PPA5 tertiary education is igly regressive# &igure
;#/E so8s te cumulative num%er of %eneficiaries of pu%lic e(penditure %y income per
capita decile#
F(gur" <-,4- Inc("nc" o# !u&/(c "1!"n($ur" (n %(g%"r "uca$(on-
Indicence of public expenditure in higher education
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 0.1 0.2 0. 3 0.4 0.5 0.6 0.7 0.8 0.9 1
P r opor ti on of popul ati on (r anked by i nc ome per c api ta)
Source: Authors calculation using A2)S !""".
-/
See Demery ,-...0#
A- THE RETURN TO EDUCATION IN PHILIPPINES-
A-,- Pr"'(ou) )$u(") on $%" r"$urn $o "uca$(on (n P%(/(!!(n")-
)e return of education is one of te %asic indicators of any analysis tat deals 8it te
economics of education# )e previous Pilippines Poverty Assessment calculates" using
te /CCE APIS" an average rate of return ranging from //#7F up to /6#6F" %eing te
return of 8omen iger tan te returns of men# )e estimation tat separates te return
of education %y levels so8s tat te lo8est return ,=#-F0 is associated 8it primary
education" iger is secondary education ,/.#7F0 and te igest is for college
education ,/C#6F0# )ese results are similar %ut not totally consistent 8it te results
using also te /CCE APIS in Ouim%o ,-..-0 and Scady ,-...0#
Ta&/" A-,- Ra$" o# r"$urn ")$(+a$") I-
!lementary Secondary )ertiary
Qu(+&o 2.66.7 /<#. -/#- -E#.
S%a* 2.6667 /-#/ /-#C -=#<
Geroci ,-..-0 as also analysed te issue of te return to education# Geroci ,-..-0
descri%es te difference %et8een successive levels of education over time using te $&S
as te source of data#
Ta&/" A-.- Ra$" o# r"$urn ")$(+a$") II-
&*ementary ;rade
2er(+( no ;rade
Secondary ;rade
2er(+( e*ementary
;rade
Co**e;e ;rad+ate
2er(+( (econdary
;rad+ate Mincerian coeBB.
Private
08<< 21.6 15.3 14.6 13.8
088> 27 14.3 15.5 14.2
0889 24 14.3 15.8 14
So!ial
08<< 13.3 14.9
088> 15.1 13.5
0889 15.5 13.5
Source: 9erochi (%&&%'
'ecently Grafts ,-..60 as calculated te private and social rate of return of education
in Pilippines using te /CCE APIS for te su%set of 8age and salaried 8orkers# )a%le
<#6 presents te results" 8ere tere is a distinction %et8een complete and incomplete
cycles
--
#
Ta&/" A-8- Ra$") o# r"$urn III-
Pri2ate Socia*
Complete !y!le
* High s!hool 10.44 7.26
* College 13.53 10.55
In!omplete !y!le
* "lementary gradate 11.10 6.44
* Some high s!hool 6.25 3.69
* High s!hool gradate 10.16 6.33
* Some !ollege 8.93 6.21
Source: Braft (%&&6'.
)e rates of return on ta%le <#6 are lo8er tan te ones presented a%ove# Peraps more
surprisingly te difference %et8een te private rate of return of college education
,/6#;60 and elementary education ,//#/.0 is lo8# If 8e 8ere to factor in te different
pro%a%ility of unemployment of %ot levels of education ten te relative advantage of
tertiary education 8ould %e under 4uestion#
*everteless 8e ave to take te estimates in ta%le <#6 8it caution# )e previous ta%les
so8 o8 different studies find very different estimates of te return to education# >e
8ill consider tis issue in follo8ing sections in order to clarify te differences and
provide our o8n estimates#
A-.- T%" r"$urn) o# "uca$(on (n P%(/(!!(n") u)(ng $%" APIS .66.-
Bne of te most important indicator of te relevance of education as an investment is
te return to education# In tis section 8e present different estimates of te return to
education using te latest source of information availa%le" te APIS -..-# At te same
time 8e compare tese results 8it te ones o%tained previously using te same
metodology#
--
Grafts ,-..60 argues tat te rate of return for elementary graduates and some elementary education is
too small for o%taining reasona%le estimates#
Bo1 8
Da$a /(+($a$(on) on ;ag")-
)e study of te return of education re4uires" as a %asic input" information a%out
8ages and ours of 8ork# It is 8ell kno8n tat usually te $&S do not include
4uestions on salaries 8ile &amily Income and !(penditure Surveys do not consider
ours of 8ork as relevant information# In te case of te statistical information of
Pilippines te situation is more comple( %ecause of t8o factors5
D )e e(cessive cange in te 4uestionnaires of oter8ise identical statistical
operations#
D )e special nature of some varia%les in surveys tat" for most of te varia%les"
are pu%licly availa%le#
>e sould notice te follo8ing points5
D By complementary information it is clear tat tere is information on 8ages
,%asic pay0 in te Bcto%er 8age of te $&S of Pilippines# )e files tat 8e
ave do not provide tat information#
D In addition" from January -../ on8ards tere sould %e information on 8ages
for all te 8aves# )e files 8e ave for -../D-..- do not contain suc
information#
D )e oter recent sources of information on 8ages and salaries are5
o &I!S /CC=
o APIS /CCE
o APIS /CCC
o &I!S -...
o APIS -..-
D 1nfortunately te APIS -..- do not contain information on ours 8orked# )ere are
some cases in 8ic a panel data can %e constructed# )is is te case of te APIS -..-
and te Bcto%er -..- $&S# Ho8ever te matcing is less tan perfect ,see appendi(
for details on te matcing of tese t8o surveys0#
)e literature as proposed many different estimators and corrections to calculate te
return to educations# Ho8ever in tis section 8e are not going to present an academic
discussion on te advantage and disadvantages of different metods of estimations# In
fact" and in order to esta%lis reasona%le comparison 8it previous results
-6
" 8e plan to
use te simple Mincerian e4uation for alternative samples of te individuals in te APIS
-..-# >e interpret te results are descriptive statistics instead of given an structural
interpretation of te coefficients# >e restrict te sample to individuals %et8een -; years
old and <; years old# In addition 8e consider only 8age earners
-7
since te inclusion of
selfDemployed is pro%lematic for tis kind of studies#
)e varia%les included in te regression are te num%er of years of education ,neduc0"
te potential num%er of years of e(perience ,calculated as age minus num%er of years of
education minus <0 and te s4uare of te num%er of years of e(perience
-;
#
Ta&/" A-9- R"$urn $o "uca$(on 2;ag" "arn"r) &"$;""n .< an A9 *"ar) o/7
A** Ma*e 1ema*e
CoeBB. t6(tat CoeBB. t6(tat CoeBB. t6(tat
ned! 0.1576 97.49 0.1423 72.99 0.2069 73.08
e2per 0.0364 17.05 0.0400 15.41 0.0245 7.02
e2per= 60.0005 613.02 60.0005 611.49 60.0003 64.38
AdC #= 0.33 0.28 0.48
N 218377 148311 78066
8uentes: Authors calculations based on A2)S%&&%.
)e num%er of years of education ave %een assigned using te varia%le tat contains
te igest level of education# Since tis varia%le distinguises %et8een graduates and
non graduates tere are several categories tat ave te same num%er of years of
education# &or instance graduates of ig scool and individuals tat ave done only
until te 7
t
grade of ig education are assigned /. years of education
-<
#
)e endogenous varia%le is te logaritm of te salary per our# )is varia%le is
pro%lematic since te APIS -..- do not contains any indicator of ours 8orked# &or tis
reason it 8as necessary to merge te APIS -..- 8it te Bcto%er round of te $a%or
-6
In particular 8it te results in te previous Pilippines Poverty Assessment ,-../0#
-7
>age earners are defined %y te varia%les col-.Pc8orker# >e include as suc te 8orkers for private
ouseolds" for private esta%lisment" for government and government corporations and 8orkers 8it pay
on o8n family operated %usiness#
-;
>e sould notice tat in most of te regressions te product of education %y e(perience is significantly
different from .# In order to %e a%le to compare 8it previous results 8e keep e(actly te same
specification#
-<
>e discuss te return of degrees latter in tis section#
&orce Survey# >e use te varia%le normal 8orking ours from te $&S as te
denominator for te salaries in order to o%tain te salary per our#
)a%le <#7 so8s tat te average rate of return for a year of education is /;#=F# )is is
4uite ig for international standards# Separating males and females 8e find someting
8at many oter studies ave found in te past5 males ave a lo8er rate of return to
education ,/7#-F0 tan females ,-.#<F0# Additionally te fit of te regression for
females is almost dou%le ,.#7E0 te fit of te regression for males# )is implies tat
education and e(perience e(plain a muc iger degree of salaries varia%ility in te case
of females tan in te case of males#
)a%le <#; so8s te same regression %ut restricting te sample to te ouseold ead" if
e2se is a 8age earner %et8een -; and <7 years old# )e results so8 a smaller return
to education ,/6#<F0# )is pattern 8as already present in te analysis of te return to
education in te previous Pilippines Poverty Assessment# As %efore 8omen ,/E#/F0
en9oy a %etter rate of return tan men ,/6#6F0#
Ta&/" A-<- Ra$" o# r"$urn- Sa+!/" o# %ou)"%o/ %"a)-
Ho+(e7o*d 7ead( Ma*e 1ema*e
ned! 0.1366 68.08 0.1338 63.65 0.1815 26.01
e2per 0.0290 8.99 0.0247 7.24 0.0214 2.21
e2per= 60.0005 68.91 60.0004 66.44 60.0004 62.65
AdC #= 0.32 0.3 0.52
N 128080 108986 18094
Since te regressions are identical to te ones run in te previous Poverty Assessment
and te survey ,APIS0 is te same %ut referred to a different year 8e can analyAe te
evolution of te rate of return over time" specially since te Asian crisis could ave
affected it# In fact te rate of return as increase from /6#6F ,APISCE0 to /;#=F
,APIS.-0# In te case of men te rate of return as gro8n from /-#6F to /7#-F and for
8omen it as gone up from /<#<F to -.#<F# )erefore te increase as %een muc
larger for 8omen tan for men#
If 8e consider only te ead of te ouseold te results are similar# In general te
return to education as increased from /-#7F to /6#<F# )e same indicator for men
ouseold ead increased from /-#6F to /6#6F and for 8omen from /;#6F to /E#;F#
)erefore 8e can conclude tat" no matter 8at sample 8e use" te rate of return of
education as increased from /CCE to -..-#
>e can also %reak te sample in function of education levels# )e results of tose
regression are presented in ta%le <#<# If 8e assume tat one year of education as te
same return depending on te iger level of education ten ta%le so8s tat
elementary education reaces /.F 8ile secondary goes up to /<F and iger
education is up to -6#-F# As %efore tese rates are clearly iger tan te ones o%tained
using te APISCE ,elementary =#-FK secondary /.#7FK and iger education /C#6F0#
Ta&/" A-A- Ra$" o# r"$urn &* /"'"/ o# "uca$(on-
&*ementary Secondary .ni2er(ity
ned! 0.1008 13.52 0.1599 14.74 0.2322 39.71
e2per 0.0309 4.68 0.0310 5.78 0.0394 11.49
e2per= 60.0005 65.14 60.0004 64.37 60.0005 66.61
AdC #= 0.04 0.04 0.2
N 68134 78059 78741
&inally 8e sould consider te effect of aving graduated versus not aving graduated#
&or tis purpose 8e ave taken 8orkers tat ave taken te same num%er of years of
education in eac level and use a dummy varia%le tat takes / if te 8orker graduated
from tat level# )e results are very interesting ,ta%le <#=0# Graduation from elementary
or ig scool do not imply any significant improvement in salaries
-=
# Ho8ever for
iger education graduation as a very large payoff5 it implies a -CF iger salary tat
8orkers 8o ad 7 years of university %ut did not graduate# )ese results make a lot of
sense since many 9o%s re4uire a university title altoug" as 8e so8 %efore" at te end
graduates may end up in a 9o% 8ere tey are over4ualified#
Ta&/" A-=- R"$urn $o graua$(on-
&*ementary Secondary .ni2er(ity
gradate 60.0546 60.95 0.0553 0.74 0.2900 5.03
e2per 0.0202 2.2 0.0276 4.18 0.0380 10.23
e2per= 60.0003 62.36 60.0004 62.92 60.0004 65.53
8uentes: Authors calculations based on A2)S%&&%
If instead of using regression 8e 9ust calculate a simple test of differences %et8een te
group of graduates a non graduates from ig scool te result is te same# )e
difference is not significantly different from . ,diffQ E#CFK tQ/#7C0#
-=
)e results are uncanged if 8e do not control for te years of e(perience#
Ho8ever tese results do not correspond to te ones o%tained using te APISCE. )e
APIS /CCE sample reveals a C#CF of advantage" in terms of 8ages" of elementary
graduates versus non graduatesK a /6#7F in te case of iger education graduates and a
/C#6F for iger education graduates#
=- CONCLUSIONS-
During te last /. years tere ave %een many compreensive analysis of te situation
of education in Pilippines# &ive of tem are particularly relevant5 te Congressional
Commission on !ducation ,/CC-0K te Bversigt Committee of te Congressional
Bversigt Committee on !ducation ,/CC;0K te )ask &orce on Higer !ducation of te
CH!D ,/CC;0K te ADBD>orld Bank report on Pilippines !ducation for te -/
st
Century ,/CCC0K and te Presidential Commission on !ducation 'eform ,-...0# Most of
tese studies present a similar diagnostic of te pro%lems of education in Pilippines"
and in particular" iger education# )e even proposed similar ideas to try to solve tose
pro%lems# Ho8ever" as 8e 8ill so8 in tis section" most of te proposal ave not %een
developed and" in fact" many of te pro%lems identified %y tese studies ave 8orsen in
recent years# )ere are %asically t8o reasons for te failure of tese proposals5
a# )e political economy of te education sector in Pilippines is particularly
difficult# )is implies tat institutional inertia as a very important 8eigt ,)an
-../0#
%# )ere are too many proposals# Altoug finding a silver %ullet for te pro%lems
of education in Pilippines seems an over8elming endeavour tere is need for
simple and applica%le proposals tat can generate political consensus" since te
institutional constrains and te effect of inertia are very important#
In te follo8ing sections 8e present" under separate epigraps" a summary of te
diagnostic and recommendations derived from previous sections#
General trends5 inputs and outputs
*iagnostic:
)e Pilippines3 population as a ig level of ?nominal@ education in comparison
8it te countries in te region# Ho8ever te recent trends ,reduction of government
e(penditure on education over GDP" increasing pupil to teacer ratio in elementary and
secondary" etc0 endanger today3s privileged position of Pilippines in term of te
education of its population#
In fact during /CCC" -../ and -..6 pu%lic enrolment gre8 %y -"<F" -";F and 7"/F
respectively" %ut te total %udget in real terms of te Department of !ducation" in carge
of primary and secondary education" contracted %y -"EF" /"/F and 6"6F respectively#
In per capita terms in -..6 te decline of per capita allocation in real terms 8as CF#
Bfficial sources claim tat te reasons for te 8orsening of te %udget of %asic
education is te continuation of ig population gro8t and te transfer of students
from private scools to pu%lic scools as a conse4uence of te Asian crisis#
!ven 8orse" te operations %udget as fallen to <#<7F ,-..60 from /.F ,/CCE0# )e
education system in Pilippines as al8ays %eing criticiAed for spending a very ig
proportion of te %udget in personal services 8ile te operations %udget 8as very
small# )e reduction in te proportion of e(penditure in %ooks" desks and classes as
%een going on for 4uite a long time# In /CCE te >BDADB ,/CCE0 study on te
educational system in Pilippines argue tat it 8as necessary to increase te proportion
of operational %udge at least to /;F# )e reality is tat" instead of improving" te
proportion of operational %udget for %asic inputs as %een declining even furter#
F(gur" =-,- Pro!or$(on o# o!"ra$(ona/ &ug"$ on $o$a/ D"!E &ug"$
0
2
4
6
8
10
12
1998 1999 2000 2001 2002 2003
Y ear
Source: Congressional 2lanning and +udget *eart/ent= 4ouse of :eresentati-es.
It as %een recogniAed for a long time tat tere is 4uite an important level of
corruption in te purcase of te(t%ooks and te cost of constructions of classrooms# In
fact te &ilipino Cam%ers of Commerce and Industry as so8n tat it is possi%le to
construct a classroom for PP7.."... instead of te PPE.."... tat cost a classroom
procured troug te government#
All te indicators ,ne8 )IMSS data" recent licensiture e(amination passing rates" etc0
so8 tat tere is not improvement in te traditional lo8 4uality of education in
Pilippines" specially in secondary and iger education#
:eco//endations:
# 'everse te recent trends in pu%lic e(penditure on %asic education#
# As 8e so8 previously" te private enrolment in secondary education as decrease
E"<F from /CC=DCE to -..-D.6" altoug te num%er of private ig scools as
increase from -"=67 up to 6"-</# )erefore te gro8t rate of private ig scools in
tis period ,/C"6F0 as %een iger tan te gro8t rate of pu%lic ig scools ,/=F0
even toug te enrolment in te second type of institutions as increase 6-";F# If
students ave %een transfer from private ig scools to pu%lic ig scools for
economic reasons ,Asian crisis0 te voucer system sould %e used 8it more intensity
to avoid create private capacity underutiliAation# During te scool year -../D.- /"7-=
ig scools participated in te voucer system# )is is still only 7<F of te total
private ig scool#
# Increase te payment for te voucers# 1nder te voucer system te government
pays per student PP-";.. 8it a cost of around PP=.. millions# )is is less tan ."=F
te total %udget of te Dep!d# )ere is no dou%t tat voucers are more efficient tan
te construction of ne8 classrooms and te underutiliAation of private ig scools# )e
CPBD ,-..60 calculates tat 8it PP=.. millions used for voucers it 8as possi%le to
construct E;/ classrooms ,cost per classroomQPPE.."...0 for 7-";;. students ,at te
actual rate of pupils per class0# )is is only /<F of te -=;"... %eneficiaries of te
!ducation Service Contracting#
# Impose a rule tat force to increase operational %udget in proportion to personal
%udget 8it a target of /;F in ; years#
!4uity considerations#
*iagnostic:
Incidence analysis so8s tat primary and secondary education are proDpoor#
Ho8ever iger education is clearly regressive#
)e regressive nature of iger education inges in t8o factors5 students from 8ealty
families can attend good ig scools and get access to te %est pu%lic and private
scoolsK and te cost of pu%lic university is t8ice as ig as te cost of private iger
education institutions#
)e lo8 4uality of secondary scools for te poor implies tat teir level of
kno8ledge is lo8 at te end of ig scool and" terefore" cannot access to te good
pu%lic universities# )is means tey ave to go to lo8 4ualityDlo8 fee private
universities if tey 8an to continue teir education#
Due to %udget limitations te num%er of grants for iger education as decreased
,more tan /.F from -../ to -..-0#
:eco//endations.
# Increase te num%er of grants for poor people to study iger education#
# Implement proDpoor systems to admission to te good pu%lic universities ,8ere
re9ections rate range %et8een =. and C.F0# Ho8ever" avoid using income as %asis
for admission ,income sould only %e used for concession of grants" conditional on
admission0# It is more efficient to grant automatic admission to teir preferred
iger education institution to students in te top /.F of teir ig scool class
,ranked %y te ig scools temselves or in function of a national e(am %ut ranked
%y scools0#
# 'evert te trend in te reduction of scolarsips#
'egional issues
In tis report 8e ave empasiAe te issue of regional differences in education inputs"
outputs and outcomes# Poor regions" in particular Mindanao" ave very lo8 levels of
participation in education and ig dropDout rates# In addition regional coort survival is
igly negatively correlated 8it poverty incidence# )e regional dimension of poverty
is very important in educational issues#
Higer education#
)e performance of iger education graduates in te 9o% market is" in general"
disappointing# )ey so8 ig unemployment rates ,iger tan lo8er levels of
education0 and" even tougt teir underemployment rate is lo8" tey 8ork in 9o%s not
ade4uate for teir level of education ,over4ualified0#
)ere are at least to reason for te ig rate of unemployment rate among iger
education graduates5 it could %e voluntary unemployment ,iger education graduates
from 8ealty families can afford to 8ait a long time until tey find a 9o% tey 8ant to
accept0 or it could %e due to lo8 demand for university graduates %ecause of te lo8
average 4uality of teir education# )e ICS of Pilippines so8s tat firms %elieve
tertiary graduates do not ave te necessary skills for te 9o%s tey demand#
It is %y no8 a common place to argue tat te lo8 level of skills and kno8ledge of te
average graduate from iger education as to do 8it te num%er of years of education
prior to reac tat last level# In many countries students accumulate /- years of
education %efore gaining access to te university# In Pilippines tey only need to study
for /. years ,< years of elementary scool and 7 years of ig scool0# &or tis reason
some reports argue tat te first t8o years of te university are used to rise te
kno8ledge of students to te level tey sould ave ad prior to enter in te university#
)e num%er of iger education institutions continues to gro8#
)e proportion of graduates %y disciplines is not ade4uate for te ne8 era of
glo%aliAation#
Given te lo8 enrolment rate of te poor in tertiary education tere sould %e an
increasing amount of scolarsips# Ho8ever" te num%er of %eneficiaries of te CH!D
student financial assistance program 8ent do8n /."-F from -../ ,77"E=<0 to -..-
,7."-C70# )is trend is o%viously 4uite regressive#
:eco//endations.
# !sta%lis a moratorium in te num%er of ne8 iger education institutions# )e ne8
regulation sould impose preDaccreditation to any institution tat 8ants to %ecome a
university# If te institutions do not get at least te minimum level of accreditation it
sould not %e allo8ed to operate#
# !sta%lis a minimum level of 4uality of any institution in te iger education sector#
&or private institutions tere sould %e regulation and periodical accreditation# &or
pu%lic institutions te financing sould cange from te automatic increase to a
selective financing system in function of outputs and outcomes#
# &inancing formulas for allocation of pu%lic funds among pu%lic H!I sould consider
not only enrolment %ut also outcomes# )e formula sould consider unit costs of te
provision of iger education %ut sould also 8eigt eavily outcomes ,performance of
graduates in te la%or market" etc#0# &or tis formulation to 8ork a complete and 8ell
organiAed information system is needed# )e )'AC!' system in place at te CH!D to
find out a%out te 9o% istory of graduates is not an effective source of information since
it is su%9ect to many types of %iases ,selfDselection" etc#0
'ate of return of education
Since graduation from eac level of education ,e(cept elementary0 as a ig return
te ig rate of dropDouts in secondary and university education as a large social cost#
)e large num%er of university graduates unemployed or underemployed imply an
important 8aste or pu%lic resources#
)e poor ave a lo8er cance to get te large return to iger education" conditional
on finding an ade4uate 9o%#
:eco//endations
# >en te unemployment rate is factor in te rate of return of iger education
graduates and ig scool graduates is not so different# Given te lo8 level of
kno8ledge so8ed in international test" te e(pensive pu%lic iger education system
and te return of education of ig scool graduates te allocation of funds sould gro8
faster in secondary education tan in iger education#
REFERENCES
Ace%o" C# ,-...0" )ecnical %ackground paper no / for te P!SS" Statistical Anne(#
ADB ,-..60" Gey Indicators -..65 education for glo%al participation#
Asian Development Bank and )e >orld Bank ,/CCE0" Pilippines education for te -/
st
century5 te /CCE Pilippines education sector study#
Blancard" Blivier" and $a8rence &# GatA" /CC-" L'egional !volutions"L +rookings
2aers on Econo/ic Acti-it.: != Brookings Institution" pp# /D</#
Capman" D# and D# Adams" !ducation in Developing Asia# )e 4uality of education5
dimensions and strategies" ADB and 1niversity of Hong Gong#
Congressional Planning and Budget Committee ,CPBC0" House of 'epresentatives of
Pilippines ,-..60" Sectoral Budget Analysis ,supplement to te Analysis of te
President3s Budget for &I-..60#
Cororatan" ,-..-0" 'esearc and development and tecnology in te Pilippines" PIDS
8orking paper -..-D-6#
Demery" $# ,-...0" Benefit incidence5 a practitioner3s guide" Poverty and social
Development Group" Africa 'egion" )e >orld Bank#
!sguerra" J#" Balisican" A# and *# Confesor ,-...0" ?)e Asian Crisis and te la%or
market5 Pilippines case study"@ mimeo#
Government of Pilippines ,-...0" !ducation for all5 Pilippines Assessment 'eport#
Gulosino" C# ,-..-0" ?!valuating private iger education in te Pilippines5 te case
for coice" e4uity and efficiency"@ Bccasional Paper n# <E" *ational Center for te
Study of PrivatiAation in !ducation" Colum%ia 1niversity#
Hanusek" !# and J# $u4ue ,-../0" !fficiency and e4uity in scools around te 8orld"
mimeo" Stanford 1niversity#
Graft" a# ,-..60" ?Determining te social rates of return to investment in %asic social
services"@ mimeo#
$RpeA" '#" )omas" +# and I# >ang ,/CCE0" ?Addressing te education puAAle5 te
distri%ution of education and economic reform"@ Policy 'esearc >orking Paper
-.6/" )e >orld Bank#
Mauro" Paolo" and Spilim%ergo Antonio" /CCC" ?Ho8 Do te Skilled and 1nskilled
'espond to 'egional Socks: )e Case of Spain"@ )18 Staff 2aers= +ol# 7<" *o# /#
Morada" H# and )# ManAala ,-../0" ?Mismatces in te Pilippines la%or market"@
mimeo" B$!S#
Br%eta" A# ,-..-0" ?!ducation" la%or market and development5 a revie8 of te trends
and issues in te Pilippines for te past -; years"@ PIDS discussion paper -..-D/C#
Presidential Commission on !ducation 'eform ,-...0" 2hiliine Agenda for
Educational :efor/: the 2CE: reort#
)an" !# ,-../0" ?)e political economy of education reform"@ mimeo#
)an" !# ,-..-0" Studies in the access of oor to higher education" Background paper for
te Asian Development Bank#
)an" !# ,-..60" ?Scool fee structure and inflation in Pilippines iger education"@
PIDS -..6D.6#
1*!SCB ,-..-0" )e !&A assessment country report5 Pilippines#
)e >orld Bank ,-../0" &ilipino report cards on proDpoor services#
)e >orld Bank ,-..70" Implementing recent policy recommendations in education5 a
revie8 of progress" mimeo#
T"c%n(ca/ no$" I-
Ma$c%(ng $%" APIS .66. an $%" Oc$o&"r LSF .66.
)e matcing is done on te %asis of five %asic varia%les5 te ouseold code ,notice
you cannot use only tis code since it is repeated in eac regionK for instance tere is
one cnQ/.-/ in eac region0" region" province" %arangany and line num%er ,identifies
te individual line num%er" 8ic is te num%er assign to te individual in te family#
)e varia%les in te $&S are called hcn region prov bgy ln0.
*otice o8ever tat te num%er of o%servations is not e(actly te same5 te $&S as
/C<"7E- o%servations 8ile te APIS -..- as /C."7C=#
)ere are also some inconsistencies related 8it te family siAe# &or instance te first
o%servations of te $&S -..- sorted %y te varia%les a%ove are ,in %old missing in te
APIS -..-05
. list hcn region prov bgy ln0 in 1/100
+----------------------------------+
| hcn region prov bgy ln0 |
|----------------------------------|
1. | 1 1 28 0381 1 |
2. | 1 1 28 0381 2 |
3. | 1 2 9 0011 1 |
4. | 1 3 8 0252 1 |
5. | 1 3 8 0252 2 |
|----------------------------------|
6. | 1 3 8 0252 3 |
7. | 1 3 8 0252 4 |
8. | 1 3 8 0252 5 |
9. | 1 3 8 0252 6 |
10. | 1 4 10 0041 1 |
|----------------------------------|
11. | 1 4 10 0041 2 |
12. | 1 4 10 0041 3 |
13. | 1 5 5 0061 1 |
14. | 1 5 5 0061 2 |
15. | 1 5 5 0061 3 |
|----------------------------------|
16. | 1 5 5 0061 4 |
17. | 1 5 5 0061 5 |
18. | 1 6 4 0111 1 |
19. | 1 6 4 0111 2 |
20. | 1 7 12 0451 1 |
|----------------------------------|
21. | 1 7 12 0451 2 |
22. | 1 7 12 0451 3 |
23. | 1 7 12 0451 4 |
24. | 1 7 12 0451 5 |
25. | 1 7 12 0451 6 |
|----------------------------------|
26. | 1 8 26 0221 1 |
27. | 1 8 26 0221 2 |
28. | 1 8 26 0221 3 |
29. | 1 8 26 0221 4 |
30. | 1 8 26 0221 5 |
|----------------------------------|
31. | 1 8 26 0221 6 |
32. | 1 9 7 0051 1 |
33. | 1 9 7 0051 2 |
34. | 1 9 7 0051 3 |
35. | 1 9 7 0051 4 |
|----------------------------------|
36. | 1 9 7 0051 5 |
37. | 1 10 13 0231 1 |
38. | 1 10 13 0231 2 |
39. | 1 10 13 0231 3 |
40. | 1 10 13 0231 4 |
|----------------------------------|
41. | 1 11 23 0114 1 |
42. | 1 11 23 0114 2 |
43. | 1 11 23 0114 3 |
44. | 1 11 23 0114 4 |
45. | 1 11 23 0114 5 |
|----------------------------------|
46. | 1 11 23 0114 6 |
47. | 1 12 35 0154 1 |
48. | 1 12 35 0154 2 |
49. | 1 12 35 0154 3 |
50. | 1 12 35 0154 4 |
|----------------------------------|
51. | 1 12 35 0154 5 |
52. | 1 12 35 0154 6 |
53. | 1 12 35 0154 7 |
54. | 1 12 35 0154 8 |
55. | 1 13 39 0293 1 |
|----------------------------------|
56. | 1 13 39 0293 2 |
57. | 1 14 1 0251 1 |
58. | 1 15 36 0691 1 |
59. | 1 15 36 0691 2 |
60. | 1 15 36 0691 3 |
|----------------------------------|
61. | 1 15 36 0691 4 |
62. | 1 15 36 0691 5 |
63. | 1 16 2 0151 1 |
64. | 1 16 2 0151 2 |
65. | 1 16 2 0151 3 |
|----------------------------------|
66. | 1 16 2 0151 4 |
67. | 1 16 2 0151 5 |
68. | 1 16 2 0151 6 |
69. | 1 16 2 0151 7 |
70. | 1 16 2 0151 8 |
|----------------------------------|
71. | 1 16 2 0151 9 |
72. | 2 1 28 0381 1 |
73. | 2 1 28 0381 2 |
74. | 2 1 28 0381 3 |
75. | 2 1 28 0381 4 |
|----------------------------------|
76. | 2 1 28 0381 5 |
77. | 2 1 28 0381 6 |
78. | 2 2 9 0011 1 |
79. | 2 2 9 0011 2 |
80. | 2 2 9 0011 3 |
|----------------------------------|
81. | 2 2 9 0011 4 |
82. | 2 3 8 0252 1 |
83. | 2 3 8 0252 2 |
84. | 2 3 8 0252 3 |
85. | 2 3 8 0252 4 |
|----------------------------------|
86. | 2 4 10 0041 1 |
87. | 2 4 10 0041 2 |
88. | 2 4 10 0041 3 |
89. | 2 4 10 0041 4 |
90. | 2 4 10 0041 5 |
|----------------------------------|
91. | 2 4 10 0041 6 |
92. | 2 6 4 0111 1 |
93. | 2 6 4 0111 2 |
94. | 2 6 4 0111 3 |
95. | 2 7 12 0451 1 |
|----------------------------------|
96. | 2 7 12 0451 2 |
97. | 2 7 12 0451 3 |
98. | 2 8 26 0221 1 |
99. | 2 8 26 0221 2 |
100. | 2 8 26 0221 3 |
+----------------------------------+
.
en o! o-!ile
)e same /.. o%servations for te APIS -..- are ,in %old missing in $&S -..-0
. list hcn reg prov bgy lno in 1/100
+---------------------------------------------------------+
| hcn reg prov bgy lno |
|---------------------------------------------------------|
1. | 1 "locos #egion "locos $orte 0381 1 |
3. | 1 %&g&y&n '&lley (&t&nes 0011 1 |
4. | 1 %entr&l )*+on (&t&&n 0252 1 |
5. | 1 %entr&l )*+on (&t&&n 0252 2 |
|---------------------------------------------------------|
6. | 1 %entr&l )*+on (&t&&n 0252 3 |
7. | 1 %entr&l )*+on (&t&&n 0252 4 |
8. | 1 %entr&l )*+on (&t&&n 0252 5 |
9. | 1 ,o*thern -&g&log (&t&ng&s 0041 1 |
10. | 1 ,o*thern -&g&log (&t&ng&s 0041 2 |
|---------------------------------------------------------|
11. | 1 ,o*thern -&g&log (&t&ng&s 0041 3 |
12. | 1 (icol #egion .lb&y 0061 1 |
13. | 1 (icol #egion .lb&y 0061 2 |
14. | 1 (icol #egion .lb&y 0061 3 |
15. | 1 (icol #egion .lb&y 0061 4 |
|---------------------------------------------------------|
16. | 1 (icol #egion .lb&y 0061 5 |
17. | 1 Bicol Region Albay 0061 6 |
20. | 1 /estern 'is&y&s .0l&n 0111 1 |
|---------------------------------------------------------|
21. | 1 /estern 'is&y&s .0l&n 0111 2 |
22. | 1 %entr&l 'is&y&s (ohol 0451 1 |
23. | 1 %entr&l 'is&y&s (ohol 0451 2 |
24. | 1 %entr&l 'is&y&s (ohol 0451 3 |
25. | 1 %entr&l 'is&y&s (ohol 0451 4 |
|---------------------------------------------------------|
26. | 1 %entr&l 'is&y&s (ohol 0451 5 |
27. | 1 %entr&l 'is&y&s (ohol 0451 6 |
28. | 1 Central Visayas Bohol 051 7 |
29. | 1 Central Visayas Bohol 051 8 |
30. | 1 1&stern 'is&y&s 1&stern ,&2&r 0221 1 |
|---------------------------------------------------------|
35. | 1 /estern 3in&n&o (&sil&n 0051 1 |
|---------------------------------------------------------|
36. | 1 /estern 3in&n&o (&sil&n 0051 2 |
37. | 1 /estern 3in&n&o (&sil&n 0051 3 |
38. | 1 /estern 3in&n&o (&sil&n 0051 4 |
39. | 1 /estern 3in&n&o (&sil&n 0051 5 |
40. | 1 $orthern 3in&n&o (*0inon 0231 1 |
|---------------------------------------------------------|
44. | 1 ,o*thern 3in&n&o 4&v&o 0114 1 |
45. | 1 ,o*thern 3in&n&o 4&v&o 0114 2 |
|---------------------------------------------------------|
46. | 1 ,o*thern 3in&n&o 4&v&o 0114 3 |
47. | 1 ,o*thern 3in&n&o 4&v&o 0114 4 |
48. | 1 ,o*thern 3in&n&o 4&v&o 0114 5 |
49. | 1 ,o*thern 3in&n&o 4&v&o 0114 6 |
50. | 1 %entr&l 3in&n&o )&n&o el $orte 0154 1 |
|---------------------------------------------------------|
|---------------------------------------------------------|
58. | 1 $ % # 3&nil& 0293 1 |
59. | 1 $ % # 3&nil& 0293 2 |
60. | 1 ! C R "anila 0293 3 |
|#########################################################|
61. | 1 ! C R "anila 0293 |
62. | 1 ! C R "anila 0293 5 |
63. | 1 ! C R "anila 0293 6 |
6. | 1 ! C R "anila 0293 7 |
65. | 1 ! C R "anila 0293 8 |
|#########################################################|
66. | 1 ! C R "anila 0293 9 |
67. | 1 ! C R "anila 0293 10 |
68. | 1 % . # .br& 0251 1 |
69. | 1 . # 3 3 )&n&o el ,*r 0691 1 |
70. | 1 . # 3 3 )&n&o el ,*r 0691 2 |
|---------------------------------------------------------|
71. | 1 . # 3 3 )&n&o el ,*r 0691 3 |
72. | 1 . # 3 3 )&n&o el ,*r 0691 4 |
73. | 1 %.#.5. .g*s&n el $orte 0151 1 |
74. | 1 %.#.5. .g*s&n el $orte 0151 2 |
75. | 1 %.#.5. .g*s&n el $orte 0151 3 |
|---------------------------------------------------------|
76. | 1 %.#.5. .g*s&n el $orte 0151 4 |
77. | 1 %.#.5. .g*s&n el $orte 0151 5 |
78. | 1 %.#.5. .g*s&n el $orte 0151 6 |
79. | 1 %.#.5. .g*s&n el $orte 0151 7 |
80. | 1 %.#.5. .g*s&n el $orte 0151 8 |
|---------------------------------------------------------|
81. | 1 %.#.5. .g*s&n el $orte 0151 9 |
82. | 1 CARA$A Ag%san &el !orte 0151 10 |
|---------------------------------------------------------|
|---------------------------------------------------------|
91. | 2 %&g&y&n '&lley (&t&nes 0011 1 |
92. | 2 %&g&y&n '&lley (&t&nes 0011 2 |
93. | 2 %&g&y&n '&lley (&t&nes 0011 3 |
94. | 2 %&g&y&n '&lley (&t&nes 0011 4 |
95. | 2 %entr&l )*+on (&t&&n 0252 1 |
|---------------------------------------------------------|
96. | 2 %entr&l )*+on (&t&&n 0252 2 |
97. | 2 %entr&l )*+on (&t&&n 0252 3 |
98. | 2 %entr&l )*+on (&t&&n 0252 4 |
99. | 2 ,o*thern -&g&log (&t&ng&s 0041 1 |
100. | 2 ,o*thern -&g&log (&t&ng&s 0041 2 |
+---------------------------------------------------------+
.
en o! o-!ile
PROPOSALS FOR ADDITIONAL ANALYSIS
/# !ducation and )&P gro8t#
-# Precise formulas for a practical proposal of financing iger education
%ased on o%9ective indicators#
6# Detail incidence analysis on te proDpoor ,or regressive0 nature of pu%lic
e(penditure in education# )e effect of te Asian crisis on tius#
7# 'egional dimension of educational differences#

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EDUCATION, POVERTY AND DEVELOPMENT

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