by Joel Pablo Salud
Raising a little over PhP50 billion for the Free Higher Education Law is no easy feat.
By the time the Universal Access to Quality Tertiary Education Act (RA 10931) was signed into law by Pres. Rodrigo Duterte on Aug. 3, 2017, with the completion of its implementing rules and regulations (IRR) sometime December of the same year, the national budget had already been signed and sealed.
The problem fell squarely on the shoulders of the Commission on Appropriations of the House of Representatives, which is currently chaired by Rep. Karlo Alexei Bendigo Nograles of the 1st congressional district of Davao City.
This young and feisty third-termer not only passed the 2017 and 2018 national budgets in record time, but has also ensured funding for the Free Higher Education Law.
With education as one of his primary advocacies, Rep. Nograles stands also as the brainchild behind Oplan Kaalam Scholarship Program, one of the largest educational assistance programs in the country.
It is apparent from his list of accomplishments that Rep. Nograles has the expertise to appropriate funding for some of this administration’s most difficult projects.
For one, Nograles was behind the required funding for salary increases for soldiers and policemen. He was also actively involved in the raising of the needed resources for farmers, particularly free irrigation. This led to the establishment of the Coconut Farmers and Industry Development Trust Fund.
From seeking to benefit farmers to strengthening labor and youth empowerment programs to revitalizing nationwide feeding outreaches, Nograles made sure that the funding for these projects are secure and ready for disbursement.
All because he believes that for progress to be real, it must begin in the grassroots level.
Which is also why the Free Higher Education Law stands today as a landmark law: According to Nograles, the project itself assures us that the presence of an educated workforce will sooner build us a formidable tax base than without it.
Q&A Rep. Karlo Nograles
PHILIPPINES GRAPHIC: You right now sit as chair of the Committee on Appropriations. Some people have this idea that dividing the budget for government agencies is easy, something close to fixing the budget for an ordinary household—some goes to onions, others, to tomatoes. I guess some Filipinos would like to believe that everything is simple, if not simplistic. This is not the case in Congress, I’m sure. So, how does appropriating the budget play out?
REP. KARLO ALEXEI BENDIGO NOGRALES: It’s very challenging. First and foremost, each and every representative has his or her own idea on how to divide the ‘pie,’ so to speak. You have the total amount of the national government budget and each representative wants a piece of the pie for his or her district or sector. It all begins at the budget deliberation. There we have the different department secretaries, heads of agencies, trying to defend their budget. They also ask for augmentation.
In defending and asking for augmentation, do they lobby for it? Ask other heads of departments to speak up on their behalf, maybe even send you pizza or something?
No (laughs). They make a case in their favor, of course; some ask other representatives to speak on their behalf. Or they go to the committee directly for some help.
How does the budget process work?
We, particularly the Department of Budget and Management (DBM), begin budget call as early as January. A ‘budget call’ is when the DBM asks the different departments to submit their proposed budget for the following fiscal year. Right now we’re working on a two-tier program.
Tier 1 is for existing projects, those currently being implemented by the particular department. Tier 2 is for projects and programs they would like to implement for the following fiscal year. They’re given from January to March to submit their proposals. DBM thereafter takes into consideration all of these proposals from the different departments, then looks at the current fiscal standing of the country. Then the Budget and Coordinating Council, which consists of the DBM and Dept. of Finance, because it’s the one supposed to collect our taxes, and the Bangko Sentral ng Pilipinas who do the forecasts and economic assumptions, take all these into account—inflation, exchange rate to the dollar, economic growth, and all that—and try to determine how much the next proposed total budget would be for the following year.
Once we’ve reached that level, for instance, in 2018, let’s assume that their forecast is we would be able to finance a total national budget of P4-trillion—that’s not far-fetched because in 2017, we worked on a P3.7-trillion budget, so it’s not far-fetched that we would be working on a budget of P4 trillion—then they would look at the proposed budget requirement of each department, including utilization rate of current projects as well as utilization rates of these departments and agencies. Once they’ve reached a consensus, they will take into account their proposal for the Tier 1 and Tier 2 programs. This is where they will come up with a formula. Then, finally, they’ll be able to finalize their proposed budget.
Obviously, it doesn’t end here.
No, it doesn’t end here. That’s just the proposed budget coming from the Executive. The council after which will now send it to us. This is where we come in. Often they send it to us on the day of the State of the Nation Address of the President or a few weeks after.
We’re now tasked to take a look at that budget proposal and schedule a committee hearing. This hearing is where each department and agency is called to defend their both their budget proposals and any proposed augmentations.
Can the budget ceiling be stretched higher or lessened in due course of the hearing?
Let me clarify. As far as the total budget is concerned, we cannot go higher than that. We’ll work with whatever the Executive proposes. If it’s a P4-trillion budget, then it’s a P4-trillion budget. Depending on how we allocate it, that’s really up for Congress to decide.
So, this is where the hard work begins.
Yes. Let’s take for example the Free Higher Education Law. This would give free tuition, free miscellaneous fees for all students of all state universities and colleges. That was something that wasn’t included in the proposed budget. When the President signed that into law, the proposed national budget had been already submitted to Congress. Meaning, there was nothing contained in the proposed budget to subsidize the Free Higher Education Law. So, it fell squarely on my committee’s shoulders the responsibility of raising the funds for that law.
The budget wasn’t a small amount. We needed to raise P40-billion for it. From here, we then studied the real absorptive capacity of each department. Meaning, these departments may ask the Executive for a huge budget while not having the capacity to spend all of it 100%. So we look at past history, their current history, spending patterns and utilization rate. What particular projects and programs that they easily implement and fully utilize, and others that had not been implemented. If there’s part of their proposed budget that would not be utilized, then I would rather put it to good use under the free Higher Education Law.
So, you cut and sliced from different sources to raise the P40 billion?
This is where the ‘power of the purse’ of Congress comes in. It’s literally up to Congress to finalize how much budget we will hand over to the Executive. The proposed budget is exactly that—a proposed budget. It’s up to us—Congress—to figure a way to allocate the national budget. And it makes sense because as representatives of the people and our different districts, we know exactly how it is on the ground. It could actually go either way—we can cut the budget of a certain district because we feel it doesn’t have the capacity to implement all its projects, or add to a district’s finances because we feel the projects are good for the welfare of the people. That’s as far as the House is concerned. We get first crack of the budget because we are the voice of our districts, sectors and constituencies.
After budget passes on third reading, we then hand it over to the Senate. The Senate, by and large, has a different perspective on how to allocate the budget. Their elected at large, so, ideally, their perspective is national in scope. If we look at things from a ‘micro’ perspective, they view things from a ‘macro’ perspective.
After looking at what we’ve agreed upon in Congress, the Senate now looks at what we’ve done and make their own adjustments, if they feel there’s a need to. Well, it happens 100% of the time. So they give their version of the budget based on their national perspective. To iron out any differences, we go to a bicameral conference. We put together a bicameral conference committee consisting of some members of the Lower House and the Senate. After that, we debate on the basis of our ‘micro’ and ‘macro’ perspectives.
This tedious process takes one year, from the budget call of the DBM to their submission of the budget proposal to the Lower House, then our proposal to the Senate, then the bicam, until the final proposal is submitted to the President. The President will then have to affix his signature on the final proposed budget. Again, it doesn’t end here. The President has veto powers. If the President feels some items need adjusting, he’s free to do so.
The process is tedious, but it works. We believe this is the only way we can allocate the resources needed for the people.
Referring to the Higher Education Law, how is it right now? Any updates?
The full implementation of the law will begin in June or August, March and April, the beginning of the academic year. So, the fiscal year and academic year don’t really see eye to eye. So when we allocated the budget for the Higher Education Law, that was intended in the year 2018-2019 school year. Meaning, the full implementation of the law begins in June 2018.
And I am happy to announce that on March 26, I have been told, the CHED will be releasing its implementing rules and regulations that will serve as a guide in the implementation of this landmark legislation. See, no other administration, under no President did we ever provide free higher education to our people. If you take a look at other jurisdictions and other countries as well, the Philippines is one of a very few number of countries that provide access to free higher education. This means a college degree as well as a technical vocational course.
What many people are unaware of is that the funding for the free higher education can also be accessed by students in private universities and colleges. Under this law, there is what we call a tertiary education subsidy (TES), a financial subsidy for students who wish to study in private colleges and universities. The limitation, however, is this: the TES can only be given to poor but deserving students. The subsidy reserved for the state universities and colleges, however, makes no such distinction.
So if you’re a student of SUCs, you’re entitled to receive the higher education subsidy only up to ‘plus one year’ of the required number of years for your course. If it’s a four-year course, you can avail till up to an extra allowance of one year—a fifth year. Over and above the ‘plus one year,’ I think you’re already opening the system to abuse.
Is it safe to assume that since the Higher Education Law will be implemented this coming June 2018 that an eighth or a fourth of the budget, maybe even half, is already well-nigh in place?
The full budget of P40 billion is intact and already with CHED. It’s up to CHED now to start downloading it to the SUCs, but again, the download will come after enrolment. That’s the only time the CHED will be able to get the list of enrolees from first year to fifth year. Then they will get a billing from the SUCs, saying this is how many students we have.
Down the line, what’s the worst case scenario you’re looking at? In the first year of implementing this? I’m looking at a massive influx of students who might want to benefit from this law. Also, a budget as huge as P40 billion, some people might take undue advantage of it.
One worst case scenario if that the P40 billion may not be enough. Of course, we based the figure from numerous computations. But even if the P40 billion is not enough, that will happen on the second semester. We’ll get the real score as to how many students we’re dealing with after the first semester. Even assuming that P40 billion is not enough, that P1 billion to P2 billion may be needed, or P5 billion more, we’ll surely rectify that in the 2019 budget.
My next concern, would be baka konti lang ang mag-avail. The flipside. The worst thing that would happen is that we would remit the amount back to the Treasury.
The other concern is how fast CHED could download the money to the SUCs and private schools. That takes a lot of logistics, paperwork, a lot of follow-up work. If the downloading is slow, the SUCs may not have the funds necessary to immediately run the school. Obviously, the SUCs and private schools rely a lot on tuition and miscellaneous fees to run the school. The question is: how fast can CHED download the money. It might affect their operations. The other is the implementation of the TES. As I have said earlier, the implementing rules and regulation will be launched on March 26, presumably it is only on March 26 that they would be able to finalize the process that would allow poor and deserving students to avail of the TES. Since March 26 is Holy Week, then all this would kick off after the Holy Week. By that, I mean the students can apply for TES beginning April, which is a very narrow window till June arrives. How fast can CHED process all of the applications? That’s a question that needs to be answered.
How does the higher education law fit a federal set-up, if at all we’ll one day adopt a federal system of government?
Right now, the federal system is still up for debate. I think if the time comes when discussions on the federal system in ongoing, I’m sure we will also discuss where higher education stands in the middle of all that. Will it be devolved to the separate states, or will it still be in the hands of the central federal government? Whatever the decision would be, I believe the support for free higher education will remain as a policy.
Graduates are the drivers of growth of an economy. It makes total sense to continue and fulfil that policy. The more students we have with a college degree, we’ll have more professionals and educated workforce. The really good thing about this law is that many of our SUCs are in the provinces, which is one reason for this law. We want to create drivers of growth in each and every province. If we’re able to produce more graduates in our respective SUCs in the provinces, then each and every graduate would become our future entrepreneurs, future doctors, teachers, businessmen, and drive further growth in the countryside.
As congressman, I know you have other things in mind, your district for one, but in advocating free higher education, would you have considered some of the serious problems that our educational system has suffered under all these years, like badly written textbooks? I’ve seen those textbooks myself where facts are twisted and grammar is atrocious?
There are a lot of aspects in education that needs improvements. The good thing about the budget process is that a yearly process. Passing the budget is not the end of it. Congress also has oversight functions. Part of that is to see to it that the funding we’ve set aside goes to the proper implementation of the project. Dismal performance or issues about spending—including bad textbooks or even school buildings—Congress can immediately call for a congressional inquiry. Each budget hearing, they’re required to explain to us the issues surrounding certain concerns. If we see something we don’t like, we expose it, try to rectify it, or we slash the budget altogether as a means of ensuring that the money goes to some other project that will be implemented properly.
The worst thing that can happen is handing over money for projects that are ill-conceived or worse, badly-implemented. Another serious concern is handing over money that would only end up in the pockets of certain people. Yes, corruption. Checks and balances are still in place, and it’s a never ending process and cycle. We take a look at Commission on Audit (COA) reports, and we really use the audited reports of COA. That gives us the basis to ask our questions. It’s a really useful tool for us to determine what the issues are.
Do you think the Higher Education Law would continue or extend further than this administration?
I think it will be a mistake to discontinue this policy, especially if it has been implemented well. The first year is crucial. It would lay the groundwork for future administrations to follow. We may have missteps in the first year, but these are part of birth pangs. The goal is to improve and perfect the system. The only concern as to why it would be discontinued is the availability of the budget. See, the trend is that every year the budget grows by 10%. I think the growth of the national budget outpaces the growth and increase in the budget required for this policy. It’s an investment that pays off in the end. The more educated your workforce is, the more jobs they get. By this I mean they become taxpayers. The investment goes back to government. At the end of the day, what we’re doing is building a tax base. A strong tax base gives us fiscal space to fund this policy and other projects each year.