P-Noy must address classroom shortage

The story is going around that P-Noy got visibly irked and walked out of the room after the current education secretary gave a ridiculously low figure of new classrooms built in the first year of the Aquino administration. That explains why it was rumored the third cabinet member causing P-Noy headaches is the education secretary.

The number the education sec supposedly gave is 7… not 700 or 7000 but 7. That cannot be true. But whether it is 7 or 7000 or even 70,000, the secretary of education still has a serious problem. According to a paper prepared by the Management Association of the Philippines (MAP), the annual need for new classrooms is in the range of 100,000 a year.

Unfortunately, the National Budget traditionally only provides for the construction of 8,000 to 10,000 classrooms a year. The current education secretary, a Catholic religious brother, may be forced to talk to his bishop about supporting the RH bill because the unabated population growth is requiring more and more new classrooms it is almost impossible to keep up.

The annual classroom shortage for the next five years ranges between 94,000 to 124,000 units which requires more than P72 billion to P99 billion a year at the average cost of P800,000 per classroom. The perennial problem of acute classroom shortages will become nightmarish unless we urgently employ non-traditional or “out-of-the box” bold solutions. 

How can this be done? Basically, by tapping and pooling existing (available) public and private sector funds to frontload the construction of some 200,000 new classrooms in the two years 2012 and 2013.  MAP outlined a plan that would enable the P-Noy Administration to achieve what has never been achieved before – 200,000 new classrooms within two years, 2012-2013. The proposal calls for a PPP type program that involves not just the big groups in NCR but local entrepreneurs and local officials as well.

Former Education Secretary Jesli Lapus who drafted the MAP plan pointed out the existence of some P1.9 trillion in SDA accounts lying idle at the BSP. Jesli thinks that “Given acceptable Return on Investments (ROI) and government’s guarantee of payment stream, the private sector welcomes this opportunity and contribution to education.” 

I chanced upon Jesli during the 50th anniversary cocktails of First Philippine Holdings last week so I asked him why he didn’t implement such a scheme during his watch at DepEd. Jesli candidly admitted Ate Glue’s lack of credibility made it impossible to do anything this grand. “No concerted effort was possible in an Administration which was constantly besieged and could therefore not exercise political will on Congress, LGUs and the public.”

Jesli clarified that he tried to implement some of the suggestions in the MAP paper but only in piecemeal ways and with only piecemeal success. He pointed out that none of the recommendations is entirely new but this is the first time that a clear, consolidated and optimistic plan is adapted as an advocacy of the private sector for National action.

Now is the “right time”, Jesli told me, because of the rare and unique conditions prevailing with a very popular President who could exercise political will and secondly, there is this unprecedented excessive liquidity in the financial system. Unless we do something drastic now, Jesli fears that we will just end up with an accumulated classroom shortage that will morph to an impossible crisis situation.

So what is Jesli proposing?

Jesli wants to introduce the “Rent-to-Own” (BLT) and Public-Private-Partnership (PPP) under MOOE in the DepEd budget.  For the same amount of annual expenditure, this will translate to five times the number of classrooms than the usual pure capital outlay budget line. Other countries are using this model to tap into private investible funds, he said.

Then, Jesli wants a more focused use of the Special Education Fund (SEF) from real estate taxes of LGUs. The collection has exceeded P15 billion per year and Jesli said it is not only underutilized but often inappropriately utilized to cover peripheral wants.

The MAP proposal written by Jesli proposes to use half of this SEF (P7.5 billion) as an annual loan amortization amount. The LGUs can frontload the construction of some 50,000 new classrooms from a P40-billion loan total which can be secured from the banks. This is similar to the present LGUs financing using the IRA as collateral and debt service.

Then Jesli wants legislators to commit 30 percent of their “pork barrel” or PDAF amounting to some P7.4 billion per year for the construction of some 9,300 new classrooms.  This initiative alone already approximates DepEd’s entire annual historical capacity.

Funds can be accessed from our international development partners like the World Bank and the Asian Development Bank as well as promoting donations from the private sector, civil society organizations, and non-governmental organizations

Additionally, this massive school building program will also give our economy a much needed boost. At a time when a world economic recession is on the horizon, the proposed MAP program will bring about tremendous economic activity in the domestic economy by both public and private investors.

The construction of 200,000 plus classrooms over two years will mean P190-billion investments which will create some 240,000 jobs not counting the 15x multiplier effects to allied industries to construction activities. This is something that the administration needs, a shot in the arm so to speak, that will more than make up for its initial slow-spending and resultant lower GDP growth this year.

Jesli told me MAP has already sent its paper to Malacanang but he is not sure if the President has seen it. Jesli said he hopes “the President will see the golden opportunity to make this his banner achievement and feat... 200,000 in two years has never been done and probably will be hard to match in the future.”

I think the paper deserves a personal presentation by Jesli to his fellow Tarlaqueño. Hopefully, the fact that Jesli served in the Arroyo cabinet will not be used against him. I have been monitoring DepEd during his watch and he has done more at DepEd with his business background than past secretaries with their PhDs in Education.

Message to Sec Luistro: Paraphrasing the Gospel reading the other Sunday, Remember… not 7 or 77 or 77,000 but 200,000 classrooms in two years!

Hybrid vehicles

Once again, Sen. Ralph Recto has a good point when he suggested that Malacañang certify as urgent pending bills in Congress that would make it possible to have our public utility vehicles less dependent on imported diesel. At a time when hybrid vehicles have become mainstream, government should be able to provide enough incentives for PUVs to shift.

Then again, a previous program to make our buses run on compressed natural gas became a total failure because of the inability of Pilipinas Shell to keep its end of the program --- setting up the refueling logistics. If I remember right, bus operators were unable to amortize their units with the DBP because of Shell’s failure.

We really need to review our tax and import policies in the light of today’s energy situation. During the first energy crisis, the Ministry of Energy caused a ban in the importation of big gas guzzling cars. Today, government should grant tax incentives for car owners to shift to hybrids.

I was able to ride in a Toyata Prius recently and I think we should encourage more people to buy it rather than the gas guzzling SUVs that are mainly used for city driving anyway. But our tax laws make the Toyota Prius prohibitive at around P2.25 million a unit. We should be able to cut the cost in half if the taxes and duties are adjusted.

Another example would be an E-Jeepney. Today it will cost around P625,000 to buy one. We should also try to bring that to less than half a million through a revision in taxes and duties.

Maybe, we can let the anti-social gas guzzlers bear the taxes and duties we will take out from the Prius and the E-Jeepney. Imposing an annual gas guzzler tax is also appropriate. We have to be creative here.

Plastic surgery

It may be bad for macroeconomics but for our own good in these uncertain times, we should all get plastic surgery.

Cut up our credit cards.

Boo Chanco’s e-mail address is [email protected]. He is also on Twitter @boochanco