Defunding higher education development

The House of Representatives recently passed, on second reading, a bill to abolish the travel tax paid by departing passengers.

This bill repeals the travel tax imposed under Presidential Decree No. 1183 and related provisions of the Tourism Act of 2009, effectively ending the collection of fixed charges of P1,620 to P2,700 imposed since the martial law period and reiterated in several laws since the 1990s.

The authors of these bills argue that the travel tax is an extra burden on Filipino travelers and conflicts with the government’s policy of making travel easier for its citizens.

Others point out that the Philippines is the only ASEAN country imposing a travel tax and that this martial-law relic should be abolished immediately.

For all intents and purposes, this is a done deal.

The travel tax generates around P8 billion annually – proceeds of which go to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), the Commission on Higher Education (CHED) and the National Commission for Culture and the Arts (NCCA).

As expected, the government agencies that benefit from the travel tax collection objected, as it negatively impacts their programs and projects.

CHED Commissioner Shirley Agrupis said that removing the travel tax would significantly reduce the Higher Education Development Fund (HEDF), which she says supports scholarships, research, institutional development and tourism education programs, benefiting 5.4 million students across 1,906 higher education institutions.

But has the HEDF really provided a boost for the development of higher education?

The need to secure continuing funding for higher education was heavily debated during discussions on the Higher Education Act of 1994 (RA 7722). Higher education has historically been neglected and underfunded by the national government, which prioritized basic education.

Education champions led by senators Edgardo Angara, Leticia Shahani and Kit Tatad championed the concept of the HEDF in the new CHED law.

Section 10 of RA 7722 provides that the HEDF is “hereby established for the strengthening of higher education in the entire country” and that the fund “shall be administered by the Commission.”

The law also provided that, for sound and judicious management, CHED shall appoint a reputable government financial institution as the fund’s portfolio manager.

In the 1990s, the HEDF supported the new mandates of the recently formed CHED, including curriculum development, quality assurance, research and development and scholarships and grants for higher education institutions. Additionally, it funded the construction of the new CHED building on C.P. Garcia Avenue.

The Development Bank of the Philippines managed it, and the Commission had full control over the utilization of the HEDF.

However, some enterprising bureaucrats (who were clearly not education champions) convinced president Gloria Arroyo to sign Executive Order 431 (2005), which required all national government agencies to transfer cash funds to the Bureau of the Treasury.

As a result, CHED lost control over the fund because it now had to request its use through the DBM, and it was subject to “fiscal space” in the National Expenditure Program (NEP).

The DBM also insisted that CHED cannot use the HEDF for infrastructure development.

Since the Aquino administration, CHED has asked the DBM to maximize the use of the HEDF. It has been used to fund newly passed laws to prevent unfunded mandates, grants to support HEIs, additional funding for scholarships and medical school equipment under the Doktor Para sa Bayan law and sports development.

As required by the Tourism Act of 2009, the use of the travel tax component of the HEDF prioritized tourism-related educational programs.

Because its use was restricted, the HEDF soon ballooned to more than P10 billion.

DBM has only allowed CHED to use a small portion of the accumulated funds, close to P1 billion annually over the past decade.

As expected, the HEDF attracted the attention of enterprising politicians, who demanded that the money be used to fund scholarships for their constituents.

Congress badgered CHED to use the HEDF to pay the Tertiary Education Subsidy (TES) claims of enterprising private universities. DBM released close to P3 billion for this purpose, but the COA later questioned the expenditure.

Senators inserted special provisions in the GAA to use the HEDF for tuition reimbursement claims of public universities in 2024 and 2026.

In what universe are all these covered under the “strengthening of higher education in the entire country” provision of RA 7722?

Congress has consistently criticized CHED for failing to use the HEDF, yet it has never enacted legislation to restore the commission’s control over the fund. Similarly, politicians claiming to be “education champions” have never tried to persuade the President to amend EO 431 to exclude HEDF collections.

So, am I happy with the impending abolition of the travel tax and the reduced funding for CHED’s HEDF?

I opposed this proposal when I was CHED chairman.

But seeing that Congress, the DBM and the President never really supported CHED’s power to use the HEDF as provided in RA 7722, the abolition of the travel tax does not make a difference. Higher education will remain underfunded under this administration.

Senators Shahani and Angara must be turning in their graves knowing how the current executive and legislative officials have emasculated CHED and made the modernization of higher education a pipe dream.

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