Ex-CHEd Chair Licuanan says Cha-cha efforts are unconscionable waste

MANILA, Philippines — All resources to be spent on Charter change (Cha-cha) are unconscionable waste, said former chairperson of the Commission on Higher Education (CHED) Dr. Patricia Licuanan on Tuesday.

Speaking at the Senate’s hearing on Resolution of Both Houses No. 6, Licuanan bucked proposals to ease foreign ownership of educational institutions in the Philippines via Cha-cha.

“As a citizen who loves her country and worries about its future, I share the dismay of many over all this fuss about Cha-cha at a time when the country has so many serious problems. I’m not convinced that amending the Constitution is the solution to our economic woes,” said Licuanan.

Licuanan said foreign direct investors that have pledged to come into the Philippines did not make Cha-cha a condition for their entry, adding that those who opted not to enter didn’t name the “restrictive provisions” of the 1987 Constitution as a factor.

“Let me just say that I believe that the time and resources being spent and to be spent on Cha-cha is an unconscionable waste. Focusing on Article 14 on educational institutions, I assume the intention of adding the word “basic” to education at the start of the section is to apply the amendments only on higher education institutions. My general view as an educator is that this distinction is unnecessary,” she emphasized.

Instead of pushing for Cha-cha, Licuanan saw the need to develop partnerships with foreign universities being carried out by some higher education institutions. She specifically mentioned that CHED’s internalization policy encourages and supports such.

“But don’t we like to consider what our neighbors like Singapore and Malaysia have done? My view is that the circumstances are different. The Yale National University of Singapore project stands out for consideration. Singapore wanted to develop the creativity perceived to be missing in their otherwise well-developed and high performing education system,” she added.

Benefits and disadvantages

Citing her experiences as the Senior Consultant of the Arizona State University and former President of RMIT University, Dr. Gael Mcdonald presented the advantages and disadvantages of easing foreign ownerships in educational institutions.

“So the first one is clearly the benefits around knowledge because you can provide very diverse educational programs that might not be available locally. That obviously gives opportunities of building local capacity in both students and staff,” said Mcdonald.

Apart from this, she said foreign ownership in local institutions would ensure quality education.

“If you are selective in who you bring in and these organizations have got rankings, they ‘ve got established research cultures – you can actually bring in a lot of knowledge and expertise in regard to quality framework,” she said.

The third advantage is internalization — which according to Mcdonald is clearly an initiative within the Philippines at the moment.

“Another advantage is the economic impact. When you establish a new university, you establish jobs, you attract students, you contribute to the local economy, you pay taxes, and you can also encourage innovation and entrepreneurship,” she explained.

But Mcdonald emphasized that allowing such a policy also has disadvantages. For one, she said countries who allow foreign ownership in local education institutions often get “brain drained.”

“Students who go overseas don’t necessarily come back so that is a genuine concern with talents going abroad,” she said.

Apart from this, she mentioned that another potential concern is that with foreign ownership, a university may end up working under two regulatory environments.

The third and last on her list was the concern of cultural dominance.

“On a continuum, do you look at building local capacity and enhancing existing organizations [or] do you go to the other extent opening up, quite generously, for foreign entities to come in, or do you sit in the middle and perhaps selectively pursue organizations of quality that have past experience in entering to a foreign market and actually have assets which could be of value to the country?” she asked.

Promoting internalization

Meanwhile,  for their part, the Second Congressional Commission on Education (EDCOM 2) underlined that amending the 1987 Constitution to allow foreign ownership of higher education institutions is only the first step to promote internationalization in the Philippine education system.

In the same hearing, EDCOM 2 Executive Director Dr. Karol Mark Yee presented a comparative study of foreign ownership policies of educational institutions in ASEAN, and considerations that the government must take into account.

“Based on our research, within ASEAN, only the Philippines has foreign ownership, establishment, and enrollment restrictions stipulated in the Constitution, whereas other countries only indicate this via legislation,” said Yee.

Yee said Singapore and Malaysia, which both allowed foreign ownership, rolled out government incentives to encourage the establishment of foreign education institutions.

“In Malaysia, international non-profit schools enjoy 100% income tax exemption, whereas private schools, although less, still enjoy income tax relief at 70%. In Vietnam, international schools have corporate income tax exemption for 4 years and 50% reduction of tax payable for the next 5 years. International schools are also exempted from non-agricultural land use tax. Additionally, a VAT exemption exists for selected goods used for education (e.g. textbooks). These are similar to Myanmar and Cambodia, which also give tax breaks and incentives to encourage the establishment of international schools,” Yee explained.

EDCOM 2 Advisory Council Member, Dr. Cynthia Bautista,  on the other hand, stressed the need to guard against opening up to “lower-tier higher education institutions.”

“We have to guard against that, which will further erode the reputation of the Philippines…Because our reputation is not as good as we imagined [compared to] the 1970s…Our reputation for diploma mills is very high”, she emphasized.

“While safeguards may be put in place through legislation and executive orders, we also have to be mindful of our implementation track record: a culture tolerant of circumventions of regulations, lack of capacity of regulatory bodies to regulate substandard higher education institutions,” she noted.