Economists back free tuition veto

A group of economists on Thursday said they support the position of Duterte's economic managers on the bill granting free tuition fees in state universities and colleges (SUCs).

"It has been reported that his economic managers are recommending a presidential veto of the proposed law. We, the Foundation for Economic Freedom (FEF), support their recommendation," the group said in a statement.

The proposed Universal Access to Quality Tertiary Education Act was submitted by the Congress on July 5 for President Rodrigo Duterte’s signature.

Budget Secretary Benjamin Diokno told the House committee on appropriations that the government cannot afford to shoulder the cost of full tuition subsidy to SUCs.

"FEF supports a presidential veto because we believe the proposed act will cause substantial amount of taxpayers’ money to be spent on measures that are unlikely to result in the achievement of intended objectives," the group said.

Diokno earlier said that the proposal will cost about P100 billion.

"This amount is not pittance, to echo the observations of National Economic Development Authority Director General Ernesto Pernia," the FEF said.

Pernia told the members of the House appropriations committee that the economic managers have submitted a position raising questions on the soundness of the bill.

"These measures are not only of doubtful effectiveness but also arguably anti-poor and inconsistent with the pro-poor orientation of the President’s development agenda," the FEF said.

"First, the free tuition subsidy will benefit predominantly the well-off, as pointed out by the economic managers and PIDS (Philippine Institute of Development Studies) fellows, Dr. Aniceto Orbeta and Dr. Vicente Paqueo. Only a small proportion of the subsidy will benefit the poor, since only a small percentage (12 percent) of them make it to SUCs," it said.

The FEF argued that there was no evidence supporting the idea that free tuition will increase the enrollment rates in SUCs, let alone the higher probability that the children of the poor will be able to enroll.

"Neither is there evidence that making SUCs free will improve the learning achievement of students. It is disconcerting, though, that there is no significant statistical correlation between higher education enrollment probability and ease of access to SUCs, on the whole and among the poor," it said.

"While we support the idea of an income-contingent student loan, it would be highly risky to invest huge amount of taxpayers’ money at this point, when there is no evidence yet that in practice such an idea will work in the Philippines," it added.

The proposed measure should be vetoed as there are better alternative ways of using taxpayers’ money that are more cost-effective and pro-poor.

"On this point, we support the use of available government resources to more adequately finance implementation of the recently approved UNiFAST law," it said.

In 2015, then-President Benigno Aquino III signed into law Republic Act No. 10687, which provides for a comprehensive and Unified Student Financial Assistance System for Tertiary Education.

"This law provides a coherent framework for rationalizing and expanding student financial assistance program based on sound public finance principles and is consistent with President’s inclusive development plan," the FEF said.

"UNiFAST advocates for full financing (tuition, living allowance, and other expenses) for merit scholarships for the bright, grants-in-aid for the poor, and loans for everybody else," it added.

The funds for the proposed free tuition would be better used to finance more worthy alternative interventions to achieve the intended objectives or to support other more promising high priority development programs in other sectors, the FEF said. — Ted Cordero/VDS, GMA News