Saturday, March 27, 2010

Privatization 3: UP, NDCP, other SUCs

State universities being political creation and politically-funded, will never be independent of politics and politicians. And very often, the minds and academic biases of their faculty members and researchers are skewed towards justifying ever bigger government intervention, regulation and taxation of many aspects of our lives.

My article last week, "Privatization 2: State Universities and Colleges (SUCs), attracted a number of counter-arguments in one of my yahoogroups from some friends, especially from fellow UP alumni. The most common arguments are:
(1) might as well privatize MalacaƱang, the police, armed forces, disaster preparedness and everything in government, and
(2) SUCs educate the children of the poor, why deprive the poor of university education?

Liberty-oriented people do not advocate zero government and anarchy. They believe in a "limited (or minimal) government" and there are various definitions of what is a “limited government.” One such definition is one that focuses on “protecting the citizens' right to life, right to private property, right to liberty." Thus, there should be only few and small taxes to finance a limited and lean government.

The judiciary and the police, also the armed forces if there are clear, explicit threats of external aggression, are absolute necessity that government must keep, they cannot be privatized. All the other functions are either secondary or unnecessary functions. Even roads and highways construction and maintenance can be privatized, as seen from the various tollways in the country and abroad.

The problem is that the Philippine state has become lousy even in keeping the police, justice prosecution, and the judiciary, those directly involved in the promulgation of the "rule of law", into really credible institutions. Many people do not write even a single paper advocating the privatization of certain police functions like maintaining peace and order in society. They simply do it. The guys who protect our buildings, our schools and universities, our shops, malls, parking lots and churches, are not government policemen or spies. They are private security guards.

Below are the major arguments for UP privatization as a first step towards privatizing all other state universities and colleges (SUCs).

One, remove the hypocrisy of double standard. One policy of fiscal subsidy for some university students, and one policy of fiscal constraint for the others. The former includes those who get taxpayers subsidy of up to 80 to 90 percent of their school fees while the latter receive zero subsidy from the state, and still this latter group are generally able to manage. The "rule of law" says that the law should apply to all and exempt no one. So it does not appear good that two contradictory policies apply to tertiary students in this country.

Two, it is not true that UP attracts the poor and needy in Philippine society. In the first place, the poor and needy do not reach college. They drop out before they reach or finish high school. Secondly, the last time I observed, it would appear that the parents of UP students on average, are richer than the parents of students of UE, FEU, STI, AMA, NU, Adamson, Mapua, Perpetual, etc. But UP students get taxpayers subsidy while students of those private universities receive zero subsidy.

Recently, there was a big student unrest at the Polytechnic University of the Philippines (PUP). The school administration wanted to raise tuition fees from the current Php12/unit up to Php200/unit for some courses. The Php12/unit has been stuck for many years now. It would appear that the price of one hamburger or one bottle of beer in a restaurant is equivalent to, or higher than, the cost of one subject for four months in PUP. And the PUP student militants and their supporters elsewhere think this is correct, and the militants threw out and destroyed hundreds of chairs and tables in full public view and in front of many tv cameras, because they wanted more modern chairs and tables without paying extra for such additional costs.

Three, this statement is wrong now: “UP's reason for being is to gather the brightest of the youth and train them to run government.”

Some 102 years ago when UP was created by the Americans in 1908, that was a good reason and was worth supporting with taxpayers' money. There were also very few private universities then, and perhaps there were no other state Us. Now with more than a thousand private universities which have little or zero experience in relying on taxpayers’ money for their operation, the choice of the Philippine state and its local government units to run the various bureaucracies has expanded widely.

Besides, UP and other SUCs are also training students who have zero ambition of joining government, or have zero ambition of staying in the country shortly after graduation. And it is a human right violation to force these people to work in government, or force them not to go abroad. The injustice to taxpayers who do not even have children, or have children who went to private universities and receive zero subsidy is amplified.

If we privatize UP and all other SUCs, no exemption, we can then privatize all government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs), no exemption. The proceeds and revenues from large-scale privatization should be used to retire the huge public debt (more than Php4 trillion) and/or reduce and abolish certain taxes and fees. Low and few taxes are certainly public service too.

On another note,  the Philippine Military Academy (PMA), under the DND, not CHED, is the second most expensive SUC in terms of student per capita spending, P500,000/student/ year ++. It should be privatized, or at least the subsidy should be drastically reduced, portions of the huge campus can be privatized and the revenue from it can be used for the additional costs of PMA students.

Another SUC, the National Defense College of the Philippines (NDCP), also under the DND, should be privatized too. Its graduate students have a per capita subsidy of about P1 million/student/ year ++. Students there include some Congressmen/women, Mayors, business executives, people who do not need subsidy. 


More comments in facebook when I posted the earlier article in my wall. Among these comments:

1. There are indeed plenty of poor students in UP, children of ordinary parents.
2. Even for student loan program, when graduates default on their loans, taxpayers will again take the tab.
3. Tax-funded scholarships will attract abuses too.

I admit that there was some exagerration in my earlier statement that "no poor students in UP as the poor do not reach college in the first place." My main argument is that all SUCs should be privatized, and government can help the poor by giving them scholarships, and the poor but intelligent students can choose which university will attract and serve them better. If UP becomes a private university someday, after 102 yrs being a beggar to Malacanang, DBM, House of Reps (HOR) and the Senate, year after year, then it can charge full cost of education to the rich students who are more than happy to do so as their parents can afford it, so long as the quality of education will remain high.

Education is first and foremost, personal and parental responsibility; "government responsibility" in education is a far second. Parents can choose the kind of education for their kids (language school, science and math school, arts and culture school, religious school, applied science and technical school, etc.), from elementary to tertiary. But taking away elem. and secondary education as "government responsibility" is too messy, we have to focus on tertiary education.

As I argued in my paper, if the state can be lousy in doing its work in its real and core function -- to protect the citizens' right to life, right to priv. property, and right to liberty -- how can we expect the state to be efficient in doing other functions which are better left to the private sector?

A friend posted this quote from former US President Reagan as a comment,

"In America we created at the local level and administered at the local level for many years the greatest public school system in the world. Now through something called federal aid to education, we have something called federal interference, and education has been the loser. Quality has declined as federal intervention has increased." - Ronald Reagan

Another friend suggested an alternative to tax-funded scholarship program, the "Scholarship Fund" set up by the schools where anyone can donate to and gain tax deductions.

The latter is a good idea. Personally, I'd like to see government to have zero involvement in tertiary education, in exchange for drastic tax cuts somewhere, like income tax. Scholarship would be a good "compromise", with preconditions like scholars must keep an average grade of 85% (or 1.75 UP grading system) in each semester.

Whenever public funds are made available to some people, there will always be certain groups who will abuse it.

Another suggestion is to have multiple scholarships with different grade requirements. There are some companies, foundations and civic groups that currently offer scholarships every year to some students in private universities.

1 comment:

Anonymous said...

I believe there is nothing wrong with privatizing some university, as long as there is something good that comes out of it. But I also believe there should be some minimal government regulation on education, like tuition hikes. This is check and balance. But then again, how can the government do an effective check and balance when it can barely stand on its own two feet. Recognizing the symptom is one thing, but curing the disease is another.