Solon warns government on $200 M loan for education

Press Release
By Alliance of Volunteer Educators
June 29, 2006

MANILA, Philippines  – Alliance of Volunteer Educators (AVE) Party-list Rep. Eulogio “Amang” R. Magsaysay is pleased about the financial assistance given by the World Bank to the country but is quick to warn the authorities concerned about worsening national debt and possible malversation of funds.

Magsaysay expressed his concern following the approval of the US $200 million loan which will center on improving the ‘quality and accessibility of elementary and secondary education in the Philippines.’

“We are very grateful with this assistance extended to us by World Bank,” the lawmaker said. “We know very well how financially-strained our government is right now that most of our educational services are short budgeted.” He said that the assistance in the form of loan will greatly help the education sector make both ends meet especially since statistics show that inadequacies continue to plague our schools, with more than 10,000 teachers needed for elementary and secondary schools; 6,832 backlog of classrooms on more than a 45:1 pupil to classroom ratio; aside from the shortages in textbooks and other school facilities and materials.

At the same time, he conveyed his concern over the possible setback of the loan. He said that although this will address part of the shortage of budget in education, “we cannot let ourselves fall prey on the vicious cycle of non-stop lending”. As of the moment, the country’s debt has swollen to almost P 4 trillion. For years, the education sector has been struggling with very limited budget even if it has been given the highest budget allocation. Last year, out of the P907.56 billion national budget, only P112 billion or 12% was allocated to Department of Education (DepEd). Out of this amount, 85% went to the salaries of teachers, leaving a mere 15% for capital outlays.

“In fact this loan is only a temporary solution to our problem. What we really need is to come up with a system that will uplift the quality and equity of education – ultimately bringing us back to being one of the most highly educated countries in the world,” the lawmaker stated.

The World Bank made the approval of the said loan after the country manifested an “improving fiscal situation” making it the biggest loan to the country to be approved in 10 years. The loan intends to finance expenditures relevant to education services identified in the Basic Education Sector Reform Agenda (BESRA) such as “strengthened school-based management, improved teaching effectiveness, enhanced quality and equity through standards, assessment and support; and effective resource mobilization.”

The National Program Support for Basic Education Project will be implemented starting this year and is expected to be fully realized in 2011. The country is given a period of 20 years to pay the said loan with a grace period of 8 years. Given the reported healthy condition of the government’s debt service, the solon is hoping that the Philippines will be able to pay the loan and will have a better education situation in the future, at the same time.

“No less than our constitution states that the highest budgetary allocation should be given to education,” the party-list solon stressed. “From what is happening right now, most of our budget is being allocated to debt servicing. But hopefully, with our government able to pay more of our debts, we will be able to pay this loan in time.” He further stated that “if we do not do something about the worsening state of our education system, it is our children who will suffer the consequences in the long run.”

He also said that while the $200 M loan will hopefully uplift the “quality, equity, governance and financing” of basic education, “we must not be complacent and allow this fund to be malversed just like the other funds.” Just recently DepEd filed “graft, plunder and conspiracy” charges against former key officials of the Fund Assistance for Private Education (FAPE) for allegedly committing illegal acts with regards to the use of its funds.