The free tuition law in state-run universities is one noble deed from both houses of Congress that deserves credit. But it is too early to celebrate the milestone—the free tuition regime cannot just take off, simply because of lack of funding.
President Rodrigo Duterte conceded that while he signed the law granting free tuition in state-run universities, colleges, and technical-vocational schools, Congress failed to identify the source of revenue that would fund the expense.
Duterte’s economic managers understandably opposed the early passage of the law without appropriated funds or identified revenues. Budget Secretary Benjamin Diokno estimates that the free tuition law will cost an additional P100 billion in next year’s budget.
The lack of an identified revenue source has ironically prompted Diokno to warn against an increase in the population of students enrolled in state schools effective by the first quarter of 2018, aware that the government will have a real funding problem once the “mandatory” provisions of the law are carried out.
Congress, in its deliberation of the proposed 2018 budget, may have to realign some of the expenses in the appropriations bill to finance the free tuition law. That is not an easy task. Some departments and line agencies may suffer a cut and be unable to fund their equally important mandate.
Increased borrowings to finance free tuition is also not the preferred funding mode because of the impact on inflation, local interest rates and other macro-economic targets that the 2018 budget has assumed. The only sensible option is to identify new revenue sources such as increased taxes to create a stable fiscal position. Congress, however, may not find the last option appealing because of the 2019 elections.
At any rate, lawmakers must find the way to fund the free tuition law because of the long-term benefits to the nation. The new law is one of the tools that will directly reduce poverty incidence in the Philippines. Much is at stake and lawmakers should take the responsibility to attend to the plight of poor college students.