Business groups have thrown their support to private schools which have been hard-hit by the COVID-19 pandemic and now face a 150-percent increase in income tax rate.
In a recent virtual forum hosted by think tank Stratbase Albert del Rosario Institute, a coordinating council for private schools underscored the need for support from both the government and the private sector.
Citing data from the Department of Education, Joseph Noel Estrada, Managing Director of Coordinating Council of Private Educational Associations (COCOPEA) said more than 900 private schools have recently closed down and 900,000 basic education students failed to enroll.
“A high percentage of private higher education institutions were closing down, while more than 50 percent were suffering a 10-percent to 50-percent decline in enrolment. This trend will likely continue without the economic and policy intervention by the government,” Estrada said.
Estrada said the problem was exacerbated by the recent increase in the income tax rate on proprietary education institutions from 10 percent to 25 percent. He said that instead of implementing the concessionary tax rate of 1 percent under the CREATE [Corporate Recovery and Tax Incentives for Enterprises] Act for the next three years, the BIR insists on implementing the 150-percent increase in income tax rate on these educational institutions.
“This looming problem particularly on the learning crisis calls for the protective power of the State over the right of all citizens to quality and accessible education at all levels. Education indeed should not only continue. For us, quality education must thrive,” Estrada said.
“We have too many empty schools and spaces, while the private schools have too much human resources and facilities. We do not have the enrollment. The problem is sustainability. We hope the government could tap the private education sector to help them deliver the education to the 27 million learners in the country,” Estrada said.
Edgardo Lacson, chairman of the Employers Confederation of the Philippines (ECOP), supported COCOPEA’s call to rescind the new BIR regulations increasing tax on private schools by 150 percent under the CREATE Law and called for the easing of tax regulations for the next three years.
Rizalina Mantaring, chairperson of committee on national issues at the Management Association of the Philippines (MAP) said: “Our educational systems have to be changed so that there’s more STEM [science, technology, engineering and mathematics]. There are more subjects on the skills needed for the future.”
“We need to create an enabling environment by passing laws and by developing the infrastructure that will help move the Philippines towards an increasingly digital future,” Mantaring said.
Foundation for Economic Freedom president Calixto Chikiamco said that with respect to education, “my suggestion for the government is to scrap the pre-college tuition, because state schools are inefficient to spend double to produce one graduate than the private sector.”
“Let the private sector be the ones to educate. Instead of free college tuition for state schools, they should expand the scholarship and let the individual student choose which school that they will go to,” Chikiamco said.
In his keynote address, former Bangko Sentral ng Pilipinas deputy governor for monetary and economics sector Diwa Guinigundo said the government should have the principle that when the private sector could do better or best, provision of public goods such as education, health services and infrastructure should be outsourced.
Stratbase ADRi president Prof. Dindo Manhit said in his statement that a supportive partnership between the public and private sectors will create a domino effect and help in addressing the country’s most urgent socio-economic challenges and in uplifting the lives of millions of Filipinos.
“Without the private sector’s active involvement in national recovery, the Philippines may not be able to quickly overcome the ongoing crisis,” Manhit said.