HomeIAMURE International Journal of Business and Managementvol. 3 no. 1 (2012)

Returns to Philippine Public Higher Education: Private, Fiscal, and Social Perspectives

Fred Avestruz



Higher education in the Philippines today appears to have reached a stage of investment saturation. Enrollment expansion in the public sector has led to relative contraction in the private sector. Budget pressures in government funding have created low quality of education in many public institutions while fierce price competition among many private institutions has led to deterioration of quality of education. This paper addresses the concerns of public institutions in their efforts to obtain sufficient funding from the government and to assess the direction of their efforts so that they do not compete with private institutions but become leaders in their education communities. Methodologies for estimating private, fiscal, and social returns are developed. These methodologies are based on cost-benefit analysis tailored to conditions where public institutions operate. Results from these estimates could guide public institutions in directing their resources to those activities that generate the greatest social returns. Private and fiscal rates of return estimates, when performed on specific disciplines, will assist institutions in assessing their current role in the market and the direction towards which they should move. Policy makers may also find these methodologies useful in their decision on creation, expansion, or rationalization of public institutions.