Right-sizing gov’t force could help fund free tuition program

Businessworld, Aug 07, 2017

THE FINANCE chief said that additional revenues from the proposed rightsizing bill may aid in creating fiscal space in funding the free tuition law.

Duterte signs law for free tuition in state colleges

As the Development Budget Coordination Committee (DBCC) is identifying possible sources of funding for what economic managers have tagged as an “unaffordable” free tuition program in all state universities and colleges (SUCs), Finance Secretary Carlos G. Dominguez III said rationalizing functions of government agencies may raise money to make the program fiscally sustainable.

Asked whether the newly approved program would be a fiscal risk for the government, Mr. Dominguez said in an interview with the press last Friday at the Finance department headquarters in Manila: “Any expenditure without the corresponding identifiable revenue will put a squeeze on the budget deficit at the percentage allowed. In our case 3% is actually a very hard ceiling.”

“Anything you spend more is going to be, it has to come out from something, either you raise more money or you cut other expenses. Rightsizing is good, maybe this rightsizing will pay for something like this. Who knows,” Mr. Dominguez added.

Republic Act No. (RA) 10931 or the Universal Access to Quality Tertiary Education Act was signed into law by President Rodrigo R. Duterte last Friday, just hours before the end of the 30-day period that would have seen the bill lapse into law.

Budget Secretary Benjamin E. Diokno earlier said that the law, which would be implemented in the first semester of school year 2018-2019, would cost about P100 billion a year, but qualified that it would be difficult to appropriate a budget for the program for the long term given the SUCs’ rapid expansion.

Funds saved from the implementation of the rightsizing act is projected to amount to P24.276 billion in the first year of implementation, which is about half of the expected P54.629-billion total cost from retirement and separation incentives shelled out.

Mr. Diokno, who heads the committee in crafting the law’s implementing rules and regulations (IRR) said that it may disallow SUCs’ “use of income” — funds raised from tuition and other school charges that are used for research, and other projects of the school — and may ask Congress a supplemental budget if it fails to find space in the proposed P3.767-trillion 2018 budget.

This is only one of the populist measures passed by the administration that warrants a fiscal expansion, such as public infrastructure, and the military and uniformed personnel pay hike. Currently pending for a bicameral conference prior to the President’s signature is the promised free irrigation for farmers. — Elijah Joseph C. Tubayan