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Contract Number AID-492 -0-11-00057 Intem Project No. US-073111-01 July 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by International Technology Management Corporation (INTEM) Philippine Education Sector Assessment Project Prepared for States Agency for International Development, Philippines Prepared by Dr. Rizal Buendia, Dr. Julieta Gregorio, Ms. Regina A. Molera, Dr. Benjamina G. Flor, Mr. Benjamin Vergel de Dios, Mr. Joel Wayne Ganibe, Mr. Arman G. Balonkita, Mr. Carlone Dawang and Mr. Nestor Mirandilla International Technology Management Corporation (INTEM) U-407 AB Sandoval Building Shaw Boulevard, corner Oranbo Drive Pasig City, Metro Manila, Philippines The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Acknowledgments This study was conducted and the paper authored by Dr. Rizal Buendia, Dr. Julieta Gregorio, Regina A. Molera, Dr. Benjamina G. Flor, Benjamin Vergel de Dios, Joel Wayne Ganibe, Arman G. Balonkita, Carlone B. Dawang and Nestor Mirandilla. The document was edited by Dr. Bernadette V. Gonzales and Dr. Eduardo Bolanos. The work was funded by USAID. The work could not have been accomplished without the collaboration and dedicated efforts of Robert Burch, Mirshariff Tillah, Aivan Leo Amit, Maritoni Oanes, and Shannon Stone of USAID/Philippines. Equally important were the contributions of numerous officials of Philippine government agencies who were generous with their time, candid and open in their discussions, and amicable and hospitable in their interactions with the research team. Colleagues from several development agencies and from nongovernmental organizations (NGOs) and education projects based in Manila also provided vital help and information to the team. Table of Contents List of Acronyms iii List of Tables vi List of Figures vi Executive Summary viii 1.0 Introduction and Context 1 1.1 Research Methodology 1 1.2 Context 2 1.3 Overview 3 2.0 Assessment by Sub-sector 11 2.1 Early Childhood Care and Development 11 2.2 Basic Education 20 2.3 Alternative Learning System 28 2.4 Technical and Vocational Education and Skills Development 33 2.5 Higher Education 40 3.0 Conclusion and Recommendation for USAID Support 50 Diagram 1. Updated Philippine Education System (K+12) 53 Glossary of Terms 54 List of Informants 57 Endnotes 61 References 64 List of Acronyms ACE Adult Community Educator ADB Asian Development Bank ADMs Alternative Delivery Modes A&E Accreditation and Equivalency AFLEP Adolescent Friendly Literacy Enhancement Program ALIVE Arabic Language and Islamic Values Education ALS Alternative Learning System ASEAN Association of Southeast Asian Nations ARH Adolescent Reproductive Health ARMM Autonomous Region of in Muslim Mindanao ADMs Alternative Delivery Modes AusAID Australian Agency for International Development AY Academic Year BALS Bureau of Alternative Learning System BEAM Basic Education Assistance for Mindanao BEIS Basic Education Information System BESRA Basic Education Sector Reform Agenda BLP Basic Literacy Program BP-OSA Balik Paaralan Para Sa Out-of-School Adult Program CAR Cordillera Autonomous Administrative Region CCT Conditional Cash Transfer CHED Commission on Higher Education CICT Commission on Information and Communications Technology CFS Child- Friendly School CFSS Child- Friendly School System CPC-6 Sixth Country Program for Children CSIs CHED Supervised Institutions CSR Cohort Survival Rate CV Compliance Verification CVS Compliance Verification System CWC Council for the Welfare of Children DALSC District Alternative Learning System Coordinator DBM Department of Budget and Management DCCs Day Care Centers DCWs Day Care Workers DDU Depressed, Deprived & Underserved DECS Department of Education, Culture and Sports DepED Department of Education DILG Department of the Interior and Local Government DORP Dropout Reduction Program DOH Department of Health DOLE Department of Labor and Employment DSWD Department of Social Welfare and Development ECCD Early Childhood Care and Development ECD Early Child Development ECE Early Childhood Education EDCOM Congressional Commission on Education EFA Education For All e-IMPACT Enhanced Instructional Management by Parents, Community, and Teachers EO Executive Order ESM English, Science, Mathematics EQUALLS Education Quality and Access for Learning and Livelihood Skills FLEMMS Functional Literacy, Education and Mass Media Survey FY Fiscal Year GAA General Appropriations Act GATSPE Government Assistance to Students and Teachers in Private Education GDP Gross Domestic Product GER Gross Enrollment Ratio GOCCs Government-Owned and Controlled Corporations GOP Government of the Philippines GPI Gender Parity Index HE Higher Education HEIs Higher Education Institutions ICT Information and Communications Technology ILO International Labor Organization IMs Instructional Managers INSET In-Service Training Program for Teachers IP Indigenous People IRA Internal Revenue Allotments KRTs Key Reform Thrusts LCEs Local Chief Executives LEP Ladderized Education Program LGU Local Government Unit LMIR Labor Market Intelligence Report LSBs Local School Boards LUCs Local Universities and Colleges JBIC Japanese Bank for International Cooperation MDG Millennium Development Goal MDG2 Millennium Development Goal Number 2 MISOSA Modified In-School Off-School Approach MLSD Middle-level Skills Development MOA Memorandum of Agreement MOOE Maintenance and Other Operating Expenses MTBMLE Mother Tongue-Based-Multilingual Education NAC National Advisory Committee NAT National Achievement Test NCBTS National Competency-based Teacher Standards NCCE National Coordinating Council on Education NCEE National College Entrance Examination NCR National Capital Region NHERA National Higher Education Research Agenda NECCDCC National Early Childhood Care and Development Coordinating Council NEDA National Economic and Development Authority NEDCC National Economic Development Council for Children NELF National Early Learning Framework NER Net Enrollment Rate NGOs Non- Government Organizations NNC National Nutrition Council NSO National Statistics Office NSEC National Secondary Education Curriculum ODA Overseas Official Development Assistance OECF Overseas Economic Cooperation Fund OGS Other Government Schools OIC Officer- In-Charge OPAE Office of the Presidential Assistant for Education OSY Out-of-School Youth ULAP Union of Local Authorities in the Philippines PAGCOR Philippine Amusement and Gaming Corporation PBE Professional Board Examinations PCER Philippine Commission on Educational Reform PELC Philippine Elementary Learning Competencies PLFS Philippine Labor Force Survey PMO Project Management Office PESS Philippine Education Sector Study PESA Philippine Education Sector Assessment PNQF Philippine National Qualifications Framework PRC Professional Regulation Commission PTCAs Parent- Teacher--Community Associations RA Republic Act RAMSE Regional Assessment in Mathematics, Science, and in English RBEC Restructured Basic Education Curriculum RBI Radio-Based Instruction SAT Student Achievement Test SARDO Students at Risk of Dropping Out SBM School-based Management SFI School First Initiative SEF Special Education Fund SUCs State Universities and Colleges SY School Year STRIVE Strengthening the Implementation of Basic Education in the Visayas SEDIP Secondary Education Development and Improvement Project SOTAR State-of-the-Art Review of the Day Care Services Philippines SReEA School Readiness Assessment TEEP Third Elementary Education Project TEDP Teacher Education and Development Program TEIs Teacher Education Institutions TESDA Technical Education and Skills Development Authority TIMMS Third International Mathematics and Science Study TPDF Teacher Performance Development Framework TPDP Teacher Performance and Development Framework TVET Technical Vocational Education and Training UN United Nations UNDP United Nations Development Program UNICEF United Nations Children’s Fund UNESCO United Nations Educational, Scientific and Cultural Organization USAID United States Agency for International Development WB World Bank List of Tables Part III. Assessment by Sub-sector Basic Education Table 1 Disparity Across Regions in the Net Enrolment Rate Table 2 Elementary Education School-leaver (drop-out) Rate (percent), SY 2008-2009 (public and private) Table 3 Dropouts in Elementary and Secondary Schools Table 4 Achievement Rate (MPS) SY 2009-2010 (NETRC) Technical and Vocational Education and Skills Development Table 5 TVET Institutions Table 6 TVET Employment Rates Table 7 TESDA Budget, 2005-2009 Higher Education Table 8 Higher Education Indicators by Academic Year: 2000-2010 List of Figures Part I. Introduction and Context Figure 1 Public Expenditure on Education as Percent of GDP Figure 2 Overseas Development Assistance - Loans Figure 3 Overseas Development Assistance - Grants Figure 4 Elementary Education NER and GER (%) SY 2002-2003 to 2009-2010 Figure 5 Dropout Pyramid Figure 6 Total Dropout -Elementary Education Figure 7 Total Dropout- Secondary Education Figure 8 Comparative Unemployment Rates in Selected Asian Economies: 2006-2010 Part II. Assessment by Sub-sector Early Childhood Care and Development Education Figure 9 ECE in the Formal School System, 2002-2009 Figure 10 Dropout Rate by Grade Level, SY 2009-2010 Figure 11 Day-Care Center Coverage, 1998-2010 Figure 12 ECE Regional Performance Basic Education Figure 13 Net Enrolment Rate: Elementary Level, 2002 – 2010 Figure 14 Net Enrolment Rate: Secondary Level, 2002-2010 Figure 15 Cohort Survival Rate: Elementary Level, 2002-2010 Figure 16 Cohort Survival Rate: Secondary Level, 2002-2010 Figure 17 Gender Disparity, Elementary Level SY 2009-2010 Figure 18 Gender Disparity, Secondary Level SY 2009-2010 Figure 19 Percentage of Education Budget Distribution by Sectors (2011) Technical and Vocational Education and Skills Development Figure 20 TVET Enrolment and Graduates, 1995-2009 Figure 21 Certification Rate, 1995-2009 Figure 22 TVET Funding by Source Figure 23 Philippine National Qualifications Framework Higher Education Figure 24 Proportion of Higher Educational Institutions Figure 25 Higher Education Graduates of Top Five Discipline Group and Academic Year Figure 26 Proportion of HEI Faculty and Teaching Staff by Academic Qualification Figure 27 Performance (% Passing) in Licensure Examination Figure 28 Number of Schools Classified as Centers of Development and Centers of Excellence by Type and Region Philippine Education Sector Assessment 2011 EXECUTIVE SUMMARY 1. The Philippine Education Sector Assessment (PESA) project is an attempt to capture in a single sector-wide assessment the state of Philippine education. The assessment examines the conditions of all education sub-sectors (early childhood education, basic education, vocational-technical education, non-formal education/alternative learning system, and higher/tertiary education) and identifies key challenges, issues, and concerns confronting the government. 2. It also appraises in broad strokes the sector’s state of governance, management, and financing after the educational system was tri-focalized in 1994. In line with the bilateral assistance agreement between the US and Philippine government, the study serves to guide the United States Agency for International Development (USAID) in its new education sector priority-setting process. 3. The study used multiple research methodologies such as semi-structured questionnaires for interviews with key informants (a total of 85 were interviewed from national and local governments, donor agencies, non-governmental organizations/civil society organizations, and program beneficiaries), focus group discussions, observations, review of policies and strategic plans (medium-term development plans, publications of international agencies like UNDP, UNICEF, WB, ADB, etc.), documentary analysis (regulatory documents, implementing rules and regulations, programs/projects, operational plans), content analysis of manuscripts and official records (assessment reports, data and statistics from official sources like the National Statistics Office [NSO], Basic Education Information System [BEIS], publications from credible Internet sources, and review of relevant literature. I. GENERAL FINDINGS 1. Tri-focalization of education has resulted in weak coordination among the three education agencies. The tri-focalization of education in 1994 was borne out of the recommendation of the Commission on Education (EDCOM) report in 1991. Tri- focalization was aimed at improving policy making, planning, and programming at the subsector level as each of the three lead agencies was given the principal responsibility for its “undiluted and undivided attention” on its respective areas of concern. This resulted in the establishment of the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA) in 1994, and allowed the Department of Education and Sports (DECS), later renamed as the Department of Education in 2001, to concentrate on basic education (primary and secondary education). The National Coordinating Council for Education was also created, but has not met since its creation. Thus, there is no mechanism to ensure that policies, programs, and projects of each subsector are dovetailed to national development plans 2. There was an attempt to assess, plan, and monitor the entire education sector through the creation of the Presidential Task Force for Education (PTFE) in 2007. It was ineffective in harmonizing policies, programs, and reform initiatives of the three co-equal education agencies given the ad-hoc nature of its creation. The PTFE was established by a mere Executive Order (EO 632) and it officially ceased to exist in 2010 following the change in administrations. 3. Despite tri-focalization, there is overlap of mandates among the three agencies. For instance, DepEd does not only administer, regulate, and supervise elementary and secondary schools but also continues to operate some 300 specialized technical- vocational schools even as it is engaged in non-formal education. Meanwhile, CHED maintains its academic and administrative supervision over public secondary and post- secondary institutions (usually agricultural or industrial arts and trades schools), and laboratory schools of higher education institutions, classified by CHED under the “other government schools” (OGS) category. On the other hand, TESDA, an agency which prepares and provides students with technical and craft skills, has not been engaged in the delivery of technical-vocational education in high schools (which is primarily managed by the DepEd). 4. Investments in the education sector are low compared to other countries in Southeast Asia. Although the Philippine government has been allocating the largest share of the national budget to education, the country continues to have the lowest percentage in terms of allocation for education as a ratio to the Gross Domestic Product (GDP) among five selected ASEAN countries. Still the country maintained a slow upward trend over the five-year period (2004 to 2008) while other countries showed a declining trend (except for Vietnam which only had 2008 data). It is noted that basic education in the Philippines received an unprecedented 18% jump in budget allocations for 2010. 5. The quality of basic education has deteriorated. The country ranks among the poorest performers in East Asia and the rest of the world in terms of quality standards. In the 2003 Trends in International Mathematics and Science Study (TIMSS) results for the fourth graders, the Philippines ranked 23rd among 25 countries in both mathematics and science; for the 8th graders (equivalent to second year high school), the Philippines ranked 34th of 38 countries. In the 2008 TIMSS Advanced Mathematics category, the Philippines placed last among 10 participating countries in mathematics overall. The 2010 National Achievement Test results showed a mean percentage score (MPS) of 68% for the elementary levels, and for high school, the MPS was only around 45%. 6. The national trend shows that leaving or dropping out of school is more prevalent during the entry years. In SY 2009-10, the (simple) dropout rate was 1.56% in Grade 1 and 7.68% in first year high school. There were more boys who dropped out from school (1.80%) than girls (1.29%). There are many factors that can be attributed to the high dropout rate in Grade 1. Children who have not had ECE experience prior to entering Grade 1 are not ready - socially, psychologically, and cognitively. Their inability to adjust to their transition from home to a structured learning environment and formal schooling can lead to their dropping out of school. In addition, children with poor health and nutrition are unable to focus and concentrate on their learning processes. A school readiness assessment for Grade 1 entrants revealed that only 42% were ready for school (SY 2009-2010). 7. Poverty remains a major reason for dropping out. Basic education, while free, is still characterized by numerous costs to learners, parents, and local communities. Families bear the full cost of school meals, (in spite of DepEd’s “School Feeding Program”) transportation, shoes, and school supplies. This places education beyond the reach of most of the disadvantaged sector, with many students dropping out mainly due to poverty. The times they are out of school are spent in helping their families augment the family income. 43% of children aged 0-14 belong to poor households. The number of college and university drop outs is comparable to those in the elementary and secondary levels. Students opt to drop out for a year or two then enroll again after some time. 8. Out-of-school children and youth remains a big issue. The 2008 Functional Literacy, Education, and Mass Media Survey (FLEMMS) reveals that of the 39 million population aged 6-24, 32 percent or 12.3 million are not attending school. Of this number, 24 percent say that the prohibitive cost of education deters them from going to school, 22 percent are either working or looking for work, and 20 percent lack interest in going to school. Data on Philippine Labor Force Survey (PLFS) show that boys make up more than half of the total number of working children, around 63 percent in 2009. Generally, six out of 10 working children did not attend school. As of April 2010, there are 2.4 million working children in the country (PLFS, 2010). 9. Illiteracy remains a big challenge. The FLEMMS shows that 6.9% of the population aged 10-64 cannot read and write (around 6 million people). The number of illiterates and those who have not graduated elementary and high school is estimated at 45 million, or 40% of the total population of 92 million in 2008. 10. Piecemeal reforms have yet to be institutionalized. The piecemeal reform interventions of donor and development partners do not provide an avenue for concerted structural and programmatic changes that would result in large-scale, integrated, and sustained outcomes. Numerous pilot initiatives have already been introduced and tested in the areas of student assessment, alternative service delivery, pedagogy, inclusiveness and community participation in the subsector of basic education. Major pilot reform initiatives such as TEEP, SEDIP, BEAM, EQUALLS-Project, STRIVE, and CFSS have demonstrated significant successes changes in different areas, such as competency standards for teachers; advancing the development of student assessment; enhancing school-based management; championing the quality of Muslim education nationwide, and changing the philosophies and mindsets of those within their reach (Philippine Human Development Report, 2008-09:65-100). However, the mainstreaming or up- scaling of these successful pilot-initiatives is a big challenge and there is no convergence of strategies yet as to their national application. 11. Assistance from international development agencies made on basic education was mostly loans rather than grants. Foreign assistance fund for the improvement of the basic education sub-sector in the past 10 years amounted to around PhP45.9 billion, 77% of which came from loans. The remaining 23% were grants to the recipient divisions located in the 20 most impoverished provinces. Basic education (elementary and secondary levels) received almost 82% of the total loans. The World Bank (WB) and WB/Japan Bank for International Cooperation (JBIC) provided approximately 52% of total loans for the past decade. For grants, the Australian Agency for International Development (AusAid) accounted for almost half (46%) of the total grants while USAID accounted for 16% of the total. Most of the projects, both loans and grants, were focused on improving access to and quality of basic education. II. SUB-SECTOR KEY FINDINGS EARLY CHILDHOOD DEVELOPMENT 12. Early childhood education (ECE) enrolment in the formal system has been low for the past years. In SY 2009-2010, (a) only 19.98% of 3-4-year olds were in 50,172 day- care centers; (b) the gross enrolment ratio (GER) in ECE for 5-year-old children was at 22.18%; and (c) 66.17% of 6-year-old children entering Grade 1 had ECE experience. A school readiness assessment for Grade 1 entrants revealed that only 42% were ready for school. 13. Lowest performing regions. Based on the combined data on attendance in day-care centers, gross enrolment in ECE, and Grade 1 entrants with ECE experience, the lowest performing regions were all in Mindanao: the Autonomous Region in Muslim Mindanao (ARMM), the Zamboanga Peninsula (Region IX), and the CARAGA Region (Region XIII). The highest and better performing regions were Western Visayas (Region VI), Central Visayas (Region VII), and Central Luzon (Region III). 14. DepEd is not ready to meet the resource requirements for universal preschool education. While the DepEd budget for pre-primary education increased from P1.9B in 2010 to PhP2.3B in 2011, this is insufficient to make kindergarten truly universal as there are about 2.5 million 6-year-old children who need to be accommodated. Shortages in classrooms and teachers have to be addressed. There are 29,615 preschool teachers nationwide and only 2,299 with permanent status. Funds for the more than 10,000 teachers that will be tapped through the service contracting scheme will have to be made available. BASIC EDUCATION 15. There is a downward trend in cohort survival rates. The downward trend in key education indicators at the elementary and secondary levels in the past 10 years makes it unlikely for the Philippines to achieve the Millennium Development Goal in 2015 (Philippines 2010 MDG Report). While cohort survival rate at the elementary level was on an upward trend from 69.50% in SY 2002, it dropped to 64.66% in SY2009-2010. On regional performance, ARMM has the lowest cohort survival rate. 16. Access remains a problem. The country’s difficulty in achieving universal primary education is due mainly to the lack of access and the inequitable distribution of schools. Between 2005-2010, the number of elementary schools increased by 2,651 bringing the total to 38,168 public elementary schools and 7,017 secondary schools throughout the country. However, these are still not enough. The additional schools constructed were mostly in regions with high poverty incidence. For example, the ARMM had the highest number of additional schools, a region where 69.3% of children below 15 years old live in poverty. In addition, the ARMM suffers from a very high classroom-to-pupil ratio (1:53) compared to Regions I and II which have better ratios exceeding even the ideal 1:35 ratio, with 1:31 and 1:29 ratios respectively. Next to ARMM, the NCR is also faced with a high classroom-pupil ratio of 1:49. It has to resort to classes with double or even triple shifts, in order to accommodate the large number of students. 17. There are other factors that contribute to lack of access. There are pockets where classroom shortages persist due to continued increase in enrolment, poor targeting of resources, classroom damage due to calamities, and disparities in resources/funding among schools in different areas. Other factors are due to geographic reasons such as distance and remoteness of barangays (villages), mountainous terrain, or scattered islands. Addressing disparities in classroom constructions was impeded by RA 7880 or the “Fair and Equitable Allocation of the DECS Budget for Capital Outlay”. ALTERNATIVE LEARNING SYSTEM (NON-FORMAL EDUCATION) 18. ALS coverage is limited due to budget constraints. Since ALS started certification in 1999, only 1,682,326 learners have been reached. With only 1,981 mobile teachers to address the needs of 48,000 barangays in the Philippines (or an average of about one teacher for 24 barangays), it seems easy to see the gaps between supply and demand. Only 1% of DepEd’s budget goes to the Bureau of Alternative Learning Systems. 19. The passing rate in the accreditation and equivalency (A&E) test is comparable to the promotion rate of formal basic education. From 2000-2010, a total of 1,682,326 learners were enrolled in ALS, of which 77% completed the programs. In the same time frame, a total of 635,987 (65,196 elementary and 570,881 in secondary) took the Accreditation and Equivalency Exam. The number of passers for elementary was 15,190 (22%) and 134,380 for secondary (26%). 20. ALS suffers from a perception of being inferior to the formal system. Despite its possible key role in enabling the Philippines to attain MDG 2 by 2015 through a more flexible and potentially innovative delivery system leveraging the now available information and communications technologies, it suffers from a perception of being inferior to its formal counterpart. This perception is common among all stakeholders, even among DepEd personnel and the learners themselves. ALS is seen as the alternative to basic education for out-of-school youth, illiterate adults, and the poorest of the poor. This view, however, is generally held within the education sector of any country or any culture: that non-formal sector is seen as a poor substitute for formal schooling, in spite of the fact that it provides an option for the marginalized sectors. 21. The current organizational structure does not cover informal education although this function is legislated by virtue of EO 356. The existing divisions of BALS primarily address non-formal educational concerns. The current organization is focused on accreditation and equivalency and has difficulty in providing access to educational opportunities with more creative and innovative delivery schemes TECHNICAL-VOCATIONAL EDUCATION AND TRAINING 22. Growth and development of TVET is contingent on how it is perceived by society and the manner that it is managed. TVET’s growth is still limited due to society’s poor perception of it. There is a notion that TVET is for those who cannot enter university; that it is limited to technical-vocational trade areas, appropriate for males; and a terminal option with limited upward mobility both in education and in the work place. TVET’s development is also determined by the way the sub-sector is managed. TVET suffers, too, when the entire education system is poorly coordinated. 23. TVET’s success hinges on its partnership with industry. TVET’s success depends on the involvement of the private sector, employers or industry associations. The latest impact evaluation study (2008) revealed a 55% employment rate for the sub-sector’s graduates. However, results from BPAP-TWSP shows that training, coupled by coordination with the private sector, results in higher employment rates of the graduates - 65.6% (TESDA, July 2010, p.49). 24. People’s expectations from the TVET sub-sector remain the same: more training opportunities and better, stable jobs after that. The first expectation is within TESDA’s control. Current enrolment stands at 1.9 million but can still grow considering that TVET can and should attract those who stopped schooling after high school; those who were not able to finish higher education; and the unemployed as well as the employed wishing to upgrade their skills competencies. The second expectation is beyond TESDA’s control and rests solely in the hands of the employers. However, TESDA can increase employability by ensuring that training programs address industry requirements as well provide employment facilitation services to TVET graduates, such as organizing job fairs and internships. 25. TVET needs to encourage innovations. Donors are expected to support the “inclusive growth” development goal of the new government. It aims to reduce poverty by giving people sustainable productive employment. TVET becomes a necessary contributor to this process because unemployed and newcomers to the labor market will need skills. Four areas will be prioritized – agriculture, health, ICT and tourism – as they have the potential to hire most the number of people. However, new things or ways must be explored. There is a need to encourage innovation in the TVET sub-sector. Using financial incentives, stakeholders can raise innovative proposals addressing the following criteria: 1) must link TVET graduates to employment; 2) promotes partnerships among stakeholders; 3) within the priority areas/industries. HIGHER/TERTIARY EDUCATION 26. Higher Education Institutions (HEIs) are not generating innovative research. The Philippine higher education system has deteriorated over the years. The programs offered are less responsive to the emerging knowledge-based economy but more aligned with the demand of overseas employment especially in the health care services, i.e., nurses, caregivers, pharmacists, and other health care workers and professionals. Ten years after CHED launched the National Higher Education Research Agenda (NHERA), an evaluation made in 2008 revealed that an increase in research studies published in international journals were concentrated among a small number of leading universities. It was also found out that these HEIs are only in six out of the 16 geographic regions, and the total number of HEIs involved in producing all the international publications represents only 4.27% of the 2060 HEIs that now operate in the Philippines. Moreover, CHED’s 2010 record shows that, overall, private HEIs have dominated the Centers of Development (CODs) and Centers of Excellence (COEs), constituting 62.5% of the total 232. In terms of geographic distribution, the NCR maintains the concentration of CODs and COEs. The figures reveal the skewed distribution of CODs and COEs with the NCR as sole center of academic excellence in the country. This contributed to the influx of students in Metro Manila to gain better higher education and, consequently, left other regions of the country to HEIs which have less capability to educate students at the tertiary level. 27. Shortage of qualified and competent academics and teaching staff. The increase in the number of HEIs in the country does not mean that there has been a considerable increase in the number of qualified and competent academics and teaching staff. In 2010, only 10% of faculty members of higher education institutions have doctoral degrees, and only 36% have some graduate qualification (i.e., Master’s degree or equivalent specialized training). Hence, more than half (54%) of all those handling higher education courses only have Bachelor’s degrees. In private HEIs, the faculty profile is dismal: only 8% have doctoral degrees compared to 13% in public HEIs and 37% have graduate degrees in private as against 34% in public institutions. 28. Poor performance in licensure examinations. One key measurement in determining the quality is the performance of students in the professional board examinations (PBE) conducted by the Professional Regulation Commission (PRC). Data show that performance of graduates in the different licensure and board examinations has been declining in the last ten years. The overall passing rates are quite low (around 36% on the average). Private non-sectarian institutions show the poorest results in the professional board examinations. While some “elite” institutions have consistent passing rates of over 90%, close to 300 HEIs have zero passing rates for some disciplines. However, in the most recent available study of CHED (2008), it found that there was a big drop in passing rates even among the top three universities (Ateneo de Manila University, De La Salle University, University of the Philippines) in the country. 29. Rise of local universities and colleges (LUCs). There has been a considerable rise of LUCs across the country; a 121% increase in nine (9) years, or an average of six LUCs established every year. The quality of education in these LUCs is very low. Based on the monitoring conducted by CHED in 2010, majority of the programs being offered by the LUCs do not have CHED’s permit or recognition. Only 31 out of the 89 LUCs have permit from CHED to offer degree programs. Out of the 89 LUCs, 58 have not complied with or are deficient in the requirements set by CHED. In terms of professional examinations, although majority of the LUCs with CHED’s subscribed courses have attained passing marks above the national passing rate, these marks are not even above 50%. This means that more than half of LUC’s graduates who take the professional board examinations fail. This poses a problem not only to LUCs and other public HEIs but also to private HEIs. 30. Graduates of higher education lack basic skills. The 2009 World Bank Philippines Skills Report reveals that university graduates have serious gaps in foundational skills, such as problem-solving, critical thinking, initiative, and creativity. To a lesser extent, there are also gaps in job-specific technical skills. III. CHALLENGES AND OPPORTUNITIES 31. K+12 challenge. The country is confronted with the K+12 challenge. It is aimed at enhancing the quality of basic education as a matter of urgent policy action by decongesting and enhancing the current curriculum. Basic education will be undergoing a major transformation under the present administration’s 10-point agenda to “fix basic education.” The K+12 program is the centerpiece of this transformation that will basically expand basic education from 10 to 12 years, with kindergarten now mandatory prior to entry in Grade 1. It aims to universalize kindergarten, and is expected to substantially increase the gross enrolment ratio (GER) in early childhood education (ECE). 32. In this regard, the education system needs to have sufficient classrooms ready at the opening of school year 2011-2012 to pave the way for the universalization of kindergarten. DepEd plans to pass on K+12 smoothly into the next administration in 2016 when the first batch of senior students enroll in senior high or Grades 11 to 12. Through this program, DepEd will have to overhaul the curriculum and solve the shortages of teachers, classrooms, textbooks, and other problems. While the government is convinced that this is a necessary and a long-overdue step, notwithstanding its obstacles mainly in the financing of education, some quarters believe otherwise. Hence, there is a need for a continuous monitoring and evaluation of the program as it progresses and casts the net as wide as possible in consulting key sectors as it is the biggest education reform that will be undertaken. 33. Limiting effect of technical-vocational education and training. It should be no surprise that in a country where post-elementary education is dominated by the private sector, training for work overseas has become big business. With an unemployment rate of 7.4% in 2011, the promise of high-paying jobs overseas for skilled labor with minimum levels of education, the high cost of education at the tertiary level, and difficulty in gaining productive and suitable jobs among university/college graduates, Filipinos have less incentive to pursue higher education. However, as the world moves away from industrial/factory-based to knowledge-based economy, the country has to align its human resources and capital towards the production and development of highly- skilled knowledge engineers and knowledge managers who are capable of producing and distributing knowledge and information and creating jobs rather than manual and skilled labor filling up limited jobs in industries, factories, and construction sites. Communication is increasingly being seen as fundamental to knowledge flows. Changes in technology are making educated and skilled labour more valuable, and unskilled labour less so. Early Childhood Development 34. Coverage is limited. Achieving 100% coverage for Grade 1 entrants with some forms of organized ECE experience requires huge investments. The present number of ECE venues and physical facilities can accommodate only half of the more than 7.5 million 3- 5-year-old children who need to have preschool education. In addition, day-care workers and teachers have to be hired, trained, and equipped with the appropriate teaching guides, manuals, and materials. Only 0.1% of the education sector budget or around P1.8 billion is invested annually in ECE. 35. Improving access to marginalized children. Marginalized children, especially those living in poor households or in far-flung communities and those from indigenous populations, including Muslim children, need more focused interventions and equal opportunities. The Day Care Service Program, both center-based and home-based, can be supported as this is most viable and accessible to 3-4-year-old children in the communities. The remaining 9,051 barangays without day-care centers can be prioritized in the provision of access; home-based ECCD, as an alternative delivery mode and not infrastructure driven, can be supported by equipping the service providers with adequate skills and competence. Basic Education 36. BESRA challenge. The MDG2 places great premium on the national implementation of the Basic Education Sector Reform Agenda (BESRA 2005-2011) as the key to achieving universal access to primary education by 2015. The potential of BESRA in addressing the challenges in basic education primarily relies on the institutionalization of the six key reform thrusts in all the 197 divisions in the 17 regional units of DepED. At present, various DepEd technical working groups are actively engaged in the national implementation, monitoring, and evaluation of the KRTs. 37. Continuity of School-Based Management (SBM) and Teacher Education and Development (TED). SBM decentralizes the responsibility and accountability of basic education to internal and external stakeholders in three major systems, namely: school accountability, quality management, and governance structure. Teacher Education and Development operationalizes competency-based systems for continuous professional development inclusive of standards, hiring, deployment, performance, promotion, and continuous training. It is imperative that these programs are patronized and sustained by key leaders to be fully realized. Both are key elements of BESRA. 38. Supporting Quality Assurance and Accountability and Learning Support (QAALS). The QAALS, together with SBM, sums up the quality management system on quality planning, assurance, and control. The learning support systems include work on: - National Achievement Framework to improve the operation of the National Achievement Test - the Mother Tongue-Based Multilingual Education Program that will change the mediums or languages of instruction from the present bilingual system (Filipino and English) to a trilingual system – mother tongue, Filipino, and English; - the Alternative Delivery Modes for large classes, students at risk of dropping out and students in underserved depressed areas aim to mitigate the drop-out problem. Alternative Learning System 39. ALS needs are very basic. These include the provision of physical facilities for BALS for visibility, recognition, and identity (branding) and capacity building for Instructional Designers who are currently not adequately trained and lack the resources to produce high-quality instructional materials. Recruiting and training of instructional designers and development of pedagogical materials and interactive instructional tools remain a challenge to encourage adult learners to study and increase local demand and subscription to ALS services. Technical-Vocational Education and Training 40. TESDA needs institutional strengthening. TESDA needs to oversee all the private providers of TVET training and regulate the quality of offerings for the 1.9 million enrolled in these institutions. But this enrollment can still grow considering that TVET can and should attract those who stopped schooling after high school; those who were not able to finish higher education; the unemployed as well as employed wishing to upgrade their skills competencies. It needs support to develop the Philippine National Qualifications Framework, which will make transitions between higher education and TVET smoother. TESDA can also increase employability by ensuring that training programs address industry requirements as well as provide facilitation services to TVET graduates such as organizing job fairs and internships. This requires a strong institutional mechanism in partnership with industry. Higher Education 41. Modernizing HEIs The main priorities for restructuring and modernizing higher education for this programming period are: i) Development and implementation of the national qualifications system and quality assurance in higher education; ii) Improvement of university management; and, iii) Improvement of correlation with the labor market and knowledge-based society through better study programs. 42. Therefore, the support and assistance for developing qualifications and tools for quality assurance, evaluation, and accreditation (e.g. methodologies, procedures, standards, benchmarks), studies and surveys envisaged at system level will require a complementation of support from policy makers as well as political and education leaders for their effective transposition at higher education institutions level (e.g. development of internal standards, methodologies, and procedures for quality assurance and management; adaptation of study programs to the National Qualification Framework in higher education, including curriculum development with respect to it, etc.). The actions funded under this area will also aim to expand learning opportunities (e.g., encouraging open distance learning, mechanisms for increasing access to higher education for vulnerable groups, improved library and scientific documentation tools and access to it) and to increase interaction of universities with business community and research. IV. RECOMMENDATION FOR USAID SUPPORT 43. Contribute and support in the strategic reform program of the Philippine educational system through policy research and development. The reason the EDCOM-created National Coordinating Council for Education (NCCE) never got off the ground was because by making CHED, DepEd, and TESDA equal partners in education, the NCCE failed to take into account the hierarchical nature of Philippine government entities. The tri-focalization of education which seemed like a good idea at the time of EDCOM may have outlived its usefulness. There is a need to conduct a comprehensive assessment on the benefits and shortcomings brought about by the trifocalization of education in 1994. The Office of the Presidential Assistant for Education (OPAE) created under EO 632 that was tasked to coordinate the work of DepEd, TESDA, and CHED was short lived given the nature and character of its creation. 44. Support in upgrading human resources and capital by enhancing the knowledge distribution power of the economy through student scholarship and faculty development programs. Essentially, public research laboratories and institutes of higher education carry out key functions in the knowledge-based economy, including knowledge production, management, transmission, and transfer. However, HEIs fail to produce graduates with: i) adequate skills; and, ii) suitable degrees that complement to national development objectives because of historical and persistent market failures such as the well-known obsession for diplomas. 45. The country’s science system also faces the challenge of reconciling its traditional functions of producing new knowledge through basic research and educating new generations of scientists and engineers with its newer role of collaborating with industry in the transfer of knowledge and technology. Research institutes and academia are de- linked or have weak linkages with key industrial partners for the purposes of research, innovations, and finance. Scholarships and faculty development programs are limited and those which are available are less inclined towards research and development thrust of the country. Given this, there is a need to provide long-term scholarships, allocation of soft loans, and provision of other forms of incentives and financial assistance to HEI students that will ensure high quality education and technical expertise to deserving students. There is a need to produce more computer scientists, engineers, mathematicians, geographers, chemists and physicists, among others. 46. Sustained program in building capacities of leaders. The most important in the education reform agenda is leadership - political leaders as well as our educational leaders - who must confront the educational problems. Education stakeholders recognize the need for improved sector-wide planning to address key deficiencies across the education sector. 47. Programmatic assistance to education sub-sectors. - There is a need to strengthen the early childhood education as the foundation of life learning system of children. - Because the needs are many, basic education support can be in any of the areas, ranging from infrastructure, classroom furniture, professional development, and any of BESRA’s KRTs. - Support to the Alternative Learning System requires enhancement as it addresses the basic learning needs of the various marginalized learners who have been deprived of access to basic education. - Technical and vocational education has to improve its efficiency and effectiveness to match the demand for critical skills and high-level professions, tighten the industry- academe links and better dissemination of labor market information, emphasize education and training in generic competencies such as trainability, work ethic, ICT literacy, critical thinking, problem solving, and communications skills. - Universities and colleges have to be developed as centers of research and development whose outputs serve the needs and demands of the industry which, in turn, is responsible for producing better goods and services and absorbing the qualified graduates of tertiary education.