The Education Service Contracting (ESC) Program of the Philippines

Michael M. AlbaDe La Salle University Manila

The ESC program in a nutshell

• provides a fixed tuition subsidy to graduates of public elementary schools who opt to enroll in participating private high schools.

• effectively, contracts private schools to provide secondary education to students who otherwise would have

attended public schools.

Program Features

• Beneficiaries– graduates of public elementary schools

• who opt to enroll in participating private high schools– Grantees pay school fees and expenses in excess of

the tuition subsidy.• who are accepted by the participating private high

schools – A school committee processes applications and

screens grant applicants.

Program Features

• Benefits– a fixed annual tuition subsidy through 4 years of

high school• Value of the grant since SY 2008-2009: PhP10,000 per

year in NCR and PhP5,000 elsewhere in the country.

• Requirements – Grantees must pass all academic requirements in

each year level.– Grantees cannot take a leave from schooling except

due to force majeure or illness.

Program Features

• Service Providers– Private high schools

• who apply to DepEd to participate in the program• who pass an annual certification process for quality of

delivery.

How the ESC Program came to be

• Education policy makers (in government and the private sector) wanted to make use of excess resources in private schools to address congestion and poor quality in public schools– Legal bases

• RA 6728 of 1989: Government Assistance to Students and Teachers in Private Education (GASTPE)

• RA 8545 of 1998: Expanded GASTPE

Program Objectives

• Make quality secondary education more accessible to poor Filipino students

• Enhance the complementary roles of public and private education sectors

• Maximize the use of existing resources in the private education sector

• Realize savings for the government• Ease the need for constructing new classrooms

and hiring new teachers

What has been achieved? (1)

• National Coverage as of SY 2008-2009– 476,776 grantees

• 9.3 percent of 5.1 million students in public high schools• 35.8 percent of 1.3 million students in private high schools

– 2,033 participating private high schools • 39.8 percent of 5,110 public high schools

– On average, 4 private high schools handle the enrollment spillovers or congestion problems of 10 public high schools

• 46.3 percent of 4,392 private high schools

– 234.5 grantees per school, on average• 58.6 grantees per year level per school, on average

What has been achieved? (2)

• The ESC program provides a lower cost alternative to direct public provision of education – Cost of a public high school student: PhP9,048– Cost of an ESC grantee: PhP5,344

What has been achieved? (3a)

• On average, a participating school receives PhP1.18 million per year from DepEd due to the ESC program

• But, in general, school fees exceed the ESC grant.– The average support value of the ESC program is

0.67– sv = ESC grant ÷ school fees

HOW MUCH DO ESC GRANTEES PAY ON THEIR OWN?

TOTAL = P 4.43 B

PAID BY ESC GRANT, 2,393 ,

54%

PAID BY GRANTEE,

2,040 , 46%

ESC grants generate P4.43 billion in revenues for ESC schools

ESC grantees shoulder P2.0 billion of the P4.43 billion.

What has been achieved? (3b)

• In effect, the ESC program generates resources for participating schools, in excess of government transfers, since grantees make significant co-payments.More resources are thus generated for basic education.

Challenges

• Can the ESC program be expanded without increasing costs and lowering the quality of private school education?– What is the cost structure of the program?– What is the optimal mix of delivery? Will private schools

themselves become congested or suffer in quality?• Can the ESC program be better targeted to improve

the overall accessibility and quality of secondary education?– How can the ESC program be used to improve public high

schools?