Abad: With gov’t fiscal situation, budget for SUCs couldn’t be increased

Department of Budget and Management Press Release

November 27, 2010

And this is the other side of the story.

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ABAD: WITH GOV’T FISCAL SITUATION, BUDGET FOR SUCs COULDN’T BE INCREASED
REFORMS IN THE SUC SYSTEM ALSO CRITICAL FOR QUALITY SPENDING ON PUBLIC HIGHER EDUC


Budget and Management Secretary Florencio B. Abad today said that with the government’s ballooning fiscal deficit situation, the government could not increase funding for State Universities and Colleges (SUCs) as it had to prioritize funding for other pressing socio-economic needs.

“If only our fiscal situation was better, we could provide additional support for SUCs. We ask for understanding that because our resources are lacking, we had to prioritize other more urgent needs, such as in basic education where more poor students will benefit from,” he said.

He stressed that proposed funding for SUCs of P23.407 billion for 2011 is not a reduction from this year’s funding level. While the 2010 budget allocates P23.845 billion for SUCs, P1.0 billion for maintenance expenditures and P1.8 billion for capital outlay are Congressional Initiatives (CIs).

These CI were subjected by the former President to a conditional veto that these cannot be released unless new revenue measures are enacted by Congress. These CIs were also not included in the 2011 proposed budget, together with other non-recurring expenditures.

Abad meanwhile clarified that he is not pushing for tuition fee hikes for all SUCs. “I did not say that. What I said that SUCs should maximize the use the cash balances, generated from tuition fees and revenue generating projects and activities, that these are authorized to retain. They could also pursue other income-generating partnerships using their underutilized assets,” he said.

More importantly, he said SUCs should productively use its available funds.

“Right now, there is a total of P19.1 billion in cash balances by SUCs, or an average of P65.9 million per SUC, as of end 2009. Especially with our fiscal state, we want these SUCs to use their funds in productive ways, not just keep these in the bank,” he said.

In addition, for 2011, the Higher Education Development Fund (HEDF) will have P750.8 million available to assist cash-strapped SUCs,” he added, noting the HEDF balance as of June 2010 amounts to P2.12 billion.

The secretary stressed that this issue on the budget for SUCs just shows how urgent it is to pursue reforms in public higher education. “Else, government funding for SUCs will never be enough. Our funds provided to SUCs are spread out too thinly and without much impact, especially when it comes to providing training in disciplines most needed for sustainable economic development.”

For one, he said that there are 110 SUCs, many of which are not viable. He said a possible direction for SUC reform is, through consolidation, having strong and focused centers of excellence and state university systems such as the University of the Philippines and the Mindanao State University rather than hundreds of individual SUCs.

While state subsidy will continue, he said SUCs should be able to practice their academic and fiscal independence better through income-generating activities such as lease of land and other beneficial partnerships especially in the use of knowledge generated through research.

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