By: Atty. Gregorio B. Austral, CPA
Complementarity principle: a love-hate relationship
between private schools and the government
They say that taxes are the lifeblood of the country such that they should be
collected without delay, by all means. Consequently, no court shall issue an injunction
against the collection of taxes as a general rule.
On the other hand, private schools count the school fees of the students as their
lifeblood. Rarely do they receive aid from the government to help them tide over
difficult times.
In the past weeks, we have seen how the proposed bill on the total ban of the
“no exam, no permit” policy has breezed through the legislative mill in the Senate. The
objective of the bill is laudable, as it intends to remove the financial burden of the
parents and students before the latter can take any examination.
The bill proponents are, in effect, saying that schools must wait until parents and
students are ready to pay. This policy leaves the schools alone to solve the liquidity
problems that may result from this prohibition.
Meanwhile, in the banking industry, while the government imposes stringent
regulations on the liquidity requirements of banks to protect public interest, the Bangko
Sentral ng Pilipinas has a ready lifeline for banks with liquidity problems. Banks can
always ask for help from the BSP.
Interestingly, the “no exam, no permit” bill leaves private schools hanging.
Unlike banks, there is no ready loan facility that schools may avail in case of problems
with paying for utility bills, employees’ salaries, and other administrative expenses.
In November, 2020, the College of the Holy Spirit Manila, founded more than a
century ago announced that it is closing in 2022. A month after, the Holy Cross of
Davao College management admitted that it was suffering from financial woes and
would be forced to retrench all its employees in 2021.
Another school, the Colegio de San Lorenzo in Quezon City, made it to the
banner headlines of the national dailies when it issued a notice of closure at the start of
the school year after accepting students.
Those schools are just a handful of private schools that closed shop due to
financial hardships. Their demise caught the attention of the media. But many other
schools simply vanished without much media hype.
Private schools play an important role in educating learners and molding the
students into good and productive citizens of this country based on the institution’s
vision, mission, and goals.
While public schools offer the same or similar programs, the values and culture
each school imbibes into their students spell the big difference between public and
private schools. And to the learners and their parents, the variety of options enhances
the opportunity to receive education and training from the learning institution that
offers the most appropriate programs for each individual learner.
Except for very few private schools with diversified sources of funds, most
private schools rely on the tuition and miscellaneous fees they collect to pay for the
salaries and benefits of their faculty and other operating expenses.
Often, private schools rely on loans to finance their capital expenditures with the
monthly loan amortizations sourced from the tuition fees of the students. For this
reason, private schools have a higher market risk which means that a significant
decrease in enrollment can lead to default in their obligations. Those entangled in the
debt trap have difficulty escaping the vicious cycle of financial miseries.
Private schools face enrollment problems not because of fierce competition
among fellow private schools. While their hands are with stringent regulations, private
schools have to contend with government policies that disregard their existence.
True, free college education has a laudable objective of giving better access to
education, especially for the poor. But free college education offered by contiguous
local government units building local colleges like mushrooms is a recipe to drive private
schools out of existence.
Under the Constitution, the State recognizes the complementary roles of public
and private institutions in the educational system and shall exercise reasonable
supervision and regulation of all educational institutions.” (Article XIV, Section 4 (1)).
Complementarity has no fixed definition, but the most straightforward definition is
supplying mutual needs or offsetting mutual lacks.
With the current situation wherein private schools are subjected to very stringent
regulations amid the “opening spree” of colleges by the LGUs, the government may
have allowed an unbridled license to exterminate private schools eventually. By then,
in the hands of a tyrant God forbids, learners will be like robots programmed to follow
orders and with no freedom to explore the vast universe of knowledge and free
expression.