OPINION: The Economics of K+12

By Nicki Tenazas

N. Tenazas

In the past few weeks, the nation has been debating, both formally and informally, about the pros and cons of the proposed K+12 program of the Department of Education. While the debate is welcome as it helps policy makers fine-tune their proposals, it should be directed at the real issues and not along ideological or partisan lines.

The gist of the proposal is that (1) Kindergarten shall be universal and compulsory starting SY2011-2012, (2) the new curriculum will be applied to Grade 1 and 1st year high school students by SY2012-2013, and assuming the pioneering cohort of students shall progress up the education ladder without a hitch, (3) the 1st year students in SY2012-2013 will have the option to enter Grade 11 in SY2015-2016, the first year of senior high school.

DepEd prudently provided the justifications and benefits of the proposed program. These are even categorized by stakeholder group. For individuals and families, the benefits center on having more time to master the curriculum, leading to higher long-term earnings potentials. For society and the economy, the benefits revolve around being globally competitive and having a higher growth trajectory. The historical beginnings of the reforms were also explained and the justifications for the program are technically sound.

Unfortunately, no matter how clear the intentions of the government are, opposition is always expected and should not be ignored. This article aims to put forward other positive aspects of the program that may not have been exhausted in the discussions yet. It is hoped that additional focus on the pragmatic issues of the program will help influence the final form of the ensuing policy.

No time but now

The timing of the proposed program, which comes at the heels of the recently concluded global recession, was not a moment too soon. Southeast Asian tigers like Singapore, Malaysia and Thailand are widening their lead over the Philippines in terms of labor quality and overall investment climate. Emerging economies in our backyard, namely Laos, Cambodia and Vietnam are also prioritizing skills development. Even our distant neighbors in South Asia, like Bangladesh, India and Sri Lanka speak of nothing but ways to address their skill shortages. Indeed, the recent economic slowdown has shown that countries and individuals with better skills can adjust easier to external shocks.

At the same time, the Philippines has just entered a new era in governance. The current administration has received a resounding mandate to reform the country and to simply make it a better place to live in. The political capital that the current administration is still enjoying is a vital advantage in pushing through with major systemic reforms. The legislative and financial challenges of the K+12 program can be best addressed now rather than at any other time in the coming six years.

Addressing historical inefficiencies

The first benefit of the program is that Kindergarten prepares children for the rigors of formal schooling. As a relatively new parent, I was surprised (and proud) to see that my three year old son can already read, spell and write almost any Tagalog word. By the time he reaches age five, I believe that he will be fully literate in the English language as well, even before I plan to enroll him into school for the first time. Why then, does the government even need to create a policy that says every child should be a reader by the end of grade three? The answer is early exposure. The period between age three and five is a very critical time for overall development. By providing free Kindergarten for all, every child in the country, regardless of economic status, will have at least a year of unpressured exposure to learning and socialization. This prepares them for higher levels of education, thus supporting the rationale for the K+12 program.

Another benefit of the proposed program being pushed by DepEd is the possibility of more students mastering the curriculum because of more time allotted for it. A corollary of this is the possibility that the teaching load will also lighten. In a scenario where the learning objectives of children are properly budgeted, teachers will have more time to implement child-centered learning. It may be true that time spent on preparation of lesson plans, contact with students and checking homeworks and tests may not necessarily decrease; however, make-up classes due to cancellation of classes and review sessions for upcoming achievement tests may no longer be necessary. If more time is allotted for the same topics, teachers can facilitate deeper understanding of the lessons, removing the need for further instruction.

One of the other benefits of a wisely budgeted curriculum is the possibility of revising national achievement tests to focus on higher-order thinking skills. If children are exposed to more exploratory and open-ended learning, it follows that they should be assessed using the same benchmark. This will help improve the perception of the quality of outputs of the education system.

One of the arguments against the program is that it lengthens time in school, which could have otherwise been used to become economically active and augment family income. But closer inspection reveals that in the case of the Philippines, this is a myth. Everybody under 18 years old is not eligible for formal work. The result is that those who drop out of school to work end up in the informal sector, which is often synonymous with low pay and harsh working conditions. Even those who enter college and dropout at 18, armed with higher education “units” may not fare significantly better than 16 year old informal workers. Within three to five years, their peers who were fortunate enough to finish college or technical courses will overtake them in terms of salary and working conditions. In this case, the decision to forego schooling will greatly impede their lifetime earning potential.

The K+12 program also aspires to correct the connotation that basic education is simply a preparation for college. Developed countries like Germany, Australia and South Korea are testaments to the fact that good basic education and industry-linked technical training systems are enough to drive the economy. If a credible high school diploma can be earned at age 18, students will have another career option aside from college. If they decide on entering the labor market immediately after high school, they will not be second-class workers but instead, they will be fully protected by labor laws and safety nets.

The portion of the cohort that will pursue higher education will be a boon to the universities and colleges. Considering that these students have solid academic foundations, tertiary institutions can stop the practice of becoming “catch-up” schools. Many tertiary institutions still require general education courses for students. Among its other purported uses, it is simply a way to make sure that the academic foundations of students are strong before they go into more specialized courses. This, in turn, reduces the amount of time a student spends on highly technical courses.

The same can be said of future entrants to technical and vocational training institutions. They will possess better academic foundations that will enable trainers to implement a more rigorous and technical approach to training. With a curriculum that is closely linked to industry, high school graduates would be more equipped to adapt to the rapid technological changes in the most highly sophisticated trades and crafts. This, in turn, will significantly improve their employability and, possibly, their earning capacity as well.

At the heart of the global disadvantage of Filipino labor is the current lack of years spent on highly specialized courses, whether in college or in training institutions. This is the reason why our doctors just end up as nurses abroad, why our information technology workers are paid lower salaries compared to their foreign counterparts and why PhD candidates in the country need to retake majority of graduate courses abroad just to qualify for a foreign PhD. Bilateral and multilateral skills recognition agreements remain as rhetoric rather than becoming policy: no developed country will allow a Philippine college degree to be equivalent to their college degree; at the same time, the Philippines can not to admit officially that our educational system is indeed substandard.

One way to change this perception of low quality, aside from improved national achievement tests, is through international assessment tests like the TIMMS and the PISA. Due to consistently poor performance, some experts opined that the Philippines should suspend joining these tests until such a time that we have fixed our education system. The reasons for low performance are well-documented: student maturity, overcrowded curricula and poverty are the common explanations for low achievement. The K+12 program, whether intended by its proponents or not, will address two of these over time. First, Filipino test takers have historically been one or two years younger than their foreign counterparts. This places them at an automatic disadvantage in terms of emotional and intellectual maturity. With the K+12 program, there is a chance that test takers at the higher levels will be of the same age as foreign test takers. For test participants in the lower levels of education, the age gap may not be perfectly addressed but increased years of schooling may make a significant difference in outcomes. More importantly, test takers will be armed with comparable knowledge because of the new curriculum. Less topics to cover means better understanding of concepts, which would come in handy for higher-order questioning that these international assessments are famous for.

Therefore, instead of shying away from international comparison, the Philippines should embrace future chances to inform the world that our educational system is, slowly but surely, improving. By gradually increasing our rankings in these assessments, the stature of Philippine education and graduates will also improve. This will then help raise our global competitiveness in the long run.

One possibly unintended consequence of the K+12 program is the fact that colleges and training institutions would experience significantly decreased, if not very minimal, enrollment for two years during the transition period of the K+12. While this can be seen as a major inefficiency and loss of revenue for these institutions, this period can also be put to good use. First, this would be a good time to conduct simultaneous revision of post-secondary curriculum so that educational outcomes become fully aligned once the first batch of K+12 graduates arrive. Also, this would be an opportunity for professors and trainers to upgrade their skills by going on study leaves, professional training or producing knowledge products. Lastly, it would be a good time for government to finally push through with the critically-acclaimed but seemingly impossible task of rationalizing higher education institutions.

Doomsayers exaggerate

Despite of all these possible benefits from the proposed program, fears still abound in some sectors of society. The arguments revolve around (1) the fact that this program is a misplaced priority and resources should instead be used to address the basic shortages of the system and (2) the perceived opportunity cost of the additional years of schooling, especially for the poor. These arguments, frankly, are exaggerated at best and at worst, completely wrong.

The DepEd’s proposed implementation scheme for the program is a workable plan simply because it starts early but it buys time for essential resources to be put in place. It all hinges on economic growth and fiscal capacity: if the current government lays the right foundation, economic growth can be expected to accelerate; this in turn would mean more financial flexibility for the government and more opportunities to invest in education.

The resource shortages of the education system is a perennial problem. For years without fail, the same basic problems are hounding the country. Some education insiders would joke that if an education ministry report written in the year 1900 was unearthed and the figures are simply updated, the finished product would not be far off from the current situation. The important point is that the K+12 program should not be hijacked by the same (and seemingly unending) problems of the system. If the current government miraculously finds a way to solve resource shortages, well and good; however, if the government does as expected and fails to provide adequate resources to meet acceptable resource ratios, the rationale of the K+12 program remains intact.

One possible example of this kind of erroneous thinking is the statistic on number of teachers. Everybody says that the country lacks teachers. However, analysis of micro data shows that there are teacher surpluses in certain areas while there are indeed shortages in others. If only teachers could be transferred from one division to another without triggering protests, some of the shortages would be addressed. Also, DepEd never fails to prioritize teacher hiring in all of its budget proposals. Thousands of new teachers are hired each year, but unfortunately these are still not enough to address the shortages. Another thing to consider is the new K+12 curriculum: if teachers can implement child-centered learning and focus on becoming facilitators rather than mere lecturers, they can easily manage a larger number of students per session, thus reducing teacher requirements. A good case in point: private schools in Manila are perceived to provide good quality education; but it is also true that many elementary and high school sections in exclusive schools reach up to 55 students per class. Therefore it can be safely concluded that educational outcomes do not only depend on the quality of students and the class size; it also depends on the teaching strategies and the support resources.

The most emotionally-charged argument against K+12 is the financial burden it places on the poor. Some are calling the program anti-poor for the obvious reason that rich people in urban areas enroll their children into private schools with already longer years of schooling (Pre-Nursery, Nursery, Kinder 1, Kinder 2, Prep and Grade 7) without batting an eyelash, while the poor constantly need to choose between food, medicine and shelter or the daily expenses associated with going to school. However, it was discussed earlier that staying in school at least until a child reaches 18 is in the best interests of everybody in the long run. It effectively reduces dead weight loss from existing policies and cultural norms. But another analogy might drive the point better: insurance.

The real issue with additional years of schooling is present versus future spending. Resources that we consume now can no longer be invested for future gain. Time deposits, pension funds and life insurance offer good parallelisms to this fact. Almost everybody will agree that savings and compound interest can work wonders for multiplying money. That is why given the chance, everybody would probably choose to have any or all of the said financial instruments in their portfolios. However, the usual reason why many Filipinos do not have these investments is perceived poverty: they feel that they could not even spare a few pesos per month for savings and/or insurance payments. If they die young, they are probably correct. Unfortunately, if they live to reach middle age, they begin to realize the wasted opportunities that compound interest could have offered. If they could have found a way to squeeze their income and tighten their belts a little bit more, they could have been sitting on a respectably-sized nest egg by the time they hit 40 or 50 or 65.

The same is true for educational investment. Filipinos, famously and romantically, live in the “now”. After all, having money now is more important than having that same amount of money in the future. By the same token, working odd jobs now and contributing to the family income today is more important than the millions you might earn ten years from now. But for a society of gamblers, this is surprising: we seem to be gambling on all the wrong things. We invest in the Lotto and in Jueteng, in Tong-its and Sabong. We even gamble with our health through alcohol, cigarettes and drugs. Why then, can we not put hope in the fact that staying in school is a good investment worth fighting for?
The nagging question then is: if it were possible to give the poor just enough money to cover all educational expenses, would they think twice about enrolling their children in a K+12 school? Hand-to-mouth existence is a difficult situation, indeed, but it is a predicament that should not afflict decisions for the future and condemn people for the rest of their lives. In the same way that many poor Filipinos see the value of insurance and strive to meet their monthly payments to agents, so too can the poor find a way to keep their children in school and expect a higher earning potential from them. This will start to break the cycle of poverty that began with too little investment in education in the first place.

Admittedly, the government still needs to support the poor, especially with K+12. While private returns to education are high, public returns are also significant and provides enough justification for government intervention. Education vouchers and conditional cash transfers are steps in the right direction, but these need to be improved and expanded further.

The way forward

The circumstances surrounding the K+12 proposal are far from ideal. But in reality, nobody lives in ideal circumstances. The important thing is to pursue something that is worthwhile, but pursue it in the best possible way. The following are some suggestions that DepED can consider in implementing the program:

Clearly define roles in terms of Kindergarten implementation. The ECCD Council and the DSWD are currently on top of day care service in the country. It is best to align expectations on this program so that day care workers prepare the children for Kindergarten in the right way. This is especially important as day care centers in the country seem to be generally under-equipped and under-manned.

Continue all other non-contradictory initiatives. Real reforms come from a combination of big and small activities. The current thrusts to hire more teachers, build more schools, provide more books, supplementary materials and information and communication technologies should be continued. This will help reduce the resource gap when the time comes to actually implement the additional years of schooling.

Ensure that the K+12 curriculum meets global standards. Many DepEd employees, administrators and teachers alike, cannot seem to differentiate between the numerous versions of curricula the Department has piloted and implemented throughout the years. Now is the time to really transform the curriculum into something internationally-recognized but locally-useful. Focus on child-centered learning, with the help of ICT, could provide significant improvements in educational outcomes.

Avoid “vocationalization” of secondary education. There is a strong temptation to include arts, crafts and trades education in the expanded curriculum, particularly in the proposed higher secondary level. But while it seems to be logical and pro-poor, international experience has shown that this could be a major pitfall of education systems. In any case, employers generally prefer academically-sound graduates who possess the important “soft” skills (communication skills, interpersonal skills, attitude of hardwork and perseverance, etc.) over haphazardly-trained “technical and vocational” graduates. It seems trainability is a major industry concern and the K+12 curriculum should ensure that all graduates meet this criteria. It is best to leave technical education to TESDA in the same way that higher education is left to CHED. Besides, by providing TESDA and CHED with more qualified students, DepEd has done the lion’s share of reform in the educational system already.

Improve the National Achievement Test to reflect the proposed K+12 curriculum and administer it to pilot areas as early as possible, just to get reliable “before and after” comparison of learning outcomes. By having a parallel achievement test long before the actual curriculum is implemented, DepEd can (1) fine-tune the new achievement test based on adequate data and (2) have a credible monitoring and evaluation tool to assess the initial outcomes of the K+12 program.
Coordinate with CHED and TESDA regarding the implementation of the program, especially regarding the two-year transition period where post-secondary enrollees is expected to significantly decrease. Government could benefit from this period by reforming state-owned institutions but it may need to compensate private institutions for lost income. Government may also consider an “Honors” exam that will allow graduates of grade 10 or 11 to skip the remaining years of senior high school and go straight to college.

Locate additional sources of funds for K+12 implementation. Loans and grants from bilateral and multilateral agencies are justified at the beginning of major programs but its long term sustainability should rest with the partnership of the public and private sectors. Many PPP arrangements are proving to be effective in many countries including the Philippines and these could help ensure the success of the program.

While the proposal is not yet cast in stone, DepEd might want to reconsider awarding diplomas after completing grade 10. Part of the wisdom behind this move is the western concept of Ordinary (O) and Advanced (A) levels of achievement. This is a good example of the caveats of simply importing foreign innovations. The mere presence of the grade 12 diploma automatically diminishes the marketed value of the grade 10 diploma. It is a negative memento of the old system wherein 16 year olds are given the customary “pat on the back” just to help ensure that the K+12 program becomes more palatable to stakeholders. By removing the grade 10 diploma, many will be forced to really complete the basic education cycle and not opt for the easy way out and revert to the same problems that the K+12 program set out to solve. Also, if DepEd really wants to provide alternative options after grade 10, it can seriously consider the “Honors” exam mentioned earlier.

Improve overall teacher compensation. The 4-year implementation of the most recent salary standardization law significantly increases the nominal income of teachers. While some say that this is still not enough, it is actually a very good compromise. What government can now do is to improve other benefits and perks. Improving systems for GSIS, Pag-ibig and Philhealth will make all teachers very happy. The mere idea of getting their salaries on time would also be a major boost to morale. Lastly, other perks like tax exemption, public recognition and the like could also be effective inspirational tools, but should be closely linked to performance. Such improvements will also show that the current government has the capacity to implement both major and minor reforms at the same time, giving it more credibility to introduce the K+12 program.

Maximize technology. Large technology projects are currently taboo in government in light of recent scandals and the ever-present possibility of corruption. But the truth is that system-wide ICT improvements can greatly augment and ease the transition into the K+12 system. Small but effective ICT programs, including (and especially) the ones for teacher training, should be situated within a comprehensive management framework and expanded to as many beneficiaries as possible.

Prepare a comprehensive social marketing campaign. DepEd already intends to conduct many stakeholder consultations on the program. However, DepEd spin doctors should craft a unified message that touches the heart of the issue for the ordinary Filipino. They should also communicate clearly how DepEd plans to implement all its planned reforms at the same time. Lastly, national discussions are welcome but they are sometimes too politically-charged. Grassroots communication is preferred and all efforts should be made to get the support of as many international, government and non-government organizations as possible.

In conclusion, it is understood that it will take time before the K+12 program will run smoothly and for its promised benefits to be felt in its entirety. At least one generation of parents may never get over the idea that the additional years of schooling (and thus expenses) happened during their lifetime. Private companies may take a while before they fully trust the skills of a grade 12 graduate. Other countries may take a while before they notice gradual improvements in our educational system, as evidenced by ever-increasing rankings in international assessments. It may take a few generations to completely pay back everything that government will loan just to implement this program. But it is clear that this is the right thing to do now because its expected value far outweighs its expected costs. In layman’s terms, the fact that something is difficult should not determine if something should be done; if that were the case, nothing great would have been accomplished at all. Ever.

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