According to the human capital theory, the economic development of a nation is a function of the quality of its education. In other words, if people are more educated, the greater the chances of economic development.

When Gloria Macapagal-Arroyo was sworn into office on June 30, 2004 as the country’s 14th President, she vowed to give “education for all.” After four years, the country’s out-of-school rates ranked among the highest in Asia, even exceeding rates of Indonesia and Vietnam.

Rising resource shortages characterize the crisis in Philippine education. The proposed budget for education this year only represents 2.19 percent of the Gross National Product (GNP), compared to the ideal six percent of GNP as pegged by the International Commission on Education for the 21st century.

There is a significant decrease in government allocations for public education. The share of national government in state colleges and universities’ (SCUs) financing has been steadily declining from 85 percent in 2001 to 77 percent in 2005.

Decreasing government support to SCUs will cause further deterioration in the quality of higher education in the Philippines. Ironically, the President remains tight-lipped on any increase in the budgetary allocation to education, particularly in SCUs.

As seen from the budget cuts plaguing state education, the President may have to do harder to fill the gap between what she preaches and what she does. Far worse than lip service are the billion-peso anomalies in the midst of the education crisis embroiling the highest officials of the land.

Twenty-two years after Edsa People Power 1 Revolution which toppled the administration of Ferdinand Marcos after allegations of widespread cheating in the 1986 Presidential elections, the country is again hampered by another controversy – the scandal on the National Broadband Network, also known as the NBN/ZTE deal or NBN/ZTE anomaly.

The deal turned into a hullabaloo involving Chinese Zhongxing Telecom Co. (ZTE) who was allegedly able to bag the contract with a $329-million bid despite lower bids submitted by two other companies – US-based Arescom Inc. and Filipino Amsterdam Holdings Inc. The contract was signed by DOTC Secretary Leandro R. Mendoza and Vice President of ZTE Corporation Yu Yong, in the presence of President Gloria Macapagal Arroyo and Chairman Hou Weigui of ZTE. The project was supposed to develop a National Broadband Network in the country that will improve government communications capabilities, had it not been suspended.

The scandal embroiled the highest officials in the country, from former Comelec Chair Benjamin Abalos who allegedly helped broker the deal and tried to hush-up ZTE’s unhappy competitors for the project; to former NEDA Director General Romulo Neri who dropped hints that he had been offered $200-million to approve the deal but later invoked executive privilege to shun succeeding Senate hearings; and the son of the speaker who is connected with a rival company bidding for the same contract and has accused Abalos of offering him a $10-million bribe to back out of the bidding. At the center of the massive scandal is a man named Jun Lozada a.k.a. J. Lo, former president of the Philippine Forest Corporation who made a tearful revelation of what he knew about the alleged anomalies hounding the scrapped ZTE deal.

The exposed $130 million kickback from the $329 million National Broadband Network Project with China’s ZTE Corporation would have actually sustained the budget of the University of the Philippines (UP).

The country’s premier university which has around 40,000 students in different campuses has suffered the biggest budget cut in 2005 alone. The $8.81 million slice in its budget was by far the biggest in its almost century-old operations.

The significant drop of UP in the list of top 500 universities in the world can be ascribed to the yearly budget cut. UP barely makes it in the top 400 while De La Salle University (DLSU), Ateneo de Manila University (ADMU) and the University of Santo Tomas (UST) trail behind. Among these schools, UP is the only state university whereas the other three are all private institutions.

The imposed budget cut in the UP system causes shortage on faculty, quality infrastructures and educational instruments like laboratory materials. This also threatens the closure of courses and programs and worse, forces SCUs to increase tuition, come up with income generating projects such as privatizing services and selling assets while allowing private corporations to invest.

After 13 years of implementation of the Socialized Tuition and Financial Assistance Program (STFAP), tuition in UP has increased from $.42 to $7.43 per unit. From $7.43 per unit, fees in bigger campuses such as UP Diliman, UP Los Banos and UP Manila have increased up to $24.78 per unit. The increase from $4.96 per unit to $17.34 per unit was also implemented in smaller campuses in Baguio, Visayas and Mindanao. Cellphone charging fees, computer fees and radio fees are now being collected from students staying in UP dormitories. Miscellaneous fees have also augmented as manifested in the increase in internet, energy and library fees.

The NBN Project kickback could have insured resource gaps in SCUs. The $130 million bribe (P5.2 billion in the current exchange rate) could have covered salaries for dedicated and qualified professors, additional facilities, materials and supplements needed by students, not only from the premier university, but also from SCUs all over the country. The ZTE kickback would easily liberate SCUs from charging their students with additional fees and still leave millions more to spare.

There are still students from UP who live in a state of poverty as our country is confronted with various crises. Statistics show that among the students who pass SCUs, only 30% of these students actually enroll. As former president of the National Union of Students of the Philippines (NUSP) Rizza Ramirez have added, the “Iskolar ng Bayan” has now become a “paying scholar.”

In the latest corruption survey conducted among foreign businessmen in Asia by the Hong Kong-based Political and Economic Risk Consultancy, it was found that the Philippines is now perceived as the most corrupt country in the region. On a scale of 0 to 10, with 10 as the worst possible score, the Philippines received a grade of 9.40, worsening sharply from 2006’s grade of 7.80.

Filipinos have undergone a 500% increase in oil prices since 2004 apart from the $3.09 million wage hike. Proper housing and basic social services in the country are also found wanting. The bigger picture shows that the billion-peso kickbacks from the NBN deal are enough to sustain the minimum cost of living of 7.5 million Filipino families.

This shows how much losses from corruption could possibly resolve and cover the resource gaps in the education sector and sustain the lives of poor families by liberating them from additional expenses. There is a scant amount of money for social services and yet we find that much of it only goes straight inside the pockets of the highest officials who ironically are the ones responsible in helping deliver Filipinos from poverty.

Four years ago, Gloria Macapagal-Arroyo gave Filipinos hope when she pledged to give education for all. But as the old adage goes, all promises are bound to be broken, more so when you have nowhere to go at the top of the dump heap.