Why UP should be privatized

Very often, University of the Philippines (UP) students are called "iskolar ng bayan" (scholar of the people) because their education is partly financed by taxes and hence, they should "give more" to society than graduates of Ateneo, Lasalle, etc. But is the same expectation of "iskolar ng bayan" expected of graduates of Polytechnic U of the Phils.,, Mindanao State U, Benguet State U, Leyte State U, Cagayan State U, Phil Normal U, Cebu Normal U, plus 100+ other state universities and colleges (SUCS)? I seldom if ever, hear such things.

Two years from now (in 2008), UP will be 100 years old. UP was created by the American colonial government here; it was the Americans who crafted the UP charter, which until now, or 98 years after, have not been changed.

Below are my general arguments why UP should be privatized:

(1) UP should have its fiscal autonomy from the state.
It should not be a beggar as it was in the past 98 years, to Congress, the Senate, and the Office of the President (OP) and the Department of Budget and Management (DBM).

Imagine the amount of resources (time and money) saved by the UP president, chancellors, deans, college secretaries, and other administrators by not going to DBM/Malacanang-Congress-Senate-bicameral conference for many days, for many weeks, every year dealing with those bureaucrats and politicians. And you repeat this process year in and year out.

When I was still working in congress, I can only sympathize with some govt. bureaucrats who have to wait until 12 midnight, even until 3am, waiting for their budget to be discussed in the plenary (after the comm. on appropriation has reported out its proposed budget) when congress is rushing the budget. Why? Well, congress somehow wasted their time for many weeks in some politicking and investigations; hence, the rush to finish jobs which they should have done earlier.

(2) UP should have administrative autonomy from government.
Up to now, majority of the members of UP's Board of Regents (BOR) are legislators + political appointees + CHED chairperson.

Even some senseless concerns of congressmen and senators about UP but they happen to head the appropriations committee, are heard and UP has to bow to them more often than not; otherwise, UP's budget will be slashed further. Or it's charter modernization/revision bill will be gathering dust.

Once a corporation, a financial institution, a university or whatever is state-owned or controlled, it is impossible for their administrators to withstand the intrusion of politicians. SSS and GSIS are not funded by general taxpayers money, their annual financial operations are not sourced from congressional appropriations. These are private money, private constributions by members. But but the OP determines and appoints who should head these agencies, and it can occassionally pressure its political appointees whom those financial institutions can lend big amount of money, where to invest, and so on.


3) UP must assert its land property rights over squatters.
The university administrators cannot even remove the squatters in the main Diliman campus, in Mt. Makiling and Los Banos, Laguna campus, etc. Because political leaders (the mayor, the congressman, the senator, cabinet secretary, and so on) can call UP administrators to temper the move. Politicians can intervene anytime in behalf of the squatters who are not even connected with the university.

So, many UP Diliman employees, researchers and teachers live in Antipolo and Bulacan, while the squatters live inside the Diliman campus (Purok Dagohoy/Ricarte, Area 2, etc.).

4) Along with the privatization of UP and most (if not all) state universities and colleges (SUCs), income taxes should be slashed to low levels.
Or other taxes should be abolished. Expenditures cut and tax cut should go together.

The national government can either give UP a one-time endowment of say, P10 to P15 billion, then zero in the coming years (vs. the current P4.5 B/year on average, including PGH budget), or zero endowment upon privatization.

UP got lots of finance guys, both alumni and those still at the College of Business Administration (CBA), who can find ways to raise revenues for the university, like leasing for commercial use its vast idle lands, and not rely much on tuition fee hikes.

(5) UP alumni and retired faculty and non-academic personnel can exercise control over policies of the university as investors and stock owners.
This way, those who have benefitted from UP education and services can "give back" in the form of investing into the university for its modernization, upgrading of salaries and benefits of current faculty members and other personnel.

UP alumni investing in UP is one of the best form of alumni support, why not tap it? There will be greater sense of urgency among UP alumni to pour money and other resources into the university once they know that UP has stopped being a beggar to politicians in Congress and Malacanang.

There was an observation that Ateneo alumni have the culture of giving back or returning something to their alma mater. Unlike the UP alumni who got used to receiving from the UP, afterall, scholar ng bayan.

Assuming that said observation is true, among the reasons would be the following.

a) Ateneo (or other private universities) know that their universities have nowhere else to turn to for their financial muscles except the current batch of students and them, alumni. In contrast, UP and other state universities have the state to depend on, to literally beg money from every year.

b) The former’s university administration listen to them, not the politicians, for some policy issues affecting the university. In contrast, UP and other state Us have to listen to politicians --Malacanang, Congressmen and Senators -- because these are the guys who appropriate and release the money to them.

c) Ateneo & other private Us alumni see the improvements in their alma mater, no squatters occupying the universities' land area, they can enforce their property rights over their land assets. In contrast, UP alumni are discouraged to see the squalor of squatters that continue to deprive UP to provide its own faculty and non-teaching personnel decent and proximate housing.


(7) Privatization is only a means, not end.
The end remains the same -- provide top quality education to its students, rich or poor, although special preference to poorer students. At the moment, because of the deep fiscal constraints of UP, where many of its best faculty members and researchers are leaving the university, where some facilities are deteriorating, it can no longer perform effectively its goal of providing top quality education to its students.

The rich must pay the full cost of UP education, the poor can apply for scholarships or enter into working-student or study now pay later schemes.
How about the poor entering a private UP?
Give them money so they can enrol (as scholars).
Or lend them money so they can enrol (as study-now-pay-later recipients).
Or let other private sector/foundation or govt. scholarships pay for their school fees.

A friend, Banni Alli, agreed with my initial proposal and proposed the following schemes for UP’s fiscal:

1) UP can generate enough funds by leveraging its assets by factor of 10 (its properties are considered prime land, historical books, arts, etc.).
2) When the assets are inventoried, a UP Asset Management Team can be set up to issue what we call an "Asset-Backed Securities", i.e. Bonds with 5-10 year maturities, and a servicing interest of prime rate or less.
3) The assets shall become the mainstream income to service the Bonds annual interest, and then retire the principal at maturity.