MANILA, Philippines — The government must ease restrictions and clarify its guidelines on tax incentives for companies that hire trainees of technical vocational education and training (TVET) programs, education experts said, adding that the private sector plays a crucial role in the success of tech-voc education.
The problem is that some tech-voc education centers are required to get an NGO certification before companies that donate training equipment to them can avail of tax incentives, according to the Second Congressional Commission on Education (EDCOM 2).
Experts in EDCOM 2 have flagged this as a potential roadblock as more schools with TVET programs seek to partner with companies in delivering hands-on training.
EDCOM 2 Executive Director Karol Yee told Philstar.com in a phone call that policy issues “need to be ironed out” for both companies and schools to be unburdened by restrictions.
“What’s happening is even if there is a policy that is supposed to apply to educational institutions, there are unrelated policies that get passed without considering how it affects educational institutions,” Yee added.
Monark Foundation executive director Cecil Valencia has also urged TESDA to clarify its guidelines on the Dual Training System (DTS) benefits for industry partners, which allows companies who participate in the DTS to deduct 50% of expenses paid to accredited DTS institutions from their taxable income.
“We keep on saying we have 50% incentive for them. But how can we avail of the incentive? I consulted with TESDA a few weeks ago - unfortunately, they cannot give clear guidelines, Valencia added in mixed English and Filipino.
According to TESDA, the tax incentive aims to encourage "greater private sector participation in the DTS" and allow more students to be trained in actual work exposure in business establishments.
Philstar.com has reached out to TESDA to clarify the tax incentive program. We will update this story with their response.
Members of EDCOM 2 conducted the first round of site visits to gather findings for its Technical-Vocational Education and Training (TVET) & Lifelong Learning priority areas from July 3 to 4.
Importance of private sector participation
Yee also told Philstar.com that it can be more efficient for companies to help deliver TVET programs in fields that require robust training facilities, which some government TVET centers may not have.
For instance, in Don Bosco, German manufacturer Grohe provides industry-based training for plumbing programs, which gives Don Bosco learners enough skills to eventually earn certification in Plumbing Technology, according to TVET Administrator Vester Casaclang.
Yee also cited the FAST Logistics Learning and Development Center and Toyota Motors Philippines School of Technology in Laguna as examples of how students taking equipment-heavy courses benefit from the facilities already available in private TESDA centers.
“It can easily be observed in the models – when you look at Toyota and FAST – it makes sense if the companies provide that training. For public tech-voc education centers, it wouldn’t have the facilities or logistics for automotives,” Yee said.
“It would entail so much capital investments,” Yee added.
FAST Logistics offers a course on heavy equipment operation while Toyota has courses on automotive repair and painting.
State think tank Philippine Institute for Development Studies found in 2020 that enterprise-based training programs — carried out in partnership with companies —“is widely considered the most responsive to industry needs, as it tends to be practical, exhibits close linkages with enterprise requirements.”
However, enterprise-based training continues to account for a small proportion of enrollment and graduates, PIDS added.