Free college education will help close income gap

MANILA, Philippines - Free college education in state universities and colleges (SUCs) can greatly help in closing the income gap in the country, Valenzuela City Rep. Sherwin Gatchalian said last Friday.

Gatchalian cited a special report by The Economist intelligence unit that the Philippines will continue to have “wide inequalities of income.”

“We need to fund higher education and make it free in all state universities and colleges to give our students a fighting chance for a better life and help close the income gap,” said Gatchalian, a member of the House committee on higher and technical education.

Gatchalian filed House Bill 5905, or the “Free Higher Education Act,” which will fully subsidize tuition in all SUCs for all current and future enrollees, provided they maintain good academic and moral standing.

According to the Family and Income Expenditure Survey 2012, a household led by a college graduate earns an average family income more than twice that of a family headed by a high school graduate.

The  measure, if enacted, will play a crucial role in averting the growing divide between the economic classes in the country, Gatchalian said.

A special report by The Economist intelligence unit said the country will continue to be “one of Southeast Asia’s poorest economies, with a lower level of GDP per head than the majority of the region’s other economies.

“The Philippine economy will also remain marked by wide inequalities of income, and the disparity between the richest and poorest households will stay acute. Consequently, large numbers of Filipinos will continue to live in poverty,” the report said.

The report noted the benefits provided by the government to indigent households in rural areas is limited only to basic services.

Gatchalian said the measure will help improve students’ future income. It will especially help students from poor households to enhance their social mobility.

“There are higher private returns in investing on tertiary education than secondary school education,” Gatchalian said. “This shows the singular power of higher education in improving economic outcomes for the neediest segments of our population.”

 The bill provides for the creation of the Special Tuition Subsidy Fund, which shall be managed by the Commission on Higher Education (CHED).

The CHED will be responsible for creating a mechanism to be used by SUCs, which will detail the exact amount of subsidy for eligible students.