TESDA

ISSUES AND PROBLEMS IN FINANCING

Budget Allocation 2017-2021

Fiscal Year – GAA
(Personnel Services, MOOE, Capital Outlays)
2021 – 14,464,356,000
2020 - 12,974,013,000
2019 – 12,554,663,000
2018 – 7,560,385,000
2017 - 6,684,759,000
https://www.tesda.gov.ph/About/Tesda/136

1. Unused budget
P3.6 billion unspent from its 2019 budget, or 25% of the total allotment (budget just have to revert to
the Treasury)
https://www.rappler.com/nation/senators-flag-billions-unspent-tesda-funds

Due to COVID 19 pandemic, the challenge of continuing TECHVOC educ using online platforms

2. Low value for tech-voc education

Yet, for all its responsibilities and expanded coverage, there remains a poor regard for tech-vocational
education and certifications – particularly at the early levels – given by TESDA. These are often poorly
regarded to have significant value.
In 2004, TESDA institutionalized a ladder approach to learning that allowed its graduates to use TVET
credits when pursuing higher education. In reality, however, majority of TESDA graduates still choose
short courses.
Even with the Ladderized Education Act of 2014, only a minority aspire to pursue higher skill levels, which
partly explains the predominance of entry level training courses offered by private schools, and the
perennial problem of underutilization of government funds assigned to TESDA.
https://www.philstar.com/business/2019/05/07/1915583/poor-regard-tech-vocational-education

3. Equipment & Facilities

-The full implementation of tech-voc courses under the K to 12 program has aggravated the lack of
facilities and equipment, qualified trainers, and assessors in the sector, another problem area. As the
Philippine TVET sector is largely supply-driven, this reality adds to the job and skills mismatch and under-
employment.

-TESDA & local government units (LGUs) nationwide are having difficulty of establishing and operating
their own Technical Vocational Education and Training (TVET) centers

Villanueva said that the agency’s plan is to devolve the establishment and management of TVET centers
to LGUs within 15 years. Devolution is a government policy that was adopted into law (Republic Act
7796) in 1994.
“The devolution is now ongoing. But we are going slow on this program because LGUs don’t want to
gambit and there is also the issue of sustainability considering the political changes that happen every
three years and the cost of operation,” he said.
Villanueva said the operation of one small training center is estimated to cost at least about P3 million,
which is taken from the funds allocated to Tesda.
SCHOLARSHIP
Programs Covered
1. Training for Work Scholarship Program (TWSP) - is a scholarship program which provides immediate
interventions to produce the needed skilled and certified workers and fill-up the unfilled jobs in key
industry sectors in the country. The TWSP seeks to support rapid, inclusive and sustained economic
growth through course offerings in priority industries and key employment generators. The following
programs are also covered by the TWSP:
a. Trainers Methodology (TM) Level I and Level ll
b. Language Programs
c. Competency Assessment and Certification for Workers (CACW)
d. Enterprise-Based Training
e. New and Emerging Competencies
f. Social Equity Programs

2. Private Education Student Financial Assistance (PESFA)

Example: Richwell Colleges Inc. & COLM Pulilan

3. Universal Access to Quality Tertiary Education (UAQTEA)

a. Free WET in Post-Secondary State-Run TVIs (STVI)
b. Tertiary Education and Subsidy (TES)

4. Tulong Trabaho Scholarship Program (TTSP)

5. TESDA Overseas Scholarship Program

4. Graft and Corruption

-Ghost Training - refers to training reported as held solely for the purpose of obtaining payment of the
corresponding scholarship allocation, but upon verification by TESDA was not actually conducted
-Ghost Trainees - refer to persons reported to have attended a training solely for the purpose of
obtaining payment of the corresponding scholarship allocation, but upon verification by TESDA are
found out to be fictitious.

-multiple availment

-“non-compliance” to TESDA training standards

-Commission on Audit (COA) report on TESDA released in 2013 that highlighted a number of
questionable payments to 11 technical vocational institutions (TVIs) found to have overpriced tuition fees
or shortened training schedules.
-https://www.philstar.com/business/2019/05/07/1915583/poor-regard-tech-vocational-education

5. Job Matching not Job shortage

-Students commonly would prefer formal education
-Low number of graduates and enrollees vs. projected #

Urdaneta noted that TESDA actually allocated a lot of scholarship fund to the Build, Build, Build
program’s key sectors. But because the applicants were few, the agency had to drop those classes.

Applicants matching the right job are a bigger problem than job shortage as more applicants are needed
in some of the programs run by the Technical Education and Skills Development Authority (TESDA),
TESDA. – June 2019
“For you to have a cost-effective and cost-efficient program, it has to have 20 trainees. Pero minsan 10
lang, so hindi na namin pwede (ituloy) kasi hindi na siya cost-effective,” she said.
- https://www.gmanetwork.com/news/money/economy/698111/tesda-sees-more-of-a-problem-in-job-
matching-than-job-shortage/story/
Commision on Higher Education
-LEGAL BASES

The  Commission on Higher Education (CHED)  was created on May 18, 1994 through the passage
of  Republic Act No. 7722, or the Higher Education Act of 1994. CHED, an attached agency to the Office
of the President for administrative purposes, is headed by a chairperson and four commissioners, each
having a term of office of four years. The Commission En Banc  acts as a collegial body in formulating
plans, policies and strategies relating to higher education and the operation of CHED.

The creation of CHED was part of a broad agenda of reforms on the country’s education system outlined
by the Congressional Commission on Education (EDCOM) in 1992. Part of the reforms was the
trifocalization of the education sector into three governing bodies: the CHED for tertiary and graduate
education, the Department of Education (DepEd) for basic education and the Technical Education and
Skills Development Authority (TESDA) for technical-vocational and middle-level education.

In 1997,  Republic Act (RA) No. 8292, otherwise known as the “Higher Education Modernization Act of
1997” was passed to establish a complete, adequate and integrated system of higher education.

The said law also modified and made uniform the composition of the Governing Boards of chartered
state universities and colleges (SUCs) nationwide in order to:(a) achieve a more coordinated and
integrated system of higher education;(b) render them more effective in the formulation and
implementation of policies on higher education;(c) provide for more relevant direction in their
governance; and (d) ensure the enjoyment of academic freedom as guaranteed by the Constitution.

CHED
ISSUES AND PROBLEMS IN FINANCING

Budget Allocation 2017-2021

Fiscal Year – GAA
(Personnel Services, MOOE, Capital Outlays)
2021 - 49.3 B
2020 – 46,782,466,000
2019 – 51,491,252,000
2018 - 49,426,187,000

1. INADEQUACY OF FACILITIES AND EQUIPMENT

Among the 1,792 HEIs (excluding SUC campuses), only 100 or 5.6 % HEIs can be assumed to have
adequate facilities.

2. BUDGET CUT
The budget of the Commission on Higher Education (CHED) will go down by P11.65 billion next year,
with universal access and financial assistance programs getting the biggest deductions, as provided by
the free college tuition law enacted two years ago.
The CHED will get P40.784 billion in 2020, which is 22.22 percent lower than its budget of P52.435 billion
this year.
https://www.philstar.com/headlines/2019/09/11/1950915/ched-budget-cut-p1165-billion-2020
3. DELAY FUND RELEASE

Manpower issues, non-compliance of SUCs delay fund release, says CHED chief

Received reports that some SUCs waited for six to eight months before they got the funding for the free
higher education law, which prompted some schools to lay off some personnel.

While De Vera admitted that there have been delays in the downloading of funds due to administrative
and manpower issues, he said some SUCs did not comply with the requirements on time resulting in the
delay.

Read more: https://newsinfo.inquirer.net/1336109/manpower-issues-non-compliance-of-sucs-delay-
fund-release-says-ched-chief#ixzz6xv7vyXmR
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

4. INADEQUACY OF FACULTY CREDENTIALS

The funds available now in CHED is at all time high compared to previous years. But the intake of those
who want to study abroad is not as high as expected.
https://news.abs-cbn.com/news/06/10/21/ched-university-teachers-need-to-improve-credentials

The teaching staff of Philippine universities need to "improve their credentials" and engage in more
research with their peers from other countries, the Commission on Higher Education (CHED) said
Thursday.
CHED Chairman Prospero "Popoy" de Vera made the statement following the release of the 2022 QS
(Quacquarelli Symonds) World University Rankings, which found that Philippine universities performed
poorly in the research (citations per faculty) indicator.
"Many of our faculty members still need to improve their credentials, finish their PhDs, for example...
Dapat makapag-publish ka sa journals para makilala ka sa ibang bansa at 'pag nag-research kayo,
papayag sila mag-research kayo together," De Vera said.

5. DETERIORATING QUALITY
- that has led to skills-jobs mismatch, low productivity in research and development, and a deficient
science and innovation culture
-TOP UNIVERSITY LOW RANK IN QS despite the free universal education access
-scholarship fund, still quality is going down
-BUDGET ALLOCATION 2019-2021 (SCHOLARSHIP)
-EQUIPMENT & FACILITIES
-Insufficiient budget allocations for scholarship

1.4 Application of SUCs budget allocation system (Normative Funding Formula) Normative Financing
aims to rationalize the allocation of funds to SUCs; to improve delivery of service in the fields of
instruction, research and extension; to harmonize the programs and course offerings of SUCs to the
national thrusts and priorities; to reward or encourage quality teaching, research, and extension
services; and to encourage SUCs to improve cost recovery measures, practice fiscal prudence and
maximize resources. CHED applied the revised Normative Financing on 100% of the SUCs' allocation for
Maintenance and Other Operating Expenses (MOOE) in 2013.

Autonomous status allows HEIs to launch new courses/programs in the undergraduate and/or graduate
levels including doctoral programs in areas of expertise without securing a permit/authority from CHED.
HEIs granted autonomous status also enjoy the privilege of increasing tuition fees without securing a
permit from CHED provided, however, that they fully comply with the existing CHED policies, standards,
and guidelines (PSGs) on increases in tuition and other school fees, especially those pertaining to the
consultation process and other requirements. Because of their autonomy, such HEIs are free from
CHED’s monitoring and evaluation activities while complying with the submission of requested data for
CHED’s data gathering and updating of its management information systems and projects. [26]
Other benefits of HEIs granted autonomous status include exemption from the issuance of a Special
Order (S.O.) for their graduates, priority in the grant of subsidies and other financial
incentives/assistance from the CHED whenever funds are available, privilege to offer extension classes
to expand access to higher education, authority to grant honorary degrees to deserving individuals in
line with the provisions of the existing CHED issuance on conferment of honorary degrees, privilege to
establish linkages with recognized foreign higher education institutions, provided that the existing CHED
PSGs for twinning, networking, and linkages are fully complied with

Higher education institutions (HEIs) that have been granted autonomous status
III – Central Luzon
 Angeles University Foundation
 Baliuag University
 Centro Escolar University (Malolos Campus)
 Holy Angel University
 Wesleyan University Philippines

HEIs with deregulated status enjoy the same privilege as autonomous HEIs, but they must still secure
permits for new programs and campuses.[
III – Central Luzon  La Consolacion University Philippines
National Capital Region  Philippine Women's University
 San Beda University
Students Financial Assistance Programs (STUFAPs) Aimed at providing access to quality higher education
among poor but deserving students, STUFAPs consist of: (1) Scholarships – including the Full Merit,
OneTown-One Scholar (OTOS) and Half Merit programs, the beneficiaries of which are selected on the
basis of their performance in qualifying examinations (2) Grants-inAid – Tulong Dunong, including, Study
Grant Program for Solo Parents and their Dependents, DND-CHED-PASUC Study Grant, OPAPP-CHED
Study Grant Program for Rebel Returnees, and CHED Special Study Grant for Senate and House of
Representatives, which are meant for the students from poor families, indigenous communities, and
persons with disabilities; and (3) Student Loans for the needy but deserving students. For AY 2011-2012
there are 60,240 (as of December 2011) beneficiaries, broken down as follows: scholarships - 18,559
grant-in-aid - 37,023 and student loan programs – 4,658

Inadequacy of facilities and equipment Among the 1,792 HEIs (excluding SUC campuses), only 100 or 5.6
% HEIs can be assumed to have adequate facilities. • Quality of Education has also been a decline in our
country’s global competitiveness. Based on Quacquarelli Symonds (QS) World University Rankings - Top
500 2006 - 4 Philippine Universities 2010 - 3 Philippine Universities 2013 – 1 Philippine Universities

LOOK FOR NEWS REGARDING NO 1ST YEAR COLLEGE STUDENTS DURING K-12 IMPLEMENTATION, WHAT
DID CHED DO?
https://youtu.be/92slypLCj30

Problems and Challenges

The NTESDP 2018-2022 has identified problem areas that challenge the TVET sector.

The 4IR and rapid technological advancements are seen by experts to make many jobs obsolete.
This would make it difficult for the country’s TVET providers to cope and catch up with the rapid pace of
innovation, technological change, and advanced workforce skills requirements
Also a problem area is the low employability of Philippine TVET graduates, a mere 65 percent. TVET
providers face the perennial criticism that they are providing and producing low level skills and technical
education. This reality spills over to the labor economy which is characterized by the prevalence of low-
value work compared to mid- to high-value jobs in a ratio of 70:30

The full implementation of tech-voc courses under the K to 12 program has aggravated the lack of
facilities and equipment, qualified trainers, and assessors in the sector, another problem area. As the
Philippine TVET sector is largely supply-driven, this reality adds to the job and skills mismatch and under-
employment.
The Filipino workers’ out-migration is also creating a brain and brawn drain affecting the pool of
qualified and skilled workers. In 2013, there were 10.2 million Filipinos overseas. In addition, there has
been a drop in industry enterprises participating in TVET, demonstrated by the low enrollment of
enterprise-based modality training even if it is the most successful modality in terms of employability,
with an average employment rate of 68.9 percent.

Access to TVET also poses a challenge. Limited funding and other resource limitations contribute to
certain sectors not being attended to and reached by TVET. One such sector is the marginalized and
disadvantaged poor, which government data in 2015 recorded at 21.6 percent. 
 

Republic Act No. 7796

RULE IX
FINANCING FOR TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
SEC. 6. Fees and Charges. - The TESDA may exact reasonable fees and charges for such tests and
trainings it may conduct and retain such earnings for its own use, subject to guidelines promulgated by
the TESDA Board.
SEC. 1. Technical Education and Skills Development Committees.
The TESDA shall establish Technical Education and Skills Development Committees at the regional and
local levels to coordinate and monitor the delivery of all technical education and skills development
activities of the public and private sectors. The TESDA Board is authorized to set aside a portion of the
appropriation of the TESDA for the operation of the TESDA Committees.
SEC. 2. TESDA Committees' Relations to Local Development Councils. The TESDA Committees shall
establish linkages with the appropriate regional and local development councils in order that they may
likewise serve as the Technical Education and Skills Development Committees of the said development
councils.
SEC. 3. Composition of TESDA Committees.
The composition of the Technical Education and Skills Development Committees shall be determined by
the Director-General subject to the guidelines promulgated by the TESDA Board.
SEC. 1. Skills Olympics. - To promote quality skills development in the country and with the view of
participating in international skills competitions, the TESDA, with the active participation of private
industries, shall organize and conduct annual National Skills Olympics. The TESDA, through its
Secretariat, shall promulgate the necessary rules and guidelines for the effective and efficient conduct of
Annual National Skills Olympics and for the country's participation in international skills olympics.
SEC. 3. Scholarship Grants. - The TESDA shall adopt a system of allocation and funding of scholarship
grants which shall be responsive to the technical education and skills development needs of the
different regions in the country.
SEC. 2. Functions and Responsibilities of the TESDA Secretariat.
SEC. 4. Incentives Schemes. - The TESDA shall develop and administer appropriate incentive schemes to
encourage government and private industries and institutions to provide high-quality technical
education and skills development opportunities

FINANCING
SEC. 7. Instructional Improvement Fund. - The instructional improvement fund in public technical-
vocational schools and institutions shall be used for the expansion, upgrading or maintenance of school
facilities, particularly machinery, equipment and other learning resources.

Development fund
a one-time lump sum appropriation from the National Government; an annual contribution from the
Overseas Workers Welfare Administration Fund, the amount of which should be part of the study on
financing provided for in Section 4 of this Rule; donations, grants, endowments, and other bequests or
gifts; and any other income generated by the TESDA.

ISSUES
JOB SKILLS-MISMATCH
LOW QUALITY GRADUATES
P14.8 Billion TESDA Budget for 2019 aims to promote skills-based education
  Print
In line with the Duterte administration’s commitment to advance human capital, P14.8 Billion has been
allocated for the Technical Education and Skills Development Authority (TESDA) in the proposed 2019
National Budget. This is almost twice the previous year’s allocation of P7.56 Billion.
The increased budget allocation aims to promote skills-based education towards a more specialized
labor market. “We have a young population with a median age of 24. By providing them with better
access to education, especially skills-based training, we can make Filipino workers more agile and
competitive, so much so, that it would become easier for them to find employment opportunities,”
Budget Secretary Benjamin Diokno said.
 
Table 1 - TESDA appropriations from 2016 to 2019 (in thousand pesos)
  2016 2017 2018 2019
Actual Actual Estimate Proposed

TESDA budget (GAA) 7,561,299 8,183,280 7,560,385 14,830,090

Budget for major programs  

Training for Work Scholarship Program 2,206,000 2,415,000 2,784,887 2,273,961

Private Education Student Financial Assistance 200,000 200,000 200,000 200,000

Special Training for Employment Program 566,245 908,873 933,053 1,725,099

 
With a budget of P2.3 Billion, TESDA’s Training for Work Scholarship Program targets to offer 163,672
enrollees with courses in priority industries and key employment generators, such as agri-fishery, agri-
business, agro-industrial, and general infrastructure, among others.
Meanwhile, for TESDA’s Special Training for Employment Program, P1.7 Billion is earmarked for
community-based trainings on specific skills that will promote employment in local communities.
Lastly, the Private Education Student Financial Assistance, another key TESDA program, will receive a
P200 Million budget in 2019. This will provide financial assistance to 4,000 poor but deserving students
enrolled in technical-vocational courses, and will provide assistance to private institutions in assuring a
steady supply of enrollees to their course offerings.
Notably, under the Universal Access to Quality Tertiary Education program, P7.0 Billion will be used for
the implementation of the free technical education and training in more than 50 state-run technical-
vocational institutions nationwide. This is seen to benefit 203,185 students in 2019. This program also
covers the provision of starter tool kits, as well as the fee for the National Competency Assessment, a
test to determine whether the student has achieved the level of competency required in a specific skill.
“We hope that our efforts of ensuring universal access to education, including technical-vocational and
skills-based education, will greatly enhance our country’s economic prospects, not only through
employment, but also in ensuring inclusive development,” DBM Secretary Diokno noted.

The Technical Education and Skills Development Authority (Tesda) bared yesterday many local
government units (LGUs) nationwide are having difficulty of establishing and operating their own
Technical Vocational Education and Training (TVET) centers. The reason is owing to lack of funding.
While Tesda law provides that management of TVET centers must be eventually delegated to the local
governments, the LGUs complained about their financial incapability to put up and maintain these
facilities, Tesda Director General Joel Villanueva said.
Villanueva said that the agency’s plan is to devolve the establishment and management of TVET centers
to LGUs within 15 years. Devolution is a government policy that was adopted into law (Republic Act
7796) in 1994.
“The devolution is now ongoing. But we are going slow on this program because LGUs don’t want to
gambit and there is also the issue of sustainability considering the political changes that happen every
three years and the cost of operation,” he said.
Villanueva said the operation of one small training center is estimated to cost at least about P3 million,
which is taken from the funds allocated to Tesda.
Based on Tesda data, there are 126 TVET facilities nationwide, of which 57 are schools for agri-fisheries
that turned over to Tesda under the 1997 General Appropriations Act (GAA).
Tesda Deputy Director General Milagros Dawa-Hernandez told a recent budget hearing in the Senate
that each of these schools “carries its own budget lines.”
Tesda data also showed that out of the 126 TVET facilities, the operation of some 60 plus regional
training centers and provincial training centers are dependent on the maintenance and other operating
expenses (MOOE) allocated to Tesda.
“In most cases, funds for the operating expenses of the centers are being mobilized through the
convergence arrangements with the LGU in the sites where they are,” Hernandez said.
Most LGUs remain hesitant, however, to take over the operations of these training centers amid the
projected cost.

Issues on Technical/Vocational Education

• Students commonly would prefer formal education
• Ensuring adequate qualified technology teachers
• Upgrading of facilities/Rapid increase of technology
• Adequate and stable financial support- budgetary limitations of the government
• Competitiveness of the Filipino worker overseas
• Needs research and development

The Administrative, Financial and Management Service (AFMS) provides the core of CHED’s operational
service requirements covering human resource management, budgetary allocations, accounting and
audit procedure, record-keeping functions, and general services, and is tasked to effectively provide the
critical support system for the aforementioned operational, financial and administrative requirements.
The diverse magnitude and complex aspects of personnel and funds management require the presence
of four (4) divisions, namely: the Budget Division, the Accounting Division, the Human Resource
Management Division (2 Units), and the General Services Division (4 Units) :
Issues • Quality - For example, the results of standard tests conducted (National College of Entrance
Examination) for college students, were way below the target mean score. • Affordability - There is also
a big disparity in educational achievements across social groups. For example, the socioeconomically
disadvantaged students have higher dropout rates. And most of the freshmen students at the tertiary
level come from relatively well-off families. • Budget - The Philippine Constitution has mandated the
government to allocate the highest proportion of its budget to education. However, the Philippines still
has one of the lowest budget allocations to education among the ASEAN countries. • Mismatch - There
is a large proportion of "mismatch" between training and actual jobs. This is the major problem at the
tertiary level and it is also the cause of the existence of a large group of educated unemployed or
underemployed.