Idle school funds

We have long known that public education needs both special attention and money. As early as 1968, Congress created the Special Education Fund (SEF) through Republic Act No. 5447, setting aside money to pay for classrooms, textbooks, equipment, teacher salary adjustments, and scholarships.

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Under RA 5447, the SEF was funded by earmarking portions of real property and cigarette taxes to the Department of Education (DepEd). The law conveyed that education mattered enough to deserve an additional tax base and its own fund, not just whatever was appropriated in the general budget.

That principle was carried over into the 1991 Local Government Code, which devolved public services, including education, to local government units (LGUs). Control over the SEF was transferred to local school boards from DepEd, with funding drawn from an additional 1% real property tax collected by LGUs.

Yet after 57 years of the SEF, there is still no convincing evidence that the fund, in its current design, has systematically lifted the public school system out of its chronic problems. Classroom and teacher shortages persist, and inequalities between schools in rich and poor LGUs endure.

Studies point to a familiar pattern: some cities and municipalities manage the fund well and see local gains, while others underspend, misalign priorities, or simply park SEF balances in bank accounts while learners struggle in overcrowded, under-equipped classrooms, and from lack of teachers.

Reports indicate that from 2018 to 2022, the SEF accumulated an unspent balance of P15 billion sitting idle in LGU bank accounts, earning interest. Clearly, money is not the problem, governance is. The way we govern and spend education funds has not been enough to improve outcomes at scale.

The Department of Finance’s (DoF) call for SEF reforms is therefore timely and necessary. But Congress should also take a long, hard look at what has transpired since 1968 and make an informed decision on how best to redesign the SEF and make it the true helping fund that it was meant to be.

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