Distressed private schools get support from business groups

Published July 6, 2021, 3:50 PM

by Merlina Hernando-Malipot

Private schools that have been hard-hit by the economic impact of the coronavirus disease (COVID-19) pandemic received support from business groups as they now face a 150-percent increase in income tax rate.


The Coordinating Council of Private Educational Associations (COCOPEA), in a virtual forum hosted by think tank Stratbase Albert del Rosario Institute, underscored the need for support from both the government and the private sector.

Citing data from the Department of Education (DepEd), COCOPEA Managing Director Joseph Noel Estrada said more than 900 private schools have recently closed down and 900,000 basic education students failed to enroll.

“A high percentage of private higher education institutions were closing down, while more than 50 percent were suffering a 10-percent to 50-percent decline in enrollment,” Estrada said.

This trend, he added, will likely continue without the economic and policy intervention by the government.

Estrada said the problem was also exacerbated by the recent increase in the income tax rate on proprietary education institutions from 10 percent to 25 percent.

Instead of implementing the concessionary tax rate of one percent under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act for the next three years, Estrada said that the Bureau of Internal Revenue (BIR) insisted on implementing the 150-percent increase in income tax rate on these educational institutions.

“This looming problem particularly in the learning crisis calls for the protective power of the State over the right of all citizens to quality and accessible education at all levels,” Estrada said.

Meanwhile, Employers Confederation of the Philippines (ECOP) Chairman Edgardo Lacson expressed support to COCOPEA’s call to rescind the new BIR regulations increasing tax on private schools by 150 percent under the CREATE Law and called for the easing of tax regulations for the next three years.

Management Association of the Philippines (MAP) Chairperson of Committee On National Issues Rizalina Mantaring also agreed, noting that the country’s educational systems “have to be changed” so that there will be more Science, Technology, Engineering and Mathematics (STEM ) and there should be “more subjects on the skills” needed for the future.

“We need to create an enabling environment by passing laws and by developing the infrastructure that will help move the Philippines towards an increasingly digital future,” Mantaring added.


COCOPEA says new BIR circular did not ‘rectify’ 150% tax hike policy vs private schools