By Ronald Mendoza
(2nd of two parts)
Increased efficiency and earlier delivery
Compared with conventional procurement, PPPs offer a stronger option to build more classrooms faster and at a lower cost for DepEd.
To illustrate: it could take up to 50 years to build about 100,000 classrooms under conventional procurement, assuming the Department of Public Works and Highways (DPWH) builds 2,000 classrooms a year.
With aggressive reforms underway at DPWH, delivery may improve—yet even doubling the current pace would still mean completing 100,000 classrooms in 25 years.
Alternatively, under PPPs, DepEd expects to deliver more than 100,000 classrooms within three to four years.
Under this approach, the government pays only once classrooms are completed, usable, and fit for teachers and learners. Payments, structured as “availability payments,” are spread over 10 years and begin only after delivery, similar to lease installments.
Value for money
Beyond the pace and scale at which PPPs can construct classrooms, they also significantly reduce the administrative burden on the government.
Under conventional procurement, classroom building projects are typically bundled in small lots of around four classrooms per package. So if the government uses conventional procurement on 16,000 classrooms, this would imply up to 4000 Bids and Awards Committees (government bodies responsible for evaluating projects).
PPPs can consolidate classroom packages into fewer, larger packages, lowering transaction costs, reducing construction and long-term maintenance risks, and facilitating more competitive pricing.
Taken together, value-for-money analysis from the Asian Development Bank and DepEd indicates that PPPs could yield government savings of over P40 billion compared with conventional procurement.
As noted by Secretary Arsi Balisacan of the Department of Economy, Planning, and Development, shifting from conventional procurement to PPPs significantly improves the government’s quality of spending, supporting more inclusive economic growth.
He said the PPP approach relies on lower imported inputs, higher labor and domestic content, and enables classroom construction across most of DepEd’s 47,972 schools nationwide.
Lower social cost
DepEd’s classroom PPPs are also expected to lower the social cost of learning losses arising from protracted classroom deficits.
By building more climate-resilient and earthquake-resistant classrooms, the program will also provide safer and more resilient learning environments for students.
DepEd’s connectivity initiatives (in part under another PPP, PSIP Connect) will also help modernize these learning spaces, transforming them into “smart classrooms” and opening our teachers and learners to a world of information from educational technology such as Khan Academy and Google for Education.
Robust social and economic returns
Early estimates of the cost of these ambitious projects place them at around P1.3 trillion or roughly P130 billion a year. This annual payment of P130 billion is only about 2 percent of the 2025 government budget.
Spreading payments out over 10 years enables the government to carve fiscal space for these investments. And the returns are quite significant — well over 20 percent based on estimates by the Asian Development Bank.
This is easily twice the typical return from other infrastructure projects and remains a conservative estimate, not including broader spillover effects on health and good governance, owing to a better-informed and educated young population.
Early evidence from rigorous evaluations of digital learning interventions found that providing tablets, internet connectivity, and digitized learning modules in DepEd last mile schools, among the most challenging learning environments in the Philippines, improved test scores by up to 0.34 standard deviations (SD, a measure of impact over the average result).
A comparable study also conducted in the Philippines, providing a similar digital package incorporating high-touch high-tech principles, produced considerable learning gains of approximately 0.25 SD.
To put these results in perspective, the Philippine PISA science score in 2022 was 356, or 116 points below Vietnam.
Results from the evaluation studies noted here suggest that digital integration can cut the learning performance gap with Vietnam by up to roughly one-third, highlighting the critical role of digital investments in leapfrogging learning recovery in the country.
Increased transparency and good governance
As a final note, DepEd also plans to launch a major transparency drive in partnership with parent-teachers associations, civil society, and local governments to help ensure efficient and leakage-free delivery of these PPPs.
Anchored by DepEd’s transparency portal, called Project Bukas, the PPPs can be monitored by all education stakeholders in each community where these matter the most.
And once all of DepEd’s 47,972 schools are interconnected through PSIP Connect (another PPP), reformists expect this to usher in an era of transparency and partnership in DepEd, which can help fuel continued reforms and improvement.
It is therefore crucial that these PPPs receive our full support. Given tight fiscal space, it will take strong political will and strong support across all political stripes to pull off this generational investment in classroom construction and modernization through connectivity.
Only through PPPs can we hit our education targets earlier. And only through PPPs can we accomplish this large infrastructure surge under stronger governance conditions.
Ronald Mendoza is the Undersecretary for Strategic Management at the Department of Education, and previously served as dean and professor at the Ateneo School of Government.
