The Philippines' Education System FALLING BEHIND Against COMMUNIST Vietnam Because of ONE CRUCIAL Difference
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| Foreign Trade University |
The equity rule of education in the Philippines vs. Vietnam
Opening schools to foreign ownership and presence might come at a great cost to educators and future generations of learners. Lawmakers admit that revising the Charter’s foreign ownership provisions is just the first step, and further easing of regulations would be needed to attract foreign investors in the sector. This is where the danger lies, as it will provide another convenient reason for the government to not provide the necessary public resources in the annual budget that the education sector deserves. It would lead to more privatization and commercialization of the local school system.
Furthermore, IBON cited this as well:
Section 4. (2) Basic educational institutions, other than those established by religious groups and mission boards, shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens. The Congress, however, may require increased Filipino equity participation in all educational institutions. The control and administration of educational institutions shall be vested in the citizens of the Philippines, unless otherwise provided by law.
I would call IBON's claim of "economic reform for education as unnecessary" baloney because Vietnam thought differently. The Allens website has an article written by Vietnamese writers Linh Bui, Ha Nguyen, and Phuon Nguyen on the education system of Vietnam. We need to look at the article written on July 20, 2026. This gives a better insight from Communist Vietnam's education equity rule, as Vietnam doesn't put its economic provisions in its constitution or in its Communist manifesto:
Legal framework for foreign investment in education
100% foreign ownership permitted, with additional regulatory requirements
Foreign investors are permitted to hold up to 100% equity in education institutions across all levels, including preschools, K-12 school and universities. While this open ownership regime is attractive, foreign-invested schools were previously subject to additional regulatory requirements compared with local schools. That said, the gap is now almost closed, as most of the requirements previously applicable only to foreign-invested schools have been extended to newly established local schools.
Foreign-invested vs local schools
A foreign investor cannot directly hold equity in a school. Instead, investments must be routed through a locally incorporated company that owns the school, either directly or through a holding structure.
- Direct foreign ownership: where a foreign investor holds equity in the company that directly owns the school (OpCo), the school is classified as a foreign-invested school—irrespective of the foreign ownership percentage in OpCo. In this case, the school is subject to all regulatory requirements applicable to foreign-invested schools.
- Indirect foreign ownership: where a foreign investor holds equity in a holding company (HoldCo) that in turn owns OpCo, the regulatory position is less clear. Some guidance from the Ministry of Education and Training suggests that only direct foreign ownership at the OpCo level triggers schools' foreign-invested status. However, indirect ownership through HoldCo—especially where HoldCo is majority foreign owned—may also result in the school being treated as foreign invested. Careful structuring is essential if the foreign investor wishes to maintain the school’s status as a local Vietnamese education institution post investment.
A local Vietnamese school is one that is not classified as a foreign-invested school.
Conversion of a local school into a foreign-invested school
Any acquisition of a local school by a foreign investor at the OpCo level will lead to conversion of the school. A majority foreign acquisition at HoldCo level may also cause HoldCo to be treated as a foreign investor in OpCo, with the result that both OpCo and the school may be treated as foreign invested.
To preserve the school’s local status, the transaction is typically structured at HoldCo level as follows:
- Minority foreign acquisitions: foreign investors can invest at HoldCo level. Provided foreign ownership remains below 50%, HoldCo is treated as a Vietnamese investor and its schools retain their local status.
- Majority foreign acquisitions: these require more complex structuring, such as tiered ownership arrangements, to maintain HoldCo's status as a Vietnamese investor and to preserve the local classification of the schools post investment.
The consequences of a lack of competition in Philippine education
The same fears can be echoed again from what Hilario Davide Jr. said in 2018.
Foreign control
According to Davide, opening the country’s education system to foreigners could make schools vulnerable to foreign control.“The proposal [RB6] opens to foreign control and dominance, our basic education, which is the most crucial to the development of our young,” he said.Citing the 1987 Constitution, Davide said that having foreign leaders in the Philippines’ basic education system would undermine the “noble patriotic and nationalistic virtues,” which are constitutionally mandated to be part of the curricula of all educational institutions.
He explained that Article 14, Section 3 of the Charter provides for schools to teach patriotism and nationalism, among others, to young Filipinos.
“Can we expect foreigners at the helm or control of the educational system to seriously and healthily obey this state policy on education?” asked Davide.
As for foreign ownership of public utilities and advertising, Davide warned that it would be “extremely dangerous” if the country were to leave Congress the extent of Filipino ownership requirement in businesses in the two sectors.
“The day will not be far when public utilities and advertising industries will be under control or even under the full ownership of aliens,” he said.
This kind of mentality reminded me of what the late Lee Kuan Yew saw when he went to China, under Deng Xiaoping. Pages 618-619 from the book From Third World to First shows this sad detail:
Our visit to the university in Wuhan, one of China's major industrial cities along the Yangtze River, was a saddening experience. Some of the professors we met were American-educated. Although advanced in age and their English rusty, they were obviously men of erudition and quality. In the library, Ling, then a medical student, spoke to a young man who was recording an English-language biology textbook. She asked to see it and found out it was printed in the 1950s. She was incredulous. How could they be reading a biology textbook 30 years out of date? But they have been shut off for more than 30 years; having just opened up to the West, they had no foreign exchange to buy textbooks and journals. And they had no photocopying machine. It would take a long time closing the knowledge gap that had widened between them and the developed world. The Cultural Revolution had set them back by a whole generation. The present students, recovering from the Cultural Revolution, were taught with outdated textbooks by teachers using outmoded teaching methods and without audiovisual aids. This would be another semilost generation. True, the most brilliant of them would make it regardless of the disadvantages. But an industrial society requires a well-educated total population, not just a brilliant few.
This reminds me of how, more often than not, the Philippines' education may be behind the rest of the world. Sure, textbooks may get new editions, but looking back at my student days, I thought about these features that I blame as results of decades of the Filipino First Policy:
- Mathematics, which I believe is the most hated subject (and I hated it too back in high school, zero questions asked), is taught more like as Mental Abuse To Humans rather than Mental Acceleration To Humans. Mathematics makes our minds sharp even when we don't engage in engineering work. We see the engineer with the construction personnel. Math becomes more of a threat: if you fail in math, you get to do "useless work".
- Science can become a mundane task where people just take Biology, Chemistry (and I honestly dislike doing stoichiometry until now), and Physics to fulfill a mandate rather than to learn the environment around them. I was thinking about it, and sure, I didn't do well in those subjects back in high school. However, learning science when it gets into more real-life examples, I wouldn't need to take BS Chemistry or BS Chemical Engineering to appreciate the hard work done by chemists to create those household chemicals or warning labels.
- The Filipino subject tends to become more about teaching Pinoy Pride than well, teaching Filipino. People might've developed that strong "Filipino vs. foreigner" dichotomy which in turn, may have fed the idea that foreign investment is bad and that Filipino pride is a better mentality. This would've sprung out of the policy. In fact, parents may have had to spin every white lie they could just to get their children to pass in the "Filipino" subject.
Communist Vietnam took a different route. Instead, Vietnam decided that Doi Moi would happen by December 1986, as the purity of ideology. Vietnam decided to take a U-turn when LKY met with the late Nguyen Duy Cung, aka Do Muoi. Page 317 of From Third World to First showed how the Communist Party of Vietnam changed course:
In fact, the Vietnamese had made progress. As a result of more contacts with foreigners and greater information on the market economy, ministers and officials had a better understanding of the workings of the free market. Greater street activity, more shops, foreign businesspeople, hotels--those were all signs of prosperity in Ho Chi Minh City and Hanoi.
The difference is actually staggering. Honestly, Vietnam, despite being a Communist country, is actually more open to FDI in education. What excuse does the democratic Philippines have now?
