Funding strategies with Department of Education

I have started corresponding with our Department of Education (DepEd). Unfortunately, the Secretary who first had contact with the One Laptop Per Child initiative resigned last July (Butch Abad, only a few months on the job at DepEd, was part of the Hyatt 10 who resigned in protest of Pres. Gloria Macapagal-Arroyo's handling of accusations of electoral fraud). The officer-in-charge is Undersecretary Fe Hidalgo. I know her bercause we both sit on the Board of Trustees of the Philippine Science High School system, although she usually delegates attendance to her regular representative.

Some of the points I have raised for discussion are about funding a pilot in 2007, and a full deployment of 1 million laptops in the following two years.

An initial purchase of about 50,000 units (plus support and training) could be funded through projects already in the budgeting pipeline. Specifically, the Japan Non-Project Grant Assistance has about 400 million pesos already earmarked for the program of the Department of Trade and Industry (DTI), PC's for Public Schools. I believe that a representative of the One Laptop Per Child foundation can participate in the bidding during Feb-June 2006, and deliver 50,000 laptops in the first half of 2007 in time for teacher training during the summer (April-May here in the Philippines, the peak of the dry season before the monsoon rains) and enrollment in June.

That leaves 950,000 units to reach the minimum order. I hope the OLPC foundation is amenable to spreading out the delivery over two years, 350,000 units for delivery in 2008 and 600,000 in 2009. We may need a number of innovative mechanisms to fund this. One strategy that is being adopted by Brazil is to allocate funds for new and replacement textbooks to delivering laptops with softcopy textbooks.

The website of the Department of Budget and Management (DBM) seems to be down, so I can't get at details of the DepEd budget, but a government statistics page gives their FY 2004 budget as 107.5 Billion pesos. A million laptops would need an additional 5% to that budget. According to page 198 of the Medium-Term Philippine Development Plan 2004-2010 (251k PDF), the textbook budget for FY 2004 is 555 Million pesos, only one fifth of the cost of 1 million laptops.

I am also concerned that the private schools have opportunities for full participation. Between 20-30% of high school students are in private schools. One idea is to for the government to provide the laptops on a matching grant basis. DepEd will grant a school 100 units if they agree to pay for the costs of an additional 100 units at the government-only price of $100 each (the commercial price is expected to be $225, if available at all). This will stretch out the government budget to provide twice as many units. I believe private university-attached high schools will easily be able to raise those funds, and this approach could be piloted in Cebu City where the Cebu Educational Development Foundation for IT (CEDF-IT), an NGO that I have been collaborating with for the past 4 years, would be able to implement a pilot involving at least 5 universities. It would be nice to also pilot it in Banatayan Island, in the North of Cebu province, where there is a major experiment in deploying wireless broadband.

For smaller private schools, DepEd may want to work on the basis of an expanded "voucher" scheme. Since the public school system can't build classrooms fast enough to meet the growing demand, it provides vouchers for some students to study in private schools. But instead of paying the schools their tuition in cash, the schools may agree to accept 50 students and 100 laptops, and pay for the laptops in "kind" through services of educating the publicly-sponsored students for free for a certain length of time. Essentially, this is an exchange deal (or counter-trade) where DepEd's budget for education vouchers for private schools is channeled towards providing laptops for those private schools, while still achieving the purpose of the educational vouchers. The private schools end up paying for the laptops they receive, but they pay for it in services so this does not create as much difficulty in terms of cash flow. Of course the private schools still have to adjust their administration to accommodate 50 more students with no additional tuition, but it is their way of investing in 100 laptops for their school. If they can raise more cash, then they will be eligible to buy more laptops at the government-only price.

In addition to national government and private sector contributions, I am certain that certain local government units with sufficient cash flow, such as Makati City and certain LGU's in Cebu, would be interested in purchasing laptops for students in their jurisdiction.

I still have no clear idea what volumes would be covered by these different concepts, but with the assistance of DepEd, I hope we can do some pencil pushing and come up with a practical and feasible model for participating in the OLPC scheme.