by Arra B. Francia
While real estate giant Ayala Land Inc. (ALI) is allowed to take its time in paying rent for its use of UP lands for commercial profit, the UP administration’s income from tuition and other fees reached a 10-year high in 2014, according to data from the Commission on Audit (COA).
From a total of P333 million in 2004, the amount of fees sourced from students’ pockets has reached P502 million a decade hence. Tuition fees make up majority of the amount at P473 million, while the remaining amount is from other school fees (OSFs) such as library and athletic fees at P28 million (see sidebar).
Infographics by Ysa Calinawan
The rise in student fee collection comes amid the administration’s failure to obligate ALI of more than P205 million worth of rental income, as stated in COA’s annual audit report released within the third week of January.
“This shows the lack of control and authority of our administration to manage our land, to uphold our contracts with private entities … [and that] students are the better-paying customers compared to Ayala,” said Student Regent Miguel Enrico Pangalangan.
The COA is an independent constitutional body tasked to examine and audit the financial conditions of all government agencies, including state universities and colleges, through annual audit reports.
Uncollected and stale income
ALI currently manages and operates the UP Ayala Land Technohub (Technohub) and the UP-Ayala Town Center (UPTC) on land owned by the university. Both establishments are under billion-peso land lease contracts that span at least 25 years.
Rental income for Technohub accounts for P76 million of the unpaid fees. Established in 2006, early negotiations for the Technohub described it as a science and technology park aimed to improve research and development in UP. Instead of housing research facilities, however, the 20-hectare area became a hub dominated by business process outsourcing companies upon completion.
ALI also failed to comply with the necessary payment from January 2013 to November 2014, prompting a 24 percent per annum interest on rent amounting to P3.06 million, based on findings by the COA.
Moreover, the auditing body noted a P212.65 million amount of collections from Technohub that was kept inside a Time Deposit Account instead of being used for UP projects. This “depriv[ed] the UP’s stakeholders of the benefits that could be derived from projects to be funded therefrom,” according to the COA report.
Similar cases were recorded in UPTC, with P129 million of unpaid obligations augmented by P4.2 million in interest due to delayed payments from October 2013 to July 2014. The establishment also had an undeclared income tax of P24.32 million and a similar Time Deposit Account with P212 million in unspent funds.
Construction of the UPTC came at the expense of the old UP Integrated School (UPIS) building, which was then demolished and transferred to the lot vacated by the burned-down Narra Residence Hall. But within months of using the new UPIS building, students have already expressed complaints on its weak structure and incomplete facilities.
In the recommendations sent to COA, the UP administration stated that they will finalize the billing process with ALI and make sure that a system of payment reports will be scheduled.
“In the first place, hindi na dapat binebenta yung mga lupa for the sake of business. Dapat dinedevelop ang assets sa mismong academe,” said Anakbayan UPD Chairperson Orly Putong.
Decreasing state subsidy
For the past years, the government has granted only half of the proposed UP budget. In 2016, UP was allocated P11.6 billion against the P24.7 billion proposal of the Board of Regents, the university’s highest policy-making body.
In his 2011 budget message, President Benigno Aquino III praised universities for their capacity to generate income for themselves, stating that it was his administration’s goal to make them self-sufficient.
In his vision for the university presented in 2011, UP President Alfredo Pascual said that his administration will “pursue the development of [land] assets in partnership with the private sector to generate extra revenues for UP … We shall observe proper safeguards to maximize the financial gains of UP from its assets.”
With the constant decrease in the UP budget, the university has been forced to resort to IGPs such as Technohub and UPTC in order to make ends meet.
“Mauugat natin ito sa mismong trust ng government na bawasan ang subsidy ng UP at itulak talaga ang privatization niya and self-generation of income,” said Putong.