FPPC x HERPRP Seminar Series 2: Critical Perspectives on CHED’s De Facto Price-Cap Regulation of Private Higher Education Institutions

Photo: (L-R) Ms. Marie Lara Pauline B. Bobier, LPT, MAMS (Senior Research Associate, UP CIDS), Dr. Rhodora “Doris” Ferrer (Executive Director, PEAC), Dr. Winston Conrad B. Padojinog (President of the Center for Research and Communications, UA&P), Dr. Michael M. Alba (President, FPPC), Atty. Joseph Noel Estrada (Managing Partner, Estrada and Aquino Law Firm), Dr. Aniceto C. Orbeta, Jr. (Former President, PIDS), Dr. Vincent K. Fabella (President, JRU)

The University of the Philippines Center for Integrative and Development Studies (UP CIDS) Higher Education Research and Policy Reform Program (HERPRP), in partnership with the Far Eastern University Public Policy Center (FPPC), held its second seminar series at the Jose Rizal University last August 27, 2025.

Prof. Michael M. Alba, Ph.D., one of the awardees of the UP President Edgardo J. Angara (PEJA) Fellowship Program and the President of FPPC, co-authored by Mr. Anthony Goquinco, J.D., LL.M., present their paper entitled “CHED’s De Facto Price Cap Regulation of Private Higher Education Institutions.” 

Prof. Alba and Mr. Goquinco’s essay critiques CHED Memorandum Order No. 03 Series of 2012 (Tuition and Other Fee Increase), highlighting four key insufficiencies: the absence of an appeals process, the lack of transparency in the application processing, the lack of restrictions on extraneous fees, and the absence of accountability provisions for CHED’s implementation lapses. The authors further emphasize that CHED’s uneven treatment of private higher education institutions (HEIs) (regulated through price caps) and state universities and colleges (fully subsidized under the Universal Access to Quality Tertiary Education Act) violates principles of public-private complementarity, competitive neutrality, and efficient public spending, thereby distorting higher-education governance.

Prof. Alba and Mr. Goquinco propose the following key reforms to establish a coherent, efficient, and equitable framework for higher education governance in the Philippines. First, the constitutional principle of public-private complementarity must be clearly defined and operationalized to ensure coordinated governance between private and public institutions. Second, competitive neutrality should be institutionalized so that both private HEIs and state university colleges (SUCs) compete fairly under uniform regulatory conditions, promoting efficiency and better outcomes. Third, public spending must be precisely targeted toward high-impact interventions, aligning institutional functions with sustainable funding sources. Tuition fees should support degree programs, while government funds finance research and public service initiatives as public goods. Lastly, the one-stop online platform should replace price-cap regulation to enhance transparency and address information asymmetry.

One of the panelists, Dr. Aniceto C. Orbeta, Jr., former president of the Philippine Institute of Development Studies (PIDS), commends Dr. Alba’s comprehensive discussion of CHED’s price-cap regulation, providing historical and economic context to the debate. He recalls that PIDS once recommended linking tuition increases to the education deflator, an inflation indicator reflecting cost escalation in education. However, CHED’s actual practice simplified this into an inflation-based cap that applied uniformly to all HEIs. Dr. Orbeta Jr. agrees that such a price-cap regime, while efficient and straightforward, discourages quality improvements since institutions are incentivized to cut costs. He supports Prof. Alba’s suggestion of adding an inflation-expectation component and negative offsets (allowing increases above inflation) for HEIs that commit to quality improvement or recovery from calamities. Dr. Orbeta Jr. also supports the one-stop online platform proposal as a superior solution, arguing that transparency and voluntary disclosure of data, such as tuition schedules, graduation rates, and employment outcomes, could empower students and drive market discipline. Finally, he echoes Prof. Alba’s concern about uneven governance between private and public HEIs, noting that policymakers’ preference for publicly provided education hampers competitive neutrality. He concludes by advocating greater transparency and consistent regulatory treatment across the higher education system.

On the other hand, Atty. Joseph Noel Estrada, Managing Partner of Estrada and Aquino Law Firm, focuses on the unconstitutionality and illegality of CHED’s price-cap regulation. He asserts that no existing law, whether Batas Pambansa Blg. 232 (Education Act of 1982) or Republic Act 6728 (Government Assistance to Students and Teachers in Private Education Act) authorizes CHED to impose a ceiling on tuition increases. Such limits, he argues, violate the academic freedom of private higher education institutions (PHEIs), which includes the right to manage their finances and determine tuition within the bounds of the law. Atty. Estrada cites jurisprudence, particularly Manila Electric Company v. Public Service Commission, to stress that acts not prohibited by law are permitted unless explicitly restricted. Thus, CHED’s price-cap regime, having no statutory basis, is ultra vires, unreasonable, and unconstitutional. He adds that CHED’s quasi-legislative power under Republic Act 7722 (the Higher Education Act of 1994) cannot be used to amend or expand existing statutes. Atty. Estrada concludes that any form of price-cap regulation undermines institutional autonomy and disrupts the constitutional principle of complementarity between public and private education. However, he echoes Prof. Alba’s recommendations for operationalizing complementarity and enforcing competitive neutrality, warning that government dominance in funding SUCs and restricting PHEIs leads to systemic inequity and regulatory overreach.

Lastly, Dr. Winston Conrad B. Padojinog, President of the Center for Research and Communications of the University of Asia and the Pacific, builds on Prof. Alba’s findings and contends that CHED’s current regulatory framework is outdated. The price-cap policy, introduced when private HEIs dominated the landscape, no longer fits the post-2017 context, where the Universal Access to Quality Tertiary Education Act (RA 10931) gives SUCs tuition subsidies. With SUCs now enrolling the majority of students, private institutions, which are dependent on tuition, face financial constraints. Dr. Padojinog highlights perverse incentives, noting that budget-model schools, which focus on minimal compliance, are favored, while quality-oriented institutions are penalized. To modernize policy, he proposes three reforms: (1) adopting a voucher system that funds students instead of institutions; (2) restoring socialized tuition in SUCs to target aid more equitably; and (3) removing price caps to enable genuine competition and complementarity. Dr. Padojinog concludes that maintaining the current regulatory setup will stifle innovation, lower quality, and erode the competitiveness of private HEIs, calling for prudential, not prescriptive, regulation that respects market dynamics and educational diversity.

The UP CIDS and FPPC Seminar Series documents are available online via https://publicpolicy.feu.org.ph/uppeja-feuppc. The other seminar series are expected to happen in the first quarter of 2026.