Why Ayala, Phinma are investing in schools

Posted at 05/18/14 1:05 PM

MANILA – Why are big companies like Ayala and Phinma pursuing businesses in the education sector?

In an interview on ANC’s “Inside Business with Coco Alcuaz,” Ayala and Phinma officials said investing in the education sector will bring more benefits if executed well.

Chito Salazar, president of Phinma Education Network, said that although the returns are not as much as their other ventures, it satisfies the company’s core value of serving the nation.

“It's a good business, it's the reason why we're still there… It may not meet the returns of other hot businesses today, but it also satisfies another core value of Phinma which is [to get into] businesses that could serve the nation," he said.

“It was a great mix to make a profit and to be able to to help the country.”

Salazar said that the market is tricky, as setting prices for tuition fees are often associated with the expected return in quality of education to be received by students.

“It's a tricky market, [and] the pricing is tough. When providing a low tuition fee, people will associate it with lower quality, so we’re trying to find that balance," he said.

However, he said the key to success in the industry is finding the right system and teachers who will be able to steer the school into a good direction.

“It's really the faculty and finding the right systems that we can impose on the kids…. We’ve had to coach our teachers and drive standards, and actually we've been pretty successful," he said.

At the same time, Fred Ayala, CEO of the Ayala Group's LiveIt Investments Ltd., added that there is a way to provide better education without increasing the costs.

Ayala Corporation will soon open 11 private high schools in Metro Manila, where the annual tuition will be around P23,000 per student. Ayala said they want to provide good value for that price, although he noted the school will have no frills like air conditioning.

“One of the most interesting things about education is that you can actually deliver better quality without necessarily increasing your cost," he said.

“You can't deliver quality at that kind of price and offer everything, so we're not going to be offering air-conditioning, we're not offering fancy facilities. They're going to be clean, they're going to be safe, but it is no frills," he addded.

Ayala said that teachers will be undergoing training. An advanced curriculum developed with Pearson will be built around the curriculum set by the Department of Education (DepEd).

He also said that curricula, similar what the company will be doing, should be tailored as to what employers seek for in job aspirants.

Following the high unemployability rate of graduates in the country, the way to go around the problem is to improve skills to be taught in schools and also to command excellence from students.

“We're really trying to deliver the basic skills of English, computer literacy,[and] real-life experience in actually doing the job…Much of the program [were planned by talking to] employers, asking them who do you really need to hire," Ayala said.

He said that due to these reasons, education is the most important soft infrastructure investment.

Salazar pointed that for schools to improve its classes and overall performance, remediation programs, mentoring, tutorials, and other efforts should be executed.

These are all little, if not no cost efforts to provide quality education to students.