Fast-Food Education
By Aries Rufo Newsbreak Senior Writer
Incoming freshman Sherrye Alberto, 20, is excited about her future. A high school graduate of Hope Christian Academy in Sto.Tomas, Batangas, Alberto enrolled at an Amable M. Aguiluz (AMA) school branch in Cubao for a four-year course in business information system. “I heard AMA’s IT [information technology] school is of international standard. I want to specialize in IT so I can work abroad.”
Eda Compra, 22, matriculated at the System Technology Institute (STI) this school year after seeing its state-of-the-art laboratories and facilities. Although the annual tuition is about P24,000, Compra was enticed to enroll after the school allowed its students to pay after enrollment.
Alberto and Compra are among the thousands of students investing their future in AMA or STI—both of which boast of having the largest network of colleges in the country. Like Alberto, Compra believes that an STI degree is a sure ticket to employment abroad or to a high-paying job in an IT company.
Alberto and Compra learned of AMA’s and STI’s courses through ads—an awareness strategy that these two schools are known for—and reinforced by recommendations from peers or relatives.
A Social Weather Stations survey in 2003 commissioned by AMA had confirmed AMA and STI’s high visibility among those who wanted to take up computer courses, leaving behind the more established schools like De La Salle University, Ateneo de Manila, University of Santo Tomas, and Mapua Institute of Technology.
Franchised EducationAlthough relatively new entrants in the educational system, AMA and STI have modified how education as a business is defined and managed. Unlike traditional private schools—many of which are not profit-oriented—AMA and STI proved that education is like any other commodity governed by market forces.
The two schools are credited with introducing the concept of “franchise education,” which allows as many investors as possible to take part in a product or service—in this case, education.
Lito Vitriolo, deputy executive director of the Commission on Higher Education (Ched), explains that like any franchise setup, AMA and STI’s “trademark” is contracted to investors for a certain fee. “Aside from using their brand, you also get access to their processes, management system, quality, policies, curricula, etc. in the operation of the school.”
In AMA’s case, its manual covers everything—from the enrollment of students to the course outline, syllabus, curriculum, the hiring of teachers and janitors. The business side, however, is the sole concern of the franchisee.
Franchising proved to be such a gold mine for AMA and STI that it spawned copycats. It also spurred competition between AMA and STI as they tried to copy each other’s business strategies.
Thus, it is not rare to find an AMA branch and an STI branch located within spitting distance of each other.
NEWSBREAK learned that an AMA franchise may cost between P3 million and P5 million, while an STI franchise is pegged at P750,000 for vocational courses and P1 million for degree courses. On top of these franchise fees, AMA and STI receive royalties from the franchisees.
Vitriolo says that the competition also allows education and, theoretically, even quality education, to be more accessible in the provinces. Thus, a student enrolled in AMA or STI in Manila presumably gets the same quality of learning as the student enrolled in STI or AMA in Tagum, Davao del Norte.
AMA and STI, however, were not among those identified by Ched as centers of development for excellence in IT education. In government licensure examinations, AMA’s passing percentage in electronics and communications engineering from 1999 to 2003 was between 10 and 35 percent as against the national average passing rate of 43.98 percent.
In the non-IT-based accountancy course, AMA’s two campuses offering the degree registered from 7 to 10 percent passing rate as against the national average rate of 18.87 percent. AMA, however, has an exceptional passing rate for secondary education at 81 percent as against the national average rate of 33.37 percent.
Student GlutAt any given year, AMA and STI have about 200,000 students combined, outstripping other schools in student population. Patrick Azanza, AMA senior vice president for academic affairs, told NEWSBREAK that AMA alone registers 150,000 enrolments for college and vocational courses, while STI, based on its annual report, has around 45,000 enrollees.
From learning centers offering short-term computer literacy courses with a few dozen students, AMA and STI have altered the educational landscape in only about 25 years.
Founded by businessman and currently special envoy to the Gulf Region Amable Aguiluz V in 1980, AMA Institute of Computer Studies quickly morphed into a computer college the following year, offering a four-year degree course in computer science. Starting with 13 students, its population rose to 600 in less than three years and reached 2,000 in 1985. Its first campus was established in Makati in 1983 and a second one was opened in Quezon City in 1986.
At present, it boasts of 204 campuses, learning centers, and affiliates, including branches in Bahrain, Hong Kong, Bangladesh, China, and Singapore. Plans are afoot to put up branches in Thailand and Saudi Arabia.
STI began as a computer training center in 1983. Public affairs head Resty Bundoc says the initial idea of the founders, who are former IBM executives, was to train potential employees in computer information and technology.
STI eventually spun off to formal education, and by the late ‘80s, it had expanded to 20 branches and programming centers. To date, there are about 100 STI branches, including two branches in Vietnam and one in Indonesia.
The two schools’ rapid growth was aided by a move to offer disciplines other than computer education. Azanza says it was a natural course, as IT knowledge has become a must for other courses, such as nursing, engineering, accountancy, and even teaching. AMA offers a four-year degree course in computer science, engineering, accountancy, secondary education, and health care.
STI has degree courses in engineering, business and management, education, and health care.
Bundoc says the decision to diversify is a business strategy, as enrollment in IT courses appears to have reached a plateau. “The curve is not as high anymore as in the ‘80s,” he says. Information and technology-based courses, however, remain AMA and STI’s biggest source of student population, comprising 70 percent of total enrollees.
Hefty Revenues
AMA and STI have changed the rules of the game in attracting students. They introduced advertising as a marketing strategy. AMA public relations head Johnny Ramos says they spend an average of P100 million in ad placements a year, while STI pours in around P30 million
They reap the returns: the two schools’ combined revenue easily amounts to over P1 billion annually. AMA’s flagship campus, the AMA Computer University in Project 8, Quezon City, posted a net income of P59.3 million in 2001, based on its financial statement submitted to the Securities and Exchange Commission. The following year, its net income rose to P88 million.
AMA refuses to divulge its revenue from its entire educational system, but Azanza says it can easily breach the P1-billion mark.
Based on STI’s annual report, the school grossed P635.4 million from 2003 to 2004, up by 27 percent from the previous fiscal year. Its entire network—to include the centers offering certificate courses—grossed P951.4 million.
The trend is expected to continue as the two schools have opened up nursing courses. “Nursing is the hottest course right now” and this will continue in the next 20 years, says STI’s Bundoc.
Some Ched officials are concerned over the “commercialization” of education by AMA and STI through their franchising scheme. Acting Ched chair Carlito Puno says it could hurt the integrity of education, particularly in the tertiary level. He says it is not far-fetched for some franchisees to be more concerned with making money and in the process short-change students.
“Maybe it is the conservative in me,” says Puno, who was president of the Philippine Christian University before being joining Ched in 2001 as commissioner. Franchised schools may not adopt the “mission and vision” of the parent school because their owners are entirely different.
AMA says, however, that only learning centers offering six month- to two-year courses are being franchised and that the quality of its tertiary education is not compromised. Since they teach vocational courses, these learning centers are under the supervision of the Technical Education and Skills Development Authority.
Ched’s Vitriolo says there is danger that substandard schools may falsely create an impression of quality because they are franchised. “This is where Ched comes in, to ensure that these are not diploma mills.” —with Abby Asistio
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