This paper reports on the results of the review of the two major scholarship programs of the Technical
Education and Skills Development Authority (TESDA), namely: (a) the Training for Work Scholarship
Program (TWSP) and (b) the Private Education Student Financial Assistance (PESFA). The two scholarship
programs account for 73% of the number of scholars among the technical-vocational education and
training (TVET) graduates in 2007 (TESDA, 2010a). The paper was commissioned to be an input to the
current effort of the Philippine Government to improve the policy-basis and result orientation of the
budgeting process.
The primary objectives of the study are to determine (a) the internal efficiency (through the drop-out
rate), and the (b) external efficiency (through the rate of employment) of scholars of the TESDA
technical-vocational scholarship programs. These questions are designed to answer the basic policy
question whether the program is worth spending scare resources on. Once these basic questions are
answered, one can then go to the next set of operational questions aimed at identifying the avenues for
improving the effectiveness and efficiency of the program. To address effectiveness, the study look at
ways of improving (a) the selection of scholars, (b) the selection of skills that need promoting through
scholarships, and (c) selection of training institutions. Finally, ways of improving the efficiency of
delivering the service were also explored.
Given the limited time and resources, the study had to resort to second best methods and sources of
data in reviewing the scholarship programs. Since there was no time and resources to do primary data
generation, the study had to rely on data generated by TESDA. In particular, it did a re-analysis of the
2008 Impact Evaluation Study (IES) survey data to generate empirical evidence on the various issues of
the study. It also used data from reports regularly submitted by the technical-vocational institutions
(TVIs) to TESDA for one region - the National Capital Region (NCR). This data set is the primary source of
official TVET statistics. Administrative data from the implementing units of the scholarship programs
were also used. In addition to these data sets, three separate Focused Group Discussion (FGDs) involving
relevant decision makers were also done. One was with national TESDA officials, another with the
regional TESDA officials, and third was with the officials of the TVIs and TVI-employers.
The assessment shows that the scholarship programs are performing well in terms of internal efficiency
as indicated by the high graduation rates particularly in recent years. They are not performing well
though in terms of external efficiency as indicated by low employment rate. It is important to
emphasize, however, that compared to general TVET graduates, the scholars, particularly PESFA
scholars, but not TWSP scholars, are performing better compared to non-scholars in terms employment.
Thus, the low external efficiency performance is a general TVET sector problem and not a problem
specific to the scholarship programs.
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The study also highlights some of the operational problems. Foremost of this is the weak monitoring and
evaluation capacity. The primary indication of this is the lack of standardized reference period in
computing the employment rate – the primary indicator of external efficiency. Unless there is good and
consistent estimate of the employment rate, the assessment of the effectiveness of TVET, in general,
and the scholarship programs, in particular, will remain in doubt. The selection of skills to support may
have problems. This is clearly indicated by the TWSP which was supposed to address frictional
unemployment problems but whose employment rates of its beneficiaries are lower compared to other
scholars. This clearly denies its supposed greater market orientation compared to the other
scholarships. While it appears that the private sector is sufficiently involved in many aspects of the
training process, the low employment rate indicates that whatever has been done has not solved the
relevance issue. Thus, there is need to find other ways of involving the private sector to improve the
employment rate of TVET graduates. Finally, given the limited capacity at TESDA to manage the TVET
sector, a fair question is whether administering several scholarship programs is justified particularly if
the programs are not achieving their primary objectives.