An Empirical Analysis on the Determinants of Public Education Expenditure in the Philippines

Abstract

Using time-series data from 1989 to 2018, this study examines the determinants of public education expenditure in the Philippines. Following Wagner’s law, this paper investigated the relationship of gross domestic product per capita, unemployment rate, urban population growth, and lagged public education expenditure to public education expenditure. The ordinary least squares (OLS) method was used to determine the significance of the variables, and statistical tests were conducted to measure the overall significance of the model. The findings show that gross domestic product per capita and lagged public education expenditure were positively significant determinants contributing to the Philippines' growth of public education expenditure. On the other hand, the unemployment rate and urbanization growth were insignificant and did not contribute to the increase in expenditure. The results also provided strong evidence on the relationship between GDP per capita and public education expenditure, supporting Wagner’s law in the Philippine context. Finally, this study recommends that policymakers review budget allocation and utilization to achieve wider education accessibility and better quality of education in the Philippines.