We’re not a pawnshop, says Catholic school

(UPDATED) Nothing's wrong with the policy requiring parents to produce collateral if unable to pay tuition, says a Catholic school director

UNDER FIRE. St Andrew's School, which is under the controversial Diocese of Parañaque, faces criticisms over a policy requiring collaterals from parents who cannot pay their students' tuition.

MANILA, Philippines (UPDATED) – St Andrew’s School (SAS) in Parañaque sees nothing wrong in requiring parents to produce “anything of considerable value” if they’re unable to pay their children’s tuition, said school director Fr Rolando Agustin in a statement early Sunday morning, June 24.

Agustin said this is not the same as a “pawnshop operation” as critics claim.

The priest was responding to a manifesto by concerned SAS alumni against the school’s practice of “forcibly” demanding collateral, such as game consoles and TV sets, from parents. The alumni said this is done “as if SAS were already engaged in the business of pawnshops.” (Read: Catholic school hit over ‘collateral.’)

The two parties’ statements came in the wake of a Rappler exclusive on the alleged misuse of funds in the Diocese of Parañaque, which oversees SAS. (Read: Bishop accused of diverting milions.)

In a statement, Agustin said that the existing policy when he took over the position was to not allow “students with back accounts of 25k (P25,000) and more…to enroll.”

This was “due to the ballooning unpaid accounts of students, which to date (total) about P29-M,” he wrote. In 2005, the students’ past due receivables only amounted to P129,445.50.

“This situation has undermined the viability of the school as the ballooning past due receivables (have) resulted (in) deficits in our working funds, causing delays in the payment of teachers’ and non-teaching personnel’s salaries and benefits,” Agustin said.

Thus, “to give flexibility to students and their parents” with unpaid tuition fees, Agustin said he pushed for a new policy: “to accept from parents some form of guarantee in the payment of their unpaid tuition fees.”

Agustin said the spirit behind this new policy is to present an alternative scheme that kills two birds with one stone: Students can remain in school while the school could ease or address its mounting past due tuition collectibles. 

“Without this (collateral-based) scheme, the other alternative is for the student not to be accepted in the school. Without this scheme, the ballooning past due receivables from students will never be addressed,” Agustin explained.

[Editors’ note: Agustin sent Rappler another statement early Monday to clarify that he did introduce the “collateral” concept, which was not yet the prevailing policy when he took over. He apologized for the confusion.]

‘No interest’

The school director said the collateral scheme is unlike a pawnshop operation because the school does not charge any interest, unlike pawnshops that usually charge 5% a month.

He also noted that pawnshops grant loans based on a small percentage of the pawned items’ values. “Our school in effect grants tuition loans at amounts much higher than the collateral given,” Agustin said.

He also said the items received as guarantee payments “are kept intact and are not for sale.”

Agustin said the school should not have accepted students with unpaid accounts if it strictly implemented its policy that “students with back accounts of 25k (P25,000) and more cannot enroll.”

“There is therefore no truth to the allegation that the school management is inflicting personal affront and humiliation to parents. We are in fact giving the parents an alternative solution to their present financial situation,” Agustin explained.

In their statement, the SAS alumni said they hold the SAS management and board of trustees “responsible for the erosion (of) the school’s moral values resulting (in) rampant irregular accounting practices, conflict of interest, unchristian-like and oppressive school policies, proliferation of lies, and trampling upon the dignity of parents.”

The Department of Education’s (DepEd) opinion is not readily available over the weekend, said the agency’s communication department.

Alumni representative Eduardo Carabeo Jr, however, told Rappler his group has consulted with DepEd officials who said requesting collateral is not allowed. “The only thing they could do is to hold the credentials of students,” he quoted DepEd officials as saying.

Collection ongoing

Agustin also addressed accusations of a cover-up of a multimillion-peso loss in school funds during the term of former SAS director Fr Bayani Valenzuela. In their statement, the concerned SAS alumni brought up the issue of the supposed cover-up, which was also tackled in Rappler’s exclusive.

Valenzuela invested school funds that amounted to P14-M in Prime Bank in 1998. Later, the SAS board acknowledged “the loss of huge amount of money… as uncollectible amount with the total amount of P10,324,946.03” from the P14-M.

Agustin said the school has recovered P3.7-M while efforts are ongoing to collect the balance of P10.3-M. “However, the fact that we all have to accept is that the probability of collection is getting smaller,” the school director said.

He also denied accusations of a cover-up. “He was in fact removed from his position,” said Agustin, echoing an earlier statement by Parañaque Bishop Jesse Mercado. (Read: Bishop breaks silence on diverted funds.)

NO COVER-UP. In an interview with reporters last week, Parañaque Bishop Jesse Mercado says his diocese has punished former St Andrew's School director Fr Bayani Valenzuela.

Agustin said the SAS board declared the P10.3-M uncollectible based on the recommendation from the school’s internal auditor “to write off the account after 14 years have lapsed and all efforts to collect the same have been exhausted.”

“I understand that this is an accepted practice for accounting purposes – to write off bad accounts which are no longer deemed as collectible after the lapse of so many years, based on the decision of management. The said board resolution is without prejudice to any collection efforts exerted to recover the P10.3-M,” Agustin said.

“This board resolution has nothing to do with any cover-up but pertains to the disposition of the long-standing uncollectible account in our financial statements,” he said.

The SAS alumni have demanded an end to “the very unprofessional manner of running SAS.”

Agustin, for his part, said SAS is now in a difficult situation.

“The problems besetting St Andrew’s School when I took over as school director last November 2011 are not easy to resolve. Suggestions from the different stakeholders, like parents and alumni, on how to resolve these problems are therefore welcome,” he said. – Rappler.com

Click on the links below for related stories: