HOW TO IMPROVE THE ENTERPRISE-BASED EDUCATION AND TRAINING FRAMEWORK

HOW TO IMPROVE THE ENTERPRISE-BASED EDUCATION AND TRAINING FRAMEWORK

The Enterprise-Based Education and Training (EBET) framework of the Philippines, implemented under Republic Act No. 12063, is one of the most promising reforms in our technical-vocational education system. Administered primarily by the Technical Education and Skills Development Authority (TESDA), the program aims to bring training directly into the workplace so that workers learn the exact skills that industries actually need.

The philosophy is simple: “training to trabaho.” If students learn inside factories, offices, farms, or construction sites, they are more likely to get hired immediately after training.

On paper, EBET looks excellent. In fact, historical data suggests that graduates of enterprise-based programs enjoy employment rates of around 80 to 85 percent, much higher than traditional school-based technical training. That alone should convince us that the concept is correct.

However, if the concept is good, why is participation by the private sector still slow?

One possible reason is the design of the incentives.

Under the current system, companies are allowed to deduct training expenses from their taxable income. Eventually, this incentive could reach 75 percent of training costs, although the full benefit will only be felt in the coming years. But here lies the practical problem: companies must spend the money first before they can enjoy the tax deduction later.

For many employers, especially micro, small, and medium enterprises (MSMEs), this creates a cash flow dilemma. They must pay for trainee allowances, training materials, insurance, and mentoring time upfront. The tax benefit comes later—and not even in cash, but in the form of tax credits.

In the real world of business, that arrangement is not always attractive. With good accountants and lawyers, some companies already have legal ways to reduce taxes through other means. That is the uncomfortable truth.

Let me be clear: I support EBET and I believe it is a very good program. But if we want it to succeed, we must be honest about its weaknesses.

One practical solution is to shift part of the incentive system from tax deductions to direct subsidies. Instead of waiting for tax breaks, the government could provide training vouchers or grants, particularly for MSMEs. This would help businesses cover the immediate costs of trainee allowances, tools, and protective equipment.

Another improvement would be the expansion of third-party “EBET support integrators.” These organizations could help small businesses handle the paperwork required by TESDA and the Bureau of Internal Revenue (BIR). If a single integrator could manage the documentation for twenty or thirty small enterprises, it would dramatically reduce the burden on entrepreneurs who simply want to train workers.

We should also strengthen the ladderized education system. Technical training should not be viewed as a dead end. A worker who completes a high-level apprenticeship should be able to convert those competencies into college credits recognized by the Commission on Higher Education. That would make technical training more attractive to young people and their parents.

Another reform worth considering is the creation of a single digital portal linking TESDA, the BIR, and the Department of Labor and Employment. One system could handle trainee registration, monitoring, certification, and tax documentation. Reducing bureaucratic steps would encourage more employers to participate.

There is also the concern about “poaching.” Some companies hesitate to train workers because those workers might leave immediately after gaining new skills. Perhaps the government could introduce incentives for companies that retain their trainees for at least two years.

In the meantime, there may be an interim solution. Some corporations might be willing to charge their EBET expenses to their corporate social responsibility (CSR) budgets. This would allow them to develop their own workforce while fulfilling their social commitments.

If any company is interested in exploring this EBET–CSR partnership, I would be happy to help coordinate the effort with TESDA.

After all, the success of EBET will depend on one simple principle: government and industry must work together to build a workforce that is ready for the future. If we get this right, we will not only train workers—we will strengthen the Philippine economy itself.

RAMON IKE V. SENERES

www.facebook.com/ike.seneres iseneres@yahoo.com senseneres.blogspot.com 09088877282/05-02-2027

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