MANILA, Philippines — A nearly ₱10-billion government fund is being released to help settle unpaid costs incurred by state universities and colleges (SUCs) under the country’s Free Higher Education program, giving financial relief to institutions that had previously absorbed the expenses.
The Department of Budget and Management (DBM) said it has released ₱9.753 billion to the Commission on Higher Education (CHED) to address funding deficiencies involving 108 SUCs nationwide.
But while the announcement may sound like another massive free-college funding boost, the money is primarily intended to settle past obligations—not simply provide a new cash benefit to students.
Billions cover three academic years
According to the DBM, the funding covers validated Free Higher Education (FHE) deficiencies from Academic Years 2022–2023, 2023–2024 and 2024–2025.
The expenses had previously been absorbed by beneficiary SUCs using their own institutional resources, putting pressure on their available funds.
CHED, through the Unified Student Financial Assistance System for Tertiary Education (UniFAST), will facilitate the corresponding release to the affected universities and colleges under existing guidelines.
The release is also backed by CHED-DBM-UniFAST Joint Memorandum Circular No. 2026-01, issued in June 2026, which established guidelines for releasing funds for FHE deficiencies covering the same three academic years.
What does the ₱9.753 billion mean for students?
The key point is that the funding is designed to reimburse or cover institutional costs associated with the government’s Free Higher Education program.
Under Republic Act No. 10931, or the Universal Access to Quality Tertiary Education Act, qualified students in state universities and colleges are provided free tuition and other school fees. The government’s broader Universal Access to Quality Tertiary Education framework also supports eligible students in CHED-recognized local universities and colleges.
The latest DBM release therefore strengthens the financial foundation behind the existing free-higher-education system rather than announcing a completely new free-college program.
SUCs could regain financial breathing room
The financial significance goes beyond settling old bills.
With SUCs no longer having to carry the same burden from previously absorbed FHE costs, institutions could have greater room to direct resources toward their core operations.
These may include academic programs, research, student services, laboratories, libraries, information technology systems and campus facilities, subject to applicable budgeting, accounting and auditing rules.
The Daily Tribune likewise reported that the release could ease pressure on SUCs and provide additional fiscal space for institutional priorities.
Part of a broader education push
The release comes as the government continues to emphasize education in its national spending priorities.
DBM’s 2026 budget documents identify Universal Access to Quality Tertiary Education as a major component of the government’s effort to reduce financial barriers to higher education. The agency’s 2026 budget materials also allocate funding for free tuition and other assistance programs supporting eligible learners.
The administration has also previously described education as a major national priority, with the proposed 2026 budget placing basic and higher education at unprecedented levels of overall government spending.
The bigger issue: keeping free college financially sustainable
The latest release also highlights one of the central challenges facing the government’s free-higher-education policy: ensuring that funding keeps pace with the actual costs and enrollment demands of SUCs.
The DBM has previously acknowledged concerns over possible funding gaps as SUC enrollment continues to change. In discussions surrounding the education budget, officials and lawmakers have stressed the need to align allocations with realistic enrollment projections so institutions are not left underfunded.
That makes the ₱9.753-billion release more than just a reimbursement.
For 108 state universities and colleges, it represents an effort to clear accumulated financial obligations while keeping the free-higher-education system operational.
And for Filipino families counting on public universities to make college more affordable, the bigger question now is whether future appropriations can consistently keep up with the demand.
For now, the government has put nearly ₱10 billion on the table. The challenge is making sure the funding reaches the institutions that carried the burden—and that the free-college promise remains financially sustainable in the years ahead.
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