Serving the Underserved

Throughout his esteemed career, PHINMA Education’s President and CEO Chito B Salazar’s biggest concern has been the level of poverty he sees in the region and the resulting lack of means and opportunity for people to access education to rise beyond it. On completing his Masters and PhD, Chito joined the Asian Institute of Management to run its policy centre before entering the business of education with STI College in 2000 and then moving to the PHINMA Corporation a few years later.

It was while travelling to locales large and small with STI College that Chito first recognised that schools were too far away, too expensive or students were not properly prepared for higher education. “Until recently, higher education was not traditionally provided to low-income families unless they went to a state university,” he tells The CEO Magazine.

A Unique Model

PHINMA Corporation had been intending to enter education for some time but didn’t have a clear strategy until Chito joined the team. His vision was to create a school system that would cater to low-income families, which he perceived was an untapped and underserved demographic. “Our model is unique in that we are assessed on the same metrics that other businesses are assessed on and apply business principles and discipline to providing education services. This includes looking at ways to trim costs, improve efficiency and productivity, and provide better services,” he says.

“This, in combination with the reputation and trust the brand PHINMA has within the business community, has allowed us to grow, which in turn enables us to find willing investors.”

Since 2004, PHINMA Education has provided quality education to underserved youth in the Philippines and South-East Asia, with an academic model tailored to their needs and aspirations, as well as industry standards. Through its model that includes Active Learning, the Student Success Program, career pathways and core work skills, the network has helped students become equipped with in-demand skills they may use to help them succeed. From a single school serving 5,000 students in the Philippines’ Cabanatuan City, PHINMA Education is now a fast-growing network of 10 educational institutions serving more than 95,000 students.

An International Push

The education provider’s next big move will be into the international market – a step they commenced as far back as 2016 in Myanmar (which they left in 2019) and Indonesia in 2019. “Our experience in Indonesia affirmed low-income families, even in other countries, want to get a higher education and see education as a route to improve their lives,” Chito explains.

It may sound like a model incompatible with profit, but Chito says that despite the costs, they’re able to keep tuition fees low, offer 50 per cent and 75 per cent scholarships and, at the same time, make a profit. “I just reviewed the budget yesterday and we’re still doing 38–41 per cent earnings before interest, taxes, depreciation and amortisation, and we’re achieving net income margins of about 25–30 per cent.”

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“PHINMA Education recognises our craft and encourages us to go beyond our capabilities, for there will always be new challenges entrusted to our company. It’s a personal commitment and unrestrained growth.” – Evan S Octaviano, Operations General Manager, Karkonz Builders and Consultancy

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The ongoing uncertainty surrounding global lockdowns offers PHINMA Education its biggest challenge as it expands its international operations. In 2020, it began to offer Remote and Distance Learning (RadLearning), in addition to FlexLearning, to service markets that might suddenly be in lockdown. “We can now reach markets that previously couldn’t come to us, even if there wasn’t a lockdown, as some locations are really remote and the costs of transportation to-and-from school or living in a dorm is just too prohibitive,” Chito says.

A Personalised Approach 

When they began PHINMA Education, his team set out by intent and design to service low-income families and, Chito says, what sets them apart from other education providers is that they have an intimate knowledge of their market and customers owing to a more personalised approach.

“We require staff at all levels, right through to the executive level, to visit the homes of our students so that they can really see what the market is like. This provides us with direct knowledge of the market and that allows us to design our learning systems specifically for our students’ circumstances,” he explains. 

Chito says part of the model’s success is its focus on partnerships. “Our ultimate goal of providing quality education is for students to make their lives better by getting good jobs and placements. Education to employment is actually an ecosystem, so we’ve engaged with partners who have similar interests,” he says. 

One of the partners they’ve engaged with recently, he says, is Mount Grace Hospitals, which is part of United Laboratories. “We’re working together to provide better training for our nurses so they’re better prepared to work in their hospital system,” he says. “Our partners know what the employers are looking for, which we integrate into our curricula. For example, one of the things we’re trying to do right now is to integrate German language learning because nurses are in demand in Germany.”

Leading by Example

When it comes to his management style, Chito says he demands excellence and perfection from everyone he works with – because it’s what their market needs. “Our markets are deprived of so much already and the only way we can really help them is if we give them our all,” he says. 

He says he also likes to lead by ‘doing’ rather than ‘saying’ and is aware that the responsibility of PHINMA Education’s success or failure starts and finishes with him. “At PHINMA Education, we live by the mantra: ‘Always accept blame and accountability, but the credit goes to the team’. I think this gives our executives the freedom to speak and to share their ideas because the buck stops with me.”