Previous studies have shown returns to schooling in the Philippines to be well above those of alternative investments, and decreasing returns to education suggesting the need to focus on primary education. These figures are overestimated due to omitted variable bias. More recent studies have shown decreasing returns to schooling over time but increasing returns to higher education, due to changing market conditions as well as better model specification. Still, omitted variable bias and endogeneity problem remain. Accounting for observed as well as unobserved heterogeneity, this study finds even lower returns to schooling. Accounting for the endogeneity of education, it finds return to tertiary education rising substantially, and finds no significant returns to basic education implying the need for a change in policy focus. The study also looks at the effect of education quality on education returns and its policy implications.