By Almira Louise S. Martinez, Reporter
The Philippines may experience an economic slowdown fueled by the low proficiency levels of scholars, as literacy rates in each local and international assessments decline.
“A decline in literacy weakens human capital, lowers staff’ ability to adapt to technology, and limits movement into higher-value jobs,” John Paolo R. Rivera, senior research fellow on the Philippine Institute for Development Studies (PIDS), told BusinessWorld in a Viber message.
“If this trend shouldn’t be reversed, the Philippines risks slower long-term growth, weaker competitiveness, and deeper inequality, as more Filipinos remain trapped in low-skill, low-pay work while other countries move up the worth chain,” he added.
The foundational learning crisis has been a long-term problem for the country for at the very least 30 years, in response to the Second Congressional Commission on Education (EDCOM 2).
“Should you see our curriculum for the past three many years, it’s very ambitious, it’s very aspirational. You go from so many varieties of literary texts, you study poems, short stories, prolonged essays,” EDCOM 2 Executive Director Karol Mark R. Yee told BusinessWorld in an interview.
“But (it) seems our challenge was illiteracy and the dearth of ability to understand complex texts,” he added. “We’d like a curriculum that adapts to the learner, and we want to strategize and prioritize because we will’t expect them to learn every part.”
Functionally illiterate Filipinos on the rise
Data from the agency showed that about 24.8 million Filipinos were functionally illiterate in 2025, nearly doubling from the 14.5 million in 1993.
The identical concern was evident within the 2024 Functional Literacy, Education, and Mass Media Survey (FLEMMS) report by the Philippine Statistics Authority (PSA), which showed 18.9 million Filipinos aged 10 to 64 were considered functionally illiterate.
Functional illiteracy, as defined by the local statistics agency, is the flexibility to read, write, and compute, but lacks comprehension skills.
Probably the most alarming markers flagged by Mr. Yee is the poor performance of elementary students, specifically in grades 1 to three, where 85% are struggling to read, and only 15% can read in response to their grade level.
“We’d like to give attention to the inspiration,” he said. “We really want literacy until grade 3 because without that, you can’t keep moving them as much as further grade levels to learn the opposite complex tasks.”
The SEA-PLM 2024 report
Within the 2024 Southeast Asia Primary Learning Metrics (SEA-PLM), Filipino grade 5 students were lagging in reading and arithmetic inside the region.
The study revealed that only 13% of learners were considered to have reached the minimum reading proficiency, while 14% have reached the minimum proficiency in mathematics.
“Should you take a look at the worldwide data, it is admittedly declining, which is why we’re not the one ones saying there’s a crisis – just about all are facing their very own crisis,” Mr. Yee said.
“Except that for us, because this is maybe the primary time that we’re confronting this… It is obvious to us that we are usually not alone. There’s loads of us, and plenty of have already succeeded,” he added.
Economic effects of the training crisis
The decades-long learning crisis may have lasting implications for the country’s future workforce, Federation of Free Staff President Jose Sonny G. Matula said. “If literacy rates keep falling, the long-term risk is that the economy becomes locked into low value-added work.”
“Meaning slower productivity growth, weaker ability to soak up technology, reduced competitiveness in higher-skill manufacturing and services, and greater inequality because fewer staff can move up the abilities ladder,” he added in a Viber message.
Mr. Matula noted that the industries that may very well be affected by staff lacking foundational literacy skills include manufacturing and production lines, construction, and OSH-sensitive work, logistics and inventory systems, customer handling and documentation services, and gig work where staff must navigate apps, terms, rankings, and digital pay systems.
“On the macro level, declining literacy undermines human capital – so GDP growth becomes harder to sustain, more fragile, and fewer inclusive because productivity improvements stall,” he said.
“A significant gap is the tendency to treat literacy as a ‘school issue only’ when it is usually a labor, economic, and social protection issue,” he added.
Leonardo A. Lanzona, an economics professor at Ateneo De Manila University, said that roughly one 12 months of education can result in a 7% increase in wages. “We will perhaps infer that illiteracy is near losing 7% of wages per 12 months.”
Analysts underscored that persistent low learning outcomes could lead on to significant economic losses.
“Global studies suggest learning losses can cost countries several percentage points of GDP (Gross Domestic Product) over the long term through lower lifetime earnings, weaker productivity, and reduced tax revenues,” Mr. Rivera said.
“For the Philippines, persistent poor literacy could mean billions of pesos in foregone income annually, especially because the economy becomes more digital and skills intensive.”
Citing the information from the World Literacy Foundation in 2023, Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes echoed similar worries, stating that lost earnings, reduced productivity, and limited employability attributable to illiteracy could cost $4.72 billion or P277 billion annually.
He added that the United Nations Children’s Fund (UNICEF) also warned of a possible $17 trillion in lost lifetime earnings for the present generation globally without intervention.
“These numbers highlight the severe learning crisis within the Philippines, especially post-pandemic,” he told BusinessWorld in a Viber message.
By 2028, Mr. Yee said EDCOM 2 is in search of around 30% improvement within the reading proficiency of grade 3 students, raising the grade-level readers from 43% to 75% inside three years.
Reforms underway
“Our proposal is that by 2028, we hope that 75% of all of our grade 3 students are reading at their grade level,” he said. “That can be a superb start since it signifies that we’ve seriously undertaken the reforms needed.”
The Department of Education (DepEd) goals to deal with learning gaps through different education reforms and initiatives, similar to the ARAL (Academic Recovery and Accessible Learning) program.
The ARAL program, launched on Sept. 13, is remitted under Republic Act No. 12028 and goals to offer tutorial support for kindergarten to grade 10 learners in reading, mathematics, and science.
Within the 2026 budget for education, P8.93 billion can be allocated to the ARAL program to make sure learning gaps are addressed by “adequately trained and fairly compensated” tutors.