THE Philippine call center industry is a juggernaut, employing over a million and generating billions in revenue. Its workers’ voices are a familiar sound for callers from around the world, the nation’s deep pool of English speakers underpinning the country’s rise into a global hub for customer service outsourcing.
Artificial intelligence is shaping up to be a huge disruptive force but another, more insidious problem is emerging — an education system that’s producing graduates who were never properly taught to read in the first place.
Nestor Flores, the chief executive officer of Abba Personnel Services, Inc., a Philippines-based recruitment firm specializing in overseas placements, said the most noticeable gaps are in math and English, particularly in comprehension, grammar, and vocabulary.
“We administer a written exam as part of our hiring process. It’s essentially the same exam we’ve used for many years, yet it appears to be more difficult for applicants to pass today,” Mr. Flores said.
According to a three-year review of the country’s education system that culminated in January with the release of the Second Congressional Commission on Education report, nine in 10 Filipino children can’t read and understand a simple text by age 10. The failure persists throughout high school, leaving millions of students effectively functionally illiterate by the time they graduate.
It’s an educational crisis that’s already holding back the potential of the call center-dominated outsourcing industry, Jack Madrid, president of the IT & Business Process Association of the Philippines, said.
“Communication is more than just English fluency, it’s comprehension,” Mr. Madrid said. “Regardless of whether you’re in healthcare or banking, you need to be able to comprehend because the type of work our global customers expect from us is problem solving. This is no longer directory assistance.”
US outsourcing firm Concentrix Corp., which has a significant presence in the Philippines, is witnessing similar shortcomings. The Fremont, California-based group runs multiple sites across cities including Manila, Cebu and Davao.
“As a company that hires thousands of Filipinos every year, we do see the impact of learning gaps in areas such as reading comprehension, critical thinking and problem solving,” Amit Jagga, Concentrix Philippines chief business officer, said. “The Philippines continues to generate a large volume of applicants but not all are immediately job ready for the demands of modern customer experience roles.”
Concentrix is donating computers to schools and has a program that seeks to strengthen teacher capabilities, providing them with training on English proficiency, digital literacy and business ethics.
Abba Personnel’s Mr. Flores said when foreign employers hire Filipino workers, they prioritize relevant work experience and that “usually comes with the underlying assumption that workers already have a solid academic foundation. Work experience builds on that foundation rather than replacing it.”
In the decades after World War II, thanks to its adoption of a nationwide public school system under US rule, the Philippines had one of the highest literacy rates in Asia. Its large, English-proficient labor force helped make the nation one of the world’s top suppliers of migrant workers, including nurses and seafarers. A booming business process outsourcing industry emerged, and the country has long sought to move into more advanced electronics manufacturing, alongside regional peers such as Malaysia and, more recently, Vietnam.
Now, the unfolding education emergency risks turning those industrial aspirations into a pipe dream.
“Human capital has been one of the country’s greatest strengths, particularly given its young and dynamic population,” Asian Development Bank Philippines Country Director Andrew Jeffries said. “But when large numbers of learners leave school without strong foundational skills, it can affect productivity, workforce readiness and the country’s ability to move into higher-value sectors of the global economy.”
President Ferdinand R. Marcos, Jr. has vowed to prioritize education for the remainder of his term that ends in 2028.
“The challenges that hound our education sector are immense,” he said in February at the launch of an initiative to fast-track the construction of school buildings. “But now we have the opportunity to correct at least part of those problems.”
In an interview with Bloomberg last month, he said the nation’s workforce is considered “our greatest asset.”
“They are relatively well-trained, but we have to do reskilling and upskilling,” Mr. Marcos said. “Our people have to be ready to maximize the advantages that AI provides and watch for the dangers that sometimes AI will bring.”
There’s no single reason to explain the education decline. In part, it’s a culture of mass promotion, where teachers are encouraged to move students up even if they’re not ready. Teacher evaluations often depend on student pass rates and schools want to avoid high failure or dropout numbers.
Carla Joyce Espino, a 28-year-old single mother from Hagonoy, a town in Bulacan province north of Manila, says she was surprised when her son Draven managed to move up to Grade 2 without being able to read.
“I fear my son will be among the many hordes of students who reach high school without learning how to read and write,” Ms. Espino said. “I really don’t want that to happen.”
Starting this summer, a tutoring program called “Tara, Basa!” — Tagalog for “Let’s Read” — will be made available to Grade 1 pupils. The program seeks to aid low-income families by tapping college students as tutors for children who are struggling. “I have high hopes it’s not yet too late for Draven to learn how to read and reach his ambition, whatever that might be,” Ms. Espino said.
Some schools meanwhile have outdated text books and other materials, raising concerns about quality, and poverty is another major factor. Malnutrition and financial hardship play a central role in keeping children out of the education system, with many families unable to afford transport or sufficient food and kids instead needing to work or stay at home to help instead of studying.
In Happyland, a densely populated informal settlement in Manila, Angel Ramos, a 35-year-old mother of five, had to make a painful choice between education and food. Three of her children have stopped school because the family can’t afford it. Ms. Ramos acknowledges the possibility that education could be her children’s way out of poverty, “but when I think about it, it’s more important they eat.”
One policy advisor and former finance agency undersecretary blames a lack of focus on learners’ formative years.
“Basic education has been neglected, that’s the root cause. Children drop out as early as Grade 2,” said Milwida Guevara, president at Synergeia Foundation, a non-government organization working to improve basic education.
The EDCOM II study released in January also found that by age 15, just when children are finishing junior high school, only one in 10 can read with understanding. More than 70% don’t have the minimum proficiency in math. “Most Filipino learners are not mastering foundational competencies — literacy and numeracy — leading to lifelong handicaps,” the commission said.
Education has also been underfunded in recent decades, even as the nation’s constitution mandates it should get the biggest share in the annual budget, said Ruby Bernardo, national chairperson of Alliance of Concerned Teachers, the country’s biggest teachers union.
“It’s a decades-old problem that’s now burdening the students,” Ms. Bernardo said, pointing to the lack of classrooms, teachers and learning materials.
The Philippines this year allocated P1.3 trillion ($21.6 billion) in its budget for education, the highest ever, equivalent to 4.4% of gross domestic product and the first time the country has met the United Nations benchmark of 4% to 6% of GDP for education spending.
Corruption is an issue as well, Ms. Bernardo said, considering that for many years the construction of classrooms has been handled by the public works department, which is embroiled in a graft scandal over billions of dollars of substandard and non-existent infrastructure projects. It’s estimated the Philippines has a shortage of some 145,000 classrooms.
“The risk for the Philippines is not simply that some children learn less; it is that the country gets trapped in a low-skills, low-productivity, low-complexity growth model just as global competitors are reorganizing around higher-value manufacturing, digitally enabled services and AI,” World Bank lead economist for the East Asia Pacific region, Tara Beteille, said.
While that’s a threat for the business process outsourcing industry, it’s “even more consequential for semiconductors and advanced manufacturing,” she said. The Philippines is seeking to expand into higher-value design and manufacturing of chips, from more basic assembly and packaging.
“The Philippines has a young, growing population, and every percentage point of improvement in student proficiency translates into real, lasting economic growth,” Ms. Beteille said. The World Bank has done some economic modeling on the Philippines that shows acting on learning today could translate into growth gains equivalent to 73% of current GDP over the next five decades.
Danilo Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc., acknowledges the many problems but is reassured the country’s main education agencies are coordinating their efforts.
“I’m encouraged by the fact that Education Secretary Sonny Angara and TESDA Director-General Kiko Benitez are there and they’re interested in making the changes,” Mr. Lachica said, referring to the Technical Education and Skills Development Authority, which oversees vocational training and certification. “But how do you eat an elephant? You just have to take it one bite at a time.” — Bloomberg
