Literacy issues threaten Philippines AI and digital innovation goals

CEBu, Philippines — The Philippines’ goal to become a leader in AI and digital innovation may be held back by a more basic problem: many senior high school graduates still struggle with functional literacy, said Michelle Alarcon, president of the Analytics & Artificial Intelligence Association of the Philippines (AAAP).

Speaking at a recently held Globe Business “G summit 2025”, Alarcon cited statistics from the Philippine Statistics Authority (PSA) that point to an “alarming percentage” of senior high graduates who, while formally literate, struggle to apply the very concepts they were taught.

“They may have gone through the motions of schooling, but when it comes to applying knowledge, many fall short. That’s a serious national concern,” she warned.

While much of the public discourse has centered around building “Technology Quotient” or TQ—a measure of one’s ability to adapt and thrive in digital environments—Alarcon cautioned that this metric may be insufficient.

“It’s not about TQ alone. We’re assuming that because students use learning management systems or access content online, they are tech-ready. But the deeper issue is that many can’t translate concepts into action, regardless of the platform,” she said.

In a knowledge economy where industries are increasingly powered by automation, data science, and emerging technologies, the capacity to apply learning in real-world contexts is critical.

Yet, Alarcon underscored that the Philippine education system may be ill-equipped to deliver even this basic competency.

“This isn’t just about emotional intelligence (EQ), or even technology quotient (TQ). We are talking about a system-wide readiness problem,” she said. “Addressing it requires collective effort—from government to the private sector to civil society.”

Alarcon acknowledged initiatives from groups such as the Private Sector Advisory Council (PSAC), which works closely with the Office of the President to align industry needs with educational reforms.

Still, she emphasized the urgency of systemic transformation. “We’re still a work in progress,” she admitted. “If I could claim we’ve solved it, I would. But the truth is, the whole nation needs to be behind this.”

The remarks come at a time when the Marcos administration has stepped up efforts to position the Philippines as a digital innovation hub in Southeast Asia.

Yet industry leaders are increasingly vocal about the growing disconnect between educational outcomes and workforce demands.

In the short term, Alarcon believes that partnerships between tech companies and educational institutions may help narrow the skills gap.

However, without a national strategy to overhaul learning outcomes, the country’s long-term competitiveness in the AI and analytics space could remain aspirational at best.

Bridging the digital divide begins not with code or curriculum, but with a literate, functional foundation,” she added.