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New report shows drastic economic impact of illiteracy on the Philippines

A new report by the World Literacy Foundation found that the problem of illiteracy costs the country's economy an estimated P258 billion or $4.72 billion every year.

In its report “Economic Cost and Social Impact of Illiteracy” released Monday, the international organization said they found that the impact of illiteracy cuts across different aspects of social welfare and the economy.

To approximate the economic impact of illiteracy on people’s personal income and on a country’s national income, the World Literacy Foundation used UNESCO’s mathematical formula for calculating the economic impact of illiteracy.

The study, released ahead of the three-day literacy conference held by the World Literacy Council, found that the estimated cost of illiteracy to the global economy is estimated at $1.19 trillion.

“Around the world, the impact of illiteracy on personal income varies but it is clear earning potential is limited. Illiterate people earn 30%-42% less than their literate counterparts,” the report said.

It added that people who cannot read or write struggle to find opportunities to increase their earnings due to the absence of basic literacy skills needed for vocational education or training.

Missed opportunities to climb socio-econ ladder

The study also found that illiteracy has led to lost earnings and limited employability and lost business productivity around the world.

Surprisingly, it also showed that the effects and costs of illiteracy apply equally in both developed and developing nations.

People struggling to read and write can also miss out on "wealth creation" opportunities due to the comprehension skills required of individuals applying for a loan or investments in various financial instruments.

"Typically, a family in a developed country will purchase a home using a mortgage and work many years to pay off the house. Many such 'home owners' do not understand the bank loans they take out although they sign legally-binding documents to get them," the report stated.

People struggling with literacy will also struggle to establish a "personal financial plan" or evaluate financial investments to provide themselves with a retirement income, among other means of generating income.

Pandemic worsened illiteracy

While the Philippines' Department of Education has long detected several frustrated readers in schools, prompting the creation of several local and national reading programs through the years, the pandemic’s disruptions to education have also deepened inequalities in children’s literacy skills.

World Literacy Foundation Chief Executive Officer and co-author of the report Andrew Kay said that “early data shows a drop in literacy rates post-pandemic,” justifying the need for urgent literacy programs.

In the Philippines, at least nine out of 10 children aged 10 struggle to read and write simple text, according to the World Bank’s latest statistics on learning poverty in 2021.

The country also ranked lowest among 79 countries that participated in a 2018 international reading literacy assessment.

In January, Education Secretary Sara Duterte, also the country's vice president, acknowledged the severity of the country’s growing number of frustrated readers in the department’s first Basic Education Report.

Meanwhile, teachers and other local education officials have highlighted how students’ inability to grasp complex material affects their performance in almost every other subject area, like history and the social sciences.

To address illiteracy, the report recommended governments around the world to implement adult and parental literacy programs.

Education leaders should also come up with strategies to ensure students stay in schools, such as the inclusion of vocational training, the construction of more schools to reach geographically isolated students and more scholarships for financially insecure students, according to the report.

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