| Summary: | The Philippines has made remarkable progress in improving the quality of basic education in recent decades. Even so, despite significant improvements in primary and secondary education, the number of students who drop out of school remains worryingly high. More than five million youths have failed to complete a basic education. Alternative Learning System (ALS) is a second-chance, informal education program operated by the Department of Education (DepEd) for out-of-school youths and adults. This report aims to assess the current implementation of ALS using a variety of sources , including recent surveys, and analyzes (a) the target populations, (b) current beneficiaries, (c) delivery modes (with a focus on learning facilitators' contracting schemes), and (d) labor market returns to ALS. Key messages are as follows: (i) Only a small proportion of the target populations are enrolled in the ALS program, (ii) the first target groups for ALS are students who drop out of high school for financial reasons, (iii) performance-based payment is expected to improve performance, (iv) the current arrangement for monitoring activities within the ALS program can be improved, (v) labor market returns to ALS are significant only when learners successfully pass the secondary A&E exam, and (vi) small class size (fewer than 40 learners per facilitator) is more efficient. The report concludes that a holistic approach is required for a socially efficient solution for students who do not complete school and those who are at high risk. An expansion of ALS may distort incentives among students currently in school, and coordinated efforts with other programs such as the Alternative Delivery Mode are becoming increasingly important. Earlier intervention guarantees greater returns
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