Worldwide, approximately 781 millionadults are unable to read or write in any language. Whileadult literacy rates have increased significantly over thepast several decades, recent progress largely reflects amore-educated younger generation replacing a less-educationolder generation. The Philippines has made remarkableprogress in improving its public basic education system overthe past decade, yet half of Filipino students fail tocomplete the full cycle of basic education. While loweringthe dropout rate is a top priority of the PhilippineDepartment of Education (DepEd), much can be done to improvethe educational and employment prospects of those who havealready dropped out. For the past five decades, DepEd hasoperated parallel education systems for youth and adults whodid not complete basic formal education. The currentincarnation of the Alternative Learning System (ALS)includes two core components, the Basic Literacy Program andthe Accreditation and Equivalency (A and E) Programs.Obtaining this credential enables ALS participants to applyto higher education and training institutions or to jobsthat require a high school education. In partnership withDepEd, the World Bank conducted a series of assessments ofthe ALS designed to shed light on the obstacles it faces andassist the government in developing a strategy to addressthem.This policy note summarizes the empirical evidenceobtained from these assessments and other program data andpresents policy options to increase the effectiveness of theALS. This policy note is divided into six sections.Following the introduction,the second section describes theALS and its target population. The third section examinesdemand-side challenges and identifies strategies forsupporting ALS participants. The fourth section considerssupply-side challenges and outlines priorities forstrengthening the implementation of the ALS. The fifthsection evaluates the returns generated by the ALS, and thesixth section recommends policies to expand its scope andenhance its impact.