The Philippines has experienced overall growth over these last twenty years, but the growth of the manufacturing sector has been sluggish and the country has lost innovation capacity. Re-gaining momentum will depend on many factors, but skills have a key role to play to support the growing service sector, help improve the competitiveness of the manufacturing sector, and, in general, enhance the long-term ability of the country to innovate and adapt and assimilate new technologies. This book analyzes the functional skills that workers need to be equipped with to be employable and support firms' competitiveness and productivity and the role of the education and training system in providing them. It is the most comprehensive attempt so far to review the skills that matter to employers using an innovative employer skill survey. The book reveals that a dramatic increase in educational attainment occurred in just under two decades in the Philippines. However, in view of the growing demand for skills, the book also makes clear that there are initial indications of emerging skills gaps, suggesting that skills are becoming a constraining factor for the economy. Several policy implications are fleshed out for the supply of skills in the country, both overall and by education and training sub-sector, which we expect to be a valuable contribution to the improvement of the education and training system. This book is primarily intended to the policy makers which shape the delivery of education and training in the Philippines and other middle-income countries.