The law makes enrolment in kindergarten compulsory before children can begin the traditional six years of primary school.
State-run high schools, which currently only have a four-year curriculum, will also be required to add two extra years. Students will have to complete the extra education to qualify for university.
"We now know that our traditional 10-year basic education cycle is deficient," Aquino said at a ceremony where he signed the law.
"Given that our young people are at a disadvantage in terms of basic education, how can we expect them to compete for employment and other higher pursuits?"
Aquino, half way through a six-year term, has said one of the main goals of his presidency is to create a more inclusive society in the impoverished country of 100 million people.
Twenty-nine percent of the workforce are jobless or underemployed, according to the latest government data. Nearly 10 million Filipinos have been forced to seek better-paying jobs abroad.
The government said it was building tens of thousands of new classrooms, hiring nearly 18,000 teachers, and printing tens of millions of textbooks this year to implement the programme nationwide.
The education department budget has been raised to 232 billion pesos ($5.64 billion) this year, up 44 percent from 2010 levels, largely to pay for the extra services, Aquino said.
Schools operated by the private sector must also begin implementing the reforms in the next school year, which starts in June.
More than 150 languages are spoken in the former US colony, although English has been the main language of instruction from the start of school.
Another major part of the reforms will be to teach in Tagalog or other native languages from kindergarten until the third year of primary school.
The language of instruction will then gradually shift to English from grades four to six in primary school. Subjects will then be taught in English throughout high school.
The Philippines considers English proficiency by its workforce as a competitive advantage, allowing a business process outsourcing industry to flourish and Filipinos to work overseas.