Timothy reveals to Phillip that he cannot read or write. How does this make Phillip feel? What do Phillip's feelings reveal about him?

Phillip reacts to Timothy's illiteracy with smugness, which reveals how immature Phillip still is.

This happens in Chapter 8, on page 68, when Timothy and Phillip are using stones to spell the word "help" on the ground in hopes that passing planes will see it and come to their rescue. Phillip realizes that Timothy wants to write this word on the ground but doesn't know how to spell it. Here's how Phillip reacts to this discovery:

I felt good. I knew how to do something that Timothy couldn't do. He couldn't spell. I felt superior to Timothy that day, but I let him play his little game, pretending not to know that he really couldn't spell.

Keep in mind that Phillip has recently lost his self-control and had a loud, babyish crying fit over their situation. He feels like a helpless child (which he is) and is desperate to regain his dignity. Until this point, Timothy has taken care of himself and Phillip with his own superior knowledge of survival skills and a steady, friendly, fatherly manner. Phillip has often felt the burden of his youth and ignorance in Timothy's company, so now that the boy realizes he can do something that the old man cannot, Phillip feels superior and proud, smug in the knowledge that he's better at reading and writing than Timothy is and that Phillip's own spelling skills are actually useful for the task they're working in.

What we can understand from this revelation about Timothy and its effect on Phillip is that the boy lacks maturity. Someone older and more mature than Phillip would understand that their situation isn't a contest of who's better at what. It's a situation that calls for teamwork, for reliance on each other, and for sensitivity. Timothy is probably self-conscious about his illiteracy, since he certainly doesn't admit it openly--and a mature friend would be sensitive to that issue, careful not to offend the old man. Instead, Phillip keeps his observations secret not out of tact but out of smugness: he seems to snatch onto this deficiency of Timothy's as if it's a good card in a game to play later to his own advantage. And in fact, if you read a bit further, you'll see Phillip losing his temper and yelling at Timothy about how the old man can't even read. Phillip has a lot of growing to do, socially and emotionally.