Phonemic Awareness (PA) is a foundational skill that is critical for learning to read. In English (phonemes, which are tiny speech sounds) are mapped onto letters that we use for reading and spelling.
Reading involves mapping a spatial sequence of letters, from left to right, onto a temporal sequence of phonemes, organized from first to last.
Spelling involves a similar process but in the other direction. In order to spell, the child must be able to go from sound to print.
The above mentioned reasons are what makes PA so important.