The World Bank Group has approved a record USD1.02-billion financing package for the Philippines, backing reforms aimed at lowering electricity costs, strengthening water security and accelerating the country’s transition to cleaner energy.
The package includes a USD1-billion loan from the International Bank for Reconstruction and Development (IBRD) and a USD20-million performance-based grant from the Livable Planet Fund, making it one of the World Bank’s largest policy-based financing operations for the country.
The Second Energy Transition and Climate Resilience Development Policy Loan supports reforms to reduce the Philippines’ dependence on imported fossil fuels, expand renewable energy capacity and attract private investments while improving access to reliable water services.
“The Philippines has everything it needs to power itself at lower cost, wind along its coasts, sunlight year-round and geothermal energy beneath its soil,” said Zafer Mustafaoğlu, World Bank division director for the Philippines, Malaysia and Brunei. “This operation helps turn those natural advantages into reliable, affordable electricity for Filipino families and businesses.”
The financing comes as the Philippines pushes to diversify its energy mix amid volatile global fuel markets and persistently high electricity prices, which have weighed on household spending and business competitiveness.
Among the reforms backed by the program are the full operationalization of the Renewable Energy Market, the integration of electric vehicle charging into utility planning and the country’s first offshore wind auction, which aims to contract 3.3 gigawatts of capacity by 2030. The World Bank estimates these initiatives could unlock about US$7 billion in private investments and create thousands of jobs.
The package also extends beyond energy, supporting reforms to improve water service delivery through stronger financing mechanisms, more sustainable tariff structures and enhanced institutional capacity for local water providers.
The government aims to increase the number of financially sustainable water service providers from 10 to 100 by 2027, particularly in underserved and climate-vulnerable communities.
By pairing energy transition with water sector reforms, the World Bank is backing a broader strategy to strengthen the Philippines’ long-term economic resilience while reducing exposure to global energy shocks and climate-related risks.
