World Bank Group Backs Philippines' Push for Energy and Water Security

New financing will help lower electricity costs and strengthen water services for communities across the country

WASHINGTON, JUNE 25, 2026 - The World Bank Group this week approved new financing for the Philippines to expand access to affordable, reliable electricity and strengthen water security for millions of Filipinos, helping businesses grow, lowering costs for households, and creating jobs.

The Second Energy Transition and Climate Resilience Development Policy Loan (DPL) responds to one of the most pressing challenges facing Filipino households and businesses today: the high and volatile cost of electricity. By reducing reliance on imported fossil fuels and accelerating the deployment of homegrown energy solutions, the DPL will help shield the Philippines from global price shocks and put the country on a more secure and affordable energy path.

"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. At a time when global energy markets are deeply volatile, this DPL helps the Philippines take control of its own energy future, support growth, and create jobs."

The DPL supports a package of landmark economic actions to scale up the country's domestic energy capacity while mobilizing private investment. These include the full operationalization of the Renewable Energy Market integration of electric vehicle charging into utility planning, and the launch of the Philippines' first-ever offshore wind auction, which targets 3.3 gigawatts of contracted capacity by 2030 - enough to power millions of homes. This is expected to mobilize approximately US$7 billion in private investment, creating more jobs in the sector.

By 2027, the share of installed renewable energy capacity is targeted to rise from 30% to 42%, helping diversify the country's energy mix and reduce its exposure to imported fossil fuel price shocks.

The DPL is anchored in the Philippine Development Plan 2023-2028 and the country's long-term vision, AmBisyon Natin 2040. It is designed to mobilize private capital at scale by creating the regulatory certainty and market architecture that investors need.

Beyond energy, it also tackles long-standing challenges in the water sector, where more than 1,600 local government units are responsible for providing services but often lack the financing and institutional capacity to do so reliably. It supports cost-recovery tariff frameworks, a unified financing structure that prioritizes poor and climate-vulnerable communities, and bulk water pricing regulations - scaling the number of local water providers with sustainable business plans from 10 to 100 by 2027.

The DPL - comprising a US$1 billion IBRD loan and a US$20 million performance-based grant from the Livable Planet Fund - is among the largest IBRD operations the World Bank Group has approved in support of the Philippines' development agenda. It was shaped by extensive consultations with relevant government agencies, the private sector, utilities, consumer groups, civil society organizations, and local government units, ensuring that the supported reforms respond to the needs of Filipino communities.

The DPL builds on the progress made under the first operation, reflecting the World Bank Group's long-term commitment to support the Philippines to deliver affordable, reliable, and sustainable electricity, and build a more prosperous, resilient, and job-rich economy. The first operation established the legal framework for offshore wind, launched the reserve market, expanded retail energy competition, and laid the institutional foundations for sustainable local water services.