“Neither a borrower nor a lender be, for loan oft loses both itself and friend.” — William Shakespeare
On March 31, 2025, I learned that the lending institution, the World Bank, had approved the Marcos administration’s request for an additional loan of US$800 million (approximately P45.8 billion) to scale up the adoption of clean energy technologies and improve water management across multiple uses.
According to the World Bank’s press statement dated March 31, 2025, this Development Policy Operation (DPL) is a rapidly disbursing financial support mechanism provided by the World Bank to help member countries meet development financing needs through a program of policy and institutional actions.
The World Bank stated that it aims to promote sustainable growth, reduce poverty, and enhance the well-being and incomes of the poor, consistent with the country’s development goals.
I had been monitoring the regular press briefings in Malacañang, but I had never heard the President’s spokesperson mention anything about the loan.
Any foreign loan undertaken by the national government is important to know about, as it will ultimately be paid for by future generations of Filipinos—those who are newly born or yet to be born.
The loan, which focuses on renewable energy and clean water access, was approved by the World Bank’s Board of Executive Directors.
Zafer Mustafaoğlu, World Bank Division Director for the Philippines, Malaysia, and Brunei, said that more affordable renewable energy in the energy and transport sectors is crucial for the Philippines to build a strong economy.
“Focusing on renewable energy sources and using energy more efficiently can help the country reduce electricity costs, improve energy security, and cut down on pollution,” Mustafaoğlu said.
In the island province of Palawan, where incessant and pestering brownouts severely affect local businesses due to poor energy services, residents—both innocent and uninformed—will be forced to share in repaying the loan through their taxes.
I am uncertain how the province of Palawan and the city of Puerto Princesa could benefit from this loan package in addressing Palawan’s persistent power issues.
For a long time, the World Bank has recognized the Philippines as one of the most dynamic economies in the East Asia and Pacific region, but it also noted that the country faces considerable risks and challenges to long-term growth and prosperity, including its increasing dependency on imported energy, high electricity costs, and vulnerability to natural disasters.
When the World Bank approved this operation to support the Marcos administration’s policy reform efforts, it encouraged the government to invest in energy transition by focusing on local renewable energy (RE) sources, energy efficiency (EE), and other clean energy alternatives to lower generation costs while improving energy security.
This loan package includes provisions to expand the proportion of consumers who can choose their electricity suppliers and improve the framework for competitive procurement of renewable energy, which is expected to lower electricity prices by increasing competition in the sector.
Feng Liu, World Bank Senior Energy Specialist and Task Team Leader of the operation, said: “To accelerate energy transition and keep electricity affordable for all Filipinos, the Philippines needs reforms to achieve the government’s renewable energy and energy efficiency targets, improve grid capacity and flexibility, and enhance competition in electricity markets.”
“These reforms can help lower power supply costs and improve the reliability and resilience of the power system, thereby making electricity more affordable and reliable for Filipino households and businesses,” Liu added.
With this, I hope the energy sector players in Palawan will understand what is meant by reforms to reduce supply costs and improve the reliability and resilience of the power system.
Dubbed by the World Bank as the First Energy Transition and Climate Resilience Development Policy Loan, the program will support actions that accelerate energy transition and increase climate resilience in the Philippines.
It is expected to increase the share of renewable energy in installed generation capacity from 30 percent in 2023 to 42 percent by 2027.
It will also support the procurement of 1,000 megawatts of new offshore wind capacity and implement energy efficiency measures that save 5 GWh annually.
The electrification of public sector vehicles and electricity market reforms will further decarbonize the grid.
By strengthening renewable energy markets and unlocking private sector investments, the program is expected to have a scalable, transformative impact beyond 2030, placing the Philippines on a sustainable trajectory, according to the World Bank.
On the water sector side, the operation will also help improve governance and cohesion by introducing policy reforms in water resources management, water supply, and sanitation—promoting better coordination between national and local governments.
Maria Fiorella Fabella, World Bank Senior Water Supply and Sanitation Specialist, said: “These reforms in the water sector are expected to increase access to safely managed water supply and sanitation services; raise funding and financing for water and sanitation projects; and improve the financial sustainability of local government-run water service providers.”
“Ultimately, the DPL, a first for the Philippine water sector, is a move toward more effective coordination, planning, and management across sectors and levels of government,” Fabella added.
So, if we are to look closely at the words of the World Bank’s top officials, the loan appears perfectly applicable to address Palawan’s persistent power woes and clean water challenges in its municipalities.
But since it is a loan secured by the central government in Manila, the likelihood is that Palawan’s political leaders will either have to beg for a share of the funds or, as is often the case, do nothing.
And none of the self-proclaimed leaders of Palawan and Puerto Princesa City have ever addressed the pressing and persistent issues of power and clean water, both in the island and mainland municipalities.
As of this writing, according to the Bureau of the Treasury, the Marcos administration has incurred ₱1.82 trillion in debt since assuming office, largely due to a high interest rate environment, pushing the country’s outstanding obligations to an all-time high of ₱14.62 trillion in 2023.
Today, the Philippines has been reported as the World Bank’s fifth-largest borrower for two consecutive years under President Ferdinand R. Marcos Jr.’s administration.
The country has borrowed a total of US$2.35 billion from the World Bank in fiscal year 2024.
Records show that these loans have been allocated to various sectors, including disaster risk management, digital transformation, infrastructure development, and climate resilience.
