The World Bank is preparing to approve a $275.38 million loan, scheduled for board approval on October 31, 2023, to improve water supply and sanitation across three selected areas in the Philippines.

This funding is part of the Accelerated Water and Sanitation Project in Selected Areas (AWSPSA), with a total projected cost of $293.96 million, which includes government and private sector contributions.

The Philippine government will contribute approximately $14.16 million (over ₱780 million) to finance the project, alongside $1.32 million from private equity and $3.08 million sourced from unguaranteed commercial debt.

The Department of Finance (DOF) will manage the borrowing on behalf of the government, with implementation led by the Department of the Interior and Local Government (DILG) and the Department of Public Works and Highways (DPWH).

The primary aim of the AWSPSA is to enhance access to safe water supply and sanitation services while improving the functioning of water service providers in the identified regions: Loboc in Bohol, Siargao Island in Surigao del Norte, and Jolo in Sulu.

Issues regarding water security in the Philippines have been highlighted by the World Bank, noting challenges such as excessive rainfall, drought, and pollution, which are exacerbated by climate risks that threaten existing inequalities in water resource access.

The bank reported that as of 2022, only 48 percent of the Philippine population had access to safely managed water, significantly lower than the East Asia and Pacific regional average of 78.4 percent.

Similarly, access to safely managed sanitation stood at 63 percent, trailing the regional average of 69 percent.

The statistics reveal pressing deficiencies in sanitation infrastructure, with only 7 percent of households connected to sewer systems.

A prevalent reliance on septic tanks, often poorly constructed and inadequately maintained, further compromises sanitation quality.

Notably, an estimated 4 million individuals resort to open defecation, surpassing the 1.1 percent regional average.

The World Bank pointed out that disparities in access and service quality are pronounced between affluent and impoverished populations, with only 35 percent of rural areas having safe water access in 2022, compared to 62 percent in urban areas.

In response to these challenges, the World Bank is committed to supporting the Philippine government’s goal of achieving universal access to safe water supply and sanitation by 2030, as outlined in the 2020 Philippine Water Supply and Sanitation Master Plan (PWSSMP).

The AWSPSA will mark the first World Bank-financed water and sanitation project in the Philippines in two decades and is expected to lay the groundwork for comprehensive long-term support in the sector.

Additionally, projections indicate that the Philippines is set to borrow a total of $7.85 billion (over ₱437 billion) from the World Bank in the next two years.

This lending is part of a new six-year country partnership framework, designed to support the country’s ambitions of achieving upper-middle-income status.

Starting in mid-2025, the World Bank Group anticipates extending between $22 billion and $23 billion (over ₱1.2 trillion) in loans and financial assistance to the Philippines, covering fiscal years 2026 to 2031.