The World Bank has approved its first loan for the Philippines since the country was elevated to upper-middle-income country (UMIC) status in July, financing a $268.62-million project to expand climate-resilient water and sanitation services in three islands, improve water security, and generate thousands of jobs.

In a statement on Saturday afternoon, Aug, 1 (Manila time), the World Bank said its Washington-based board approved the Philippines Accelerated Water and Sanitation Project in Selected Areas (AWSPSA) last Friday, July 31, which will increase safe and reliable access to water and sanitation in Bohol, Siargao, and Jolo islands, where water-access gaps and climate risks remain significant.

The project, which will be implemented by the departments of Public Works and Highways (DPWH) and of the Interior and Local Government (DILG), has a total cost of $268.62 million. The World Bank will finance $250.87 million, while the remaining cost will be funded by the Philippine government and private-sector equity.

According to the World Bank, the project is expected to generate about 8,700 jobs within five years of completion, with employment gains projected to rise to around 46,500 over a 25-year period.

The lender said near-term employment will come from construction activities, while longer-term gains will be driven by broader economic activity supported by reliable access to safe water and sanitation.

The project is also expected to benefit tourists, public school students, and people in healthcare and daycare facilities through dependable, flood- and drought-resilient water and sanitation services.

“This project tackles the core drivers of water insecurity and service gaps—climate vulnerability, operational inefficiencies, and financing constraints—while prioritizing the needs and voices of women, youth, and vulnerable communities. By strengthening institutions and mobilizing private participation, it will help deliver reliable, safe services and support sustainable economic and tourism growth for island communities,” World Bank division director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said.

The project will expand climate-resilient water supply systems, sanitation facilities, water storage, distribution networks, and water, sanitation, and hygiene (WASH) facilities. It will also strengthen the performance, governance, and institutional capacity of local water service providers to improve water security and resilience to climate-related risks.

In addition, the project will pilot closer coordination between the national and local governments in achieving the country’s water and sanitation targets and the United Nations Sustainable Development Goal (UN SDG) 6.

The World Bank said the operation represents the first phase of its broader multi-phase programmatic approach on water security and resilience in the East Asia and Pacific (EAP) region, reflecting its long-term commitment to building climate-resilient and water-secure communities across the region.

Bohol, Siargao, and Jolo were selected through a prioritization framework that considered poverty and water-access gaps, vulnerability to droughts and floods, as well as project readiness, including the availability of feasibility studies (FS), permits, and local government support.

Manila Bulletin earlier reported that the Philippines is seeking as much as $8.9 billion in fresh loans from the World Bank, the Manila-based Asian Development Bank (ADB), and the Beijing-based Asian Infrastructure Investment Bank (AIIB), based on their indicative lending pipelines, before the country loses access to concessional financing following its transition to UMIC status. The newly approved World Bank financing forms part of that broader lending pipeline. - Danielle T. Bayani