The World Bank has warned that about two million Filipinos could fall into poverty unless the government expands targeted social assistance to protect vulnerable households from rising energy costs..
In its latest Philippines Economic Update, the Washington based lender urged the government to temporarily expand the coverage of the Pantawid Pamilyang Pilipino Program or 4Ps, to include near-poor households affected by higher electricity and fuel costs.
The World Bank said rising energy prices have [placed a disproportionate burden on low-income families, making stronger social protection measures critical as the country faces slower economic growth and elevated inflation.
Beyond expanding the financial assistance, the lender urged the government to keep inflation under while avoiding policies that could undermine the country’s economic recovery.
It also called on policymakers to address uncertainties in infrastructure governance, lower the cost of doing business and restore investor confidence to encourage both public and private investment.
The World Bank said lowering electricity costs would play a crucial role in lowering poverty and improving living standards, noting that the Philippines continues to have among the highest power rates in Southeast Asia.
The WB report said achieving the government’s target of increasing renewable energy’s share in the country’s energy mix to 35 percent by 2030 could significantly reduce electricity costs if accompanied by investments in transmission facilities, energy storage, grid flexibility and reforms that promote greater market competition.
If these measures are implemented, residential electricity prices could fall by as much as 28 percent while the transition to cleaner energy could generate around 161,000 jobs and lift approximately 730,000 Filipinos out of poverty.
The World Bank expects the Philippine economy to slow down to 3.7 percent in 2026 citing policy uncertainty that has dampened investments and higher global energy prices that have fueled inflation and weakened consumer spending.
The Washington-based lender identified two factors weighing on the country’s economic outlook: prolonged policy uncertainty, which has reduced fixed investment, weakened private-sector confidence and discouraged foreign direct investments and rising global energy prices that pushed average domestic inflation to 4.8 percent in the first half of 2026.
These challenges have weighed on household spending, employment and overall economic activity, with the poorest 30 percent of Filipino households bearing the greatest impact, the report said.
Despite the weaker outlook for 2026, the World Bank projects the Philippine economy to rebound to 5.2 percent growth in 2027, provided the government implements key policy reforms.
“This is a milestone the Filipino people have earned. The World Bank is proud to have been supporting the Philippines in its continuous development,” said Zafer Mustafaoglu, World Bank Division Director for the Philippines, Malaysia and Brunei.
“Sustaining it requires going further, prioritizing reforms that lower the cost of doing business, restore investor confidence, and create more and better jobs for Filipino families. That work continues, and so does our partnership,” he added.