Philippines to target poverty in 2012 budget

MANILA, Philippines—President Benigno Aquino is to ask parliament to pass a $42 billion budget that aims to give more poor families cash handouts next year, a senior aide said Thursday.

Under the budget bill three million poor households will for a limited time receive a monthly allowance of up to P1,400 pesos each, compared with 2.3 million families this year, Budget Secretary Florencio Abad said.

“This is a budget that is focused on achieving results; that the dividends of good governance reach the poor in a direct, immediate and substantial way,” Abad said in a statement.

A third of the P1.82 trillion budget is pencilled in for basic education, public health and cash transfers to the poor, while nearly a quarter is for public works to support agriculture, tourism and industrial development.

The budget, which Aquino will submit during his annual state of the union address on July 25, is 10.4 percent higher than the total passed by Congress last year.

The cash transfers require households to spend the Department of Social Welfare and Developmetn handouts on schooling and family health and food expenses, allowing the Philippines to meet United Nations development targets.

Nearly five million families, or a quarter of the population, live on a dollar a day or less, according to official data.

Abad said defense spending would rise 9.9 percent to P114.4 billion as the government embarks on a military modernization program.

The military calls for an upgrade come amid increasingly robust claims by China in the West Philippine Sea, while Manila also continues to fight communist guerrillas and Muslim separatists.

However, the single largest allotment is for debt servicing, although the P367.2 billion set aside is down from P372.1 billion in last year’s budget.

Abad said the government would aim to keep the budget deficit at P286 billion, or 2.6 percent of gross domestic product, next year down from this year’s target of P300 billion, or 3.0 percent of GDP.

The Treasury said Thursday the budget deficit stood at P9.54 billion in the five months to May, down 94 percent from a year earlier.