Aquino seeks bigger budget to help poor

Agence France Presse

Posted at Aug 31 2010 05:59 PM | Updated as of Sep 01 2010 05:25 AM

MANILA  - Philippine President Benigno Aquino has asked parliament to pass a modest 6.8% rise in government spending for next year's budget to help focus on helping the poor, aides said Tuesday.

They said the P1.645-trillion ($36.35 billion) budget bill, submitted to Congress last week but made public on government websites only on Tuesday, would help eliminate corruption and wasteful subsidies.

"We made some bold decisions to correct glaring inefficiencies, terminated programmes that no longer delivered their intended outcomes, and reduced funding for programmes that require redesign," Aquino wrote to parliament.

Aquino, son of the late democracy icon Corazon Aquino, was elected president in an election landslide in May, pledging to fight corruption that he said has kept the vast majority of the 90-million-strong nation poor.

"We cannot allow inefficiency or corruption to dissipate the limited funds at our disposal," said Aquino in his budget message, adding 20%  of the annual Philippine budget was believed to be lost each year through graft.

To improve transparency, Aquino said he would order government agencies to publish on their websites how funds were spent on state-financed projects.

Presidential spokesman Ricky Carandang told reporters the performance of scores of government corporations that received annual support from the national budget were under review.

The budget bill seeks to increase spending on education, social security, state-run housing programmes, land reform and subsidies to local governments by 13.7% to P 530.37 billion.

Defence, energy, transport, and security would also be safe from spending cuts, but all other ministries have to tighten their belts.

Annual debt payments would retain the biggest share of the budget at P631.32 billion, or 38.6% of total spending.

However the total amount would be 2.55%  lower than in 2010.

Carandang said the government's funding shortfall next year would be about P290 billion, or 3.2% of the gross domestic product, down from P325 billion, or 3.8-3.9% of GDP, this year.

That would be plugged with borrowings, 84% of them from domestic lenders and the rest from abroad, he added.

Aquino is expected to face months of political horse trading to have his budget passed.