The Philippines will give four million families consuming 100-kilowatt hours of electricity or less a one-time cash subsidy of 500 pesos each to ease the burden of high power rates, as well as rising food and fuel prices. Philippine President Gloria Macapagal Arroyo said the power subsidies are worth 2 billion pesos ($46 million) and are part of a program to shield the vulnerable from inflation and to boost economic growth. “The high price of gasoline and everyday commodities has hit our poor the hardest,” Arroyo said in a statement. “Several months ago, we cut tariffs. Now, we would be providing targeted cash payments to the poorest of the poor to help them cope with their electric bills,” Arroyo said. About a third of the country's total population, expected to hit 90 million this year, lives on less than $1 a day. The Philippines has abandoned a plan to balance its budget this year and has set aside additional spending of as much as 93.6 billion pesos, partly to fund additional subsidies and imports of rice as well as various cash transfer programs for the poor. The additional spending, on top of a Congress-approved annual budget of 1.236 trillion pesos, would result in a budget deficit of as much as 75 billion pesos, or 1 percent of gross domestic product, this year. In 2007, the country had a fiscal shortfall of 12.4 billion pesos, or 0.2 percent of GDP. Annual economic growth slipped to 5.2 percent in the first quarter against 7.0 percent in the same period of 2007 and 6.4 percent in the fourth quarter last year. The Philippines expects the economy to grow between 5.7 percent to 6.5 percent this year against 7.2 percent last year, which was a 31-year high. Arroyo said the power subsidies would first be applied to consumers in Manila and would be funded from expected higher revenues of 18.6 billion pesos this year from sales tax on fuel products arising from the spike in oil prices.
