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Economy

Duterte signs off on his first 'populist' budget

Record spending on infrastructure, college tuition, irrigation, and war on drugs

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President Rodrigo Duterte signed the 3.35-trillion-peso ($67 billion) 2017 Philippine budget at Malacanang, the presidential palace in Manila, on Dec. 22.   © Reuters

MANILA -- President Rodrigo Duterte signed his first annual budget on Thursday, stepping up social services and infrastructure spending next year.

Duterte became Philippine president on June 30, and plans a record budget of 3.35 trillion pesos ($67.5 billion) in 2017, up 11.6% from this year.

"[The budget] includes the sizeable increase in allocation of infrastructure project, free education for state universities and colleges, universal healthcare, rice allowance for the poor, free irrigation subsistence, allowance for prisoners, pension for war veterans, and centenarians," he said in a speech at the presidential palace in Manila.

Tuition in state colleges and irrigation for farmers were not free previously. Next year, the education department's budget will rise over 32% percent to 544 billion pesos, making it the biggest allocation. The social welfare department's budget will rise 15.8% to 128.3 billion pesos.

Duterte is the first president from the southern island of Mindanao, and pledged to help the marginalized and develop rural areas during his campaign. He hopes ramped-up infrastructure development will help sustain economic growth of 6.5% to 7.5%.

The public works department's allocation will increase 18.3% to 454.7 billion pesos while the transportation department's will grow 25% to 53.3 billion pesos.

Budget for the interior and local government department is set to jump 19.4% to 148 billion pesos, partly as "support for the country's serious efforts against drugs, which will also help augment the allowances of prisoners and will be allotted for the construction of jail facilities," Duterte said.

Salary increases for police personnel will account for part of the interior department's increased allocation. The police have been pivotal to Duterte's controversial crackdown on illegal drugs during his first six months in office.

Some 6,000 people allegedly involved in drugs have been killed in that period. Over 2,000 died during police operations, and the rest were slain by unidentified vigilantes.

The government needs 2.48 trillion pesos to pay for all this, which is 9.7% above this year's target. The shortfall is to be funded from a mix of foreign and domestic borrowings. The president hopes to have to borrow less next year with improved tax collections.

Nikkei staff writer Mikhail Flores contributed to this report.

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