Malacanang on Wednesday presented the proposed P1.645 trillion national budget for 2011, described by the Aquino administration as a "reform budget" that will lift the nation from poverty through honest and effective governance.

Appearing before the initial public hearing by the Committee on Appropriations of the House of Representatives, Budget and Management Secretary Florencio Abad said the proposed 2011 national budget was earmarked to finance projects where it is much needed to benefit the people.

"We have redesigned the budget to ensure that every centavo will be put to good use," the DBM chief told the House body chaired by Cavite Rep. Joseph Emilio Abaya.

Abad said the proposed budget is anchored on the four principles of transparency and accountability, bias in allocating resources for the poor, fiscal responsibility to reduce debt, public-private partnerships to spur growth, and zero-based budgeting to prioritize activities with impact.

He noted that the proposed 2011 budget represents 18.2 percent of gross domestic product (GDP) which is a prudent level consistent with these governance principles. Abad said a conservative five percent GDP growth rate is assumed even as government targets 7-8 percent growth.

He said the proposed budget for next year deficit is expected to be reduced by 10.8 percent to P290 billion, or 3.2 percent of GDP as against 3.9 percent in 2010.

"It would seem that we are reducing the size of the government. But what we are doing is to make government more relevant and responsive to the people," the DBM chief said.

He said education, public health, social protection, housing and land distribution for the poor, spending on the social services sector receives a significant share of P560.8 billion or 34.1 percent of the proposed budget.

Under the proposed budget, Congress will get P7.7 billion; Office of the President - P4.1 billion; Office of the Vice-President - P179.805 million; Department of Agrarian Reform - P16.7 billion; Department of Agriculture - P37.6 billion; Department of Budget and Management - P780.880 million; Department of Education - P206.2 billion; State Universities and Colleges - P23.4 billion;

Department of Energy - P1.3 billion; Department of Environment and Natural Resources - P13 billion; Department of Finance - P12.2 billion; Department of Foreign Affairs - P11.1 billion; Department of Health - P33.3 billion; Department of Interior and Local Government - P88.1 billion; Department of Justice - P7.6 billion; Department of Labor and Employment - P6.4 billion; Department of National Defense - P104.6 billion; Philippine Veterans Affairs Office - P13.8 billion; Armed Forces of the Philippines - P89.8 billion; Department of Public Works and Highways - P110.6 billion; Department of Science and Technology - P6 billion;

Department of Social Welfare and Development - P34.2 billion; Department of Tourism - P1.4 billion; Department of Trade and Industry - P2.5 billion; Department of Transportation and Communications - P32.3 billion; National Economic and Development Authority - P2.1 billion; Presidential Communications Office - P976,157 million; Other Executive Offices - P5.8 billion; Autonomous Region in Muslim Mindanao - P11.8 billion; the Judiciary - P14.3 billion; Commission on Audit - P4.4 billion; Commission on Election - P2.3 billion; Office of the Ombudsman - P1.1 billion; and Commission on Human Rights - P285.466 million. (PNA/PIA9-BST)