PRESIDENT Arroyo yesterday launched the P500 million "Katas ng VAT (value added tax): Para sa Maliliit na Ospital," a program for the upgrade of primary government hospitals.

The fund will come from the P4 billion excess earnings from the value-added tax collected in the second quarter, she said at the launching in Datu Odin Sinsuat in Maguindanao.

The P4 billion will also finance subsidies for "lifeline" electricity consumers (P1 billion), microfinancing for the immediate families of public utility drivers and conductors (P500 million), and subsidies for senior citizens aged at least 75 years and who are not covered by the Government Service Insurance System or Social Security System pensions (P500 million). The rest of the P4 billion, Arroyo said, will be used for rehabilitation of typhoon-devastated provinces like the Panay islands and parts of Mindanao.

Arroyo said she chose Maguindanao for the launching to stress that the government prioritizes areas with a high incidence of poverty. Maguindanao is one of the 10 poorest provinces in the country. The others are Zamboanga del Norte, Surigao del Norte and Sur, Agusan del Sur, Misamis Occidental, Lanao del Norte, Mountain Province, Masbate and Biliran.

She said the P500 million would be used to purchase x-ray machines, laboratory diagnostic equipment and other instruments to improve facilities.

She said the equipment would enable primary hospitals likes the Datu Odin Sinsuat Hospital to conduct simple surgeries, including caesarian sections.