He added that the 2010 budget would impact the next president. “You don’t want that in the first State of the Nation Address, the next president will say ‘The government is bankrupt.’”

On Monday night, President Arroyo signed into law the P1.54 trillion budget for 2010, ending fears of a reenacted budget. It is 8% higher than the P1.415 trillion budget in 2009 to account for more stimulus spending.

Lawmakers wanted to re-align about P64 billion in the budget originally set aside for debt payment to fund their pet projects. President Arroyo vetoed the realignment since this would result in a budget deficit of P358 billion, as explained by Budget Secretary Rolando Andaya.

The budget deficit—the gap between government’s revenues and spending—has already reached P293 billion in 2009, an all-time high for the Philippines.

To plug the budget deficit, the government resorts to more debts from local and foreign creditors.