MANILA, Philippines—Senate Majority Leader Juan Miguel Zubiri predicted on Tuesday the reenactment of the 2008 budget in January 2009 due to glaring disparities between the budget bills of the two chambers of Congress.

“We may have to reenact this year's budget, but it all depends on the ongoing bicameral conference today (Tuesday). If they can't reconcile the disagreeing provisions, then we can't approve it (by Wednesday),” Zubiri told reporters before the start of the Senate's plenary session.

Both the Senate and House of Representatives will go on a month-long Christmas break starting Thursday.

A bicameral conference to reconcile the disagreeing provisions of the separate budget bills of the Senate and the House of Representatives started on Tuesday at the Philippine Coconut Authority building in Quezon City.

“In that scenario, definitely, we will have a reenacted budget in January, but only for the first two weeks,” said Zubiri who came from a meeting with President Gloria Macapagal-Arroyo and Speaker Prospero Nograles and other congressional leaders in Malacañang.

With a vote of 13-2, the Senate passed late Monday on third and final reading the P1.415-trillion proposed national budget or the General Appropriations Act of 2009.

Sen. Edgardo Angara, chair of the Senate finance committee, said the Senate version contained in Committee Report No. 230 included a P10-billion “economic stimulus fund,” a provision absent from House Budget Bill No. 5116 passed in November.

Since Congress, by law, is barred from increasing the budget proposal of the President, Angara and the members of the Senate had to cut debt service payment by P10 billion, on top of the P14 billion adopted by the House, for a total of P24 billion.

Thus, from P287.87 billion, debt payment reduction next year will only amount to P277.84 billion.

The P10-billion slash from debt service payment would fund the stimulus fund, said Angara.

However, even if Congress passed the budget bill, the Arroyo administration would still be on deficit-spending by as much as P102 billion in 2009.

Angara justified the decision to increase the projected deficit in 2009, saying next year's national budget would have more funds for “classic social services” such as health, education and infrastructure development, which would generate much-needed jobs.

Under interpellation by Sen. Panfilo Lacson, Angara said that the economic stimulus fund “embraced” funding for more classrooms, coastal resource management, roads, bridges and airports and health facilities.

Angara defended the deficit-spending strategy of the government, which dashed the Arroyo administration's goal of ever balancing the national budget.

“It's a question of putting on the scale your goal of preserving the growth in your economy and inducing (deficit), and we chose to grow the deficit. A one percent contraction of the GDP will translate to 20 million Filipinos falling below the poverty line,” stressed Angara.

The long-time senator said deficit-spending “is not per se unwise provided that deficit spending is dedicated to job creation and to productive activities ... that will enhance productivity and efficiency of the economy. That's what we need in this time of crisis.”

Angara said the proposed budget supported the Arroyo administration's priority programs and other projects to soften the impact on the economy of the global economic crunch spawned by the US financial crisis.

He disclosed that President Arroyo had suggested a deficit ceiling of P102 billion, or 1.2 percent of the gross domestic product.

“We have consulted with the economic managers and some officials of government and we're given the assurance that the deficit can go as high as 2 percent without impairing our financial stability,” Angara said.

When asked by Lacson if the government would “borrow more” to fund next year's budget, Angara said:

“That's correct. We can technically afford an additional deficit of P60 billion, which if added to the P102 billion proposed by the President, we will legitimately and definitely go into deficit spending of up to P160 billion,” said Angara.

Lacson said this meant that President Arroyo would have to borrow as much as P437 billion in 2009 from foreign financial institutions, thus burying her erstwhile target of balancing the budget next year.

Other senators wanted an itemized list of the projects and programs to be funded by the lump sum appropriations in the 2009 GAA.

“The lump sum appropriations should be detailed and made clear,” said Sen. Francis Escudero, pushing for line item budgeting instead.

Escudero also batted for transparent bicam meetings by opening it to the public, a position taken by Senate Minority Leader Aquilino Pimentel Jr. and Sen. Pia Cayetano when they cast negative votes.

Pimentel and Cayetano voted no because the budget bill would give President Arroyo wide discretion in disbursing huge sums in the trillion-peso budget for 2009.

“I vote no basically for the reasons that there are certain provisions in the proposed budget which ran counter to Congress' constitutional mandate to hold the power of the purse,” said Cayetano.

She said the budget provided for lump sum amounts and there were no clear guidelines that would guide Congress “on the wisdom and purpose for the proposed allocations.”

Cayetano said several items “do not have special provisions for their use and administration. These funds, thus, become subject to the discretion of the President. The grant of such wide discretion to the President goes against our mandate to be the guardians of the public treasury.”

Pimentel supported Cayetano in her explanation of vote.

“I also share her explanations in various points of the budget that we are objecting to,” said Pimentel.

The Senate also tinkered with other budgetary allocations adopted by the House, slashing the proposed P50-million budget intended for the Philippine Tourism Authority as well as the P10 million appropriated each for the Office of the Press Secretary and government-run PTV 4 network.

From the original P13 million slash, the chamber also cut down the budget of the Metropolitan Manila Development Authority by P23 million, or a reduced budget of P1.7 billion.

The proposed budget is 15.35 percent or P188.3 billion higher than the P1.227 trillion appropriated for this year. Agriculture, public works and highways and education will be among the major beneficiaries of additional budget next year.

The Department of Education received the highest allocation in the amount of P162.3 billion.