MANILA, Philippines?President Macapagal-Arroyo has finally approved the P1.54 trillion national budget for 2010, but did not yield to the lawmakers? realignment of P64 billion from debt payment to their pet projects.

Ms Arroyo signed General Appropriations Act or Republic Act 9970 Monday night, the eve of the kick-off of the official campaign period for national candidates in the May elections.

While it is eight percent or P115 billion higher than the P1.415-trillion 2009 budget, this year?s outlay is geared toward fiscal stimulus spending ?but on a moderate level,? Budget Secretary Rolando Andaya said.

?More investments... in infrastructure, education and social services but more on a moderate level based on the capability of the departments to spend these amounts,? he told reporters in an ambush interview.

Until the budget?s signing on Monday night, the government had been operating on a reenacted 2009 budget.

To keep the deficit at a manageable level and eventually achieve a balanced budget, Ms Arroyo vetoed the lawmakers' realignment of P64.6 billion from debt service payments to their projects, part of the so-called pork barrel.

Senators and congressmen slashed the budget for debt service from P340.8 billion, as originally proposed by the Executive Department, to P276.2 billion, at the bicameral conference committee.

The P64.6 billion was distributed to projects all over the budget.

If approved in toto, the government would resort to borrowings, and risked bloating the budget deficit to P358 billion or 4.2 percent of the gross domestic product, way above the tolerable limit of 3.5 to 3.6 percent of GDP, according to Andaya.

"That's too big. That cannot be allowed to happen. If we allow that to happen, the new administration will never be able to balance the budget during their term,'' he said.

That's why it was set aside, until the lawmakers could come up with P64 billion revenue to cover it, he added.

As expected, the Department of Education received the biggest allocation of P174.9 billion, followed by the Department of Public Works (P135.6 billion); Department of Interior and Local Government (P66.45 billion); Department of National Defense (P57.84 billion), and Department of Agriculture (P41.17 billion).

Rounding out the top 10 biggest recipients were the Department of Health (P29.28 billion); State Colleges and Universities (P23.84 billion); Department of Agrarian Reform (P21.06 billion); Department of Transportation and Communications (P17.16 billion) and Department of Social Welfare and Development (P15.37 billion).

Andaya said the 2010 budget included a P50-billion allocation for the rehabilitation of the towns and provinces devastated by storms "Ondoy'' and "Pepeng'' during the last quarter of 2009 and P10.6-billion allocation for the Commission on Elections.

In terms of expenditures, personal services, also known as the pay, pension and premium contributions of government personnel, was allotted the biggest share of the pie with P494 billion, according to the Andaya.

The 15.2-percent increase in personal services stems from the passage of the Salary Standardization Law III which took effect in June 2009 and will require P68.4 billion in its second year of implementation in the middle of the year.

On top of this, the government will create 14,729 new DepEd positions at a cost of P2.1 billion in its first year of implementation, and deploy 10,000 new policemen at P1.4 billion.

The Maintenance and Other Operating Expenses (MOOE) is alloted P864 billion. Debt service accounts for the biggest chunk of the MOOE, with an allocation of P340.8 billion.