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PRESIDENT Benigno Aquino 3rd on Thursday signed into law the P1.816-trillon budget for 2012, which is the earliest government appropriations law ever approved since 1986.

The P1.816-trillion General Appropriations Act (GAA) for 2012, or Republic Act No. 10155, is 10.4-percent higher than this year’s budget of P1.645-trillion.

President Aquino had vetoed the imposition of a ceiling on public sector indebtedness since it would have forced the government to constrict spending, especially on critical social services and infrastructure—a move that drew criticism from Sen. Joker Arroyo.

Mr. Aquino assured that the 2012 budget would be spent wisely and the fund would be used to improve the economy amid the global economic slowdown.

With other countries preoccupied with their economic woes, the President said, “our economic growth should come from our country.”

He also tasked the economic development cluster of his Cabinet on how to fast-track quality disbursements, while warning agencies not to spend the budget unwisely.

According to Budget Secretary Florencio Abad, the public sector debt as of 2010 stands at 73.3 percent of gross domestic product (GDP), which is well beyond the 60-percent debt cap provision included by Congress in the GAA bill.

GDP is the amount of final goods and services produced in the country in a year.

“With this, a debt cap would tie the hands of the executive,” Abad said.

The Budget chief, however, added that the Aquino administration was committed to reducing the fiscal deficit and public sector debt stock in the medium-term.

Abad said that the Aquino administration would jumpstart economic growth by January with the unveiling and implementation of at least P140 billion worth of infrastructure projects under the 2012 national budget.

“In contrast to 2011, when infrastructure spending was delayed, we intended to begin 2012 on a very strong note. Various infrastructure projects are ready for implementation right on the first working day of 2012,” he added.

“We earlier directed agencies to disaggregate their 2012 budgets into specific projects before the budget was submitted to Congress in July, and to already bid them out short of award, so that notices to proceed can be issued in January,” the Budget secretary said.

President Aquino also ordered the Budget department to find out what caused the slow processing in the implementation of infrastructure projects.

The 2012 budget includes P1.254-trillion of new general appropriations, which include P1.09 trillion of programmed appropriations and P162-billion of unprogrammed or standby appropriations should additional or new revenues and project loans come in.

The proposed new appropriations are 25.4 percent more than this year’s level.

The top five departments with the biggest budget allocations are the Department of Education, with P238.8 billion (15.2 percent higher than 2011 budget of P207.3 billion); Department of Public Works and Highways (P125.7 billion); Department of National Defense (P108.1 billion); Department of Interior and Local Government (P99.8 billion); and Department of Agriculture (P53.3 billion).

The judiciary, on the other hand, has the 10th biggest allocation with P15.7 billion.

The 2012 budget will be supported by a revenue collection program of P1.545 trillion, equivalent to 14.2 percent of GDP. The increase is attributed to the sustained tax administration efforts of the Bureaus of Internal Revenue and Customs.

In line with the priorities of the Aquino administration, social services continue to receive the bulk of the budget pie with P568.6 billion—or 31.3 percent of the total budget—followed by the economic services sector with P438.8-billion (24.2 percent), reflecting the largest increase of 21.3 percent from this year’s allocations. Debt burden servicing comes next with P356.1 billion (19.6 percent); general public services, P338.1 billion (18.6 percent); and defense, P114.4-billion (6.3 percent). As a share of the budget, servicing of the debt burden is three percent lower than this year.

Allocations to local government units will receive P291.6 billion, of which internal revenue allotment amounts to P273.3 billion. Allocation to government-owned and -controlled corporations, meanwhile, amounts to P21.8-billion—an increase of about 90 percent from P10.8-billion this year—to provide larger support for rice sufficiency related undertakings, electrification and housing.

Major allocations are poured into anti-corruption, poverty reduction, rapid growth, lasting peace and environmental protection, including climate change mitigation and adaptation.

Meanwhile, Sen. Arroyo also on Thursday expressed disappointment over the decision of President Aquino to veto the provision included during the bicameral conference committee report on the final version of the proposed 2012 budget that limited to 60 percent of GDP the foreign borrowings of the government.

It was the senator who proposed the debt cap provision that was also endorsed by administration allies and Senators Frank Drilon and Ralph Recto, who head the Senate Commitees on Finance and Ways and Means, respectively.