MANILA, Philippines - There was nothing illegal in budget releases made during the administration of former president Gloria Arroyo, the Department of Budget and Management (DBM) said.

DBM Undersecretary Mario Relampagos said that all spending under the previous administration were within what the Congress had appropriated.

"All the releases made by the DBM were within the authorization made by Congress of P1.54 trillion. We didn't exceed that. So there's no legal problem in all releases that were made so far," he said.

Relampagos statements came after President Benigno Aquino III, in his first State of the Nation Address, criticized his predecessor for overspending.

But the DBM official admitted that the Arroyo government lacked prudence in managing its finances, with the budget deficit going through the roof.

"Relative to the fiscal program, it may not be prudent at that time that we accelerated spending when revenues were not forthcoming as programmed. So there was no prudence. It could have been more prudent so we can control the deficit within the target deficit for that period," Relampagos said.

The Philippines' deficit hit a record P298.5 billion in 2009, and is expected to hit a new high of P325 billion this year since the Arroyo administration had already exceeded the deficit goal for the first half.

Presidential spokesperson Edwin Lacierda, meanwhile, echoed Relampagos' views, adding that the Arroyo administration misspent public funds at times.

Lacierda said, for example, that bulk of the government's calamity fund was allotted for Pampanga, where the hometown of the former president is located, when the provinces of Rizal and Pangasinan were more devastated by killer typhoons Ondoy and Pepeng last year.

"It's a question of how they managed the country, the financial situation. You tell me if it's not irresponsible, if it's ethical. I think we're raising the bar of governance here kung saan kung maayos sa pagasikaso sa ekonomiya, sa paggamit ng calamity fund, siguro wala tayo sa ganitong sitwasyon ngayon," he said.

President Aquino earlier said that only 6.5% of the P1.54-trillion budget for 2010 remains with still 5 months left in the year. Budget Secretary Florencio Abad said that the amount represents only what the President could realign to fund key social programs and not the government's operating fund.

Despite this, the President said he was not looking to ask Congress for a supplementary budget because his administration would like to "practice austerity as much as possible."