FINANCE Secretary Ralph G. Recto said that the National Tax Allotment (NTA) for local government units (LGUs) will be the equivalent of 35% of National Government revenue in 2026 when allocations to special-purpose funds are taken into account.
“Today they’re getting roughly 32% as we calculated yesterday, and it will go up to about 35% by 2026. More or less,” Mr. Recto told reporters on Thursday.
The government is required by the Local Government Code to provide 40% of its tax revenue to LGUs, though it is allowed to deduct certain items, such as Special Purpose Funds, from the NTA calculation.
Among the exclusions from the 40% calculation are “special allotments like that for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM),” he said.
The Code originally called for the LGU share to be 40% of all “internal revenue,” which the Supreme Court struck down in its Mandanas ruling, effectively amending the law to read 40% of all taxes.
According to the 2025 budget, LGUs will get a P1.03-trillion NTA, which is based on the National Government’s revenue from three years prior.
Mr. Recto also added that LGUs are due to receive additional revenue once the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law becomes more apparent.
“By 2026 there will be additional revenue for the local government units, particularly from TRAIN,” Mr. Recto said, referring to the tax reform measure that streamlined the collection process to improve compliance and boost revenue.
The DoF met the Mayors for Good Government (M4GG) representatives, Quezon City Mayor Ma. Josefina G. Belmonte and Baguio City Mayor Benjamin B. Magalong, on Wednesday.
Mr. Magalong, founder of M4GG claimed that LGUs were “shortchanged,” receiving only 31% of NG revenue in 2024 and 32% in 2023.
“I think what is important is no one is shortchanging the local government. And as promised, we are very transparent. We show them all the calculations,” Mr. Recto said.
Meanwhile, Ms. Belmonte, president of the League of Cities and a co-convenor of the M4GG said both parties are still open to talks on the matter.
“Siyempre hindi pa nagtatapos dyan… (Things don’t end there). We would like to see if there are other legal remedies other interpretations of the Constitution as well as the SC ruling,” she said.
Ms. Belmonte added that municipalities that rely on the NTA are disproportionately affected, unlike highly urbanized cities that have other sources of revenue. — Aubrey Rose A. Inosante