The share of local governments from national tax collections will increase by P129.32 billion next year, reaching P1.32 trillion. President Ferdinand Marcos Jr. will highlight the non-partisan, formula-based disbursement of these funds in his upcoming State of the Nation Address (SONA) next month.
President's Commitment to LGUs
Executive Secretary Ralph Recto emphasized the President's commitment to local governments, noting that Marcos, as a former local executive, views these allocations as entitlements. “These are guaranteed plowbacks that will go from big cities to the remotest barangays,” Recto said.
Officially called National Tax Allotments (NTA), the 2027 amount is based on 2024 internal revenue collections, as mandated by law. Recto explained that the indexation is fixed and cannot be altered, making these funds automatic appropriations.
Breakdown of Allocations
Under the established NTA allocation formula, 83 provinces will share P303.56 billion; 149 cities, P303.56 billion; 1,491 towns, P448.84 billion; and 41,912 barangays, P263.97 billion. Recto cited a Department of Budget and Management (DBM) memorandum for these figures. An LGU's share is primarily determined by its population and land area.
Davao City received the largest allocation among cities for 2026 at P10.1 billion, nearly 15% higher than the previous year. In the National Capital Region (NCR), top recipients include Quezon City (P9.82 billion, 15% increase), Manila (P6.09 billion, 14% increase), Caloocan City (P5.5 billion, 14% increase), Taguig City (P4.40 billion, 18% increase), and Pasig City (P3.05 billion, 17% increase).
Recto assured that all LGUs will see increases next year.
Funding Sources
The P1.32 trillion NTA will be sourced from P990.68 billion from the Bureau of Internal Revenue collections, P329.09 billion from the Bureau of Customs, and P63.6 million from other collections certified by the Bureau of the Treasury.
Local Government Support Fund
On top of the NTA, President Marcos initiated an increase in the Local Government Support Fund (LGSF) to a record P57.87 billion for 2026. Recto noted that the President believes LGUs should be tapped for implementing national projects. “The conventional thinking is that the NTA is enough, but the President said we should tap the expertise and resources of LGUs,” Recto said.
He added that treating national and local projects separately is a false dichotomy, leading to a pivot towards partnering with LGUs. For instance, the Department of Education is now collaborating with towns and cities to address classroom backlogs by making them implementors of agency infrastructure projects.
