In a significant meeting held at the Department of Finance (DOF) office in Manila, Finance Secretary Ralph Recto engaged with city mayors to address and resolve concerns regarding the computation of National Tax Allotment (NTA) shares for local government units (LGUs). The dialogue, which took place on January 15, 2025, included key figures such as Baguio City Mayor Benjamin Magalong, Quezon City Mayor Joy Belmonte, and Dumaguete City Mayor Felipe Antonio Remollo.
Secretary Recto provided a comprehensive breakdown of the NTA calculations, ensuring that the process was transparent and aligned with the Supreme Court’s 2019 Mandanas-Garcia ruling and other relevant legislation. The discussion revealed that the DOF’s computations were consistent with those of the LGUs, with minor variances accounted for by legal deductions.
Recto emphasized the DOF’s commitment to transparency, stating that no changes or amendments were made to the existing framework. He highlighted that the calculations were based on a Supreme Court ruling and a resolution from the Development Budget Coordination Committee, developed in consultation with LGUs.
The city mayors expressed gratitude for the open dialogue and the DOF’s willingness to listen and address their concerns. Mayor Magalong of Baguio City even apologized for previous comments suggesting that LGUs were receiving less than their due share of NTAs.
Recto reassured the mayors that the DOF remains open to ongoing discussions to enhance the fiscal capabilities of LGUs and improve service delivery to Filipinos. He also noted that the Mandanas-Garcia ruling, effective since 2022, has increased the NTA shares of LGUs to 40 percent of national taxes, excluding those collected by the Bureau of Internal Revenue.
The Supreme Court’s decision mandates the inclusion of all national tax collections in the NTA base, with exceptions for special purpose funds and allotments for national wealth development. Recto clarified the items exempted from the LGUs’ share, including funds earmarked for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
Looking ahead, Recto projected an increase in LGU revenues by 2026 due to the expiration of certain laws, such as the TRAIN (Tax Reform for Acceleration and Inclusion) law. He estimated that the LGUs’ share of the NTA would rise from approximately 32 percent to about 35 percent.
Recto concluded by affirming the national government’s commitment to ensuring that LGUs receive their fair share of the NTA, noting the President’s and his own family’s deep understanding of local government needs.