Manila: President Ferdinand R. Marcos Jr. will emphasize the increase in local government units' (LGUs) share from national tax collections during his fifth State of the Nation Address (SONA) on July 27, according to Malaca±ang on Wednesday. Executive Secretary Ralph Recto announced that the National Tax Allotment (NTA) for LGUs is projected to reach PHP1.32 trillion by 2027. This amount marks an increase of PHP129.32 billion from the 2026 level and reflects higher national tax collections and the government's commitment to strengthening local governance.
According to Philippines News Agency, Recto explained that the PHP1.19-trillion NTA for 2026 is based on internal revenue collections from 2024, in line with the law that mandates the allotment be calculated using collections from three years prior. Recto noted that this allocation will be a significant component of the proposed 2027 national budget, which is currently being finalized by the Department of Budget and Management.
The NTA allocation formula specifies that approximately 83 provinces will receive PHP303.56 billion; 149 cities, PHP303.56 billion; 1,491 towns, PHP448.84 billion; and 41,912 villages, PHP263.97 billion. Recto assured that the allocation system is "non-partisan, formula-based," ensuring LGUs receive their shares automatically and without political interference. He stated that the indexation is established as automatic appropriations, beyond alteration.
About PHP990.68 billion of the PHP1.19 trillion NTA will originate from the Bureau of Internal Revenue collections, PHP329.09 billion from the Bureau of Customs, and PHP63.6 million from other collections certified by the Bureau of the Treasury. Recto highlighted that an LGU's share is determined by its population and land area. For 2026, Davao City received the largest allocation of PHP10.1 billion. In Metro Manila, the largest recipients for 2026 include Quezon City (PHP9.82 billion), Manila (PHP6.09 billion), Caloocan City (PHP5.5 billion), Taguig City (PHP4.40 billion), and Pasig City (PHP3.05 billion).
In addition to the NTA, Recto mentioned that the Marcos administration has increased the Local Government Support Fund (LGSF) to a record high of PHP57.87 billion for 2026, aiming to further enhance partnerships between national agencies and LGUs in implementing development projects. He emphasized that the President believes in leveraging the expertise and resources of LGUs in national projects, advocating against the separation of national and local government projects as a false dichotomy.
