Recto resolves concerns on National Tax Allotment shares of LGUs in dialogue with City Mayors

DAVAO CITY —Finance Secretary Ralph G. Recto addressed concerns regarding the computation of National Tax Allotment (NTA) shares for local government units (LGUs) during a productive dialogue with city mayors on January 15, 2025.

Secretary Recto provided a detailed, line-by-line briefing on the NTA computations, ensuring full compliance with the principles of the 2019 Mandanas-Garcia Supreme Court ruling and other relevant laws. The meeting included Baguio City Mayor Benjamin Magalong, Quezon City Mayor Joy Belmonte, and Dumaguete City Mayor Felipe Antonio Remollo.

“We did not change or amend anything. This is based on the Supreme Court ruling and a Development Budget Coordination Committee resolution, which was made in consultation with the LGUs. We are very transparent,” Secretary Recto explained.

A comparison between the NTA calculations by the LGUs and the Department of Finance (DOF) also revealed that the computations and deductions under various laws were generally aligned.

The city mayors appreciated the dialogue and the DOF’s openness to addressing their concerns. Mayor Magalong of Baguio City, in particular, apologized for his earlier remarks suggesting that LGUs were being shortchanged in their NTA allocations.

Recto reassured the mayors that he is always available for further discussions and that the DOF remains committed to working with LGUs to strengthen their fiscal capacities and optimize resources for better public service delivery.

The 2019 Mandanas-Garcia Supreme Court ruling, which took effect in 2022, increased the NTA shares of LGUs to 40% of all national taxes, excluding those collected by the Bureau of Internal Revenue (BIR). This adjustment was aimed at enhancing the fiscal autonomy of LGUs by granting them a larger share of the national tax base.

The Supreme Court ruling also mandated that the Secretary of the DOF, the Secretary of the Department of Budget and Management (DBM), the Commissioners of the BIR and Bureau of Customs (BOC), and the National Treasury include all national tax collections in the NTA computation, except those allocated to special purpose funds and national wealth development.

In determining deductions, the DOF follows the guidelines set by the SC decision, including Sections 29 (3), Article VI, and Section 7, Article X of the 1987 Constitution.

Secretary Recto was accompanied by Chief of Staff Maria Luwalhati Dorotan Tiuseco, Undersecretary Charlito Mendoza, Undersecretary Bayani Agabin, Assistant Secretaries Karlo Adriano, Allan Quebral, and Danielle Culangen, as well as representatives from the Bureau of Local Government Finance (BLGF), Bureau of the Treasury (BTr), BIR, and BOC during the meeting.