LGU budget hiked to P871 billion this year

MANILA, Philippines — The budget allocation for local government units (LGUs) this year will increase by six percent to P871 billion as state revenues have slowly recovered from the COVID pandemic.

In a latest local budget memorandum, the Department of Budget and Management (DBM) released the final guidelines for the 2024 national tax allotment (NTA) shares of the LGUs.

This year’s NTA for LGUs is higher by six percent from P820.27 billion in 2023.

Following the record high P5.768-trillion 2024 national budget, LGUs will get a higher share as their NTA is based on the 2021 revenue collection, which improved following a decline at the height of the pandemic in 2020.

In computing the NTA, the DBM used as base period the third year prior to the distribution.

In this case, the 2024 budget of the LGUs is measured based on revenues raised in 2021.

In 2021, government revenues improved by five percent to P3 trillion as the economy and business activities slowly reopened.

Based on the memorandum, the DBM said the NTA share of the LGUs would be apportioned among them – including those created, approved and ratified last year – in accordance with the allocation formula prescribed by the Local Government Code.

“It is understood that the effect of the final 2023 NTA share of the LGUs will necessitate the prioritization in the implementation of items of appropriations by the LGUs,” the DBM said.

By level, municipalities will take the largest share in the NTA with P295.18 billion followed by cities with P201.5 billion.

Provinces will receive P200.42 billion while the smallest share of P174.28 billion will go to the barangays.

The Philippines has 83 provinces, 149 cities, 1,485 municipalities and 41,905 barangays. 

For this year, Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) will receive the largest budget among regions with P103.34 billion followed by Central Luzon with P84.82 billion, Western Visayas with P68.56 billion and Central Visayas, P61.55 billion.

Lowest allocations will go to the Cordilleras with P26.09 billion, Caraga with P33.79 billion and Zamboanga peninsula, P35.16 billion.

Budget adjustments were made following developments in LGUs this year such as the conversion of the municipality of Carmona into a component city of Cavite.

Final and executory decisions on boundary disputes were also considered, including in the towns of Aguinaldo and Mayoyao in Ifugao, Malibcong and Baay-Licuan in Abra, and areas in Makati that were transferred to Taguig.

The NTA is part of the so-called Mandanas Supreme Court ruling, which increased LGUs’ share in national tax collections.

Following the implementation of the Mandanas ruling, LGUs now get 40 percent of all incomes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs.

Previously, the share of the LGUs was sourced only from the BIR collection.