The Department of Budget and Management (DBM) on Wednesday maintained that the National Tax Allotment (NTA) is not legislated under the General Appropriations Act (GAA), following a petition filed before the Supreme Court (SC) questioning its inclusion in the proposed 2026 national budget.

In a statement, the DBM said the NTA “is not a discretionary appropriation under the General Appropriations Act.”

“It is a constitutional obligation implemented in coordination with, but not created by, the annual budget law,” the agency said.

The clarification came after the Philippine Councilors League (PCL) asked the high court to declare unconstitutional the alleged inclusion of the P1.19-trillion NTA in the 2026 GAA.

Constitutionally mandated transfer

The DBM stressed that reflecting the NTA amount in the annual budget documents does not convert it into a discretionary fund.

“Recording the NTA within the national fiscal framework does not transform it into a discretionary national fund. It remains a constitutionally mandated transfer,” it said.

The department underscored that neither the Executive nor Congress has the authority to suspend or condition the release of the NTA.

Citing Article X, Section 6 of the 1987 Constitution, the DBM noted that local government units (LGUs) “shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.”

It added that this mandate is operationalized under the Local Government Code of 1991, particularly Sections 284 and 286, which set the percentage formula and require automatic release to LGUs.

According to the DBM, presenting the NTA in the national expenditure program promotes transparency and fiscal discipline by ensuring—full disclosure of government fiscal flows; accurate deficit and cash programming computations; and compliance with constitutional requirements governing disbursements from the National Treasury.

“Far from weakening local autonomy, the transparent presentation of the NTA within the national budget strengthens fiscal predictability for LGUs and reinforces responsible macro-fiscal management for the country as a whole,” the DBM said.

Petition names key officials

In its 32-page petition, the PCL argued that the NTA is not a national expenditure subject to legislative appropriation but a constitutionally mandated share that must be automatically released to LGUs.

Named respondents in the case include Executive Secretary Ralph Recto, Finance Secretary Frederick Go of the Department of Finance, DBM Acting Secretary Rolando Toledo, National Treasurer Sharon Almanza, and Economy Secretary Arsenio Balisacan of the Department of Economy, Planning, and Development.

Asked to comment on the issue, Recto said: “It is automatically appropriated.”

The DBM noted its legal team has been directed to study the issues raised in the petition and will respond accordingly before the high court.