Local government units (LGUs) next year will be allotted a total of P1.32 trillion in the form of National Tax Allotments (NTAs), the LGUs’ constitutionally mandated share from national government tax collections for local development and to fund their basic services.

On Wednesday, Executive Secretary Ralph Recto said next year’s NTA increases by P129.32 billion from 2026 NTA’s P1.19 trillion, derived from non-partisan, formula-based decisions on disbursement, which will be highlighted in next month’s SONA by President Ferdinand Marcos Jr.

People’s entitlements

“As a former local executive official himself, the President sees and honors these as people’s entitlements. These are guaranteed plowbacks that will go from big cities to the remotest barangays,“ Executive Secretary Ralph Recto said.

He said the amount for 2027 is based on the 2024 internal revenue collections, or three years prior, as mandated by law.

“That indexation is set in stone, beyond alteration. As such, they are like automatic appropriations,” Recto said.

“Ang sabi kasi ng batas at mga reglamento na ang dividends ng mga lokal na pamahalaan ay batay sa koleksyon ng mga pambansang buwis,” Recto said.

One of the biggest ticket items

Further, Recto said the amount will be “one of the biggest ticket items” in the proposed 2027 national budget that the Department of Budget and Management is finalizing.

Under the Constitution, the President has a month after he has delivered his SONA to submit next year’s national budget to Congress.

Under the established formula in NTA allocation, 83 provinces will share among themselves P303.56 billion; 149 cities, P303.56 billion; 1,491 towns, P448.84 billion; and 41,912 barangays, P263.97 billion, Recto said, citing a DBM memorandum.

The LGU’s share will be primarily determined by its population and land area.

Recto said among the cities, Davao City received the largest allocation of P10.1 billion in 2026, or almost 15 percent higher than last year’s.

Biggest recipents in 2026

In NCR, the biggest recipients for 2026 included Quezon City (P9.82 billion, 15 percent increase), Manila (P 6.09 billion, 14 percent increase), Caloocan City (P 5.5 billion, 14 percent increase), Taguig City (P 4.40 billion, 18 percent increase), and Pasig City (P 3.05 billion, 17 percent increase).

As to the funding source of the P1.19- trillion NTA, P990.68 billion will come from the Bureau of Internal Revenue collections, P329.09 billion from the Bureau of Customs collections, and P63.6 million from other collections certified by the Bureau of the Treasury.

On top of the NTA, President Marcos initiated the increase of the Local Government Support Fund to a record high of P57.87 billion for 2026.