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

During the meeting, Secretary Recto provided a detailed line-by-line briefing to the city mayors on the NTA computations, ensuring full alignment with the principles of the 2019 Mandanas-Garcia Supreme Court ruling and relevant laws. Present during the briefing were 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 said.

Meanwhile, a comparison of the computations between the LGUs and the DOF was also discussed, revealing that the calculations and deductions under various laws were more or less aligned.

The city mayors expressed their gratitude to the DOF for the dialogue and its openness to listening and addressing concerns. Baguio City Mayor Magalong, in particular, expressed his apologies to Secretary Recto for his earlier remarks suggesting that LGUs were being shortchanged in their NTAs.

In response, Secretary Recto assured the mayors that he is just ‘one call away’ and that the DOF is always open to having continued dialogues with LGUs to help them strengthen their fiscal capacities and optimize resource utilization to deliver more and better services to Filipinos.

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

In its decision, the SC ordered the Secretary of the DOF, the Secretary of the Department of Budget and Management (DBM), the Commissioners of the BIR and the Bureau of Customs (BOC), and the National Treasury, to include all national tax collections in the computation of the NTA base, “except those accruing to special purpose funds and special allotments for the utilization and development of the national wealth.”

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

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