DBM: National tax allotment not under GAA

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March 6, 2026 | 12:00am

MANILA, Philippines —  The Department of Budget and Management has clarified that local governments’ national tax allotment (NTA) is not legislated under the General Appropriations Act (GAA).

In a statement yesterday, the DBM said the NTA, the mandated share of local government units (LGUs) in the national tax collections amounting to P1.19 trillion in 2026, “exists independently” of the annual budget law.

“The inclusion of the NTA amount in the annual budget documents does not mean that it is being ‘appropriated’ in the discretionary sense contemplated for executive departments and agencies,” the DBM said.

The clarification followed a petition filed before the Supreme Court seeking to declare as unconstitutional the inclusion of the NTA in the 2026 GAA.

The petitioners claimed that the authorities initially accrued only P1.03 trillion for LGUs, computed based on the reenacted 2025 figures.

The 2019 Mandanas-Garcia ruling of the Supreme Court, which took effect in 2022, increased LGUs’ NTA shares to 40 percent of all national taxes.

Acting Budget Secretary Rolando Toledo approved on Jan. 26 the issuance of the Special Allotment Release Order and the corresponding Notices of Cash Allocation covering the P1.19-trillion full-year NTA requirements of LGUs nationwide.

In addition, the DBM said the tax allotment is not subject to executive veto as a program item, is not conditioned upon agency performance or compliance, and cannot be diminished or adjusted during budget execution.

“The DBM fully respects the constitutional mandate to ensure the automatic release of the LGUs’ just share in national taxes,” it said.

The budget department also said the agency and Office of the Solicitor General would follow the judicial process as a case has been filed.

“We will direct our legal team to thoroughly study the issues raised and to submit the government’s arguments in the appropriate proceedings,” it said.