Barangays in the country’s most remote corners and its largest cities alike are guaranteed a fixed cut of national revenues in 2027, with local government units collectively drawing P1.32 trillion from the National Tax Allotment, an amount the Marcos administration is positioning as one of the heaviest line items in next year’s spending plan.
The figure represents an increase of P129.32 billion over the 2026 level, according to Executive Secretary Ralph Recto, who framed the rising allotments as a fixed obligation rather than a discretionary grant.
“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,” Recto said.
Because the law ties the allotment to internal revenue collections made three years earlier, the 2027 total reflects what national agencies took in during 2024. Recto stressed that the computation leaves no room for adjustment by officials.
“Ang sabi kasi ng batas at mga reglamento na ang dividends ng mga lokal na pamahalaan ay batay sa koleksyon ng mga pambansang buwis (The law and regulations state that the dividends of local governments are based on national tax collections),” he said.
Population and land area drive how much each unit receives, with broader territories translating into larger shares for certain LGUs. Under the breakdown, municipalities claim the single biggest slice at P448.84 billion, followed by provinces and cities at P303.56 billion each, while barangays divide P263.97 billion.
The bulk of the money traces back to the Bureau of Internal Revenue, which accounts for P990.68 billion. Customs collections supply P329.09 billion, and a further P63.6 million comes from other sources certified by the Bureau of the Treasury.
Recto pointed to the steady climb in tax revenues, alongside the Supreme Court’s Mandanas-Garcia ruling that widened the base used to calculate local shares, as the reasons behind the upward trajectory.
Looking at how individual cities fared most recently, Davao City led all cities in 2026 with P10.1 billion, a jump of nearly 15 percent year-on-year. Within Metro Manila, Quezon City took P9.82 billion, Manila P6.09 billion, Caloocan City P5.5 billion, Taguig City P4.4 billion, and Pasig City P3.05 billion.
“So next year, may increase na naman hindi lang sila, pero lahat ng LGU (So next year, not only they, but all LGUs will receive increases),” Recto said.
Beyond the mandatory transfers, the administration has set aside a record P57.87-billion Local Government Support Fund for 2026, which Recto described as part of a deliberate shift to draw LGUs into national undertakings rather than keep the two tracks apart.
“In many meetings, he said that treating national government projects as separate from local government projects is a false dichotomy. Kaya may pivot sa LGU na gawing katuwang sila sa mga pagpapatupad ng mga proyekto (That is why there is now a pivot toward LGUs, making them partners in implementing projects),” he said.
That thinking is already visible in the Department of Education’s arrangement with local governments, which lets LGUs take on school building projects to chip away at the national classroom backlog.
The package is expected to feature in President Marcos’s State of the Nation Address, scheduled for July 27, after which the Department of Budget and Management’s finalized 2027 spending plan heads to Congress.
