MANILA – A petition filed before the Supreme Court of the Philippines is seeking to block the inclusion of P1.190 trillion in National Tax Allotment (NTA) funds for local government units (LGUs) in the 2026 General Appropriations Act (GAA), arguing the move could distort fiscal autonomy and disrupt local development spending.
Batangas Vice Governor Hermilando Mandanas and Raul Corro filed a petition for certiorari questioning the Marcos administration’s treatment of the LGUs’ share in national taxes as a line-item appropriation subject to executive controls.
The petition names as respondents Executive Secretary Ralph Recto, Finance Secretary Frederick Go, Budget Acting Secretary Rolando Toledo, National Treasurer Sharon Almanza, and Economic Planning Secretary Arsenio Balisacan.
At the core of the dispute is whether the NTA — constitutionally defined as the LGUs’ “just share” in national taxes — should pass through the annual budget process. Petitioners argue that doing so exposes the funds to executive veto, reenactment risks, and cash execution controls, potentially affecting the predictability of transfers to provinces, cities, municipalities, and barangays.
They cited the 2018 Mandanas-Garcia ruling, which expanded the tax base for computing LGU shares and clarified that these allocations are not dependent on annual appropriations.
From an economic standpoint, the case carries significant implications. The NTA constitutes a major funding source for local infrastructure, health services, education, and social protection programs. Any delay or uncertainty in its release, the petitioners said, could compress local investment cycles, disrupt project implementation, and weaken growth momentum at the grassroots level.
The high court’s ruling could shape the fiscal architecture governing national-local revenue sharing and influence public sector spending patterns in 2026 and beyond.|
