LGU budget to rise to P1.03 trillion in 2025

MANILA, Philippines — Budget allocation for local government units (LGUs) for next year will be raised by almost 20 percent to P1.03 trillion as government revenues continue to recover from the pandemic.

In its latest local budget memorandum, the Department of Budget and Management (DBM) released the indicative national tax allotment (NTA) shares of LGUs for 2025.

This came as state agencies and LGUs prepare their budget proposals for the record P6.2 trillion National Expenditure Program (NEP) for 2025.

According to the DBM, the NTA for LGUs for 2025 will be up 18.7 percent to P1.03 trillion from this year’s level of P871.38 billion.

LGUs will get a higher share as the NTA is based on the 2022 revenue collection, which improved as the economy significantly bounced back from the two-year COVID pandemic.

In computing the NTA, the DBM uses as base period the third year prior to the distribution. In this case, the 2025 budget of LGUs is measured against the revenues raised in 2022. 
During that year, government revenues grew by 18 percent to P3.55 trillion as the economy and business activities fully opened.

Of the P1.03 trillion NTA next year, 75 percent or P776.56 billion will come from the Bureau of Internal Revenue, P258 billion from the Bureau of Customs and the remaining P41.36 million from other agencies.

By level, municipalities will take the largest share in the NTA at P350.68 billion, followed by cities at P239.05 billion. Provinces will receive P237.96 billion while the smallest share of P206.92 billion will be secured by barangays.

Currently, there are 83 provinces, 149 cities, 1,485 municipalities and 41,905 barangays in the country.