DBM says national tax allotment not under GAA amid SC petition

The Department of Budget and Management (DBM) on Wednesday said that the National Tax Allotment (NTA) is not legislated under the General Appropriations Act (GAA).

This was after the Philippine Councilors League (PCL) asked the Supreme Court (SC) to declare unconstitutional the alleged inclusion of the NTA in the 2026 national budget.

“The National Tax Allotment is not a discretionary appropriation under the General Appropriations Act,” the DBM said in a statement. 

“It is a constitutional obligation implemented in coordination with, but not created by, the annual budget law,” the DBM added. 

The DBM pointed out that the inclusion of NTA’s amount in the annual budget documents does not mean it is being appropriated in the discretionary sense applied to executive departments and agencies.

“Recording the NTA within the national fiscal framework does not transform it into a discretionary national fund. It remains a constitutionally mandated transfer,” it added.

The DBM stressed that “neither the Executive nor Congress exercises discretion to suspend or condition the NTA.”

Citing Article X, Section 6 of the 1987 Constitution, the DBM said that local government units (LGUs) “shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.” 

“This constitutional command is operationalized under the Local Government Code of 1991, particularly Sections 284 and 286, which fix the percentage formula and mandate automatic release.”

“Far from weakening local autonomy, the transparent presentation of the NTA within the national budget strengthens fiscal predictability for LGUs and reinforces responsible macro-fiscal management for the country as a whole.”

According to the DBM, NTA’s reflection in the budget of expenditures and sources of financing and other budget documents ensures:

• Full disclosure of government fiscal flows;
• Accurate deficit and cash programming computations; and
• Compliance with constitutional requirements governing disbursements from the National Treasury.

The DBM said its legal team is directed to study concerns raised in the SC petition in connection with the NTA. 

In a 32-page petition, the PCL said including the NTA amounting to P1.19 trillion as part of the GAA is illegal.

The petitioners said the NTA is not a national expenditure subject to legislative appropriation but a constitutionally mandated share that must be released to LGUs.

The respondents are Executive Secretary Ralph Recto, Department of Finance (DOF) Secretary Frederick Go, Department of Budget and Management (DBM) Acting Secretary Rolando Toledo, National Treasurer Sharon Almanza, and Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan.

Asked about the matter, Recto replied: “It is automatically appropriated.” —Joviland Rita/AOL, GMA Integrated News