MANILA - Baguio City Mayor Benjamin Magalong, along with the Anti-Corruption Movement group, Mayors for Good Governance (M4GG) is calling for a dialogue with the Department of Finance (DOF) after what they said was a significant shortfall in the share of Local Government Units (LGUs) from national taxes.

Magalong said that for 2024, LGUs are set to receive only 31 percent of the National Tax Allotment (NTA), well below the mandated 40 percent under the Mandanas Ruling.

In an interview with ANC on Wednesday, Magalong explained that the NTA allocation for 2024 amounts to P871 billion, but is based on a total national tax collection of P2.742 trillion. The result is a discrepancy of roughly 8 percent. In 2023, the shortfall was slightly less, with LGUs receiving 32 percent of the national tax collection.

“[In] 2024, our National Tax Allocation for the LGUs is at P871 Billion. But if you look at the total national tax based on the taxes that I mentioned a while ago, for the category of classification of taxes, the total collection was at P2.742 trillion. So if 871 billion divided by 2.742 trillion, that’s only about 31  percent,” he explained.

“If you go back to 2023, the computation would indicate that [the local governments] received about 32 percent of the NTA,” he added.

The group is pressing the DOF for a full and transparent accounting of the tax allotments. The mayors are particularly concerned about how the tax collections are being computed and whether administrative errors or miscalculations are at play.

“We are exhausting all administrative remedies to clarify this. In fact, the first agency that I sent a letter to was DBM but I was referred to DOs (Division Offices),” Magalong said. He added that the discrepancy affects not just Baguio City but local governments nationwide, particularly in rural areas.

The mayors are also concerned about the impact of this shortfall on local governance, especially in smaller municipalities. Many 4th- and 5th-class municipalities rely on their share of the NTA to fund vital services such as infrastructure, health services, and education. The missing 8 percent could result in significant challenges for these communities, they said.

“[We are] hoping that the 8 percent would be accounted for that would be a big, big difference in terms of revenue,” Magalong said.

The M4GG is still awaiting a response from the DOF to set up a meeting and resolve the issue. They said that while they do not want to immediately assume foul play, they are pushing for clarification to ensure that the LGU share is being correctly computed and distributed according to the law.

“Hindi naman natin pwede sabihin na [may] ‘anomaly’ kaagad. Siguro iba lang yung computations, mga numbers. That’s the reason why we would like to clarify it,” Magalong explained.

The Mandanas Ruling, which took effect in 2022, was intended to increase the autonomy of local governments by providing them with a larger share of national taxes. However, the shortfall in the 2023 and 2024 allocations has raised concerns about the proper implementation of this mandate.