LGUs tackle P57.9-B fund for local projects in Palace meet
Local chief executives across the country sat down with Malacañang officials to flesh out how to prudently spend the almost P60-billion funding for local projects this year, including barangay-level support for the National Task Force to End Local Communist Armed Conflict (NTF-Elcac).
In a statement on Saturday, Executive Secretary Ralph Recto said 29 governors, 16 city and municipal mayors, and seven representatives of governors met at Malacañang on Feb. 19 to discuss the rollout of the Local Government Support Fund (LGSF), a direct-to-LGU allocation which has been earmarked P57.88 billion in this year’s national budget.
“The President has repeatedly said that LGUs should not be passive recipients of national projects but must be active implementers of the same,” Recto said.
He said the LGSF would bankroll projects identified and implemented by LGUs based on a menu of programs enumerated in the 2026 General Appropriations Act—food security, health, education, infrastructure and livelihood.
Infra projects
The bulk of the 2026 LGSF is allotted for the P37.49-billion Financial Assistance to Local Government Units (LGUs) to fund various infrastructure projects.
The Growth Equity Fund will get P11.2 billion to provide financial assistance for poor, disadvantaged, lagging and low-income LGUs, as well as those expected to have fiscal gaps due to the ongoing devolution process.
Another P8 billion is allotted for the Support to the Barangay Development Program of NTF-Elcac and P1 billion for Support and Assistance Funds to Participatory Budgeting, mainly for the construction, expansion and upgrading of water supply systems and climate-smart evacuation centers.
Budget watchdogs have flagged the LGSF, calling it “LGU pork,” which they claimed may be used as tools for political patronage and control by the administration.
Budget plan
The P57.88-billion LGSF in the 2026 GAA was 260 percent higher than the P16.08 billion requested by the Department of Budget and Management (DBM). It was also more than double the P23-billion LGSF under the 2025 national budget.
In a previous press briefing in Malacañang, Budget Secretary Rolando Toledo explained that the Marcos administration’s direction in further expanding the LGSF was to bring public services closer to the people by empowering stronger and more capable local governments.
“LGUs are no longer just recipients of funds. They are now decision-makers, planners, and implementers of services in their communities,” Toledo said.
The DBM also clarified that policies on placing projects in localities have also changed. Under the 2026 budget framework, projects that are unknown to or not requested by LGUs are no longer allowed.
“Mayors should no longer be surprised by projects being built in their areas without their knowledge. The budget is not a surprise—it is a plan,” Toledo noted.
According to Toledo, the doubling of the LGSF in 2026 was to “help LGUs that lack resources and to further strengthen basic services and livelihoods.”
“We know that not all LGUs have the same capacity. That is why the budget has a clear goal: to uplift everyone and ensure that no one is left behind,” he added.
Responding to local needs
In terms of disaster response, the DBM highlighted that LGUs have a defined role in the use of the P39.82 billion allocated for the National Disaster Risk Reduction and Management Fund (NDRRMF), including P15.33 billion earmarked for rehabilitation and reconstruction based on approved local rehabilitation and recovery plans.
Under the 2026 GAA, LGUs will have a share of the P1.19 trillion in National Tax Allotment (NTA), on top of more than P31.7 billion in special shares from national taxes and P1.41 billion from Fire Code fees.
On Jan. 26, Toledo approved the issuance of the Special Allotment Release Order (Saro) and the corresponding Notices of Cash Allocation (NCAs), covering the full-year NTA requirements of LGUs nationwide amounting to P1.19 trillion.
“By releasing the NTA in full and on time, we are enabling LGUs to act decisively, respond to local needs, and bring immediate benefits to their constituents,” he said.
Under the 1987 Constitution and the Local Government Code of 1991, the NTA represents the automatic and formula-based share of LGUs in national internal revenue, serving as a primary source of funding for local programs, projects and services.
The 2026 NTA has been directly credited to the authorized government servicing banks of LGUs, in accordance with existing budgeting, accounting and auditing rules, according to DBM.
The agency also reminded LGUs to utilize the NTA strictly for authorized purposes and to comply with reporting requirements, consistent with transparency and accountability standards.
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