‘Shortchanged’? Mayors seek talks with Recto on tax share
BAGUIO CITY—The anticorruption movement Mayors for Good Governance (M4GG) has asked the Department of Finance for a full accounting of the 40-percent local government share from national taxes, as cities and municipalities seem to have been “shortchanged,” Baguio Mayor Benjamin Magalong said on Monday.
“According to our computations, we are receiving only 31 percent instead of [the full] 40 percent in accordance with the Mandanas-Garcia ruling,” he said on the sidelines of this year’s Panagbenga Baguio Flower Festival launching ceremony at City Hall.
He was referring to the 2018 Supreme Court decision affirming that local governments are entitled to a share from all national government taxes and not just internal revenue collections.
The high court upheld the arguments made by local officials led by Batangas Gov. and lawmaker Hermilando Mandanas and former Bataan Gov. Enrique Garcia, who sued the government in 2013.
Computation
Magalong, a founder of M4GG, said they have sought a meeting with Finance Secretary Ralph Recto to shed light on how much local governments actually receive.
“I asked for a dialogue initially with Budget Secretary Amenah [Pangandaman], but she informed me the agency with the authority to discuss revenue sharing is DOF (Department of Finance),” he told reporters.
“We have written Secretary Recto seeking a dialogue so we would be apprised how the shares are being computed because we feel we are being shortchanged,” the mayor noted.
Magalong did not specify the years when M4GG encountered issues with the local government share, nor did he disclose the amount owed to Baguio by the national government.
There was no immediate response from Recto when sought for comment on Tuesday.
Bigger base
Formerly called the internal revenue allotments of 82 provinces, 1,493 municipalities, 149 cities and 42,045 barangays, this share was expanded to include other revenue sources such as the Bureau of Customs and is incorporated in the budget laws or General Appropriations Act (GAA) under the new term, national tax allotments (Nata).
Taking effect during the Duterte administration, the impact of the Mandanas-Garcia Doctrine on national expenditures was eased by enforcing a “complete devolution” of the state’s functions to local governments.
Next year’s GAA has appropriated P1.034 trillion in Nata for local governments.
In Baguio’s 2025 budget ordinance, the summer capital expects to receive a P1.462-billion share.
M4GG is composed of about 100 mayors who signed a “manifesto of good governance” on Aug. 24, 2023, when they joined a crusade against government corruption that cuts across all levels of the bureaucracy.
The movement was convened by Magalong, Isabela City Mayor Sitti Hataman of Basilan province, Dumaguete City Mayor Felipe “Ipe” Remollo, Quezon City Mayor Joy Belmonte, Kauswagan Mayor Rommel Arnado of Lanao del Norte and Marikina City Mayor Marcelino Teodoro.
Impact
“Funding has a key impact on local governments if empowering them is a genuine goal,” Magalong pointed out. But some local governments end up begging for augmentation funds from national lawmakers to make ends meet, he said.
“So what happens to 3rd class to 5th class municipalities with no pull in Congress?”Magalong asked.
He disclosed M4GG’s misgivings about the Nata when he blamed corruption’s continuing impact on national expenditures, particularly the national debt, which has swelled to P17.35 trillion in 2025.
“In 2006, the national debt was P5.9 trillion. In 2022, the state owed P13.4 trillion. In 2023, the national debt was P14.6 trillion, while last year’s debt was P16 trillion,” the Baguio mayor pointed out.
According to Magalong, the automatic appropriation in 2023 for debt servicing was P582 billion.
“In 2024, debt servicing climbed to P670 billion, although I have read that we paid much more—P800 billion based on what I read,” he said.
Magalong added: “This year, the 2025 GAA allotted debt servicing of P877 billion. For us to significantly reduce our principal [debt] for 2024, we needed to pay P1.241 trillion while corrupt officials continue to pocket people’s money.”
