BAGUIO CITY, Benguet — The lowered share of local government units (LGUs) from all national government revenues has finally been clarified, according to Baguio City mayor Benjamin Magalong.

Magalong disclosed that the reason is that cuts were made in past budget laws to accommodate special allotments for important national obligations, such as the block grant for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and the tobacco excise taxes that go to a special purpose fund.

"The BARMM, for instance, is entitled to 5 percent of the national internal revenue and customs collections. In this year’s national budget, this amounts to ₱83.421 billion," the retired police official noted.

"Also excluded from the National Tax Allotment (NTA) computations are the profits generated by the Cagayan Economic Zone Authority and revenues generated by the TRAIN law (the Tax Reform for Acceleration and Inclusion Act, or Republic Act No. 10963)," he cited.

Magalong, former Cordillera Regional Police chief had a dialogue with finance secretary Ralph Recto to iron out the matter in the presence of officials of city and municipal leagues of mayors and the anticorruption movement Mayors for Good Governance

"All these reduced the NTA of local governments to 32 percent (not 31 percent as initially suspected)," the Baguio City local executive added.

Citing Recto's explanation, Magalong asserted that the deductions were allowed by the Supreme Court (SC) in its 2018 RULING that expanded the 'just share' of 82 provinces, 1,493 municipalities, 149 cities and 42,045 barangays from the original internal revenue collections to all national government earnings such as customs duties, mining taxes and environmental charges.

The high court's decision acknowledged that numerous revenue sources had to be excluded from the NTA because these were intended for specific purposes, such as proceeds from the conversion of former American military bases and franchise taxes paid by the Manila Jockey Club Inc. and the Philippine Racing Club.

The lesson learned here, Magalong pointed out, was that all future measures in Congress that require funding would need to be scrutinized by LGUs in order to understand how new laws would affect their NTA shares.

In the meantime, Secretary Recto informed Magalong and his colleagues that some obligations guaranteed by special laws were about to expire, such as the 'sin' taxes that have been absorbed by the Universal Health Care Act (Republic Act No. 11223).