Lawmakers hike LGU ‘financial assistance’ to P19 billion

MANILA, Philippines — Aside from allocating a bigger budget for the financial aid programs of the Department of Social Welfare and Development, lawmakers have also significantly increased the budget for “financial assistance” to local government units (LGUs) for 2025, an election year.

The STAR has learned that the allocation for Financial Assistance to LGUs more than tripled to almost P18.95 billion in the approved budget for 2025, from the original P5 billion proposed by the Marcos administration.

The budget is used to fund eligible projects approved by the Department of Budget and Management (DBM). In 2024, the program had an approved budget of P14.035 billion.

Based on the 2025 General Appropriations Act or the approved budget program for the year, financial assistance to LGUs may be used to fund programs related to agriculture, cotton and textile industry, local arts and crafts, women-led social enterprises, cultural heritage and national heritage structures and sites.

It can also be used for information and communications technology systems and infrastructure development, various infrastructure projects, purchase of equipment to support evacuation and camp management operations, establishment of materials recovery facility, procurement of disaster equipment and vehicles for disaster response and rescue activities and adaptation and mitigation projects.

LGUs may also request for financial assistance from the national government to purchase ambulance, mobile medical vehicle, trucks (including mini-firetrucks) and multi-purpose vehicles.

The budget may also be allocated for assistance to indigent individuals or families, including medical, funeral, transportation, food assistance, educational assistance or scholarship and purchase of construction or repair materials for houses destroyed during disasters.

“Disbursement and utilization by the LGUs shall be subject to the pertinent provisions of existing government procurement laws, applicable budgeting, accounting and auditing rules and regulations and such other guidelines to be issued for the purpose,” read the special provisions of the law.

The DBM is expected to issue a local budget circular containing the guidelines for the release and utilization of the fund.

Last year, it set several restrictions and limitations, such as an indicative ceiling for financial assistance programs.

Earlier, LGUs raised concerns over their share in the national tax allotment. This is different from the Financial Assistance to Local Government Units, which is released based specific project proposals evaluated and approved by the DBM.

In a statement last week, the Department of Finance said Secretary Ralph Recto already met with local officials to resolve concerns regarding the computation of the tax allotment.

Baguio City Mayor Benjamin Magalong earlier called for a full accounting of tax allotment, claiming that LGUs are being “shortchanged” as they receive less than the mandated 40-percent share in total tax collections.

The DOF said Recto also provided a detailed line-by-line briefing on the computations and ensured full alignment with the Supreme Court ruling on the matter.

Based on the 2025 budget, over P1.034 trillion is automatically appropriated for the LGUs as their share in national taxes. An additional P32.655 billion was also allotted to LGUs as special shares from various taxes imposed by the government.

No budget hike

Meanwhile, lawmakers have denied the request of the Marcos administration to significantly increase the budget for the flagship program of the government’s anti-communist task force.

A review of budget documents showed that Congress only allocated P1.95 billion to the Support to the Barangay Development Program of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) this year.

The Marcos administration originally proposed P7.8 billion for the program, to be used mainly for funding projects in barangays certified by the NTF-ELCAC as “cleared” from communist activities.

In the original National Expenditure Program for 2025, the government proposed allocating P10 million to each of the 780 barangays identified by the NTF-ELCAC.

The amount was allocated for various programs, including farm-to-market roads, school buildings, water and sanitation systems, health stations and electrification.

The reduced budget would only give each barangay P2.5 million, similar to last year.

In November, it was reported that Marcos ordered the release of another P5 million to each of the 864 barangays cleared by the NTF-ELCAC last year.