‘Embo’ barangays excluded from Makati’s tax allocation

MANILA, Philippines — The 10 enlisted men’s barrio or “embo” barangays that are the subjects of a land row between Makati and Taguig have been excluded from Makati’s 2024 national tax allotment (NTA) allocation for 2024, an official said yesterday.

“This means that Taguig has to assume full responsibility for the benefits and welfare of over 300,000 residents that are now under its jurisdiction,” Makati city administrator Claro Certeza said in a statement.

Certeza cited the Department of Budget and Management (DBM)’s Budget Memorandum No. 87-A dated Dec. 28, 2023, which states that Makati will only be receiving its NTA for the 23 remaining barangays under its jurisdiction. These consist of the 20 barangays in District 1 plus Guadalupe Viejo, Guadalupe Nuevo and Pinagkaisahan.

“It is now incumbent upon Taguig to take up the mantle of governance and welfare for these communities. This transition marks a new chapter, not only in the administrative dynamics of our cities but also in the lives of the residents of these barangays. We trust that Taguig City will uphold the highest standards of service and care that these residents rightfully deserve,” he said.

Under the DBM memorandum, Makati will be receiving P1,006,144,469 for the fiscal year 2024. Prior to the removal of the “embo” barangays, Makati was supposed to receive an NTA allocation of P1,775,342,277.

Certeza noted, however, that the P770-million reduction in Makati’s NTA share will have negligible impact on the programs and services of the city government.

“Makati does not rely on the NTA because of our consistent tax collection performance. Locally sourced revenues are more than enough to fund our 2024 budget, not to mention the savings gained from the subsidies previously given to the ‘embo’ barangays,” he said.

Based on an initial report from the city finance department, total revenue collection as of December 2023 reached P24.8 billion. The bulk of the year’s income came from local sources led by business tax with P12,488,452,736.24, followed by realty tax with P8,688,442,661.55.

For 2024, the city council has approved a total city budget of P19.7 billion. The social development sector received the lion’s share with P4.1 billion allocated for the health sub-sector, P3.2 billion for the education sub-sector and P1.8 billion for the social welfare sub-sector.

In 2023, Makati allocated P1.4 billion to primary health care management and another P1.6 billion to fund the patient care program of Ospital ng Makati. It also allotted around P2 billion for education-related programs and about P1 billion for social welfare initiatives.

The NTA is distributed among LGUs – provinces, cities, municipalities and barangays – using a specific formula. It takes into account population (50 percent), land area (25 percent) and equal sharing (25 percent).

The recent Supreme Court ruling transferred barangays Pembo, Comembo, Cembo, South Cembo, West Rembo, East Rembo, Pitogo, Northside, Southside and Rizal to Taguig.

In its memorandum, the DBM acknowledged the effect of this decision in the land areas and subsequently, the NTA allocations, of Makati and Taguig.

The NTA is a system for distributing national tax revenues to local government units, replacing the previous Internal Revenue Allotment.