The Philippine government’s efforts to boost tax collections have far-reaching implications for national and local development. Finance Secretary Ralph Recto highlighted last week the transformative potential of the Mandanas-Garcia ruling, which will increase the share of local government units (LGUs) in the National Tax Allotment (NTA) to 35 percent by 2026. Coupled with Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr.’s forecast that tax collections will exceed ₱3 trillion in 2025, this development positions LGUs to play a pivotal role in shaping the future of Philippine cities and towns.
This expanded fiscal capacity offers LGUs unprecedented opportunities to implement development projects that can address long-standing issues such as inadequate infrastructure, poor public services, and limited access to technology. In the context of an increasingly digital world, these additional resources can enable local governments to embark on transformative initiatives. By leveraging the NTA increase, LGUs can modernize public services through digital platforms, improve urban planning with data-driven tools, and foster economic growth by supporting local industries and startups in technology-driven sectors.
However, the ability of LGUs to maximize these funds depends on their capacity to plan, execute, and monitor projects effectively. The transition to a larger NTA share requires not only sound financial management but also a strategic vision aligned with national development goals. Investments in capacity-building programs for LGU officials and staff are crucial to ensure that resources are utilized efficiently and transparently. Furthermore, adopting digital technologies such as e-governance systems and data analytics will enhance accountability and streamline service delivery, enabling LGUs to address the diverse needs of their constituents.
The citizenry, on the other hand, plays a critical role in this process. With the 2025 elections for local officials approaching, voters must exercise their democratic power to demand accountability and competence from those seeking public office. It is imperative for citizens to scrutinize candidates’ platforms, particularly their plans for utilizing the expanded NTA and improving tax collection efficiency at the local level.
Electing leaders with a clear vision for digital transformation and sustainable development is essential to ensuring that the benefits of increased tax collections are felt by all. Citizens should also remain engaged beyond the election period by participating in consultative processes, monitoring government projects, and holding public officials accountable for their promises. Transparency and active civic involvement are vital in creating a culture of trust and collaboration between the government and the governed.
Moreover, the projected growth in tax collections underscores the importance of fostering a culture of tax compliance. Citizens and businesses alike must recognize their responsibility to contribute to nation-building by paying the correct taxes. Simplifying tax filing procedures and enhancing public awareness campaigns about the importance of taxes in funding development projects can help improve compliance rates.
In this era of digital transformation, the Philippines stands at a critical juncture. The combination of increased LGU funding and a growing tax base has the potential to accelerate the country’s progress toward becoming a more inclusive and technologically advanced society. However, realizing this vision requires collective action from all sectors of society—government, private sector, and ordinary citizens. By working together, we can ensure that the promise of development translates into tangible improvements in the quality of life for every Filipino.
Looking forward to the 2025 elections, let us seize this opportunity to elect leaders who embody integrity and innovation and to embrace our shared responsibility in building a better future for the Philippines.