The Supreme Court (SC) was asked on Tuesday, March 3, to declare unconstitutional the inclusion of the P1.19 trillion National Tax Allotment (NTA) for local government units (LGUs) as part of the 2026 General Appropriations Act (GAA).

The petition was filed by the Philippine Councilors League (PCL) together with Batangas Vice-Gov. Hermilando Mandanas.

Named respondents in the petition were Executive Secretary Ralph Recto, Finance Secretary Frederic Go, Acting Budget and Management Secretary Rolando Toledo, National Treasurer Sharn Almanza, and Department of Economy, Planning and Development Secretary Arsenio Balicasan.

The petitioners asked the SC to rule on whether the respondents committed grave abuse of discretion in disregarding Section 6, Article X of the 1987 Constitution.

Section 6, Article X of the Constitution mandates that LGUs should have a share, determined by law, in all national taxes, which must be automatically released to them.

The petitioners told the SC that the NTA is not a national expenditure subject to legislative appropriation. They pointed out that the NTA is a constitutionally mandated share that must be automatically released to LGUs.

“Treating the NTA as an appropriation negates and violates the declared policy of the State to ensure local autonomy, as it subjects the LGUs’ just share to Executive veto, constitutional reenactment, and budget execution controls, thereby defeating the mechanical, perfunctory, and unconditional nature of automatic release mandated by the Constitution and the Local Government Code,” the petitioners said.

They also said that the respondents violated the said constitutional provision when they coursed LGUs’ share in the GAA, which resulted in the unconstitutional reduction of the share.

“Accordingly, subjecting the LGUs just share to GAA-based appropriation mechanisms and exposing it to veto or reenactment does not merely inconvenience local governments, but inflicts concrete and time-sensitive harm that defeats the very purpose of local and fiscal autonomy,” they added.

At the same time, the petitioners told the SC that the respondents committed grave abuse of discretion in misapplying Section 29 (1), Article VI of the Constitution to the NTA, despite Section 283 of the National Internal Revenue Code (NIRC) which states LGU’s share in national taxes does not accrue to the national treasury.

Section 29, Article VI of the Constitution provides that “no money shall be paid out of the Treasury except in pursuance of an appropriation made by law,” they said.

They added that Section 29 (3), Article VI provides an exception as it mandates that “money collected for a special purpose shall be treated as a special fund and paid out for such purpose only.”

“By statutory command, the Local Government Units’ share in national taxes is excluded from the National Treasury and is otherwise specially disposed of by law, confirming that such share never becomes part of the general funds of the National Government subject to appropriation or discretionary budgetary control,” they stressed in their petition.

They also pointed out that if the NTA is treated as an appropriation item under the GAA, it becomes subject to the President’s veto power.

“Such treatment is fundamentally incompatible with Section 6, Article X of the Constitution, which commands that the Local Government Units’ just share in national taxes shall be automatically released,” they said.