The national government will increase its tax allocations to local government units (LGUs) by nearly 11 percent to a record ₱1.32 trillion for fiscal year (FY) 2027, ramping up state spending to insulate regional economies from persistent global energy shocks.

Based on Local Budget Memorandum (LBM) No. 94 issued last week, the Department of Budget and Management (DBM) raised the funding from the ₱1.19 trillion distributed in the current fiscal year.

This indicative figure is based on actual national tax collections from FY 2024, as certified by the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC), and the Bureau of the Treasury (BTr).

For FY 2027, allocations to the country’s 83 provinces will rise to ₱303.56 billion from ₱273.8 billion this year, while shares for the 149 cities will increase to ₱303.56 billion from ₱274.1 billion. Meanwhile, funding for the 1,491 municipalities will climb to ₱448.84 billion from ₱404.49 billion, and allocations for the 41,912 barangays will grow to ₱263.97 billion from ₱238.1 billion.

The DBM identified the current national energy emergency as a key priority driving the increased National Tax Allotment (NTA) distributions.

“LGUs are strongly urged to harmonize their strategic resources with the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) Framework to mitigate fuel supply volatilities and reduce long-term local energy consumption and costs,” the LBM read.

Furthermore, the memorandum reinforced legal requirements governing development spending, stating that “each LGU shall appropriate in its annual budget no less than 20 percent of its NTA share for development projects”—a mandate known as the 20-percent Development Fund (DF).

To strengthen social safety nets, the 2027 guidelines also require cities and municipalities to provide low-income solo parents earning minimum wage and below with a monthly cash subsidy of ₱1,000.

Additionally, the DBM is tightening environmental oversight through Climate Change Expenditure Tagging (CCET). To guarantee transparency in environmental spending, the LBM requires LGUs to “identify, tag, and prioritize their respective climate change programs, projects, and activities (PPAs).”

To maintain fiscal resilience, LGUs were also reminded that “not less than five percent of the estimated revenue of LGUs from regular sources shall be set aside as the Local Disaster Risk Reduction and Management Fund (LDRRMF).”

As early as January, the DBM had fully released the 2026 NTAs to LGUs, a front-loading measure intended to give local executives immediate liquidity to fund essential services, including healthcare, educational support, and disaster response.