Manila: Smaller local government units (LGUs) could get a bigger shot at development under a possible recalibration of the National Tax Allotment (NTA) distribution being explored by Sen. Panfilo 'Ping' Lacson. Lacson, chair of the Senate Committee on Ways and Means, said Tuesday the existing formula leaves small municipalities and provinces with considerably fewer resources while large and wealthier cities receive allocations running into billions of pesos.

According to Philippines News Agency, Lacson highlighted the disparity in NTA allocations, noting that wealthier cities like Davao City and Quezon City receive as much as PHP10 billion. In contrast, smaller municipalities struggle to experience any significant impact from their NTA shares. He emphasized the need to address the inequitable distribution to ensure LGUs with smaller revenue bases have the capacity to finance local development.

Lacson proposed examining whether 'excess' national tax collections could be redirected to smaller LGUs. The NTA, formerly known as the Internal Revenue Allotment, represents the share of national tax collections automatically allocated to LGUs. For provinces, cities, and municipalities, their respective shares are distributed according to population at 50 percent, land area at 25 percent, and equal sharing at 25 percent. Barangays receive 60 percent based on population and 40 percent on equal sharing, subject to a minimum allocation for qualified barangays.

The senator urged policymakers to revisit the system to prevent the widening development gap among LGUs. He pointed out that without equitable distribution, smaller LGUs continue to suffer while wealthier ones prosper. Lacson called for a closer examination of the allocation system to address this disconnect, stressing the need for a more equitable approach to distributing national revenues.