Where the money comes from
A local government has three sources of money. Nearly all of it comes from one: its share of national taxes, paid straight to it by the national government.
- ₱96.92National Tax Allotment
- ₱2.15Own taxes, fees and charges
- ₱0.93Other shares, transfers and grants
All BARMM provinces, cities and municipalities together: ₱38.6B. From BLGF’s Statements of Receipts and Expenditures; FY 2025 is preliminary.
01
National Tax Allotment
From the national government, straight to each province, city, municipality and barangay
Its share of national taxes, set by formula and paid automatically, without passing through the region. At least 20% of it must go to development projects.
Code ss. 21, 348
02
Help from the Bangsamoro Government
From the region
The region receives its own block grant of 5% of national tax collections, and passes part of its money down: 40% of the national taxes collected inside BARMM, and programs and subsidies on top.
Organic Law art. XII · Code s. 313
03
Its own taxes, fees and charges
From the people and businesses in the unit
Real property tax, business taxes, permits, fees and market rentals. The only money a local government raises itself.
Code s. 148
What must be spent first
Before a council spends anything, the law has already set some of it aside. Pick a level: red bars are the least it must spend on something, gold bars the most it may. Each is a share of its own base, so they do not add up.
What it takes in
- 35%of the basic real property tax it collects. The municipality takes 40% and the barangay 25%.IRR art. 546
- NTAIts National Tax Allotment share, released automatically and without condition.Code s. 21
- 40%of the Bangsamoro share of national taxes collected in BARMM, split with the other units.Code s. 313
What it may charge
- 1%Real property tax, on assessed value — plus 1% more for the Special Education Fund.IRR arts. 530, 531
- ₱1,300Professional tax, a year, and it covers practice anywhere in the country.IRR art. 447
- 0.5%Transfer tax on the sale of land, of the price or fair market value, whichever is higher.IRR art. 437
- 10%Amusement tax on admission receipts, shared equally with the municipality.IRR art. 448
Floors — at least this much
Development projects
20%
of the National Tax Allotment · Code s. 348
Disaster risk reduction
5%
of estimated regular income · 30% of it a quick response fund · IRR art. 620
Gender and development
5%
of the annual budget · Code s. 348
Senior citizens and PWDs
1%
of the annual budget · Code s. 348
Protection of children
1%
of the annual budget · Code s. 348
Local road maintenance
1%
of the annual budget · Code s. 348
Ceilings — no more than this
Salaries
45%
first to third class — 55% at fourth and below · Code s. 349
Debt service
20%
of regular income · Code s. 348
The governor’s discretionary fund
2%
of last year’s real property tax receipts · Code s. 349
Plus at least ₱1,000 a year in aid to every component barangay. Code s. 348
What it takes in
- 40%of the basic real property tax collected on property in it. A city keeps 70% and shares 30% with its barangays.IRR art. 546
- NTAIts National Tax Allotment share, released automatically and without condition.Code s. 21
- SEFThe additional 1% on real property, which may be spent only on public schools.Code s. 333 · IRR art. 282
What it may charge
- 2%Business tax on a retailer’s first ₱400,000 of gross sales, 1% above it. Manufacturers and contractors on their own graduated tables.IRR art. 439
- ₱20Community tax — the cedula — plus ₱1 per ₱1,000 of income, capped at ₱5,000.IRR art. 452
- 2%Real property tax, if it is a city. A municipality does not levy it; its province does.IRR art. 530
- 25%Surcharge on any local tax paid late, plus 2% a month, capped at 36 months.IRR art. 459
Floors — at least this much
Development projects
20%
of the National Tax Allotment · Code s. 348
Disaster risk reduction
5%
of estimated regular income · 30% of it a quick response fund · IRR art. 620
Gender and development
5%
of the annual budget · Code s. 348
Senior citizens and PWDs
1%
of the annual budget · Code s. 348
Protection of children
1%
of the annual budget · Code s. 348
Local road maintenance
1%
of the annual budget · Code s. 348
Ceilings — no more than this
Salaries
45%
first to third class — 55% at fourth and below · Code s. 349
Debt service
20%
of regular income · Code s. 348
The mayor’s discretionary fund
2%
of last year’s real property tax receipts · Code s. 349
Plus at least ₱1,000 a year in aid to every component barangay. Code s. 348
What it takes in
- 25%of the basic real property tax collected on property in it. In a city it shares the 30% — half to the barangay the property sits in, the rest split equally.IRR art. 546
- NTAIts National Tax Allotment share — but only once MILG has revalidated it against the standards.Code ss. 21, 403
- ₱1,000A year, at least, in aid from its city or municipality.Code s. 348
What it may charge
- 1%On stores with gross sales under ₱50,000 in a city or ₱30,000 in a municipality.IRR art. 457
- FeeThe barangay clearance, and reasonable charges on cockpits, places of recreation and billboards.IRR art. 457
- FreeFiling a dispute at the katarungang pambarangay costs nothing.IRR art. 78
Floors — at least this much
The Sangguniang Kabataan
10%
of the barangay general fund · Code s. 353
Development projects
20%
of the National Tax Allotment · Code s. 348
Disaster risk reduction
5%
of estimated regular income · IRR art. 620
Ceilings — no more than this
Salaries
55%
of income actually realized from local sources last year · Code s. 355
Petty cash
20%
of the funds in the barangay treasury · IRR art. 627
The treasurer may also buy directly only up to ₱1,000 at a time. IRR art. 627
How the budget is passed
Every province, city, municipality and barangay passes its budget on the same dates. If the council misses the last one, it can do nothing else until the budget is passed.
Step 1
15 July
Every department head files a budget proposal with the chief executive.
Code s. 341
Step 2
16 October
The chief executive submits the executive budget to the sanggunian.
IRR art. 610
Step 3
31 December
The sanggunian must enact it by ordinance, on the Annual Investment Plan.
Code s. 343
If late
+90 days
Missed? The council sits on nothing else, unpaid, until it passes. At 90 days last year’s budget is reenacted — salaries and fixed costs only, no new project.
Code s. 347
Step 4
Then review
A barangay budget goes up to the town, a town’s to the province. Ninety days to act, or it stands.
IRR art. 617
The development plan is the thing being funded. A local development council — the chief executive, every punong barangay, and at least a quarter of its seats held by NGOs — writes the multi-year plan. The Annual Investment Plan comes off it, and the budget is enacted on that plan rather than beside it. The 20% development fund above is what pays for it. Code s. 343 · IRR arts. 268, 269, 271