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MANILA, Philippines — In a major boost for local governments, the bicameral conference committee approved on Wednesday a P37.49 billion budget for financial assistance under the Local Government Support Fund (LGSF).
The approved budget is four times higher than the P9.1 billion proposed by the House of Representatives and more than seven times the P5 billion in the 2026 National Expenditure Program (NEP).
It also exceeds the P16.72 billion allocated by the Senate in its version of the budget bill.
A similar pattern emerged in the 2025 budget, when LGSF funding rose from P5 billion to P18.95 billion during an election year.
Source of increase questioned
During the fourth day of bicameral talks, Sen. Francis “Kiko” Pangilinan asked where the additional funding would be sourced after the House proposed the increase.
Gatchalian, however, only offered a vague response, saying it would be sourced from cuts to other departments with “very low utilization rates and redundant programs.”
“During the course of the bicam, we saw some departments, we realigned some budgets [and] that [increase] will be taken from those realignments,” he said.
Under the LGSF guidelines, financial assistance to local governments may only be spent for specific projects, the procurement of equipment, and financial aid for indigent individuals and families.
Eligible projects include agriculture-related initiatives such as farm-to-market roads and on-site research services, as well as support for the cotton and textile industry, women-led social enterprises, cultural heritage preservation and promotion, and digitalization.
They also cover local public works such as roads, bridges, and evacuation centers, along with disaster mitigation and response projects and electric vehicle charging stations.
Why they want the boost
Some may find the fund sensible, but why did lawmakers suddenly agree to boost the LGSF without even a single contention, after both chambers had earlier passed budget versions with much lower allocations?
Rep. Albert Garcia (Bataan, 2nd District), a former governor of Bataan, said that the additional funds would be “money well spent,” given that local governments receive only an average of 16% of the national budget, despite serving as the “first line of defense” for Filipinos in times of need.
Other lawmakers like Rep. Jose Alvarez (Palawan, 2nd District) and Rep. Javi Benitez (Negros Occidental, 3rd District) also justified the increas,e saying that the devolution of powers and resources from national to local governments does not often come with sufficient funding.
“We give many responsibilities to LGUs, but we do not provide them with additional funding,” Gatchalian said in Filipino, adding that the fund serves as a mechanism to boost support for local governments.
Meanwhile, Rep. Brian Yamsuan (Parañaque, 2nd District) described it as a “bridge program” from the national government, particularly for LGUs that do not receive an adequate share of national funds.
Sen. Loren Legarda expressed similar views, saying local governments are best positioned to identity people's needs. Having “seen the menu,” she said the local government projects and programs requesting funding have “improved through the years,” now covering areas such as the environment, culture and reading centers.
Pangilinan also backed the huge increase in the LGSF, saying it provides an opportunity to “offer direct support” to farmers and fisherfolk, who are among the hardest hit and most in need after calamities.
Sen. Imee Marcos, meanwhile, said that local governments need funding beyond disasters. LGUs have particularly been shortchanged even after the Mandanas-Garcia ruling, which mandates a larger share of national taxes and customs duties, she added.
LGUs evaluated first
For Rep. Rufus Rodriguez, the LGSF should not be politicized, as it fulfills the constitutional mandate to ensure local autonomy for LGUs and is requested digitally through the Department of Budget and Management (DBM), not from individual officials.
The financial assistance under the LGSF funds, Gatchalian explained, are also only released after the DBM reviews an LGU’s performance, governance, and financial management, rather than being granted upon request.
“All digital requests of LGUs shall be subject to the evaluation by the DBM based on necessity, just and equitable distribution among LGUs, and/or fund availability,” a section of the Local Budget Circular 161 read.
The same guidelines also include a matrix that specifies the maximum amount an LGU may request according to the kind of project or for aid to be distributed to residents.
For 2025, provincial and city governments could only request up to P50 million in assistance for indigent residents and families. Municipality and barangay LGUs, meanwhile, are only given a ceiling of P20 million and P5 million, respectively.
For infrastructure projects, barangays may request up to P10 million. However, if they also seek funding for other projects, the total assistance remains capped, with non-infrastructure requests limited to P5 million.
Criticism perists. Despite safeguards cited, some lawmakers like those of the Makabayan bloc, criticized the LGSF as another form of “pork barrel,” warning that it could be used to fuel local patronage politics rather than ensure transparent, project-based allocations.
Which projects and programs were cut to fund the financial assistance under the LGSF has yet to be answered.
