Marcos orders direct PHP 58 billion fund release to LGUs

By Rjay Zuriaga Castor

President Ferdinand R. Marcos Jr. has ordered the direct release of nearly PHP 58 billion in priority program funds to local government units (LGUs), scrapping bureaucratic layers that previously slowed project implementation and assistance to communities.

The directive was announced Monday, Feb. 23, during the launch of the “Sa Bagong Pilipinas, Bawat Bayan Makikinabang” initiative at Malacañang Palace, where Marcos underscored the need to empower LGUs as frontline service providers.

Under the new arrangement, funds from the Local Government Support Fund (LGSF) will be released directly to LGUs, eliminating the demand-driven process that required local governments to complete documentary requirements before accessing allocations.

Marcos said the previous system often caused delays, particularly in small and geographically isolated areas.

“Ginawa namin ito dahil sa pagkilala na ang pangangailangan ng tao, gaano man kaliit o gaano kalaki ay hindi pa naghihintay pa,” he said.

“Upang matiyak na ang bawat sentimo ng pondo ay malinaw ang direksyon, nagtakda tayo ng mga prayoridad na programa na magpapalakas ng ating mga sektor,” he added.

For 2026, the national government increased the LGSF allocation to more than PHP 34 billion, bringing the total available funds to nearly PHP 58 billion, the highest in the program’s history.

The fund supplements the National Tax Allocation (NTA), which represents LGUs’ share in national revenues under the Mandanas-Garcia ruling.

Marcos said the expanded LGSF will bankroll priority programs, including the distribution of 60 kilos of rice to more than 5 million families, construction of hospitals and health stations, procurement of medical equipment, establishment of evacuation facilities, farm-to-market roads, and improvements in water supply and rural electrification.

He added that about PHP 1.19 trillion in NTA has been released to LGUs this year, 15 percent higher than the 2025 level, strengthening local governments’ fiscal capacity to carry out development projects.

The president said consultations were held with major local government groups before the rollout, including the Union of Local Authorities of the Philippines, the League of Municipalities of the Philippines and the League of Cities of the Philippines.

For her part, Iloilo City Mayor Raisa Treñas-Chu described the direct downloading of the LGSF to LGUs as a more systematic and targeted approach to identifying priority needs on the ground.

In Iloilo City, she said consultations are ongoing at the barangay level to gather inputs and validate proposed programs to ensure that projects proposed for funding reflect the actual priorities of communities.

She said the ground-level consultations aim to ensure that funds are allocated to projects with direct and tangible benefits for Ilonggos.

Through the LGSF, the city government is eyeing support for infrastructure development, social services, disaster resilience initiatives and other essential programs aligned with Iloilo City’s growth trajectory.