P58.5-billion LGU fund draws scrutiny over how billions could be distributed

Floyd Brenz., Philippine Canadian Inquirer
August 28, 2026

Photo Courtesy: Presidential Communications Office

Philippines – A proposed PHP58.5-billion Local Government Support Fund is facing scrutiny over the broad discretion that could be given to the executive branch in deciding how the money is distributed.

Economist Cielo Magno warned that the fund needs clear rules and parameters to prevent allocations from becoming vulnerable to political influence or patronage.

The proposed fund is part of the PHP7.2-trillion 2027 national budget, with money intended to support projects and programs of local government units.

Magno said allocations should be tied to the development plans of recipient LGUs and should prioritize major, implementation-ready projects that can contribute to local economic growth.

The concern comes as the fund has expanded significantly in recent years, with the proposed 2027 allocation more than twice the amount set aside in 2025.

Critics are particularly focused on the lack of specific parameters governing who receives the funds and what projects qualify.

The issue is therefore not simply how much money is being allocated, but how transparently and fairly those billions will be distributed to local governments.

With the 2028 elections approaching, the debate over the fund is also raising a bigger question, will billions intended for local development strengthen communities, or strengthen political influence?