The two Primera Division giants have won 21 of the last 25 league titles between them and lead the race for La Liga again this year, with third-placed Valencia a massive 18 points behind with 10 games remaining.
"Madrid have scored a lot of goals. They have very good players and they have spent a lot of money," Guardiola said.
"What Barca is doing has more merit," he added, although he did admit that money is a factor.
"Money doesn't bring titles, but it helps," he said.
"If I win titles it is because my team is rich and I sign expensive players - if not, I wouldn't win anything."
Barca are currently second in the standings, behind Madrid on goal difference ahead of this weekend's fixtures.
Both teams face tough matches, with Barca travelling to a Mallorca side beaten only once at home all season and Madrid at home to Atletico in the capital's derby clash.
"To come from where we have and compete against that team (Madrid) has a lot of merit," Guardiola reiterated.