SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES
House Bill No,__4 502

Introduced by REP. BEN P. EVARDONE
Lone District, Eastern Samar

EXPLANATORY NOTE

The November 8, 2013 super-storm Yolanda proves to be the worst typhoon
to hit the Philippines in recent history. In a Situation Report’ (January 22, 2014), the
National Disaster Risk Reduction and Management Council (NDRRMC) listed as
affected areas 12,139 barangays in 44 provinces, 591 municipalities, and 57 cities of
Regions IV-A, IV-B, V, VI, Vil, Vill, X, XI, and CARAGA (Region XIII). Based on
NEDA's Reconstruction Assistance on Yolanda (RAY) plan, the Philippine
Government needs around P361 billion (US$8,17Billion) for shelter and resettlement,
public infrastructure, education and health services, agriculture, industry and
services, local government and social protection.”

The financial requirement in the recovery efforts is indeed so huge that
everyone's helping hand and resources, foreign and local, must be tapped. To be
sure, the national government needs even the help of affected communities, the
affected LGUs, individuals and businesses in particular.

Hence, to strengthen the fiscal position of these affected LGUs and allow
them to spend their resources in the recovery efforts at the municipal (and even
barangay) level, this bill seeks to condone or authorize the condonation of certain
debts of local government units.

It must be noted that in 2012 alone, LGUs within the above-mentioned
affected regions allocated and expended’ around P4.621 Billion for debt
services/payment of loan amortizations: of which Provinces allocated and expended
around P1.017 Billion’; Cities, around P2.277 Billion®, and, Municipalities, around
P1.327 Billion®

1 NDRRMC Situation Report on the effects of Typhoon Yolanda, January 22, 2014 (6:00 a.m).
http:/iwww.gov.ph/2014/04/22indrrme-situation-report-on-the-effects-of-typhoon-yolanda-
january-22-2014-600-a-m/

htto://china.org.cniworld/Off the Wire/2013-12/48/content 30932143.htm
* Data based on Statement of Receipts and Expenditures data for CY 2012, Bureau of Local
Government and Finance
* Provinces: In Region IV-A have a combined Debt Service of P236,563,664,00 (i.e. Combined Debt
Service {Principal cost] which is the same amount constituting Payment of Loan Amortization); Region
IV-B (P7,146,973.00); Region V (P140,665,395.00); Region VI (P90,737,482.00), Region Vil



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Moreover, the author proposes the condonation of loans, whether individual,
cooperative, micro, small and medium enterprises, including non-profit non-
governmental organizations and similar entities to the extent of P50,000 including
interests thereon, when the same had been obtained from a government bank or
financial institution.

Likewise, condonation of student and similar loans, outstanding hospital
debts, regardless of amounts incurred prior to November 8, 2013, is also proposed

Also, the author proposes the grant of ‘soft loans’ to those intending to
conduct business in the Yolanda-stricken areas, and tax holidays and incentives to
encourage the opening/reopening of businesses. This aims to rekindle the local
economy,

Finally, Yolanda-atfected employees are given a 2-year tax exemption from
compensation income taxation so that the tax money saved would be used in the
reconstruction and rehabilitation of their respective homes.

On this score, the immediate passage of this bill is earnestly sought,

se P. EVARDONE

(P66,106,666.00);Region Vill (P87,951,420.00); Region X (P127,833,770); Region XI
{P170,630,001.00) and Region Xill (CARAGA) (P89,202, 424.00)

Cities: In Region IV-A had a total debt service of P542,337,537.00; Region IV-B (P186,618,887.00);
Region V (P117,963,775.00); Region VI (P269,964,836.00); Region Vil (P210,291,695.00); Region
Vill (P173,746,680.00); Region X (P148,178,319.00); Region XI (P513,816,977.00); Region XItl
{P'114,348, 805.00);

Municipalities: In Region IV-A (PhP335,064,386.00); Region IV-8 (PhP 18,992,761.00); Region V
(PhP 150,734,483.00); Region VI (PhP91,986,609.00); Region Vil (PhP 153,960,261.00); Region Vill
(PhP 142,391,537, of which P141,821,269.00 was for payment of loan amortization and
PhPS70,268.00 for retirementredemption of bonds/debt securities); Region X (PhP117,741,206.00, of
which PhP111,808,485.00 was for Payment of Loan Amortization and PhPS,932,722.00 was for
Tetirementiredemption of bonds/debt securities), Region XI (PhP206,765,029.00); Region Xill
(PhP 116,335,218.00),

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SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session 5}

HOUSE OF REPRESENTATIVES
House pitt No,__ 4502

Introduced by REP, BEN P. EVARDONE
Lone District, Eastern Samar
AN ACT
TO ACCELERATE ECONOMIC RECOVERY IN THE TYPHOON YOLANDA-

STRICKEN AREAS, PROVIDING INCENTIVES AND OTHER BENEFITS TO
INDIVIDUALS AND ENTITIES FOR THIS PURPOSE, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Section 1, Statement of Purposes. — This Act mandates the State to accelerate the
economic recovery of Local Government Units (LGUs) affected by Typhoon Yolanda
including individuals and entities therein through condonation of certain loan obligations and

provision of appropriate fiscal and/or non-fiscal incentives, tax exemptions and other

benefits,

Section 2. Condonation of LGU Loans, — All outstanding monetary debts and
interests thereon of municipalities, cities and provinces affected by Typhoon Yolanda are
hereby condoned: Provided that, such obligations arise from loan agreements with national

government wholly owned and controlled banks and/or
November 8, 2013.

ncing institutions prior to

Section 3. Personal Loans, — All outstanding monetary debts and corresponding
interests thereon of individuals, cooperatives, micro, small and medium enterprises, non-
profit non-governmental organizations and similar entities affected by Typhoon Yolanda are
hereby condoned to the extent of Fifly thousand pesos (P50,000.00): Provided that, such

obligations arise from loan agreements with national government wholly owned and

controlled financing institutions, instrumentalities, and agencies prior to November 8, 2013.


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Section 4. Other debts, — All student and similar loans, regardless of amount,

including interests thereon, incurred prior to November 8, 2013 from government-owned and
controlled corporations and entities are hereby condoned: Provided that, such loans have

been granted to individuals affected by Typhoon Yolanda.

All individual debts of whatever amount including interest thereon incurred from
national and local government hospitals prior to November 8, 2013, on account of
hospitalization of the debtor, are hereby condoned: Provided that, such obligations were
incurred by individual debtors affected by Typhoon Yolanda,

Section 5. Tax exemption.—Any person deriving income from employment who has
been affected by Typhoon Yolanda shall be exempt from compensation income taxation
under the National Internal Revenue Code (NIRC) for a period of two years from the
effectivity of this Act: Provided that, such person derives income within any of the

municipality or city affected by Typhoon Yolanda.

Section 6. Incentives to Bol-, Ecozone-registered businesses.— Any person or entity
doing business in the Philippines, enjoying appropriate fiscal and/or non-fiscal incentives
under existing laws, rules and regulations, who are respectively registered with the Bureau of
Investments (BO!) and/or with any existing economic zone authority such as but not limited
to the Bases Conversion and Development Authority (BCDA) and Clark Development
Corporation (CDC), shall be entitled to enjoy the same fiscal and non-fiscal incentives and
benefits whenever such person or entity opens, establishes or expands his business in a
municipality, city, or a cluster thereof, previously identified by the NDRRMC as affected or

damaged by Typhoon Yolanda,

For this purpose, the Bureau of Investments (BOI) is hereby mandated to administer
such incentives: Provided that, all fees and charges collected from such person or entity
doing business pursuant to existing laws, rules and regulations shall be shared equally by the

national government and the local government unit where the business may be established.

Section 7. Incentives to Non-Bol-, Non-Ecozone-registered businesses.— Any
person or entity other than those referred to in Section 1 hereof intending to open, establish or
expand his business in a municipality or city, or a cluster thereof, previously identified by the

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NDRRMC as affected or damaged by Typhoon Yolanda shall be allowed to enjoy such fiscal
and non-fiscal incentives granted under Executive Order No. 226, as amended: provided that,
he registers with the Bureau of Investments (Bol) and meets the citizenship ownership

requirements prescribed by the Constitution and existing laws.

For this purpose, the Bureau of Investments (BOI) is hereby mandated to administer
such incentives: Provided that, all fees or income collected from such person or entity doing
business pursuant to existing laws, rules and regulations shall be shared equally by the

national government and the local government unit where the business may be established.

Section 8. Loan grants to businesses.— All national government wholly owned and
controlled banks and financial institutions are hereby directed to set aside a portion of their

loanable amounts, and grant the same to individuals, cooperatives, micro, small and medium

enterprises and ilar entities intending to open new or re-establish business in a

municipality or city affected by Typhoon Yolanda: Provided that, the loan agreement shall
offer the most le
imposed under normal circumstances such as but not limited to the requirement of titled lands

it and least burdensome terms and conditions, relaxed rigid requirements

as loan collaterals; provided further, that such banks and/or financial institutions may impose
only such terms and conditions consistent with the purposes of this Act that will ensure
payment of loaned amounts within a reasonable time.

‘The Department of Trade and Industry (DTI) is hereby directed to provide appropriate

technical assistance to such individual and entity for this purpose.

Section 9. Role of National Disaster Risk Reduction and Management Council
(NDRRMC). — The National Disaster Risk Reduction and Management Council
(NDRRMC), thru the appropriate Municipal or

ry Disaster Risk Reduction and
Management Council, shall assist in the identification of individuals or entities affected by

Typhoon Yolanda who may be entitled to avail of the benefits provided for under this Act.

Section 10, Separability Clause.—Whenever any item or provision in this Act is
declared unconstitutional, in whole or in part, such item or provision not affected thereby

shall remain in force.


Section 11, Effeetivity Clause. — This Act shall take effect on the day following its

publication in at least two (2) national newspapers of general circulation.

Approved