Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 7079

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.
—————

AN ACT PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT,
PRODUCTION AND FINANCING PROGRAM, REGULARIZING ITS.
APPROPRIATION FOR ITS IMPLEMENTATION

The housing condition in the Philippines is an ever growing concern despite the
government's existing efforts at improving policy instruments for better housing service to
oor Filipinos.

The numbers need no further emphasis to demonstrate that this problem is a very urgent
one — the housing need in the country has continued to grow from 3.6 million units for the
Period of 2007-2010 to 6.6 million units for the period of 2011-2016. It is on track to rise
to 6.57 million units for the period of 2017-2022.

The Philippine Statistical Research and Training Institute projected that the country's
housing need will further grow to 22.6 million units by the end of 2040. If not properly
addressed now, the backlog of housing units will grow by the millions.

Housing is not simply a basic need; itis performs a critical role as a springboard to a better
life. Research shows that lack of access to housing have detrimental effects on children’s
mental and physical health.

Indeed, decent and affordable housing is intricately woven into better opportunities for
children and their parents. Housing is a step towards better health and stability that
many Filipino families could not afford without a helping hand.

The Philippines’ annual budget does not even give more than a percent for pro-poor
housing programs. This bill intends to address this issue by increasing and continuing
funding support to fully implement the major components of the National Development
and Production Housing Program.

In view of the foregoing, the approval of this bill is earnestly sought.

Luis IND “LARAY” F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _7079
et Re Ee
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT
PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT, PRODUCTION
AND FINANCING PROGRAM, REGULARIZING ITS APPROPRIATION FOR,
ITS IMPLEMENTATION

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

Section 1. Title. — This Act shall be known as the "National Housing
Development, Production and Financing (NHDPF) Act of 2020."

Section 2. Declaration of Policy. It is hereby declared a policy of the state to:

) undertake, in cooperation with the private sector, a continuing program of housing
and urban development which shall make available at affordable cost, decent
housing and basic services especially to the underprivileged and homeless
citizens;

b) pursue the realization of a modern, humane, economically viable and,
environmentally-sustainable society where the urbanization process is manifest in
towns and cities being centers of productive economic activity and is led by market
forces; where urban and rural areas have affordable housing, sustainable physical
and social infrastructure and services facilitated under the democratic and
decentralized system of governance; and where urban and rural areas provide the
opportunities for an improved quality of life and eradication of poverty;

) ensure that poor dwellers shall be provided with appropriate and innovative
housing program and support mechanisms to discourage further growth of blighted
communities; and

d) encourage on-site development, whenever feasible, in the implementation of
housing programs and shall promote the creation of new settlements with basic
facilities and utilities and development of sustainable urban renewal programs.


Cognizant of the role of housing as stimulus of economic growth and development, it
is hereby declared a state policy to strengthen, promote and support the component
activities of housing production and finance by ensuring continuous/sustained funding
‘support to scale-up the implementation of the major components of the National
Housing Development and Production Program.

Section 3. Statement of Objectives. Towards this end, the State shall:

(@) Increase housing production by forging partnership among housing
stakeholders to address the housing needs of the Filipino families by 2040,

(b) Generate and mobilize funds for housing purposes of Filipino families,
giving priority to the homeless and underprivileged.

(©) Ensure the provision of support mechanisms/subsidy program to improve
access of Filipino families to a variety of housing options.

(d) Guarantee the development of a strong, sustainable, accessible and
affordable housing finance system.

(©)Encourage public and private sector participation in the implementation of
government National Housing Development and Production Financing
Program.

Section 4. National Housing Development Production Program
Implementation. — Consistent with the aforementioned policy and objectives, the
Department of Human Settlements and Urban Development (DHSUD) and its
attached Key Shelter Agencies, shall intensify the implementation of the vital
components of the National Housing Development Production and Financing
Program. The implementation of this program shall be carried out by the following
agencies:

National Housing Authority (NHA)- the sole national government agency tasked to
implement and develop the following housing programs intended for the bottom 30%
of the income population:

(1) Resettlement - This program addresses the requirements of families
affected by a) government infrastructure projects, b) those living along danger areas.
and c) those affected by Supreme Court Mandamus. It entails the provision of vertical
(from § to 15-storey residential building) and/or horizontal housing units, community
facilities, socio-economic and other community support programs.

The program also involves the implementation of local/regional resettlement projects
as joint National Government-Local Government undertakings to address the
resettlement requirements of Local Government Units (LGUs) outside Metro Manila


involving families in danger areas, those affected by infrastructure projects,
indigenous peoples and former rebels.

The government infrastructure agencies shall submit an inventory of Informal Settler
Families to be affected by their projects and their location to the appropriate housing
agencies at least two years prior to its implementation and shall incorporate in their
respective project costs the amount needed for then relocation and resettlement of
affected families.

(2) Government Employees Housing Program — this program is intended to
provide decent and affordable housing to low-salaried government employees.

(3) Settlements Upgrading- this program aims to address the security of tenure
and infrastructure requirements of informal settlements on government-owned lands
proclaimed or designated as socialized housing sites.

(4) Housing Program for Calamity Victims u— this program is intended to
respond to the housing needs of low and marginal-income andlor informal shelter
families for transitional and/or permanent shelter affected by calamities such as
typhoons, landslides, earthquakes, and fires for relocation to safe areas.

(6) Land Banking - this refers to the acquisition of land, which includes idle
government lands, at values based on existing use in advance of actual need to
promote planned development and socialized housing programs with a view to
distribute the land to qualified socialized housing beneficiaries.

It covers survey and titling of individual lots for disposition to qualified
occupants, infrastructure development, housing construction and rehabilitation of
existing project sites.

Social Housing Finance Corporation (SHFC) - mandated to undertake social
housing programs that will cater to the formal and informal sectors in the low-income
bracket and to take charge of developing and administering social housing programs,
particularly the Community Mortgage Program and its different modalities:

(6) Community Mortgage Program (CMP) - this is a mortgage financing
program, which assists legally organized associations of underprivileged and
homeless citizens to purchase and develop a tract of land under the concept of
community ownership. The primary objective of the program is to assist residents of
blighted or depressed areas to own the lots they occupy, or where they choose to
relocate to, and eventually improve their neighborhood and homes to the extent of
their affordability. The different modalities of the CMP are as follows:

a) Sectoral CMP a CMP modality that caters to the different sectoral groups
including but not limited to the basic sector groups needing resettlement assistance.
A sectoral group represents a group or Coalition of persons who share similar
concerns and interests and intend to avail of resettlement 45 assistance from SHFC,


including Indigenous Peoples (IPs), Indigenous Cultural Communities (ICCs) and
other ethnic minority groups.

b) Housing for Peace Process and Nation Building CMP — a CMP modality
which would lead to the achievement of national peace and development through the
provision of housing to former rebels/rebel returnees (FR/RR). This also includes
rebuilding damaged or destroyed homes in post conflict-areas of internally-displaced
persons (IDPs).

©) Post-Disaster Rehabilitation and Reconstruction CMP — a CMP modality
which provides assistance to community housing projects in times of disaster. This
program allows the communities to immediately embark on house construction and
site development which adhere to the minimum standards and specifications of the
design and structural components of disaster-resilient housing projects, as well as
materials.

d) Industrial Workers CMP — a CMP modality intended primarily for low-income
employees of companies engaged in agro-industrial, industrial processing 16 zone,
tourist, recreational, commercial and other enterprises.

e) Site Upgrading/Development CMP — a CMP modality intended to provide
site development and housing/building construction loans for projects whose lands
are donated by private or public entities applicable to both on site or resettlement
projects.

f) Mixed-Use CMP — a CMP modality aimed at developing a self-sustaining
community by having a balanced mix of residential and commercial spaces, well-
developed infrastructure and recreational amenities along with green and open
spaces and wellness areas. Under this modality, 9% of the project area shall be
allotted for green spaces and 1% of project area for friendly facilities of Persons with
Disabilities (PWD).

National Home Mortgage Finance Corporation (NHMFC) — A government
corporation

mandated to increase the availabilty of affordable housing loans to finance the Filipino
homebuyers on their acquisition of housing units through the development and
operation of a secondary market for home mortgages.

(7) Securitization — this refers to the development of the secondary market for
home mortgages and other housing related receivables, conveyances and financial
instruments and the development/promotion of and investments in new housing-
related financial instruments and investment vehicles and the capital markets thereof.
Furthermore, this would also increase and sustain funds available for housing and
home development.

Department of Human Settlements and Urban Development (DHSUD)- the primary
national government entity responsible for the management of housing, human


settlements and urban development including the implementation of the following
programs:

(8) Public Housing — this is a housing program that is owned and/or managed
by the government for the purpose of providing security of tenure to the underserved
families including but not limited to the development of proclaimed socialized housing
sites intended to promote the establishment o new towns, new settlements, and urban
renewal.

The term “underserved families" refers to those who are disadvantaged in terms of
access to basic services because of inability to pay or other disparities by reason of
economic or social status, ethnicity, geographical isolation, and other circumstances.

(9) Subsidy — this is a financing assistance scheme intended to enhance the
affordability of well targeted and most financially incapable segment of the society. It
is a grant extended to qualified low-income beneficiaries under the National Housing
Development and Production Financing Program under any of the following
alternative subsidy schemes:

a. Extension of Interim Shelter Fund to each of the family-beneficiaries
which they can use to find safe residency and livelihood to support their
families, pending the completion of their housing units in the relocation sites.

b. Payment for upfront cost equivalent to 5% of the project cost (e.g.
mortgage insurance, titing, etc.); and

¢. Monthly payment subsidy for the first five years of the loan period in
accordance with Section 3 (a) of RA 6846 or the Social Housing Support Fund
‘Act. The department shall be authorized to establish the qualification and
income requirements of borrowers who will qualify for the amortization support
subsidy.

The DHSUD, in coordination with the LGUs and other national government agencies,
shall be authorized to formulate the criteria and guidelines to select the beneficiaries
that may qualify for the subsidy program.

(10) Public Rental Housing- this program involves the extension of fiscal
assistance of up to a maximum of 50% of the total construction cost for the National
Government Agencies (NGAs) and Local Goverment Units (LGUs) that
shaliconstruct and operate public rental accommodation to eligible low-income 36
families and housing safety net for the vulnerable sectors (e.g. senior citizens, person
with disabilities, etc.).

The DHSUD shall formulate the guidelines in the implementation of public rental
housing assistance including the adoption of the lease/rental buy-back scheme.


(11) Survey of proclaimed lands for socialized housing and inventory of
government idle lands — this involves the survey of all occupied government lands
proclaimed by the President as suitable for socialized housing and conduct of
inventory of government lands which have been idle for more than ten (10) years
except lands owned by the GOCCs and government financial institutions engaged in
shelter financing as part of its fiduciary obligations to its members andlor taken
Possession of in their ordinary conduct of business.

(12) Such other program components as may be determined by the DHSUD.

Section 5. Appropriations by the National Government. The amount of One
Hundred Thirty-Five Billion, One Hundred Fourteen Million Pesos (PI
36,114,000,000.00) or such amount necessary to carry out the provision of this Act is
hereby authorized to be appropriated annually through the General Appropriations Act
over a period of twenty (20) consecutive years commencing from the year immediately
succeeding the effectivity of this Act or until such time that the total fund requirements
provided for in this Act shall have been fully released.

A total amount of Two Trillion, Six Hundred Sixty-Seven Billion, Two Hundred Ninety-
Three Million Pesos (P2,667,293,000,000.00) covering the continuing requirement of
this Act shall be appropriated to the DHSUD and Key Shelter Agencies for the
implementation of the following component programs of the NHDPF Program:

(1) One trillion, seven hundred twenty-two billion, four hundred forty-six million
pesos (PI,722,446,000,000.00) for the implementation of the following programs of
NHA:

a. Eight hundred billion and six hundred ninety million pesos
(P800,699,000,000.00) to finance the Resettlement Program under Section 4
(1) of this Act;

b. Five hundred forty-three billion and four hundred nineteen million pesos
(P543,419,000,000.00) as subsidy for Government Employees Housing under
(2) of this Act;

c. One hundred sixty-four billion and two hundred sixty-five million pesos
(P164,265,000,000.00) for the Settlements Upgrading under Section 4 (3) of
this Act;

d. One hundred one billion and seven million pesos for the Housing Program
for Calamity Victims Section 4 (4) of this Act; and

e. Sixty-three billion and fifty-six million pesos (P63,056,000,000.00) for the
Land Banking under Section 4 (5) of this Act.


(2) Four hundred fifty-three billion, two hundred million pesos
(P453,200,000,000.00) for the implementation of the Community Mortgage Program
under Section 4 (6) of this Act.

(3) Fifty billion for the Capitalization of NHMFC under Section 4(8) of this Act.

(4) Four hundred seventy-six billion, six hundred forty-seven million pesos
(P476,647,000,000.00) for the implementation of the following programs of the
DHSUD

a. Three hundred sixty-five billion, nine hundred seventy-nine million pesos
(P365,979,000,000.00) to finance the Public Housing under Section 4 (8);

b.  Eighty-nine billion, one hundred thirty-one ~— million pesos
(P89,131,000,000.00) as subsidy under Section 9, broken down as follows:

b.1 Eighteen billion, five hundred thirty-one —million pesos
(P18,531,000,000.00) as interim shelter finance assistance for the
informal settler-families who will be relocated under Section 4 (9a)

b.2 Sixty-three billion, seven hundred ninety-six million pesos
(P63,796,000,000.00) as upfront subsidy under Section 4 (9b)

b.3 Six billion, eight hundred four million pesos as amortization support
under Section 4 (8c)

c. Twenty billion, four hundred fifty-six million pesos (P20,456,000,000.00) to
finance public rental housing under Section 4(10); and

d. One billion, eighty-one million (P1,180,000,000.00) to finance survey of
proclaimed lands and conduct of inventory of government idle lands suitable
for socialized housing under Section 4 (11).

Section 6. LGU Sources of Funds. Section 43 of RA 7279 on Socialized
Housing Tax is hereby amended, to read as follows:

Consistent with the constitutional principle that the ownership and enjoyment
of property bear a social function and to raise funds for the Program, all local
government units are hereby authorized to impose an additional one-half percent
(0.5%) tax on the assessed value of all lands in urban areas. The proceeds from the
imposition of Socialized Housing Tax shall accrue to the special funds of the LGUs,
which shall be used for the development of socialized housing projects and
construction and estate management of public rental housing of the LGUs.

Section 7. Implementation of the Securitization, Capital and Secondary
Mortgage Operations Program. The NHDP Securitization for the development of the
secondary market for home mortgages of and other housing related receivables,


conveyances and financial instruments and the development/promotion of and
investments in new housing related financial instruments and investment vehicles and
the capital markets thereof, to increase and sustain funds available for housing and
home development shall be implemented as follows:

1. The NHMFC shall be the sole implementing agency for the NHDP
securitization; and

2. The NHMFC in coordination with the DHSUD, DOF and BSP and other
concerned agencies and private sector organizations, shall formulate @ program, the
proceeds of which shall accrue to the Centralized Housing Fund.

3. The mortgages to be generated as a result of the implementation of the
‘component programs of the NHDP Program shall be sold and transferred to NHMFC,
which shall also serve as asset pool for securitization.

4. The NHMFC as the sole agency for the implementation of the NHDPA
Securitization shall manage the whole securitization process which includes the
following activities: determining the eligibility criteria for the asset pool; defining the
preliminary structure of the notes, bonds and or instruments to be issued, third parties
to be hired; and education/briefing of target investors for all the issues.

5. The NHMFC and NHDPFA-issued bonds, notes and securities shall be
‘exempt from the registration requirements under the Securities Regulation Law in
order to accelerate the issuance of its housing related securities/financial instruments
and, thus, more reasonably provide the necessary fund for housing developments.

6. Transactions by banks involving the purchase and sale of housing bonds,
debentures and such other similar instruments shall be exempt from the twenty
percent (20%) final tax on income, documentary stamps tax, gross receipts tax and
value added tax.

7. The investors’ yield or income from any socialized housing or economic
housing-related bond or asset-backed securities (ABS) issued by NHMFC directly or
through a special purpose entity under the Securitization Act shall be exempt from
income tax. Such issuances shall enjoy all the tax exemptions granted under Republic
Act No, 9627 or the Securitization Act of 2004 pursuant to the State's policy of
promoting the securitization of mortgage and housing-related receivables of
government housing agencies, to generate investment and accelerate the growth of
the housing finance sector, especially for socialized and economic housing.

8. Bonds purchased by private real estate developers shall be considered as
an alternative compliance to the balanced housing requirements under section 18 of
RA 7279 as amended by RA 10884, subject to the rules promulgated by the
Department of Human Settlements and Urban Development.

9. The Philippine Guaranty Corporation created pursuant to Executive Order
No. 58 (S. 2018) shall guaranty payment of the balance outstanding and due on the


guaranteed principal obligation, plus interest and yields thereon up to eleven percent
(11%) per annum for socialized housing packages, ten percent (10%) per annum for
low-cost housing packages, nine and a half percent 1 (9.5%) per annum for medium-
cost housing packages and eight and one half percent (8.5%) per annum for open
housing packages.

Section 8. Capitalization of National Home Mortgage Finance Corporation
(NHMFC). The authorized capital stock of the NHMFC is hereby increased from
Pesos to pesos to expand its leveraging capacity based on the volume of mortgage
loans being serviced to improve its profitability by reducing the average cost of its fund
made available for home lending programs.

The capital of the National Home Mortgage Finance Corporation (NHMFC)
shall be Fifty billion pesos to be fully subscribed by the Government of the Republic
of the Philippines, hereafter referred to as the Government: Provided, That the of the
capitalization shalll be funded from the General Appropriations Act and the remaining
shall be funded from the declared dividends of the NHMFC in favor of the National
Government. For this purpose, any and all declared dividends of the NHMEC in favor
of the National Government shall be deposited in a special account in the General
Fund, and earmarked for the payment of NHMFC's increase in capitalization. Such
payment shall be released and disbursed immediately and shall continue until the
increase in capitalization has been fully paid."

Section 9. Tax Exemptions. - The NHMFC shall be exempt from all national,
provincial, municipal and city taxes on income derived from its governmental
functions, specifically income from its activities or transactions in the exercise of its
mandates.

Section 10. Multi-year Obligational Authority — The Secretary of the
DHSUD and Heads of its attached housing agencies, pursuant to the National
Housing Development, Production and Financing Program, projects and
appropriations approved by Congress, shall, subject to the provisions of existing laws
and regulations including those of the Commission on Audit and other such terms and
conditions most favorable to the government, be given multi-year obligational authority
for housing program or project which will take more than one year to complete that
requires multi-year appropriations.

Section 11. Private Sector Participation -To fast track the approval and
implementation of housing projects and reduce the cost of socialized and low-cost
housing units, the Bureau of Internal Revenue, the Department of Agriculture, the
National Irrigation Authority, the Philippine Coconut Authority, the Sugar Regulatory
Administration, the Department of Agrarian Reform, the Department of Environment
and Natural Resources, the Mines and Geosciences Bureau, the Laguna Lake
Development Authority the Department of the Interior and Local Government, the
Local Government Units, the Land Registration Authority and the Department of
Human Settlements and Urban Development shall facilitate the release of the required
housing-related permits, licenses, certifications and tax exemptions/rulings in
accordance with Republic Act 11032 or an Act Promoting Ease of Doing Business


and Efficient Delivery of Government Services Amending for the Purpose Republic
Act 9485 Otherwise Known as the Anti-Red Tape Act of 2007 and for Other Purposes
and Executive Order No. 45 (S. 2001).

In case the responsible officers of the agencies concerned fail or refuse to
dispose of the application within the periods prescribed under RA 11032, the
applicable administrative and criminal liability as stated in Section 22 of RA 11032
‘shall be imposed.

All the incentives enumerated under Section 20 of Republic Act 10884 or an
Act Strengthening the Balanced Housing Development Program, amending for the
Purpose Republic Act No. 7279, as Amended, Otherwise known as the Urban
Development and Housing Act of 1992 shall be extended to the private sector
engaged in socialized and low-cost housing development including the construction
and estate management of public rental housing.

The participation of owners and/or developers in any of the component
programs of the NHDPFA shall be treated as one of the manners of compliance to the
balanced housing requirements subject to the conditions set forth under RA 10884.

Section 12. Collection Efficiency. In order to improve collection efficiency,
the NHA, SHFC and NHMFC shall have authority to foreclose mortgages, and/or evict
beneficiaries in accordance with existing laws.

Section 13. Implementing Rules and Regulations. - The DHSUD shall
promulgate rules and regulations necessary for the implementation of this Act.

Section 14. Repealing Clause. All laws, decrees, executive _ orders,
proclamations, rules and regulations and the issuances, or parts thereof which are
inconsistent with the provisions of this Act, are hereby repealed, amended or modified
accordingly.

Section 15. Penal Clause - Any person who violates any provision of this Act
shall be imposed the applicable administrative and criminal liability as stated in
Section 22 of RA 11032 or the Ease of Doing Business and Government Service
Delivery Act of 2018.

Section 16. Separability Clause. - If for any reason, any provision of this Act
is declared invalid or unconstitutional, the remaining provisions not affected thereby
‘shall continue to be in full force and effect.

Section 17. Effectivity Clause. - This Act shall take effect fifteen (15) days

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

Approved,