NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
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HouseBill No.  5359                                   €
EXPLANATORY NOTE
The scarcity of affordable housing affects all sectors of society, especially our public
school  teachers.    An  independent  survey  revealed  that  public  school  teachers  have  no
homes to call their own.
Majority of our public school teachers cannot afford to purchase their own homes at
market prices since they earn a gross monthly income of Plo,000 or less.   In addition to this,
more than 20% of our public school teachers have unemployed spouses, and thus, bear the
burden of providing for their families.
There had been efforts to solve this problem by providing for a special housing facility
through the state pension fund.   However,  its implementation never fully materialized.   Thus,
it  is  imperative  that  we  provide  for  a  stable  housing  program  for  our  teachers  through
legislation.
This bill seeks to institute a housing program for teachers by providing funds through
loans  at affordable  interest  rates  and  long-term  repayment  period.  It also  seeks to  involve
the  private  sector  in  providing  housing  units  exclusively  for teachers  through  the  grant  of
fiscal incentives.
In view of the foregoing, the passage of this bill is earnestly sought.


NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
HOUSE OF REPRESENTATIVES
_                                  Introduced by Representative Rufus B. Rodriguez                                 __
House Bill No.   5359
AN ACT
T0 PROVIDE FOR A HOUSING PROGRAM FOR TEACHERS
Be it erl?ct.ed  by the Senate and  House of Representatives of the  Philippines in Congress
assembled:
SECTION 1.    77t/e.  This Act shall be known as the "Teacher's Housing Program Act."
SEC 2.   Dec/arafi.on of po/i.cy.   [t is hereby declared the policy of the State to uplift the living
conditions of teachers and promote a housing  program to enable them to acquire their own
housing  units.    To this  end,  the  State  affirms  its  commitment to  strengthen,  promote,  and
support  the  component  activities  of  housing   production  and  finance  in  order  to  enable
teachers to acquire decent housing and basic services at the lowest affordable price.
SEC 3.   Coverage.   The  Program shall cover the teachers of the Department of Education
(DepEd) with a permanent status.
SEC   4 ....  Role   o_f   Government   Housing   and   Financing   Agencies.      To   ensure   the
accomplishment  of  the  objectives  under  this  program,  the  hereunder  mentioned  housing
agencies  shall  perform  the  following  in  addition  to  their  respective  existing  powers  and
functions:
(a)         The  National  Housing  Authority  shall  undertake  special  housing  projects  for
teachers.      In   addition,   it  may  also   provide  technical  and   other  forms  of
assistance to private developers in the development of housing projects;
(b)         The    National    Home    Mortgage    Finance    Corporation    shall    provide   the
mortgage  market  for  teacher's  housing  through  the  purchase  of  teacher's
housing     mortgages  and/or  issuance  of  securities.     It  shall  administer  the
funds provided for housing  loans and developer assistance under this Act as
well   as   long-term   funds   provided   by  the   Government  Service   Insurance
System and the Home Development Mutual Fund for teacher's housing.
(c)         The   Home   Guaranty  Corporation   shall   design   an   appropriate   guarantee
scheme   to   encourage   financial    institutions   and    private   developers   to
undertake  mass  housing  production    for  teachers.     It  shall  administer  the
Guarantee System Fund as provided for under this Act.
(d)         The  Government  Service  Insurance  System  and  the  Development  Mutual
fund shall be the primary provider of funds for long-term housing mortgages.
SEC   5.      Ro/e   of  the   DepEd.      The   Department   of   Education   shall   undertake   the
implementation   of   the   program   among   its   teachers   and   shall   ensure   collection   of
amortization  payments  through  a  salary  deduction  scheme.    In  line  with  this,  the  DepEd
shall:


(a)         Create  a  Teacher's  Housing  Secretariat  which  shall  issue  and  collect  the
necessary documentation,  receive  and  process application,  and  transfer the
same to the appropriate housing agencies;
(b)         Deduct  amortization  from  their  teachers  on  a  monthly  basis  and  remit  the
same to the appropriate agency.
SEC  6.    Program  Ff.nanct.ng  Scheme.     In  the  implementation  of  the  Teacher's  Housing
Program, the following shall consist the financing scheme:
(a)         Housing Loans forTeachers which shall be used forany of the following purposes:
1.    Purchase of a lot and construction of a residential unit thereon;
2.    Purchase of any of the following:
a.    brand new or old existing units;
b.    housing properties mortgaged with any institution;
c.    housing  assets  being  disposed  of  through  public  bidding  or
negotiated sale;
3.    Purchase of a fully developed lot within a residential area;
4.    Construction or completion of a  residential  unit on a  lot owned  by the
beneficiary;
5.    Home improvement or any alteration in an existing residential unit;
6.    Restructuring  of an  existing  housing  loan  in  any government housing
or financial institution, provided that the account is updated.
Loans  provided  under this  program  shall  be  computed  based  on  a  net take
home  pay which  shall  not be  lower than  Three Thousand  Pesos  (P3,000.00).   The
interest rate on the loan shall not be more than twelve percent (12%) per annum and
shall  be fixed for the entire term  of the  loan.   Provided,  that if the  borrower defaults
on his amortization payment for reasons of his own doing, the financing agency may
subject the borrower to a regular interest rates for the periods that he is in default.
To increase the benefits provided to teachers,  loans under this scheme shall
not be subject to such  charges, fees or premiums except minimum  processing fees
to be charged by the appropriate agencies.
Loans   provided   for  teachers   earning   less   than   twelve   thousand   pesos
(P12,000.00)  per  month  shall  not  be  less  than  sixty  percent  (60°/o)  of all  available
funds   allotted   for  this   purpose.     At   least  forty  five   percent  (45%)  of  the  year
appropriation for the Program shall be for Housing Loans.
(b)         Developer   Assistance   Fund.       Proponents   or   developers   of   housing   projects
exclusively for teachers and with a selling cost   not exceeding One Hundred Twenty
Thousand   pesos   (P120,000.00)   per   house   and/or   lot   package   which   shall   be
available exclusively for teachers,  may avail of a financing  loan not exceeding eighty
percent (80°/o) of the entire project cost.   The National  Home Mortgage and  Finance
Corporation,  in  coordination with  the  HUDCC,  shall  issue the appropriate guidelines
for this purpose.
At least fifteen  percent (15%) of the yearly appropriation for the program shall
be for developer financing:   Provided,  that the  unused funds for developer financing
shall be utilized for Housing Loans.
(c)         Guarantee  System  Fund.    There  is  hereby  created  a  guarantee  system  fund  for
Teacher's   Housing   Loans   not   exceeding   One   Hundred   Fifty   Thousand   Pesos
(P150,000.00) with an  interest rate of not exceeding twelve percent (12%) per annum
as  originate  by the funding  agencies  or their accredited  financial  institutions.    Such
loans shall  be assigned to the  Fund  immediately after origination for which the  Fund
shall issue promissory notes.
At least forty percent (40°/o) of the yearly appropriation for the Programs shall
be  for the  loan  guarantee.    The  Home  Guarantee  Corporation  shall  undertake  the


guarantee system under this act and shall act as the administrator and trustee of the
fund.   The  HGC  shall  issue  the  appropriate  guidelines within  one  (1) year from  the
approval of this Act.
SEE i..  Fiscal  Ince.ntives  fo_r  Private  Sector  Participation  in  Teacher's  Housing.    Private
sector developers who participate in the development of teacher's housing  shall  be entitled
to the following fiscal incentives:
(a)         Exemption  from  income taxes for housing  projects exclusively dedicated  for
teachers;
(b)         Exemption  from  capital  gains  tax  on  housing  projects  exclusively  dedicated
for teachers;
(c)         Exemption from documentary stamp tax for all project related documentation;
(d)         Exemption from value-added taxforthe project concerned;
(e)         Exemption from transfertaxes for both raw and completed projects; and
(f)          Exemption from donor's tax for lands certified by the local government units to
have been donated to teacher's housing purposes.
Provided,  that  upon  application  for  exemption,  the  housing  development  plan  shall
have already been approved  by the appropriate government agencies concerned:  Provided
further,  that all the savings acquired  by virtue of this provision shall be used to minimize the
cost of the housing units subject to the implementing guidelines to be issued by the Housing
and Urban Development Coordinating Council.
The    Department    of    Finance,    in    consultation    with    the    Housing    and    Urban
Development Coordinating Council, shall prepare the necessary implementing guidelines for
the proper implementation of the tax exemption mentioned in this section within one (1 ) year
after the approval of this Act.
SEC  8.     Fund/.ng  Sot/roe.     The  Government  Service  Insurance  System  and  the  Home
Development Mutual  Fund shall contribute a total of Two  Billion  Pesos (P2,000,000,000.00)
for the  initial  implementation  of the  Program.    Thereafter,  each  institution  shall  allocate  at
least  ten  percent  (10%)  of  their  annual   investible  funds  for  long-term  teachers'  housing
mortgages  and  shall   be   made  available  to  the   National   Home   Mortgage  and   Finance
Corporation    under terms  which  ensure  their  repayment.    The  National  Government  shall
contribute One Billion Pesos (Pl,000,000,000.00) annually for the continuous implementation
of the Program.
SEC 9.  Appropn.afi.on.   The amount necessary to carry out the purposes of this Act shall be
included  in the  General Appropriations Act of the year following  its  enactment  into  law and
every year thereafter.
SEC 10.   Separab/.//.fy C/ause.   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.
SEC  11.   Effect/.v/.fy.   This Act shall take effect fifteen (15) days after its complete publication
in at least two (2) newspapers of general circulation.
Approved,