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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

EIGHTEENTH CONGRESS
First Regular Session

613
HOUSE BILL NO. ___

Introduced by Congressman Alfred Vargas

EXPLANATORY NOTE

Teaching is the profession that creates all other professions. Their influence and
knowledge shape the lives of their students and hone them to become productive
members of society. But while teachers are genuinely fulfilled in their practice, they also
struggle with the financial limitations of their career. For one, many of them cannot
afford to purchase a home that they can call their own. Thus, it is only fitting that we
reward teachers to honor their service to Filipino students.

This bill seeks to establish a housing program for educators. It directs
government housing and financing agencies to undertake special housing projects and
provide housing funds for teachers. It also provides fiscal incentives for private sector
developers who will participate in the implementation and development of the teachers’
housing program.

Education is one of the best investments our country can put in. Quality
education creates jobs, breaks the cycle of poverty, and helps us achieve national
development. A great nation requires a highly competitive education system, which in
turn requires world class and passionate teachers. Through this, we are helping Filipino
educators to upgrade their living conditions, boost their morale and self-esteem. If
approved, this proposal will help dissuade competent teachers from leaving our country
and seek greener pastures abroad.

In view of the foregoing, the passage of this bill is urged. SB

FRED VARZAS


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

EIGHTEENTH CONGRESS
First Regular Session

613

HOUSE BILL NO. .

Introduced by Congressman Alfred Vargas

AN ACT
TO PROVIDE A HOUSING PROGRAM FOR ‘TEACHERS

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 “Teacher's Housing Program.”

SEC. 2. Declaration of Policy. It is hereby declared the policy of the State to
uplift the living conditions of teachers and promote a housing programa to enable them
to acquire their own housing units. To this end, the State affirms its commitment to
strength, promote, and support the component activities of housing production and
finance to 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 of 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:

(@) 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;


()

()

(@)

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.
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.

The Government Service Insurance System and the Development Mutual
fund shall be the primary provider of funds for long-term housing

mortgages.

SEC. 5. Role 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:

(b)

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;

Deduct amortization from their teachers on a monthly basis and remit the

same to the appropriate agency.

SEC. 6. Program Financing Scheme. In the implementation of the Teacher's

Housing Program, the following shall consist the financing scheme:

(a)

Housing Loans for Teachers which shall be used for any of the following
purposes:
1. Purchase of a lot and construction of a residential unit thereon;
2. Purchase of any of the following:
i, brand new or old existing units;


(b)

|. housing properties mortgaged with any institution;

|. housing assets being disposed of through public bidding or negotiated
sales;

3. Purchase of a fully developed lot within a residential area;

4. Construction of completing of a residential unit on a lot owned by the
beneficiary;

5, Home improvement or any alternation in an existing residential unit;

6. Restructuring of an existing housing loan in any government housing of
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 (125) 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 rate 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 earnings less than Twelve Thousand
Pesos (P12,000.00) per month shall not be less than sixty percent (60%)
of all available funds allotted to this purpose. At least forty five percent
(45%) of the year appropriation for the Program shall be for Housing
Loans.

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%) 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 early appropriation for the program
shall be for developer financing: Provided, that the unused funds for

developer financing shall be utilized for Housing Loans.

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 tweive 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%) 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.

SEC. 7. Fiscal Incentives for 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:

(@)

(b)

(9

(a)

Exemption from income taxes for housing projects exclusively dedicated
for teachers;

Exemption from capital gains tax on housing projects exclusively
dedicated for teachers;

Exemption from documentary stamp tax for all project related
documentation;

Exemption from value-added tax for the project concerned;


(©) Exemption from transfer taxes for both raw and completed projects; and
() 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) after the approval of this Act.

SEC. 8, Funding Source. 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 teacher's 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 (P1,000,000,000.00)

annually for the continuous implementation of the Program.

SEC. 9. Appropriation. The amount necessary to carry out the purpose 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. Separability. 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. Effectivity. This act shall take effect fifteen (15) days after its complete

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

Approved,