HOUSE oF REPRESENTATIVES

RECE VED
Republic of the Philippines DATE: 3° .
HOUSE OF REPRESENTATIVES per
Quezon City TIME: 22
BY: ed.
SEVENTEENTH CONGRESS
First Regular Session REOISTARON usr:
BULLS AND ing NENT

INDEX SERVI
415 EY

HOUSE BILL NO,

Introduced by HONORABLE ROMERO “MIRO” S. QUIMBO

EXPLANATORY NOTE

This bill seeks to create the Social Housing Development and Finance
Corporation (SHDFC) which shall become the lead government agency in the
development and administration of social housing programs.

On 20 January 2004, the Social Housing Finance Corporation (SHFC)
was created by virtue of an executive order (Executive Order No. 272), upon
the recommendation of the Housing and Urban Development Coordinating
Council (HUDCC) Secretariat. SHFC, a wholly owned subsidiary of the
National Home Mortgage Finance Corporation (NHMFC), was tasked to
implement the CMP and AKPF programs under the NHMFC and undertake
social housing programs for the formal and informal sectors in the low-
income bracket.

In its seven years of existence, SHFC’s weaknesses were readily
observable, if not glaring. EO 272 vaguely defined the powers of the
President of the Corporation, of the Board of Trustees, and of the
Corporation itself. As a consequence, the SHFC performed limited functions
to the detriment of the State’s goal to make available affordable decent
housing and basic services to underprivileged and homeless citizens in
urban centers and resettlement areas. Furthermore, EO 272 failed to
provide a concrete set of qualifications for the President of the Corporation
which could have adverse impact on the management of the institution.

This bill seeks to address these weaknesses and concerns.“he
passage of this bill would establish a more independent, well-organized and
transparent SHDFC that is more responsive to the housing needs of the
Filipino people. Among others, it defines the powers and functions of the
SHDFC, mandates the supervision, control and implementation of specified
socialized housing programs, creates and establishes the composition of the
Board of Trustees as well as their powers and functions, and prescribes the
qualifications of the President of the Corporation.


This bill was taken up during the joint committee meetings and
Technical Working Group (TWG) of the Committee on Government
Enterprises and Committee on Housing at the House of Representatives
during the 16' Congress. In view thereof, the expedient approval of this bill
is strongly recommended.

0” S. QUIMBO
Represerftative
Second Distric] Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 15.

Introduced by HONORABLE ROMERO “MIRO” S. QUIMBO

AN ACT
CREATING THE SOCIAL HOUSING DEVELOPMENT AND FINANCE
CORPORATION

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 “Social Housing
Development and Finance Corporation Act.”

SEC. 2. Declaration of Policy. - It is the policy of the State to undertake
a comprehensive and continuing program of housing and urban
development which will make available at affordable cost decent housing
and basic services to the underprivileged and homeless Filipinos through
the financing and administration of socialized housing programs.

SEC. 3. Statement of Objectives. - The State shall integrate all laws,
orders, issuances and administrative circulars relating to the provision of
socialized housing and land tenure security through developmental
financing schemes for low income, formal and informal income earners to
effectively achieve the following objectives:

a. To ensure the speedy and effective delivery of socialized housing finance
under the National Shelter Program and to increase the access of the
underprivileged and homeless families to various forms of security of land
tenure; ~.

b. To enhance the affordability and quality of socialized housing for low-
income families and provide developmental financing for socialized housing
projects;

c. To empower community associations of low-income earning families.

SEC. 4. Creation of the Social Housing Development and Finance
Corporation. - To carry out the aforementioned policy and objectives, there


is hereby created a Social Housing Development and Finance Corporation
(SHDFC), hereinafter referred to as the “Corporation,” with principal office in
Metro Manila, which shall replace the Social Housing Finance Corporation
(SHFC) created by virtue of Executive Order No. 272 issued in 20 January
2004,

The Corporation shall be the lead government agency in charge of
formulating, developing and implementing socialized housing finance
programs that will cater to families in the low-income bracket through
developmental financing schemes that will help the families acquire security
of land tenure, affordable and decent homes, as well as facilitate community
development.

Developmental financing under this charter shall refer to the act of funding
legally organized and registered community associations of low-income
families for the purpose of acquiring security of land tenure, financing
community and site development, housing microfinance and_ socialized
livelihood programs, and other financial services in furtherance of the
National Shelter Program.

SEC. 5. Socialized Housing Programs. - Consistent with Republic Act
No. 7279, as amended, otherwise known as the “Urban Development and
Housing Act of 1992,” Republic Act No. 6846, as amended, otherwise known
as the “Abot-Kaya Pabahay Fund or Social Housing Support Fund Act,” and
Republic Act No. 7835, otherwise known as the “Comprehensive and
Integrated Shelter Financing Act of 1994,” the Corporation shall supervise,
control, and implement the following programs:

(a) Community Mortgage Program (CMP) - This program shall assist
legally organized associations of underprivileged and homeless families 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.

(b) Community Financing Program (CFP) - This program shall assist
legally organized associations of underprivileged and homeless families to
acquire various forms of security of tenure through schemes that include
the purchase and development of tracts of land under the contept of
community ownership. ‘The CFP shall facilitate the empowerment. of
community associations to ‘enable them to effectively participate in the
program. This program shall also assist low-income families in blighted
areas to eventually improve the quality of neighbourhood and homes to the
extent of their affordability.

(0) Abot-Kaya Pabahay Fund Program (AKPFP) ~ This program secks to
implement a continuing program of social housing that shall make available
to low-income families affordable houses or lots through (a) amortization


support whereby funds are made available for low income families to assist
them in paying their housing loans; and (b) development financing where
funds are utilized to support private developers, non-governmental
organizations (NGOs) and landowners in providing affordable housing
packages to low-income families.

(d) High Density Housing Program. ~ This program is a community-driven
financing window that extends loan assistance to legally organized
communities of informal settler families living in danger areas for their near-
site, in-city, or near-city relocation in multi-storey housing projects.

(c) The Localized Community Financing Program (LCFP). - A CFP
derivative that allows local government units (LGUs) to address the housing
needs of the informal sector in their respective jurisdictions.

() Housing Microfinance. - This program is a developmental financing
scheme that aims to promote the empowerment of Corporation’s beneficiary
communities and encourage self-help cooperative housing through the grant
of livelihood loans and financing of productive, income-generating activities
to aid low income families address their housing necessities;

(g) Refinancing of socialized housing programs and offering of financing
services to the projects of the National Housing Authority (NHA), LGUs, key
shelter agencies, and other government agencies, as well as, the private
sector participating in socialized housing programs; and

(h) Such other socialized housing and developmental financing programs
or services which may be created pursuant to the aforementioned
declaration of policy and statement of objectives in this Charter.

SEC. 6. Powers and Functions of the Corporation. - The corporation
shall have the following powers and functions:

(a) To promote security of land tenure to the underprivileged and
homeless families;

(b) To provide a strong and sustainable finance program supporting the
housing objectives and, in relation thereto, to borrow or raise money
necessary to mect the financial requirements of its business by the issuance
of bonds, promissory notes and other evidence of indebtedness, And to
secure the repayment thereof by mortgage, pledge or deed of trust upon the.
properties of the Corporation;

(€) To encourage maximum participation of LGUs, other government
agencies, NGOs and people’s organizations (Pos) to ensure that homeless
families and the underprivileged can enjoy the benefits of the programs of
the Corporation;


wearvausune

(d) To institutionalize and promote housing through a self-help method
whereby families with their own or outside financing can build their homes
with their labor, self-help cooperative housing, and such other self-help
approaches to the acquisition of decent and affordable housing and
introduce support facilities, such as formulation and development of
livelihood programs, grant of livelihood loands and housing microfinance
that will enhance the financial capabilities of low-income groups to acquire
decent housing and land tenure security;

(c) To assist LGUs and government agencies, through developmental
financing, to serve the housing requirements in their respective
jurisdictions, such as resettlement, development of sites and services, and
the renewal of blighted areas;

() To formulate, adopt, amend or rescind rules and regulations when
necessary to carry out the provisions and purposes of this Act, as well as the
effective exercise of the powers and functions, and the discharge of duties
and responsibilities of the Corporation, its officers and employees ;

(g) To purchase, acquire, sell, discount, refinance real property to be used
as sites for socialized housing or otherwise deal in community or home
mortgages, such as asset-backed securities, derived from, and collateralized
by the assets of the Corporation’s programs, or participate therein, grant
non-recoverable subsidy on site development and engage in estate
management under such conditions and terms as maybe determined by the
Board of Trustees of the Corporation;

(h) To invest in securities and deal with the money and properties of the
Corporation in such manner as may, from time to time, be considered wise
or expedient for the advancement of its interests;

(i) To enter into any lawful arrangement for joint venture, profit-sharing,
union of interest, unitization, or trust agreement, reciprocal concession, or
cooperation with any corporation, association, partnership, syndicate,
entity, person, or governmental, municipal, or public authority, domestic or
foreign, in the carrying on of any business or transaction deemed necessary,
convenient, or incidental to the carrying out any of the purposes of this
Corporation; s

(i) To acquire or obtain from any government or authority, national,
provincial, municipal or otherwise, or any corporation, company, or -
partnership, or person, such charter, contracts, franchise, privileges,
exemption, licenses and concessions as may be conducive to any of the
objectives of the Corporation;

(k) To establish and operate one or more branches, offices, or agencies
and to carry on any or all of its operations and business without any
restrictions as to place or amount, including the right to hold, purchase or
otherwise acquire, lease, mortgage, pledge, sell and convey, or othetwise


deal with real and personal property anywhere in the Philippines, as may be
necessary, or incidental to the conduct of the corporate business;

() To conduct and transact any and all lawful activities, and to do or
cause to be done any one or more of the acts and purposes set forth herein,
within or outside the Philippines, and in any and all foreign countries, and
to do everything necessary, desirable, or incidental to the accomplishment of
the purposes or the exercise of any one or more of the powers herein
enumerated or which shall, at any time, appear conducive to or expedient
for the protection or benefit of this Corporation; Provided, That the funds
invested or utilized under the aforementioned modes of agreement shall not
be guaranteed by the national government except upon consultation with,
and approval of, the Secretary of Finance and the Monetary Board;

(m) To adopt, alter, and use corporate seal, to sue and be sued, and
generally, to exercise all powers under the corporation laws which are not
inconsistent herewith or with existing laws; and

(n) To exercise such powers and perform such acts as may be necessary,
useful, incidental or auxiliary to carry out the provisions of this Act.

SEC. 7. Board of Trustees. - The Corporation shall be governed and its
activities directed, controlled, and managed by a Board of Trustees,
hereinafter referred to as the “Board” which shall be composed of the
following:

(a) The Chairperson of the Housing and Urban Development and
Coordinating Council, as the ex officio Chairman;

(b) The Secretary of the Department of Social Welfare and Development
(DSWD) as ex-officio Vice Chairman;

(c) The Secretary of the Department of the Interior and Local Government
(DILG), or a duly designated representative;

(d) The Secretary of the Department of Budget and Management (DBM) or

a duly designated representative;

(©) The Governor of the Bangko Sentral ng Pilipinas (BSP) or a duly
designated representative; Se

() The Secretary of the Department of Finance (DOF) or a duly designated
representative;

(g) The Chairman of the Presidential Commission for the Urban Poor
(PCUP), or a duly designated representative;

(h) The Secretary of the Department of Environment and Natural
Rsources (DENR) or a duly designated representative;


() The President of the Corporation;

(i) Four (4) representatives of the private sector who are all citizens and
residents of the Philippines, of good moral character, of known probity, and
of proven competence and integrity: Provided, That two (2) of the private
sector representatives shall come from an NGO or PO involved in the
development of housing projects, organization of housing associations or
management of shelter finance programs or other related activities for at
least five (5) years; one (1) shall come from the academe with specialization
in the field of urban planning, development studies, economics, civil
engineering, architecture or other related courses with special training in
housing and urban development programs preferably in shelter finance
management, from a recognized college or university; and one (1) shall come
from the real estate or housing developers organization in the Philippines.

‘The four (4) representatives of the private sector shall be appointed by the
President of the Philippines from a shortlist of nominees submitted by the
Governance Commission for GOCCs (GCG) for a term of one year, subject to
reappointment, pursuant to Sections 15 and 17 of Republic Act No. 10149
or the GOCC Governance Act of 2011. In no case shall any representative of
the private sector be appointed or designated in a temporary or acting
capacity.

The Chairman, Vice Chairman and Members of the Board shall be
entitled to a reasonable per diem for each meeting actually attended at such
amounts as may be fixed by the Board in accordance with existing laws,
rules and regulations.

SEC. 8. Powers of the Board. - The Board shall have the following
powers:

(a) To adopt the by-laws of the corporation, and to revise or amend the
same as may be expedient to carry out effectively the functions of the
Corporation under this Act;

(b) To formulate, revise, or adjust periodically all policies, and to
promulgate such rules and regulations and manuals of procedure as are
necessary to ensure the effective implementation of the provisions of this
Act; &

(c) To direct the management, operation, and administration of the
Corporation;

(d) To authorize such expenditures by the Corporation as are in the
interest of its effective administration and operation;

(c) To approve the corporation's organizational and administrative
structures and staffing pattern, and create offices or positions necessary for


the efficient management, operation, and administration of the Corporation,
and to establish the appropriate compensation package for the officers and
employees of the Corporation: Provided, That all positions in the Corporation
shall not be exempt from Republic Act No. 6758, otherwise known as the
Salary Standardization Law, and other existing laws, rules and regulations
on salaries and compensation; and

() To exercise such powers as may be necessary to carry into effect the
provisions of this Act and to accomplish the purposes for which the
corporation is established.

SEC. 9. President of the Corporation. - The President of the
Corporation, hereinafter referred to as the “President,” shall be elected by
the members of the Board from among their ranks, for a terms of one (1)
year subject to reappointment, as provided for in Section 18 of the GOCC
Governance Act of 2011: Provided, That said appointee is a holder of a
degree in law, public administration, urban planning, development
university, with special training in housing and urban development
programs, preferably in shelter finance management: Provided, further, That
said appointee must have expertise and experience of at least ten (10) years
in business, finance, the professions, development of housing projects,
organization of housing associations, and management of shelter finance
programs and other related activities.

The President shall represent the Corporation in alll its dealings with other
offices, agencies and instrumentalities of the government and with all
persons and entities, public or private, domestic or foreign, and shall
exercise such other powers, functions, and duties as may be delegated by
the Board. The President shall receive such reasonable compensation,
allowances and other emoluments as Board may determine.

SEC. 10. Powers and Duties of the President of the Corporation. -
‘The President shall prepare the agenda of the Board of Trustees, execute
and administer the policies and resolutions adopted by the latter, and direct
and supervise the operations and management of the corporation. Subject to
the approval by the board in the case of managerial positions and above, the
President shall appoint the personnel of the Corporation, and prescribe their
duties and qualifications, in accordance with existing civil service laws, rules
and regulations, to the end that only competent personnel may be employed,
and, when warranted, remove, suspend or otherwise discipline thts, for
cause.

SEC. 11. Exemption from Tax, Legal Process and Lien. - All laws to
the contrary notwithstanding, the Corporation and all its assets and
properties, all appropriations, funds and amortizations collected and all
accruals thereto and income or investment earnings therefrom, as well as all
supplies, equipment, papers or documents shall be exempt from any tax,
assessment, fee, charge or customs or import duty. The Corporation shall
likewise be exempt from all kinds of taxes, fees or charges, and shall not be


liable to attachments, garnishments, levy or seizure by or under any legal or
equitable process whatsoever, either before or after receipt by the person or
persons entitled thereto. No tax measure of whatever nature hereinafter
enacted shall apply to the Corporation, unless it expressly revokes the
declared policy of the State in Section 2 hereof granting tax exemption to the
Corporation. Any tax assessment against the Corporation shall be null and
void.

The exemption from tax, assessments, fees or charges provided in the
preceding paragraph shall be in effect until the required capitalization of the
Corporation is reached.

All documents or contracts executed in line with the CMP and other
social housing programs to be administered by the SHDFC shall also be
exempt from the payment of tax, such as capital gains tax, documentary
stamp tax, and registration fees, including fees required for the issuance of
transfer certificates of title.

SEC. 12. Abolition of the SHFC and Transfer of its Powers and
Functions, Rights, Assets, and Liabilities.- The SHFC is hereby
abolished. Within six (6) months from the approval of this Act, the powers
and functions of the SHFC and the programs under its administration, in
particular the CMP and.such other related social housing programs being
implemented by it, shall be transferred to and be exercised by the
Corporation. The Corporation shall, by virtue of this Act, be subrogated to
all the rights and assume all the contracts and liabilities of the SHFC and all
its pertinent funds and appropriations, including unexpended allocations,
records, property, assets, equipment and personnel as are necessary:
Provided, That before the Corporation takes over the powers and functions
of SHFC, the latter’s obligation to pay NHMFC’s paid up capital
contributions to SHFC and trust receivables from SHFC, plus the excess of
actual collections over the agreed trustee fees treated as addition to such
trust accounts, shall all be assumed by and recorded in NHMFC’s books as
receivables from the national government, while on the other hand, the total
amount of such assumed obligation shall be converted and recorded in the
Corporation’s books as equity infusion from the national government:
Provided further, That the existing officers and employees of the SHFC shall
continue to assume their posts in a holdover capacity until they have
qualified to become civil service eligible within two (2) years fram the
effectivity of this Act and their new appointments are issued. a

SEC. 13. Structure and Staffing Pattern. - The position structure and
staffing pattern of the Corporation shall be subject to the approval of the
Governance Commission for GOCCs (GCG). To ensure the continued
implementation of the CMP, HDH and such other related social housing
programs being implemented by it during the period of transfer and
transition, SHFC personnel who are performing the functions transferred to
the Corporation shall continue to perform their duties and responsibilities;
Provided, That the said personnel may, at their option, retire or be separated


from the service within two (2) years from the effectivity of this Act for which
they shall be entitled to a severance pay equivalent to three (3) times their
monthly salary for every year of service at the time of retirement or
separation: Provided further, That a fraction of at least six (6) months shall
be considered as one (1) whole year: Provided, finally, That in the absence of
any retirement plan in the SHFC, the entitlement to the retirement benefit
under Republic act No. 7641 shall not be diminished or modified in
whatever manner.

SEC. 14, Appropriations. - The amount needed for the initial
implementation of this Act shall be charged against the capitalization to be
allocated in the amount of Fifty Billion Pesos (P50,000,000,000.00) to be
sourced from: (a) conversion of SHFC’s Ten Billion Five Hundred Ninety-
Three Million Sixty-Nine Thousand Pesos (P10,593,069,000.00) trust
liability to NHMFC, including the excess of actual collections over the agreed
trustee fees treated as addition to the trust accounts, into equity infusion
from the national government; (b) SHFC’s assets, including the Ten Million
Pesos (P10,000,000.00) paid-up capital of the NHMFC based upon its issued
outstanding shares of stocks which shall also be converted and deemed part
of the national government’s equity infusion in the Corporation; (c) the
remaining funds and assets administered by SHFC under the AKPF as well
as funds to be appropriated for amortization support and development
financing components under the CISFA; and (d) Thirty Six Billion Pesos
(P36,000,000,000,.00) from HDH allocated funds in the annual General
Appropriations Act.

No portion of the capital of the Corporation shall accrue to any agency or
instrumentality of the national government, including government-owned
and controlled corporations.

Thereafter, the amount needed for the operation and maintenance of the
Corporation shall be included in the annual General Appropriations Act:
Provided, That the operating expenses of the Corporation itself shall not
exceed the amount, as may be determined by the Board based upon
optimum efficiency and effectivity and that at least more than half of said
annual appropriation shall be disbursed for the Corporation’s programs,
projects, and activities, based upon progression of productivity and
participative contribution to the National Shelter Program.

SEC. 15. Interim Applicability of Existing Policies, Guidelinés, and
Rules. - Existing policies, guidelines, rules and regulations with respect to
the functions of the SHFC which have been transferred to the Corporation
shall continue to be applicable and in effect until amended or modified
accordingly.

SEC. 16. Audit. - The Chairman of the Commission on Audit shall
appoint and assign to the Corporation a Resident Auditor and other
subordinate personnel, responsible to and removable only by the
Commission on Audit, as provided for under Presidential Decree No. 1445,


otherwise known as the Government Auditing Code of the Philippines. The
Auditor shall submit, through the Commission, an annual report on the
financial condition and the result of the operations of the Corporation to the
President of the Republic of the Philippines and to each chamber of the
Congress of the Philippines.

SEC. 17. Legal Counsel. - The Office of the Government Corporate
Counsel shall be the General Counsel of the Corporation.

SEC. 18, Reports. - The corporation shall submit an annual report to
the President of the Philippines and to both chambers of the Congress of the
Philippines.

SEC. 19, Suppletory Application of Other Laws. ~ The provisions of
Republic Act No. 10149 or the GOCC law and the Corporation Code shall
have suppletory application on matters not provided in this Act.

SEC. 20. Implementing Rules and Regulations. - The implementing
rules dnd regulations to effectively carry out the provisions of this Act shall
be drafted and prepared by the Corporation in coordination with the
following agencies: (a) Housing and Urban Development Coordinating
Council (HUDCC); (b) National Housing Authority (NHA); (c) National Home
Mortgage and Finance Corporation (NHMFC); (d) Home Guaranty
Corporation (HGC); (e) Housing and Land Use Regulatory Board (HLURB); ({)
Home Development and Mutual Fund (HDMF); (g) Department of Finance
(DOF); (h) Department of Budget and Management (DBM); and (i) two 92)
private sector representatives to be appointed each by the SHFC and the
HUDCC. It shall be adopted and promulgated by the Board of Trustees of
the Corporation not later than ninety (90) days after the approval of this Act
which shall be published in at least one (1) national newspaper of general
circulation.

SEC. 21. Separability Clause. - If, for any reason, any provision of this
Act, or the application thereof to any person or circumstances, is held
invalid or unconstitutional, the remaining provisions not affected thereby
shall continue to be in full force and effect.

SEC. 22. Repealing Clause. ~ Executive Order No. 722, dated January
20, 2004 is hereby repealed. All other laws, decrees, executive or or
rules and regulations and other issuances, or parts thereof which are
inconsistent with or contrary to the provisions of this Act or its purposes are
likewise repealed, amended, or modified accordingly.

SEC. 23. Effectivity. - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in a newspaper of general
circulation.

Approved,