THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
S.B. No. 888 
Introduced by Senator Jinggoy Ejercito Estrada 
EXPLANATORY NOTE 
The National Home Mortgage Finance Corporation (NHMFC) as the major 
government mortgage institution has made available 185,000 housing units classified as 
follows: 
PI 80,000 - Socialized Housing at 9% interest 
P225,OOO - Economic Housi$g at 12% interest 
P375,OOO - Economic Housitjg at 16% interest 
Out of the about 185,000 total borrbwers, only around 55,000 have updated their 
loan payments; the rest have defaulted due to the economic crisis faced by our country 
beginning the last decade. Hence, Republic Act No. 8501 otherwise known as the 
"Housing Loan Condonation Act of 1998" was- enacted to rescue the National Shelter 
Program of the government by condoning the penalties on all outstanding! delinquent 
housing loan accounts with any of the government institutions and agencies involved in 
the National Shelter Program. As of todhy, only about 37,000 out of the delinquent 
96,000 borrowers availed of the provisions of Republic Act No. 8501. The other 
borrowers are given until December 31 , 2901 to avail of the condonation offered by said 
Republic Act No. 8501. In the meantime,' those who availed of the condonation under 
Republic Act No. 8501 were allowed to restructure their loan and pay the same within 
the remaining period of the loan. However, due to another surge of crisis, they were still 
unable to comply with the terms and conditions of their restructured loan agreement. 
Some of these mortgages have been foreclosed and the others are now facing 
foreclosure proceedings. The other borrohers who have not updated their obligation for 
at least three (3) months may also be 'foreclosed at any time at the option of the 
National Home Mortgage Finance Corpor&ion. 
The same is true with the other government institutions and agencies involved in 
the National Shelter Program such as the National Housing Authority (NHA), 
Government Service Insurance System (SSS), and Home Development Mutual Fund 
(PAG-IBIG Fund). 
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This situation is most alarming as while the government and the private sector 
are launching new housing projects, the present beneficiaries of National Shelter 
Program are on the verge of being thrown out of their homes after a short tenure. Thus, 
this Bill is being filed to give a relief to the underprivileged citizens of our country until 


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such time that our economic conditions improve hopefully within three (3) years from 
today. After all, it is the policy of the State to provide for an equitable land tenure system 
that shall guarantee security of tenure of beneficiaries. 
Immediate approval hereof is earpestly sought. 


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T~IRTEENTH CONGRESS OF THE 
1 
RkPUBLIC OF THE PHILIPPINES 
1 
"04 J"y 30 
:>; 
:f!J 
First' Regular Session 
1 
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S E N A T E  
S.B. NO. 888 
Introduced by Senaqor Jinggoy Ejercito Estrada 
AN ACT 
RESTRUCTURING PROGRAM, PROVIDING THE MECHANISMS THEREFOR, AND 
FOR OTHER PURPOSES 
TO ESTABLISH A SOCIALIZED AND LOW-COST HOUSING LOAN 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Title - This Act shall be known as the "Socialized and Low-Cost 
Housing Loan Restructuring Act of 2004." 
SEC. 2. Restructuring of Delinquent Socialized and Low-Cost Housing Loan 
Accounts. - In keeping with the Constitutional mandate for the- State to undertake a 
continuing program of urban land reform and housing that will make available at 
affordable cost decent housing and basic services, there is hereby establisbed a 
Socialized and Low-Cost Housing Loan Restructuring Program. Under this program: 
a) all socialized housing loan or loans amounting to Two Hundred Twenty Five 
Thousand Pesos (P25,OOO.OO) and below and all low-cost housing loans or loans 
amounting to over Two Hundred Twenty Five Thousand Pesos (P225,OOO.OO) but 
not exceeding Five Hundred Thousand Pesos (P500,OOO.OO) with any of the 
government financing institutions and agencies involved in the National Shelter 
Program (NSP), including but not limited to, the Government Service Insurance 
System (GSIS), Social Security System (SSS), Home Development Mutual Fund 
(HDMF), National Home Finance Home Corporation (NHMFC), Mortgage Guaranty 
Corporation (HGC), and the National Housing Authority (NHA) that have at least a 
six-month unpaid, monthly amortization are hereby declared covered by the benefits 
of this restructuring program notwithstanding that the same account has availed of 
the benefits of a previous restructuring or condonation program and no matter 
whether or not the annual total family income of the borrower-applicant exceeds 


Three Hundred Thousand Pesos (P300,OOO.OO); 
b) an application for restructuring shall only be charged a processing fee which shall be 
lower than those charged under previous restructuring or condonation programs and 
no downpayment shall be required for a borrower to apply for the benefits of this 
restructuring program; 
c) all penalties and surcharges shall be condoned upon filing of the restructuring 
application under this Act: Provided, that all accrued interests shall be added to the 
remaining balance of the principal, the aggregate of which shall be considered as 
the new principal amount. 
d) a borrower-applicant may be allowed to use the total accumulated value of hidher 
membership contribution or savings with the GSIS, SSS, or HDMF to pay in full or in 
part hidher housing loan; 
e) the term of a housing loan account being applied for restructuring may be extended 
for a period longer than its original term in order to lower the amount of the monthly 
amortization to a maximum of One Thousand Five Hundred Pesos (P1,500.00) for a 
period of three (3) years from the approval of the application, afterwhich, the monthly 
amortization will revert back to its original amount. The unserviced portion ensuing 
from the three-year lowered monthly amortization shall be paid on the last year of 
the term of the housing Ivan along with the last monthly amortization. In the event 
that the borrower fails to pay any amortization during the three-year period, he/she 
shall voluntarily surrender hidher property without need of judicial proceedings; 
f) in case of incapacity of a borrower, hidher legal heirs and successors-in-interest 
may assume payment of his/her outstanding housing loan; and 
g) loan restructuring under this Act may be availed of only once. 
All corresponding penalties and surcharges which NHMFC may have to pay its 
funders as a result of the implementation of this Act shall be automatically adjusted and 
condoned. 
SEC. 3. Exclusion From Coverage - In no instance shall the following housing 
loan accounts be covered by this Act: 
a) any account without a single payment since takeout; 
b) an account whose housing unit has been abandoned by the borrower-owner for 
more than two (2) years; 
c) an account whose housing unit has remained unoccupied for a period of at least 
two (2) years; 
d) an account whose housing unit is occupied by a third party other than the original 
registered beneficiary; and 


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an account that has been foreclosed, the title of which has already been 
consolidate /transferred in the name of the , government financing institution. 
SEC. 4. - The declaration of dividends Of the funds managed by the GSIS, 
SSS, and HDMF shall be limited to their members who have not availed of the 
restructuring program under this Act. 
SEC. 5. Contribution of Government Financing lnstitutions to the National 
Shelter Program - The contribution of the government financing institutions to the NSP 
shall be limited to the net earnings derived from their housing programs. 
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SEC. 6. Incentive for Prompt Payment of Monthly Amortization. - Upon the 
effectivity of this Act, all accounts whose monthly amortization are paid on time shall be 
entitled to a reasonable discount on loan interest. 
SEC. 7. Implementing Rules and Regulations. - There is hereby created an 
inter-agency committee headed by the Housing and Urban Development Coordinating 
Council and composed of all the government institutions and agencies enumerated in 
Section 2 hereof tasked to promulgate the implementing rules and regulations within 
sixty (60) days from the effectivity of this Act. 
SEC. 8. Congressional Oversight Committee. - There is hereby created a 
Congressional Oversight Committee composed of the Chairman of the House 
Committee on Housing and Urban Development and the Chairman of the Senate 
Committee on Urban Planning, Housing and Resettlement, five (5) members of the 
Senate and six (6) members of the House of Representatives. The members from the 
Senate shall be appointed by the Senate President from among the members of the 
Senate 'Committee on Urban Planning, Housing and Resettlement based on the 
proportional representation of the parties or coalitions therein. The members from the 
House of Representatives shall be appointed by the Speaker from among the members 
of the House Committee on Housing and Urban Development based c p  the proportional 
representation of the parties or coalitions therein. 
The Oversight Committee shall review and approve the Implementing Rules and 
Regulations. It shall also review the performance of the government financing 
institutions and agencies involved in the implementation of this Act. 


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modified accordingly. 
SEC. I O .  Effectivity Clause. - This 
SEC. 9. Repealing C/ause. - All /laws, executive orders, rules or regulations 
Act shall take effect fifteen (1 5) days after 
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or 
its 
complete publication in the Official Gazette or in at least two (2) national newspapers of 
general circulation. 
Approved,