Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

5908
HOUSE BILL NO..

Introduced by HONORABLE STELLA LUZ A. QUIMBO

AN ACT CREATING THE SOCIAL HOUSING DEVELOPMENT AND
FINANCE CORPORATION

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
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 an
adverse impact on the management of the institution.

‘This bill seeks to address these weaknesses and concerns. The 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 16th Congress, and was refiled by
Rep. Romero S. Quimbo during the 17th Congress.

In view thereof, the expedient approval of this bill is strongly recommended.

STE] /QUIMBO
fepresentative
2nd District, Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No.5208

Introduced by HONORABLE STELLA LUZ A. 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 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,
issuance 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; and

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

SEC. 4. Creation of the Social Housing Development and Finance
tion. - 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 shalll 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 concept 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.

¢. Abot-Kaya Pabahay Fund Program (AKPFP). - This program seeks 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.


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;

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;

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:

e.

&

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

To provide a strong and sustainable finance program supporting the housing
objectives and, in relation thereto, to borrow or raise money necessary to meet
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;

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
loans and housing microfinance that will enhance the financial capabilities of
low-income groups to acquire decent housing and land tenure security;

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


L

of the powers and functions, and the discharge of duties and responsibilities of
the Corporation, its officers and employees;

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 may be determined by the Board of Trustees of the Corporation;

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;

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;

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;

To establish and operate one or more branches, offices, or agencies and to carry
on any or alll 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 otherwise 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;

. To adopt, alter, and use a 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

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;

{ 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 Resources (DENR)
or a duly designated representative;

‘The President of the Corporation;

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 Section 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 A

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;

e. 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 term 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 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 all dealing 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 shalll 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 them 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 shalll not be liable to attachments, garnishments, levy or seizure by 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 shalll, 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 contributions to SHFC and trust receivables from SHFC, plus the
excess of actual collections over the agreed trustee fees treated as an 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 from the effectivity
of this Act and their new appointments are issued.



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 an 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, Guidelines, 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 be 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 and
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); (4) Home
Guaranty Corporation (HGC); (e) Housing and Land Use Regulatory Board (HLURB); (f)
Home Development and Mutual Fund (HDMF); (g) Department of Finance (DOF); (h)
Department of Budget and Management (DBM); and (i) two (2) 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. Repeating Clause. - Executive Order No. 722, dated January 20, 2004
is hereby repealed. All other laws, decrees, executive orders, 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,