FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No._ 2576

EXPLANATORY NOTE

The Philippines is in crisis. The sharp economic downturn has caused
diverse number of individuals and workers into unemployment and has reduced
the income of many others. As a result of this adverse economic condition, the
capacity to make payments by homeowners has deteriorated and will continue
for months or years to come, leading to the possibility of a widespread
foreclosures and evictions.

This proposed measure will benefit homeowners who defaulted due to
causes attributed to the economic crisis. This bill when enacted into law will
give homeowners the opportunity to start repayment under new schemes that
will allow them to fairly balance income against expenses, under existing
standard of living. The proposed measure will also rescue the homeowners
from the proposed of losing their homes.

R.A. 8501 enacted in 1998 to remedy defaulting accounts proved
ineffective because out of the 181,349 defaulting accounts only 19,612 availed
of the program. The homeowners were reluctant to avail of the program
because the resulting doubled amortizations and required down-payment will
push them deeper to indebtedness.

Housing is a basic human right guaranteed under the United Nations
Covenant, Philippine Constitution and domestic law UDHA (Urban Housing and
Development Act of 1992). The provision on human right to adequate
housing states: “Everyone has the right to a standard of living adequate for the


health and well being of himself and his family, including food, clothing,
housing, medical care and necessary social services and the right to security in
the event of unemployment, sickness, disability, widowhood, old age, or lack of
livelihood.”

While the government cannot build or finance housing units to satisfy the
demands, it should make sincere effort to utilize resources to ensure that low-
cost and socialized housing shall be given fair share to those resources for the
benefit of the underprivileged and most vulnerable sectors of society, enabling
the participation of the private sector towards that endeavor.

In view of the foregoing, immediate passage of this bill is eamestly
soguht.

RUFU$ B. Rt (GUEZ

iy

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 2576
AN ACT
TO ESTABLISH HOUSING LOAN REPAYMENT PROGRAM, PROVIDING
THE MECHANISMS THEREFORE, AND FOR OTHER PURPOSES

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 “Housing Loan
Repayment Act of 2010”.

Section 2. Declaration of Policy. — It is the policy of the State to
provide access to opportunities that shall uplift standard of living, promote
development of human dignity vital to progress, promote a healthy and
productive housing environment and establish a continuing affordable and
adequate shelter program that shall ensure faimess, social justice and equality,
to lessen homelessness, utilize resources equitably to make available decent
shelter to underprivileged citizens, enabling private sector participation in this
endeavor and protect the right to security in the event of unemployment,
sickness, disability, old age, widowhood or lack of livelihood.

Section 3. Purposes: The purposes of this Act are:

a. To eliminate the blockage in the economic, low cost and socialized
housing that frustrate individual dreams and government's efforts towards a
continuing shelter program;

b. To serve as emergency mechanism to prevent mass foreclosure and
evictions and distress selling of homes, resulting from unemployment, reduced
income, insufficient income, death or physical incapacity, retirement and other
causes, attributable to the economic crisis;

c. To create an environment conducive to peace, development and
progress by giving the borrowers the chance to pay under new terms that will
allow them to adjust fairly to demands of the present standard of living;

4. To pave the way for an in-depth review of the over all government
housing policies.


Section 4. Objectives: The objectives of this Act are:

a. To provide the means to secure homes for the beneficiaries so as to
promote stable neighborhoods and stable nation as well;

b. To be able to liquefy investments that can be used for continuous
shelter production:

c. To amend the loans to improve the status of the assets, raising its net
worth as an investment for capital generation.

Section 5. Coverage: All economic low-cost and socialized housing
loans that have at least six (6) months of unpaid monthly amortization as of the
affectivity of this Act;

Notwithstanding that the same accounts have availed of the benefits of a
previous restructuring or condo-nation program, provided that the original
principal amount of the housing loan shall not exceed Two Million Five Hundred
Pesos (Php2,500,000.00).

a) Agencies covered — Government financing institutions and
agencies — Government Service Insurance System (GSIS), Social
Security System (SSS), Home Development Mutual Fund (HDMF),
National Home Mortgage Finance Corporation (NHMFC), Home
Guaranty Corporation (HGC), and the National Housing Authority (NHA),
and

b) Private institutions, private developers and banks involved in
the National Shelter Program.

¢) Accounts covered — In addition to the above provision on
coverage, the Act shall also cover mortgages that have been foreclosed
but has not been sold to an individual third party, and, loans secured by
Contract-to-Sell (CTS) including accounts that have been cancelled due
to delinquency.

Section 6. Loan Classification: Considered as amended loan. The
loan to be repaid shall be the original principal amount.

Section 7. Terms:

a.) The loan shall be repaid at a maximum term of thirty years (30) and
shall be assumed by legal heirs and successors-in-interest once the
borrower reach retiring age. The borrower can however opt to
shorten the term.

b.) All accrued arrearages in interest, penalties and surcharges shall be
condoned and shall appear on the statement of account of the
borrower upon receipt and approval of the application of the
borrower.

©.) No down payment shail be required to apply for this repayment
program and a processing fee lower than the previous restructuring
or condonation program shall be charged.


Section 8. Interest rate:

The loan shall bear interest at the following rates per annum:

Loan Amount Interest Rate
Below 500,000 6%
‘Over P500,000 to 1,000,000 7%
Over P1,000,000 to P2,500,000 10.5%

Delayed Payments shall be charged minimum penalty.

Section 9. Special Provisions. In line with the government's policy of
ensuring that a fair share of the resources utilized for low cost and socialized
housing be made available to the most indigent and vulnerable sectors of our
society, this Act provides that:

a) Community Mortgage Program (CMP) loans shall bear
interest rate at 3% per annum upon effectivity of this Act, and all
accrued interests, penalties and surcharges emanating from this loan
shall be condoned. CMP projects shall be entitled to support equivalent
to infrastructure development either from their respective local
government revenues or congressional district funds or from senate
funds, to alleviate burden of cost of community improvement by the
dwellers, for them to set goals for self-improvement.

b) Relocation Program loans shall bear no interest, provided the
original relocates occupied their homes through the entire length of the
loan, to mitigate their disadvantage in the new environment that left
them unemployed and/or added cost of transportation to their place of
work.

Section 10. The payment program provided in this Act shall be distinct
and separate from the restructuring schemes implemented by the GFI's and the
borrower is given the option to choose schemes appropriate to his/her needs.

Section 11. This Repayment Program may be availed of only once

Section 12. 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 and non govemment organizations, homeowners
association or peoples organizations here of tasked to promulgate the

implementing rules and regulations within sixty (60) days from the effectivity of
this Act.


Section 13. Repealing Clause. — All laws, executive orders, rules or
regulations, or any part thereof, inconsistent with any provisions of this Act are
hereby repealed and modified accordingly.

Section 14 Effectivity Clause. — This Act shall take effect fifteen (15)
days after its complete publication in the Official Gazette or in at least two (2)
national newspapers of general circulation.

Approved