NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
HOUSE OF REPRESENTATIVES
RECENED
DATE:.QCT03
T"E;.-
BY:-
Introduced b
resentative Rufus a.
HouseBillNo.   5387
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 earnestly sought.


NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
HOUSE OF REPRESENTATIVES
Introduced by Representative Rufus a. Rodriguez
House Bill No.  RE7
AN ACT
TO     ESTABLISH     HOUSING     LOAN     REPAYMENT    PROGRAM,     PROVIDING    THE
MECHANISMS THEREFORE, AND FOR OTHER PURPOSES
B_e  it  enacted  by  the  Senate  and  the  House  of  Representatives  of  the  Philippines  in
Congress assembled:
Secfi.on 1.  7T.I/e -This Act shall be known as the "Housing Loan Repayment Act''.
Secfi.on  2.  Dec/arafi.on  of Po/i.cy.  -  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 fairness, 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;
d.  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.
c) Accounts covered - ln 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 delingueney.
Section 6. Loan Classificaition: 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.)    AIl 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.
c.)    No down  payment shall  be  required  to apply for this  repayment program  and  a
processing  fee  lower  than  the  previous  restructuring  or  condonation  program
shall be charged.
Ssection 8. Interest  rate:
The loan shall bear interest at the following rates per annum:
Loan Amount                                                   Interest Rate
Below 500,000
Over P500,000 to 1,000,000
Over P1,000,000 to P2,500,000
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°/o  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
relocatees  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 GFl'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   government
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. Separability Clause. -Should any provision of this Act or any part thereof be
declared  invalid,  the  other  provisions,  so  far as they are  separable from  the  invalid  ones,
shall remain in full force and effect.
Section 14. 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  15.  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,