Republic of the Philippines
HOUSE OF REPRESENTATIVES \
Quezon City, Metro Manila \\%

EIGHTEENTH CONGRESS
Second Regular Session

Poepmmmingy: Ue

Introduced By Representatives Michael L. Romero, Doy C. Leachon,
Conrado M. Estrella III, Deogracias Victor “Dv” B. Savellano, Pablo C.
Ortega, Marlyn “Len” B. Alonte, Strike B. Revilla, “Kuya” Jose Antonio
R. Alvarado, Micaela 8. Violago, Jose Enrique “Joet” S. Garcia, Virgilio
S. Lacson, Enrico A. Pineda, Sharon S. Garin, Rufus B. Rodriguez, Jose

Gay G. Padiernos, and Frederick W. Siao

EXPLANATORY NOTE

‘The 2019 Coronavirus Disease (COVID-19) pandemic and the successive typhoons *
which ravaged various parts of the country has shown us the importance of adequate
housing for the health and wellbeing of the population. To help curb the worst of this
public health crisis and devastation vaused by the successive typhoons, our
government should place heavy emphasis on sheltering in place. It is worth noting,
however, that as of end December 2016, there are at least 799,780 households in the
Philippines which are in unacceptable housing and 493,427 households involuntarily
doubled-up with other households in living quarters of an acceptable type. These
figuros are exclusive of housing requirements for new households as the population
increases.

‘The government has very limited resources to address the housing need. For the last
22 years, average annual infrastructure budget under the National Housing
‘Authority (NHA), which is the sole national government agency mandated to engage
in shelter production focusing on the needs of the lowest 30% of the urban population,


is at PHP 6.34 billion. This translates to housing assistance for 56,427 households
annually. For 2020, infrastructure budget under the NHA is only PHP 3.28 billion,
which is 48% below average. ‘

In order to address the housing demand, the government desperately needs private
sector participation. The rapid increase in the prices of real estate and construction
costs in the Philippines, however, greatly affect housing affordability for most Filipino
households. It is also a major barrier to entry for housing developers.

From 1990 to 2019, the Construction Materials Wholesale Price Index (CMWPI)
increases, on average, by 9.67% annually. Zonal values of land are also constantly
increasing. Developers are faced with additional costs to comply with Government
Guidelines on the Risk-Based Public Health Standards for COVID-19 Mitigation.

‘Taking into consideration the limited resources of the government to aid the housing

industry, the provision of tax incentives is the fastest and most effective way to
address housing affordability.

For the reasons statpd above, the passage ofthis bill is urgently requested.

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J rot Bp ROMERO Ph.D. DOY C. LEACHON

Representative - Deputy Speaker Representative ~ Deputy Speaker
Party List - 1-PACMAN Oriental Mindoro, 1% District
CONRADO M. ESTRELLA IIT DEOGRACIAS VICTOR “DV” B.
Representative ~ Deputy Speaker SAVELLANO
Party List - ABONO Representative — Deputy Speaker

Ilocos Sur, Ist District

PABLO C. ORTEGA MARLYN “LEN” B. ALONTE
Representative Representative
La Union, 1st District Biiian City, Lone District


is at PHP 6.34 billion. This translates to housing assistance for 56,427 households
annually. For 2020, infrastructure budget under the NHA is only PHP 3.28 billion,

which is 48% below average,

In order to address the housing demand, the government desperately needs private
sector participation. The rapid increase in the prices of real estate and construction
costs in the Philippines, however, greatly affect housing affordability for most Filipino
households. It is also a major barrier to entry for housing developers,

From 1990 to 2019, the Construction Materials Wholesale Price Index (CMWPI)
increases, on average, by 9.67% annually. Zonal values of land are also constantly
increasing. Developers are faced with additional costs to comply with Government
Guidelines on the Risk-Based Public Health Standards for COVID-19 Mitigation.

‘Taking into consideration the limited resources of the government to aid the housing

industry, the provision of tax incentives is the fastest and most. effective way to
address housing affordability.

For the reasons stated above, the passage of this bill is urgently requested.

 WEACHON
e— Deputy Speaker
lindoro, 1 District

MICHAEL L. ROMERO Ph.D. DOY
Representative — Deputy Speaker
Party List - 1-PACMAN

CONRADO M. ESTRELLA III
Representative — Deputy Speaker
Party List - ABONO

PABLO C. ORTEGA
Representative
La Union, ist District

DEOGRACIAS VICTOR ‘DV’ B,
SAVELLANO
Representative — Deputy Speaker
Hocos Sur, 1st District

MARLYN “LEN” B. ALONTE
Representative
Bitian City, Lone District


STRIKE B, REVILLA
Representative
Cavite, 2nd District

MICAELA S. VIOLAGO
Representative
Nueva Ecija, 2nd District

Wf

VIRGILIO $. LACSON
Representative
Party List - MANILA TEACHERS

SHARON S. GARIN
Representative
Party List - AAMBIS-OWA

JOSE GAY G. PADIERNOS
Representative
Party List - GP

“KUYA” JOSE ANTONIO R.
ALVARADO
Representative
Bulacan, Ist District

JOSE ENRIQUE “JOET’ S.
GARCIA

Representative
Party List - 1-PACMAN

RUFUS B. RODRIGUEZ
Representative
Cagayan de Oro City, 2nd District

FREDERICK W. SIAO
Representative
ligan City, Lone District


MICAELA S. VIOLAGO
Representative
Nueva Ecija, 2nd District

VIRGILIO S. LACSON
Representative
Party List - MANILA TEACHERS

SHARON S. GARIN
Representative
Party List - AAMBIS-OWA

JOSE GAY G. PADIERNOS
Representative
Party List - GP

JOSE ENRIQUE “JOET” S. GARCIA
Representative
Bataan, 2nd District

ENRICO A. PINEDA
Representative
Party List - 1-PACMAN



Representative
Cavite, 2nd District

MICAELA 8. VIOLAGO
Representative
Nueva Ecija, 2nd District

VIRGILIO S. LACSON
Representative
Party List - MANILA TEACHERS

SHARON 8. GARIN
Representative
Party List - AAMBIS-OWA

JOSE GAY G. PADIERNOS
Representative
Party List - GP

“KUYA” JOSE ANTONIO R.
ALVARADO
Representative
Bulacan, 1st District

JOSE ENRIQUE “JOET" S.
GARCIA.
Representative
Bataan, 2nd District

ENRICO A. PINEDA
Representative
Party List - 1-PACMAN

RUFUS B. RODRIGUEZ
Representative
Cagayan de Oro City, 2nd District

FREDERICK W. SIAO
Representative
Tligan City, Lone District


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No. 8214

Introduced By Representatives Michael L. Romero, Doy C. Leachon,
Conrado M. Estrella II, Deogracias Victor “Dv” B. Savellano, Pablo C.
Ortega, Marlyn “Len” B. Alonte, Strike B. Revilla, “Kuya” Jose Antonio
R. Alvarado, Micaela S. Violago, Jose Enrique “Joet” S. Garcia, Virgilio
S. Lacson, Enrico A. Pineda, Sharon S. Garin, Rufus B. Rodriguez, Jose

Gay G. Padiernos, and Frederick W. Siao

AN ACT
PROVIDING FOR TAX INCENTIVES ON DEVELOPMENT
OF ECONOMIC AND MEDIUM-COST HOUSING

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

Section 1 Short Title. - This act shall be known as the “ BAHAY NI
JUAN LAW of 2020”.

Section 2. Declaration of Policy. — The State recognizes how the 2019
Coronavirus Disease (COVID-19) pandemic and the successive typhoons that hit the
country has shown the importance of adequate housing for the health and well-being

of the population.


It is hereby declared a policy of the State to address the housing demand, encourage
private participation, and provide incentives to needed investments for mass housing

taking into consideration the following:

a. Housing is a key industry in the economy due to its strong linkages to other
industries;

Government has limited resources that it can allocate for mass housing;
Current housing supply is insufficient to meet housing demand;

The cost of housing production is constantly increasing.

ere:

Section 3. __ Incentives for Mass Housing. - Enterprises engaged in the
development of economic and medium-cost housing and its related activities duly
registered with the Department of Human Settlements and Urban Development -
(DHSUD) shall be entitled to the same incentives granted to enterprises registered
with the Board of Investments pursuant to Executive Order No. 226, otherwise

known as the “Omnibus Investment Code of 1987”.

Such incentives shall include:
a. Income tax holiday:
b. Exempt from the coverage of the expanded value-added tax law:
c. Duty-free importation on imported capital equipment and imported raw
materials

For this purpose, the industry shall be included in the annual Investment Priorities
Plan (IPP).

Section 4. Definition of Terms. — For the purpose of this Act, the
terms below shall be construed to mean, except where explicitly indicated or where

the context clearly indicates otherwise, as follows:

a. Economic Housing. Residential subdivision and condominium units
which conforms with the development standards of Batas Pambansa
Blg. 220 (BP 220), and are sold to the public within the current
maximum selling price of PHP 1,700,000.00 as prescribed by the
DHSUD per Housing and Land Use Regulatory Board (HLURB)
Memorandum Circular No. 09, Series of 2015.


b. Medium-Cost Housing. Residential subdivision and condominium units
which conforms with the development standards of Presidential Decree
No. 957 (BP 220), and are sold to the public within the current maximum
selling price of PHP 4,000,000.00 as prescribed by the DHSUD per
HLURB Memorandum Circular No. 04, Series of 2006.

c. Related Activities. The domestic manufacturing industries which have

direct bearing on the long-term viability of the housing industry.
Section 5. Price Coiling Adjustment. - The price ceiling for economic
and medium-cost housing shall be jointly determined by the DHSUD and the
National Economic Development Authority (NEDA); provided, that every three (3)
years thereafter, the price ceiling shall be adjusted to its present value using the
Consumer Price Index (CPD as published by the National Statistics Office (NSO);
Provided, further, that such adjustment shall be published through a Memorandum

Circular to be issued not later than 31 March of each year.

Section 6. Implementing Rules and Regulations. - The DHSUD, in
consultation with the BOI, Bureau of Customs (BOC), and other appropriate-agencies
from the private and government sectors, shall issue guidelines and prescribe rules
and regulations for within one hundred twenty (120) days after the effectivity of this
‘Act which shall be published in two (2) newspapers of general circulation. :

‘A copy of such guidelines, rules and regulations shall be furnished the
Congress of the Philippines.

Section 7 Repealing ‘Clause. ~- All other laws, decrees, rules,
regulations, and other administrative issuances or provisions thereof which are
contrary to or inconsistent herewith are hereby repealed or modified accordingly.

Section 8. Separability Clause. — If, for any reason, any section or
provision of this Act is held unconstitutional or invalid, the other sections or

provisions hereof shall not be affected thereby.


Section 9. Effectivity. - This Act shall take effect after fifteen (15)
days following its publication in the Official Gazette or in any newspaper of general

circulation.

Approved,