Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

7567

House Bill No.,

Introduced by HON. ALETA C. SUAREZ

EXPLANATORY NOTE

Having a shelter is a basic necessity of every individual. The 1987 Constitution
mandates the State to undertake a continuing program of urban land reform and
housing to make affordable and decent housing and basic services available to the
underprivileged and homeless citizens in urban centers and resettlement areas. It is for
this reason that the Republic Act 7279, or the Urban Development and Housing Act of
1992, was enacted to ensure that Filipinos, especially the underprivileged and the
homeless, gain access to affordable housing. However, there are still millions of
Filipinos who are in need of decent housing today. According to Habitat for Humanity,
there are around four million families who are living in “unsafe, unsanitary, and
unsustainable conditions” in the Philippines."

The 2001-2011 Housing Demand and Supply Profile prepared by the Board of
Investments (BOI) shows that the country is producing housing units at a deficit. The

‘https: / /www habitat.org/where-we-
i ~:text=Housi 1ds%20in%20the%20Philippineséctext=By%202030%2C%20the
sustainable%20housing%20program,

%20housing%20backlog,comprehensive


demand for socialized, economic, and low-cost housing is high compared to what was
being produced in the market, registering a 3,919,566 housing backlog as of 20117

Housing needs will only increase year after year as the population increases. It is
projected that from 2012-2030, the additional housing need will reach 6,226,940. To meet
the demand from this timeframe alone, around 345,941 housing units must be produced
annually starting 2012.° The total number of housing backlog since 2011 must be
addressed by the government to ensure that all Filipino families will live in safe and
sustainable houses as soon as possible.

This bill aims to address the growing housing needs of the country by providing
continuous funding support in the implementation of the National Housing
Development and Production Financing Program. This bill also seeks to improve the
access of Filipino families to a variety of housing options through the provision of
support mechanisms and subsidy programs.

In view of the foregoing, the approval of this bill is earnestly sought.

an ae

ALETA C. SUAREZ
Representative
Third District, Quezon Province

? http://industry.gov.ph/industry /housing/
3 Ibid


RUN

aw

10
i
12
13
14
15
16
17

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No. 7567

Introduced by HON. ALETA C. SUAREZ

AN ACT
PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT, PRODUCTION,
AND FINANCING PROGRAM, REGULARIZING ITS APPROPRIATION FOR ITS
IMPLEMENTATION

Section 1. Title. This Act shall be known as the “National Housing Development,
Production, and Financing (NHDPF) Act of 2020”.

Section 2. Declaration of Policy. It is hereby declared a policy of the state to:

a. undertake, in cooperation with the private sector, a continuing program of
housing and urban development which shall make available at affordable cost,
decent housing and basic services especially to the underprivileged and
homeless citizens;

b. pursue the realization of a modern, human, economically viable, and
environmentally-sustainable society where the urbanization process is manifest
in towns and cities being centers of productive economic activity and is led by
market forces; where urban and rural areas have affordable housing, sustainable
physical and social infrastructure and services facilitated under the democratic
and decentralized system of governance; and where urban and rural areas


18
19
20
21
22
23
24
25

26
27
28
29
30

31

33

34
35

36
37

38
rs

40
4
42

provide the opportunities for an improved quality of life and eradication of
poverty;

c. ensure that poor dwellers shall be provided with appropriate and innovative
housing program and support mechanisms to discourage further growth of
blighted communities; and

d. encourage on-site development, whenever feasible, in the implementation of
housing programs and shall promote the creation of new settlements with basic
facilities and utilities and development of sustainable urban renewal programs.

Cognizant of the role of housing as stimulus of economic growth and development, it is
hereby declared a state policy to strengthen, promote, and support the component
activities of housing production and finance by ensuring continuous and sustained
funding support to scale-up the implementation of the major components of the
National Housing Development and Production Program.

Section 3. Statement of Objectives. Towards this end, the State shall:

a. Increase housing production by forging partnership among housing stakeholders
to address the housing needs of the Filipino families by 2040;

b. Generate and mobilize funds for housing purposes of Filipino families, giving
priority to the homeless and underprivileged;

cc. Ensure the provision of support mechanisms or subsidy program to improve
access of Filipino families to a variety of housing options;

d. Guarantee the development of a strong, sustainable, accessible, and affordable
housing finance system; and

e. Encourage public and private sector participation in the implementation of
government National Housing Development and Production Financing

Program.


43

45
46
47
48

49
50
51

52
53
54
55
56

57
58
59
60
61
62
63
64
65
66
67

68
69

Section 4. National Housing Development and Production Financing Program
Implementation. Consistent with the aforementioned policy and objectives, the
Department of Human Settlements and Urban Development (DHSUD) and its attached
Key Shelter Agencies, shall intensify the implementation of the vital components of the
National Housing Development Production and Financing Program. The
implementation of this program shall be carried out by the following agencies:

National Housing Authority (NHA) - the sole national government agency tasked to
implement and develop the following housing programs intended for the bottom 30%

of the income population:

1. Resettlement - this program addresses the requirements of families affected by a)
government infrastructure projects, b) those living along danger areas, and c)
those affected by Supreme Court Mandamus. It entails the provision of vertical
(fom 5 to 15-storey residential building) and/or horizontal housing units,
community facilities, socio-economic, and other community support programs.

The program also involves the implementation of local/regional resettlement
projects as joint National Government-Local Government undertakings to
address the resettlement requirements of Local Government Units (LGUs)
outside Metro Manila involving families in danger areas, those affected by
infrastructure projects, indigenous peoples, and former rebels.

The government infrastructure agencies shall submit an inventory of Informal
Settler Families to be affected by their projects and their location to the
appropriate housing agencies at least two years prior to its implementation and
shall incorporate in their respective project costs the amount needed for the
relocation and resettlement of affected families.

2. Government Employees Housing Program - this program is intended to provide
decent and affordable housing to low-salaried government employees.


n
2

B
14
75
76

1
78
19
80

81
82
83

85
86
87

88
89
90
91
92
93
94

95
96
97

3. Settlements Upgrading - this program aims to address the security of tenure and
infrastructure requirements of informal settlements on government-owned lands
or designated socialized housing sites.

4, Housing Program for Calamity Victims - this program is intended to respond to
the housing needs of low and marginal-income and/or informal shelter families
for transitional and/or permanent shelter affected by calamities such as
typhoons, landslides, earthquakes, and fires for relocation to safe areas.

5. Land Banking - this refers to the acquisition of land, which includes idle
government lands, at values based on existing use in advance of actual need to
promote planned development and socialized housing programs with a view to
distribute the land to qualified social housing beneficiaries.

It covers survey and titling of individual lots for disposition to qualified
occupants, infrastructure development, housing construction, and rehabilitation
of existing project sites.

Social Housing Finance Corporation (SHFC) - mandated to undertake social housing
programs that will cater to the formal and informal sectors in the low-income bracket
and to take charge of developing and administering social housing programs,
particularly the Community Mortgage Program and its different modalities:

6. Community Mortgage Program (CMP)- this is a mortgage financing program,
which assists legally organized associations of underprivileged and homeless
citizens 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. The different modalities of the CMP are as follows:

a. Sectoral CMP - a CMP modality that caters to the different sectoral groups
including but not limited to the basic sector groups needing resettlement
assistance. A sectoral group represents a group or coalition of persons


98
99
100
101

102
103
104
105
106

107
108
109
110
fon
112

113
114
115

116
7
118
119

120
121
122
123
124
125

who share similar concerns and interests and intend to avail of
resettlement assistance from SHFC, including Indigenous Peoples (IPs),
Indigenous Cultural Communities (ICCs), and other ethnic minority
groups.

. Housing for Peace Process and National Building CMP - a CMP modality

which would lead to the achievement of national peace and development
through the provision of housing to former rebels/rebel returnees (FR/RR).
This also includes rebuilding damaged or destroyed homes in post-
isplaced persons (IDPs).

conflict areas of internally-

. Post-Disaster Rehabilitation and Reconstruction CMP - a CMP modality

which provides assistance to community housing projects in times of
disaster. This program allows the communities to immediately embark on
house construction and site development which adhere to the minimum
standards and specification of the design and structural components of
disaster-resilient housing projects, as well as materials.

|. Industrial Workers CMP - a CMP modality intended primarily for low-

income employees of companies engaged in agro-industrial, industrial
processing zone, tourist, recreational, commercial, and other enterprises.

. Site Upgrading/Development CMP - a CMP modality intended to provide

site development and housing/building construction loans for projects
whose lands are donated by private or public entities applicable to both
on-site or resettlement projects.

Mixed-Use CMP - a CMP modality aimed at developing a self-sustaining
community by having a balanced mix of residential and commercial
spaces, well developed infrastructure and recreational amenities along
with green and open spaces and wellness areas. Under this modality, 9%
of the project area shall be allotted for green spaces and 1% of the project
area for friendly facilities for Persons with Disabilities (PWD).


126
127
128
129

130
131
132
133
134
135

136
137
138
139

140
141
142
143
144

145
146
147
148

149
150
151
152
153

National Home Mortgage Finance Corporation (NHMFC) - a government corporation
mandated to increase the availability of affordable housing loans to finance the Filipino
homebuyers on their acquisition of housing units through the development and
operation of a secondary market for home mortgages.

7. Securitization - this refers to the development of the secondary market for home
mortgages and other housing related receivables, conveyances, and financial
instruments and the development/promotion of and investments in new
housing-related financial instruments and investment vehicles and the capital
markets thereof. Furthermore, this would also increase and sustain funds
available for housing and home development.

Department of Human Settlements and Urban Development (DHSUD) - the primary
national government entity responsible for the management of housing, human
settlements, and urban development including the implementation of the following

programs:

8. Public Housing - this is a housing program that is owned and/or managed by the
government for the purpose of providing security of tenure to the underserved
families including, but not limited to, the development of proclaimed socialized
housing sites intended to promote the establishment of new towns, new
settlements, and urban renewal.

The term “underserved families” refers to those who are disadvantaged in terms
of access to basic services because of inability to pay or other disparities by
reason of economic or social status, ethnicity, geographical isolation, and other

circumstances.

9. Subsidy - this is a financing assistance scheme intended to enhance the
affordability of well targeted and most financially incapable segment of the
society. It is a grant extended to qualified low-income beneficiaries under the
National Housing Development and Production Financing Program under any
of the following alternative subsidy schemes:


154
155
156
157
158
159
160
161
162
163
164

165
166
167

168
169
170
171
172
173

174
175
176

177
178
179
180
181
182
183

10.

a. Extension of Interim Shelter Fund to each of the family-beneficiaries
which they can use to find safe residency and livelihood to support their
families, pending the completion of their housing units in the relocation
sites.

b. Payment for upfront cost equivalent to 5% of the project cost (e.g.
mortgage insurance, titling, etc.); and

c. Monthly payment subsidy for the first five years of the loan period in
accordance with Section 3 (a) of RA 6846 or the Social Housing Support
Fund Act. The Department shall be authorized to establish the
qualification and income requirements of borrowers who will qualify for
the amortization support subsidy.

The DHSUD, in coordination with the LGUs and other national government
agencies, shall be authorized to formulate the criteria and guidelines to select the
beneficiaries that may qualify for the subsidy program.

Public Rental Housing - this program involved the extension of fiscal assistance
of up to a maximum of 50% of the total construction cost for the National
Government Agencies (NGAs) and Local Government Units (LGUs) that shall
construct and operate public rental accommodation to eligible low-income
families and housing safety net for the vulnerable sectors (e.g. senior citizens,
person with disabilities, etc.).

The DHSUD shall formulate the guidelines in the implementation of public
rental housing assistance including the adoption of the lease/rental buy-back
scheme.

_ Survey of proclaimed lands for socialized housing and inventory of government

idle lands - this involved the survey of all occupied government lands
proclaimed by the President as suitable for socialized housing and conduct of
inventory of government lands which have been idle for more than ten (10) years
except lands owned by the GOCCs and government financial institutions
engaged in shelter financing as part of its fiduciary obligations to its members
and/or taken possession of in their ordinary conduct of business.


184

185
186
187
188
189
190
191

192
193
194
195

196
197
198

199
200
201

202
203
204

205
206
207

12. Such other program components as may be determined by the DHSUD.

Section 5. Appropriations by the National Government. The amount of One Hundred
Thirty-Five Billion, One Hundred Fourteen Million Pesos (Php 135,114,000,000.00) or
such amount necessary to carry out the provisions of this Act is hereby authorized to be
appropriated annually through the General Appropriations Act over a period of twenty
(20) consecutive years commencing from the year immediately succeeding the
effectivity of this Act or until such time that the total fund requirements provided for in
this Act shall have been fully released.

A total amount of Two Trillion, Six Hundred Sixty-Seven Billion, Two Hundred Ninety-
Three Million Pesos (Php2,667,293,000,000.00) covering the continuing requirement of
this Act shall be appropriated to the DHSUD and Key Shelter Agencies for the
implementation of the following component programs of the NHDPF Program:

1. One trillion, seven hundred twenty-two billion, four hundred forty-six million
pesos (Php1,722,446,000,000.00) for the implementation of the following
programs of NHA

a. Eight hundred billion and six hundred ninety-nine million pesos
(Php800,699,000,000.00) to finance the Resettlement Program under
Section 4(1) of this Act;

b. Five hundred forty-three billion and four hundred nineteen million pesos
(Php543,419,000,000.00) as subsidy for Government Employees Housing
under Section 4(2) of this Act;

c. One hundred sixty-four billion and two hundred sixty-five million pesos
(Php1164,265,000,000.00) for the Settlements Upgrading under Section 4(3)
of this Act;


208 d. One hundred one billion and seven million pesos (Php101,007,000,000) for

209 the Housing Program for Calamity Victims under Section 4(4) of this Act;
210 and

2u1 e. Sixty-three billion and fifty-six million pesos (Php63,056,000,000.00) for
212 the Land Banking under Section 4(5) of this Act.

213, 2. Four hundred fifty-three billion, two hundred million pesos
214 (Php453,200,000,000.00) for the implementation of the Community Mortgage
215 Program under Section 4(6) of this Act.

216 3. Fifty billion (Php50,000,000,000.00) for the Capitalization of NHMFC under
217 Section 4(8) of this Act.

218 4, Four hundred seventy-six billion, six hundred forty-seven million pesos
219 (Php476,647,000,000.00) for the implementation of the following programs of the
220 DHSUD:

21 a. Three hundred sixty-five billion, nine hundred seventy-nine million pesos
222 (Php365,979,000,000.00) to finance the Public Housing under Section 4(8);
223 b. Eighty-nine billion, one hundred thirty-one million _ pesos
224 (Php89,131,000,000.00) as upfront subsidy under Section 9, broken down
225 as follows:

226 i. Eighteen billion, five hundred thirty-one million pesos,
227 (Php18,531,000,000.00) as interim shelter finance assistance for the
228 informal settler-families who will be relocate under Section 4 (9a)
229 ii, Sixty-three billion, seven hundred ninety-six million pesos
230 (Php63,796,000,000.00) as upfront subsidy under Section 4 (9b)

231 iii, Six billion, eight hundred four million pesos (Php6,804,000,000.00)

232 as amortization support under Section 4 (9c)


233
234

235
236
237

238
239

240
241
242
243
244
245
246

247
248
249
250
251
252
253

254
255

256
257
258

c. Twenty billion, four hundred fifty-six million pesos (Php20,456,000,000.00)
to finance public rental housing under Section 4 (10); and

d. One billion, eighty-one million (Php1,081,000,000.00) to finance survey of
proclaimed lands and conduct of inventory of government idle lands
suitable for socialized housing under Section 4 (11).

Section 6. LGU Sources of Funds. Section 43 of RA 7279 on Socialized Housing Tax is
hereby amended, to read as follows:

Consistent with the constitutional principle that the ownership and enjoyment of
property bear a social function and to raise funds for the Program, all local government
units are hereby authorized to impose an additional one-half percent (0.5%) tax on the
assessed value of all lands in urban areas. The proceeds from the imposition of
Socialized Housing Tax shall accrue to the special funds of the LGUs, which shall be
used for the development of socialized housing projects and construction and estate
management of public rental housing of the LGUs.

Section 7. Implementation of the Securitization, Capital, and Secondary Mortgage
Operations Program. The NHDP Securitization for the development the secondary
market for home mortgages of and other housing related receivables, conveyances, and
financial instruments and the development/promotion of and investments in new
housing related financial instruments and investment vehicles and the capital markets
thereof, to increase and sustain funds available for housing and home development
shall be implemented as follows:

1. The NHMFC shall be the sole implementing agency for the NHDP securitization;
and

2. The NHMFC in coordination with the DHSUD, DOF, and BSP and other
concerned agencies and private sector organizations, shall formulate a program,
the proceeds of which shall accrue to the Centralized Housing Fund.


259
260
261

262
263
264
265
266
267

268
269
270
27
272

273
274
275
276

277
278
279
280
281
282
283
284
285

286
287

. The mortgages to be generated as a result of the implementation of the

component programs of the NHDP Program shall be sold and transferred to
NHMEC, which shall also serve as asset pool for secularization.

. The NHMFC as the sole agency for the implementation of the NHDPA

Securitization shall manage the whole securitization process which includes the
following activities: determining the eligibility criteria for the asset pool; defining
the preliminary structure of the notes, bonds, and/or instruments to be issued,
third parties to be hired; and education/briefing of target investors for all the

issues.

|. The NHMFC and NHDPFA-issued bonds, notes, and securities shall be exempt

from the registration requirements under the Securities Regulation Law in order
to accelerate the issuance of its housing related securities/financial instruments
and, thus, more reasonably provide the necessary fund for housing

developments.

. Transactions by banks involving the purchase and sale of housing bonds,

debentures, and such other similar instruments shall be exempt from the twenty
percent (20%) final tax on income, documentary stamps tax, gross receipts tax,
and value added tax.

The investors’ yield or income from any socialized housing or economic housing-
related bond or asset-backed securities (ABS) issued by NHMFC directly or
through a special purpose entity under the Securitization Act shall be exempt
from income tax. Such issuances shall enjoy all the tax exemptions granted under
Republic Act No. 9627 or the Securitization Act of 2004 pursuant to the State’s
policy of promoting the securitization of mortgage and housing-related
receivables of government housing agencies, to generate investment and
accelerate the growth of the housing finance sector, especially for socialized and

economic housing.

Bonds purchased by private real estate developers shall be considered as an
alternative compliance to the balanced housing requirements under Section 18 of


288
289

290
291
292
293
294
295
296

297
298
299
300
301
302

303
304
305
306
307
308
309
310
311

312
313
314

315
316

RA 7279 as amended by RA 10884, subject to the rules promulgated by the
Department of Human Settlements and Urban Development.

9. The Philippine Guaranty Corporation created pursuant to Executive Order No.
58 (s. 2018) shall guaranty payment of the balance outstanding and due on the
agreed principal obligation, plus interest and yields thereon up to eleven percent
(11%) per annum for socialized housing packages, ten percent (10%) per annum
for low-cost housing packages, nine and a half percent (9.5%) per annum for
medium-cost housing packages and eight and one-half percent (8.5%) per annum
for open housing packages.

Section 8. Capitalization of National Home Mortgage Finance Corporation (NHMFC).
The authorized capital stock of the NHMFC is hereby increased from
Php5,500,000,000.00 pesos to Php50,000,000,000.00 pesos to expand its leveraging
capacity based on the volume of mortgage loans being serviced to improve its
profitability by reducing the average cost of its fund made available for home lending
programs.

The capital of the National Home Mortgage Finance Corporation (NHMFC) shall be
Fifty billion pesos (Php50,000,000,000.00), to be fully subscribed by the Government of
the Republic of the Philippines, hereafter referred to as the Government; Provided, that
the Php25,000,000,000.00 of the capitalization shall be funded from the declared
dividends of the NHMFC in favor of the National Government. For this purpose, any
and all declared dividends of the NHMFC in favor of the National Government shall be
deposited in a special account in the General Fund, and earmarked for the payment of
NHMFC’s increase in capitalization. Such payment shall be released and disbursed
immediately and shall continue until the increase in capitalization has been fully paid.

Section 9. Tax Exemptions. The NHMFC shall be exempt from all national, provincial,
municipal, and city taxes on income derived from its governmental functions,
specifically income from its activities or transactions in the exercise of its mandates.

Section 10. Multi-Year Obligational Authority. The Secretary of the DHSUD and Heads
of its attached housing agencies, pursuant to the National Housing Development,


317
318
319
320
321

322
323
324
325
326
327
328
329
330
331
332
333
334
335

336
337
338
339

340
341
342
343
344
345

Production, and Financing Program, projects and appropriations approved by
Congress, shall, subject to the of existing laws and regulations including those of the
Commission on Audit and other such terms and conditions most favorable to the
government, be given multi-year obligational authority for housing program or project
which will take more than one year to complete that requires multi-year appropriations.

Section 11. Private Sector Participation. To fast track the approval and implementation
of housing projects and reduce the cost of socialized and low-cost housing units, the
Bureau of Internal Revenue, the Department of Agriculture, the National Irrigation
Authority, the Philippine Coconut Authority, the Sugar Regulatory Administration, the
Department of Agrarian Reform, the Department of Environment and Natural
Resources, the Mines and Geosciences Bureau, the Laguna Lake Development
Authority, the Department of the Interior and Local Government, the Local
Government Units, the Land Registration Authority, and the Department of Human
Settlements and Urban Development shall facilitate the release of the required housing-
related permits, licenses, certifications, and tax-exemptions/rulings in accordance with
Republic Act 11032 or an Act Promoting Ease of Doing Business and Efficient Delivery
of Government Services Amending for the Purpose Republic Act 9485 otherwise known
as the Anti-Red Tape Act of 2007 and for Other Purposes and Executive Order No. 45 (s.
2001).

In case the responsible officers of the agencies concerned fail or refuse to dispose of the
application within the periods prescribed under RA 11032, the applicable
administrative and criminal liability as stated in Section 22 of RA 11032 shall be
imposed.

All the incentives enumerated under Section 20 of Republic Act 10884 or an Act
Strengthening the Balanced Housing Development Program, amending for the purpose
Republic Act No. 7279, as amended, otherwise known as the Urban Development and
Housing Act of 1992 shall be extended to the private sector engaged in socialized and
low-cost housing development including the construction and estate management of
public rental housing.


346
347
348

349
350
351

352
353

354
355
356

357
358
359

360
361
362

363
364

365

‘The participation of owners and/or developers in any of the component programs of the
NHDPFA shall be treated as one of the manners of compliance to the balanced housing
requirements subject to the conditions set forth under RA 10884.

Section 12. Collection Efficiency. In order to improve collection efficiency, the NHA,
SHFC, and NHMEFC shall have authority to foreclose mortgages, and/or evict
beneficiaries in accordance with existing laws.

Section 13. Implementing Rules and Regulations. The DHSUD shall promulgate rules
and regulations necessary for the implementation of this Act.

Section 14. Repealing Clause. All laws, decrees, executive orders, proclamations, rules
and regulations, and the issuances or parts thereof which are inconsistent with the
provisions of this Act are hereby repealed, amended, or modified accordingly.

Section 15. Penal Clause. Any person who violates any provision of this Act shall be
imposed the applicable administrative and criminal liability as stated in Section 22 of
RA 11032 or the Ease of Doing Business and Government Service Delivery Act of 2018.

Section 16. Separability Clause. If for any reason, any provision of this Act is declared
invalid or unconstitutional, the remaining provisions not affected thereby shall continue

to be in full force and effect.

Section 17. Effectivity Clause. This Act shall take effect fifteen (15) days after its
complete publication in at least two (2) national newspapers of general circulation.

Approved,