S E N A T E  
~i~~~~~~~~~ 
BY:., 
Senate Bill No. 422 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
The National Home Mortgage Finance Corporation (NHMFC) as the major 
government mortgage institution has made available 185,000 housing units 
classified as follows: 
P180,OOO - Socialized Housing at 9% interest 
P225,OOO - Economic Housing at 12% interest 
P375,OOO - Economic Housing at 16% interest 
Out of the about 185,000 total borrowers, only around 55,000 have 
updated their loan payments, the rest have defaulted due to the economic crisis 
faced by our country beginning the last decade. Hence, Republic Act 8501 
otherwise known as the “Housing Loan Condonation Act of 1998” was enacted to 
rescue the National Shelter Program of the government by condoning the 
penalties on all outstanding / delinquent housing loan accounts with any of the 
government institutions and agencies involved in the National Shelter Program. 
As of today, only about 37,000 out of the delinquent 96,000 borrowers availed of 
the provisions of Republic Act No. 8501. The other borrowers are given until 
December 31, 2001 to avail of the condonation offered by said R.A. 8501. In the 
meantime, those who availed of the condonation under R.A. 8501 were allowed 
to restructure their loan and pay the same within the remaining period of the loan. 
However, due to another surge of crisis, they were still unable to comply with the 
terms and conditions of their restructured loan agreement. 
Some of these 
mortgages have been foreclosed and the others are now facing foreclosure 
proceedings. The other borrowers who have not updated their obligation for at 
least three (3) months may also be foreclosed at any time at the option of the 
NHMFC. 
The same is true with the other government institutions and agencies 
involved in the National Shelter Program such as the National Housing Authority 
(NHA), Government Service Insurance System (GSIS), and Home Development 
Mutual Fund (PAG-IBIG Fund). 
This situation is most alarming as while the government and the private 
sector are launching new housing projects, the present beneficiaries of National 
Shelter Program are on the verge of being thrown out of their homes after a short 
tenure. Thus, this bill is being filed to give a relief to the underprivileged citizens 
of our country until such time that our economic conditions improve hopefully 
within three (3) years from today. After all, it is the policy of the State to provide 
for an equitable land tenure system that shall guarantee security of tenure to 
beneficiaries. 


Immediate approval hereof is earnestly sought. 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
7 JUI. -2 ;' 1 :,- :/ 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
Senate Bill No. 4 2 2 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
RESTRUCTURING PROGRAM, PROVIDING THE MECHANISMS THEREFOR, 
AND FOR OTHER PURPOSES 
TO ESTABLISH A SOCIALIZED AND LOW-COST HOUSING LOAN 
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 "Socialized and 
Low-Cost Housing Loan Restructuring Act of 2007." 
SEC 2. Restructuring of Delinquent Socialized and Low-Cost Housing 
Loan Accounts. - In keeping with the Constitutional mandate for the State to 
undertake a continuing program of urban land reform and housing that will make 
available at affordable cost decent housing and basic services, there is hereby 
established a Socialized and Low-Cost Housing Loan Restructuring Program. 
Under this program: 
a) 
all socialized housing loan or loans amounting to Two Hundred 
Twenty Five Thousand Pesos (P225,OOO.OO) and below and all 
low-cost housing loans or loans amounting to over Two 
Hundred Twenty Five Thousand Pesos (P225,OOO.OO) but not 
exceeding Five Hundred Thousand Pesos (P500,OOO.OO) with 
any of the government financing institutions and agencies 
involved in the National Shelter Program (NSP), including but 
not limited to, the Government Service Insurance System 
(GSIS), Social Security System (SSS), Home Development 
Mutual Fund (HDMF), National Home Finance Mortgage 
Finance Corporation (NHMFC), Mortgage Guaranty Corporation 
(HGC), and the National Housing Authority (NHA) that have at 
least a six-month unpaid monthly amortization are hereby 
declared covered by the benefits of this restructuring program 
notwithstanding that the same account has availed of the 
benefits of a previous restructuring or condonation program and 
no matter whether or not the annual total family income of the 
borrower-applicant exceeds Three Hundred Thousand Pesos 
(P300,OOO.OO); 
an application for restructuring shall only be charged a 
processing fee which shall be lower than those charged under 
b) 


previous restructuring or condonation programs and no 
downpayment shall be required for a borrower to apply for the 
benefits of this restructuring program; 
all penalties and surcharges shall be condoned upon filing of the 
restructuring application under this Act; 
Provided, That all 
accrued interests shall be added to the remaining balance of the 
principal, the aggregate of which shall be considered as the new 
principal amount; 
a borrower-applicant may be allowed to use the total 
accumulated value of hidher membership contribution or 
savings with the GSIS, SSS, or HDMF to pay in full or in part 
hislher housing loan; 
the term of a housing loan account being applied for 
restructuring may be extended for a period longer than its 
original term in order to lower the amount of the monthly 
amortization to a maximum of One Thousand Five Hundred 
Pesos (P1,500.00) for a period of three (3) years from the 
approval of the application, afterwhich, the monthly amortization 
will revert back to its original amount. The unserviced portion 
ensuing from the three-year lowered monthly amortization shall 
be paid on the last year of the term of the housing loan along 
with the last monthly amortization. 
In the event that the 
borrower fails to pay any amortization during the three-year 
period, he/she shall voluntarily surrender hidher property 
without need of judicial proceedings; 
in case of incapacity of a borrower, hislher legal heirs and 
successors-in-interest may 
assume 
payment of 
hislher 
outstanding housing loan; and, 
loan restructuring under this Act may be availed of only once. 
9 
9) 
All corresponding penalties and surcharges which NHMFC may have to 
pay its funders as a result of the implementation of this Act shall be automatically 
adjusted and condoned. 
SEC 3. Exclusion from Coverage. - In no instance shall the following 
housing loan accounts be covered by this Act: 
a) any account without a single payment since takeout; 
b) an account whose housing unit has been abandoned by the borrower- 
owner for more than two (2) years; 
c) an account whose housing unit has remained unoccupied for a period 
of at least two (2) years; 
d) an account whose housing unit is occupied by a third party other than 
the original registered beneficiary; and, 
e) an account that has been foreclosed, the title of which has already 
been consolidated I transferred in the name of the government 
financing institution. 


SEC 4. The Declarafion of Dividends. - The declaration of dividends of 
the funds managed by GSlS, SSS and HDMF shall be limited to their members 
who have not availed of the restructuring program under this Act. 
S EC 5. Contribution of Government Financing Institutions to the National 
Shelter Program. - The contribution of the government financing institutions to 
the NSP shall be limited to the net earnings derived from their housing programs. 
SEC 6. Incentive for Prompt Payment of Monthly Amotfizafion. - Upon 
the effectivity of this Act, all accounts whose monthly amortization are paid on 
time shall be entitled to a reasonable discount on loan interest. 
SEC 7. 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 enumerated in Section 2 hereof tasked to promulgate the implementing 
rules and regulations within sixty (60) days from the effectivity of this Act. 
SEC 8. Congressional Oversight Committee. - There is hereby created a 
Congressional Oversight Committee composed of the Chairman of the House 
Committee on Housing and Urban Development and the Chairman of the Senate 
Committee on Urban Planning, Housing and Resettlement, five (5) members of 
the Senate and six (6) members of the House of Representatives. The members 
from the Senate shall be appointed by the Senate President from among the 
members of the Senate Committee on Urban Planning, Housing and 
Resettlement based on the proportional representation of the parties or coalitions 
therein. The members from the House of Representatives shall be appointed by 
the Speaker from among the members of the House Committee in Housing and 
Urban Development based on the proportional representation of the parties or 
coalitions therein. 
The Oversight Committee shall review and approve the Implementing 
Rules and Regulations. It shall also review the performance of the government 
financing institutions and agencies involved in the implementation of this Act. 
SEC 9. 
Repealing Clause. - All laws, executive orders, rules or 
regulations or any part thereof inconsistent with any provisions of this Act are 
hereby repealed or modified accordingly. 
SEC 10. 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,