FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
SENAT~ 
S.B.NO. 
:3 04 
Introduced by SENATOR AQUILINO "KOKO" L. PIMENTEL III 
EXPLANATORY NOTE 
This bill seeks to create the Social Housing Development and Finance 
Corporation (SHDFC), which shall become the lead government agency in the 
development and administration of social housing programs. 
On 20 January 2004, the Social Housing Finance Corporation (SHFC) was 
created by virtue of Executive Order No. 272 (EO 272). 
Upon the 
recommendation of the Housing and Urban Development Coordinating Council 
(HUDCC), SHFC, a wholly-owned subsidiary of the National Home Mortgage 
Finance Corporation (NHMFC), was tasked to implement the CMP and AKPF 
programs under the NHMFC and undertake social housing programs for the formal 
and informal sectors in the low-income bracket. 
To promote sustainable source of housing finance and meet the current housing 
needs, particularly for socialized housing, it was identified that there is a need for a 
legislation that will operationalize the Social Housing Finance Corporation (SHFC) 
as the primary institution responsible for addressing the housing needs of the 
bottom 30 percent (30%) poor households. It was also identified that there is a 
need for SHFC to be empowered to enter into loans or issue bonds and other 
debentures to raise funds for housing construction. 
These institutional reforms are pursuant to the 1987 Constitution under Article 
XIII, Section 9 which provides that the State shall, by law, and for the common 
good, undertake, in cooperation with the private sector, a continuing program of 
urban land reform and housing which will make available at affordable cost decent 
housing and basic services to underprivileged and homeless citizens in urban 
centers and resettlement areas. 
The Urban Development Housing Act of 1992 (Republic Act No. 7279) 
reiterated the States policy of undertaking, in cooperation with the private sector, a 
comprehensive and continuing Urban Development and Housing Program, which 
shall uplift the conditions of the underprivileged and homeless citizens in urban 
areas and in resettlement areas. 
It will make available: a) decent housing at 


affordable cost, basic services, and employment opportunities; b) provide access to 
land and housing by the underprivileged and homeless citizens; and c) provide for 
an equitable land tenure system that shall guarantee security of tenure to 
beneficiaries and at the same time respect the rights of small property owners and 
ensure the payment of just compensation. 
With the signing of EO 272, the creation of the SHFC paved the way in forming 
a government office dedicated to deliver socialized housing programs targeting the 
underprivileged and homeless citizens and the low-income families. It was created 
primarily to assist the formal and informal sectors in the low-income bracket 
through financing and other social housing programs and shall provide security of 
land tenure for the poorest of the poor in our society. 
Although EO 272 helped establish a government owned and controlled 
corporation that will respond to the mandate of the state of providing socialized 
housing programs, there are several hindrances that the corporation faces in 
response to its mandate, which the said presidential issuance cannot address. Some 
of these limitations are: a) EO 272 did not provide the much-needed incentives (i.e. 
documentary stamp tax and transfer tax exemptions) that the program should have 
towards providing security of land tenure to its target sector; b) it did not define the 
objectives of the Corporation, as well as its powers; and c) it did not provide the 
responsibilities of the Board of Directors and the powers and functions of its 
President. Also, EO 272 does not empower the corporation to create and develop 
new and innovative socialized housing programs responsive to the needs of its 
target sector and to expand private sector participation in the delivery of socialized 
housing programs. 
Furthermore, in the proposed law creating the Department of Housing and 
Urban Development, it was identified that SHFC is one of the attached agencies of 
the Department of Housing and Urban Development. 
With the passage to law of the creation of SHDFC, envisioned to replace SHFC, 
these deficiencies will be addressed. A more responsive government office will be 
established that will take the lead in providing socialized housing programs of the 
government that will cater to the formal and informal sectors in the low-income 
bracket, especially the underprivileged and homeless Filipinos and that will take 
charge in developing and administering socialized housing program schemes 
responsive to the current housing needs. 
A-y~~-J\~ 
AQUILINO "KOKO" L. PIMENTEL III 
2 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
'1/' 
JAN 21' :12 
SENATE 
S. B. NO. 3104 
Introduced by SENATOR AQUILINO "KOKO" L. PIMENTEL III 
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AN ACT 
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TO CREATE THE SOCIAL HOUSING DEVELOPMENT AND FINANCE 
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CORPORATION, PRESCRIBING ITS POWERS AND FUNCTIONS, AND 
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FOR OTHER PURPOSES 
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Be it enacted by the Senate and House of Representatives of the Philippines 
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in Congress assembled: 
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SECTION 1. Title. - This Act shall be known as the "Social Housing 
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Development and Finance Corporation Act of2012." 
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SECTION 2. Declaration of Policy, - It is hereby declared the policy of the 
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State to undertake a comprehensive and continuing program of housing and urban 
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development which will make available at affordable cost decent housing and basic 
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services to the underprivileged and homeless Filipinos through the financing and 
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administration of tax-exempt socialized housing programs. 
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SECTION 3. Statement of Objectives. - Toward this end, the State shall 
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integrate all laws, orders, issuances, and administrative circulars relating to the 
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provision of socialized housing to effectively achieve the following objectives: 
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(a) To assist legally-organized associations of underprivileged and 
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homeless citizens to purchase and develop a tract of land and to own 
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lots they occupy or where they choose to relocate to under the concept 
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of community ownership; and, 
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(b) To enhance the affordability of low-cost housing by low-income 
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families, provide developmental financing for low-cost housing 
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projects. 
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SECTION 4. Tlte Social Housing DeJ'eiopment and Finance Corporation. 
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- To carry out the aforementioned policy and objectives, there is hereby created a 
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Social Housing Development and Finance Corporation (SHDFC), herein referred 
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to as the "corporation," with principal office in Metro Manila, which shall replace 
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the Social Housing Finance Corporation (SHFC) created by virtue of Executive 
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Order No. 272 issued on 20 January 2004. 
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The corporation shall be the lead government agency to undertake social 
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housing programs that will cater to the formal and informal sectors in the low-
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income bracket and shall take charge of developing and administering social 
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housing program schemes. 
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SECTION 5. Social Housing Programs. - Consistent with Republic Act 
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No. 7279, as amended, otherwise known as the "Urban Development and Housing 
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Act of 1992," the corporation shall supervise, control and implement the following 
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programs: 
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(a) Community Mortgage Program (CMP) - this program shall assist legally 
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organized associations of underprivileged and homeless citizens to 
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purchase and develop a tract of land under the concept of community 
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ownership. The primary objective of the program is to assist residents of 
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blighted or depressed areas to own the lots they occupy, or where they 
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choose to relocate to, and eventually improve their neighborhood and 
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homes to the extent of their affordability. 
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(b) Localized Community Mortgage Program (LCMP) - a CMP derivative 
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that allows Local Government Units (LGUs) to address the housing 
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needs of the informal sector in their respective jurisdictions. 
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(c) Other social housing programs, which may be subsequently initiated or 
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developed. 
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SECTION 6. Abolition of the Abot-Kaya Pabaltay Fund Program anri 
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Realignment of tlte Abot Kaya Pabahay Fund. - The Abot-Kaya Pabahay Fund 
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Program (AKPFP) created by Republic Act No. 6846, otherwise known as the 
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"Social Housing Support Fund Act of 1990" as amended by Republic Act No. 
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7835, otherwise known as the "Comprehensive and Integrated Shelter Financing 
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Act (CISF A) of 1994," is hereby abolished and whatever funds pertaining to the 
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Abot-Kaya Pabahay Fund shall be realigned and be used for the socialized housing 
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programs of SHDFC. 
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SECTION 7. Powers anri Functions of the Corporation. - The corporation 
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shall have the following powers and functions: 
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(a) To promote land ownership, giving priority to the underprivileged and 
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homeless citizens; 
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(b)To encourage maximum partIcIpation of LGUs, Non-Government 
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Organizations (NGO), and people's organizations (PO) to ensure that 
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homeless citizens and the underprivileged can enjoy the benefits from the 
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programs of the corporation; 
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(c)To institutionalize and promote housing aided by self-help methods 
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whereby families with their own and/or outside financing can build their 
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homes with their labor and such other self-help approaches in home 
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ownership, and introduce support facilities that will enhance the 
capabilities of low-income groups to acquire decent housing; 
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(d)To assist LGUs to serve the housing requirements in their respective 
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jurisdictions, such as resettlement, development of sites and services, and 
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the renewal of blighted areas; 
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(e) To formulate, adopt, amend and/or rescind such rules and regulations as 
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may be necessary to carry out the provisions and purposes of this Act, as 
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well as the effective exercise of the powers and functions, and the 
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discharge of duties and responsibilities of the corporation, its officers and 
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employees; 
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(f) To purchase, acquire, sell, discount, refinance or otherwise deal in 
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community or home mortgages or participate therein or engage in estate 
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management under such conditions and terms as maybe determined by 
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the Board of Directors of the corporation; 
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(g)To provide a strong and sustainable finance program supporting the 
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housing objectives and, in relation thereto, to borrow or raise money 
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necessary to meet the financial requirements of its business by the 
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issuance of bonds, promissory notes, 
and other evidences of 
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indebtedness, and to secure the repayment thereof by mortgage, pledge, 
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deed of trust upon the properties of the corporation; 
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(h) To invest and deal with the money and properties of the corporation in 
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such manner as may, from time to time, be considered wise or expedient 
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for the advancement of its interests; 
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(i) To enter into any lawful arrangement for joint venture, profit-sharing, 
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union of interest, unitization, or trust agreement, reciprocal concession, 
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or cooperation with any corporation, association, partnership, syndicate, 
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entity, person, or governmental, municipal, or public authority, domestic 
34 
or foreign, in the carrying on of any business or transaction deemed 
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necessary, convenient, or incidental to the carrying out of any of the 
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purposes of this corporation; 
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(j) To acquire or obtain from any government or authority, national, 
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provincial, municipal or otherwise, or any corporation, company, or 
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partnership, or person, such charter, contracts, franchise, privileges, 
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exemption, licenses and concessions as may be conducive to any of the 
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objectives of the corporation; 
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(k)To establish and operate one or more branches, offices, or agencies and 
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to carryon any or all of its operations and business without any 
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restrictions as to place or amount, including the right to hold, purchase or 
47 
otherwise acquire, lease, mortgage, pledge, sell and convey, or otherwise 
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deal with real and personal property anywhere in the Philippines, as may 
be necessary or incidental to the conduct ofthe corporate business; 
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(I) To conduct and transact any and all lawful activities, and to do or cause 
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to be done anyone or more of the acts and purposes set forth herein, 
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within or outside the Philippines, and in any and all foreign countries, 
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and to do everything necessary, desirable, or incidental to the 
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accomplishment of the purposes or the exercise of anyone or more of the 
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powers herein enumerated or which shall, at anytime, appear conducive 
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to or expedient for the protection or benefit of the corporation; 
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(m) 
To adopt, alter, and use corporate seal, to sue and be sued, and 
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generally, to exercise all powers under the corporation laws which are not 
14 
inconsistent herewith and/or existing laws; and, 
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(n)To exercise such powers and perform such acts as may be necessary, 
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useful, incidental or auxiliary to carry out the provisions ofthis Act. 
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SECTION 8. Board of Directors - The corporation shall be governed and 
20 
its activities directed, controlled and managed by a Board of Directors hereinafter 
21 
referred to as the Board which shall be composed of the following: 
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(a) The Chairperson of the Housing and Urban Development and 
24 
Coordinating Council (HUDCC), as the ex o.fficio. Chairman; 
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(b) The President of the corporation as ex o.fficio. Vice Chairman; 
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(c) The Secretary of the Department of Finance (DOF) or his/her duly 
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designated representative; 
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(d) The Secretary of the Department of the Interior and Local Government 
32 
(DILG), or hislher duly designated representative; 
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(e) The Secretary of the Department of Budget and Management (DBM) or 
35 
his/her duly designated representative; 
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(D The Governor of the Bangko Sentral ng Pilipinas (BSP) or hislher duly 
38 
designated representative; 
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(g) The Secretary of the Department of Environment and Natural Resources 
41 
(DENR) or his/her duly designated representative; 
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(h) The Secretary of the Department of Justice (DOJ) or his/her duly 
44 
designated representative; 
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(I) Four (4) representatives ofthe private sector: Provided, That he/she shall 
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be a citizen and a resident of the Philippines, of good moral character, of 
48 
known probity, and of proven competence and integrity: Pro.vided 
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further, that two (2) of the four (4) private sector representatives shall 
come from an NGO or PO involved in the development of housing 
projects, organization of housing associations, or management of shelter 
finance programs or other related activities for at least five (5) years, that 
one (1) of the private sector representatives shall come from the academe 
with specialization in the field of urban planning, development studies, 
economics, civil engineering or other related course with special training 
in housing and urban development programs, preferably in shelter 
finance management, from a reputable college or university, and that one 
(1) of the private sector representatives shall come from the industry of 
real estate developers in the Philippines. 
The four (4) representatives of the private sector shall be appointed by 
the President of the Republic of the Philippines for a term of six (6) 
years, with the possibility of reappointment. 
In no case shall any 
representative of the private sector be appointed or designated in a 
temporary or acting capacity. 
19 
The Chairman, Vice Chairman and members of the Board shall be entitled to 
20 
a reasonable per diem for each meeting actually attended at such amounts as may 
21 
be fixed by the Board in accordance with existing laws, rules and regulations. 
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SECTION 9. Powers of the Board. - The Board shall have the following 
24 
powers: 
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(a) To adopt the by-laws ofthe corporation, and to revise or amend the same 
27 
as may be expedient to carry out effectively the functions of the 
28 
corporation under this Act: 
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(b) To formulate, revise, or adjust periodically all policies, and to promulgate 
31 
such rules and regulations and manuals of procedure as are necessary to 
32 
ensure the effective implementation of the provisions ofthis Act; 
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(c) To direct the management, operation, and administration of the 
35 
corporation; 
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(d) To authorize such expenditures by the corporation as are in the interest of 
38 
its effective administration and operation; 
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(e) To approve the corporation's organizational and administrative structures 
41 
and staffing pattern, and create offices or positions necessary for the 
42 
efficient management, operation, and administration of the corporation, 
43 
and to establish the appropriate compensation package for the officers 
44 
and employees of the corporation; ProVided, that all positions in the 
45 
corporation shall not be exempt from Republic Act No. 6758, otherwise 
46 
known as the Salary Standardization Law, and other existing laws, rules 
47 
and regulations on salaries and compensation; and, 
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(f) To exercise such powers as may be necessary to carry into effect the 
2 
provisions of this Act and to accomplish the purposes for which the 
3 
corporation is established. 
4 
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SECTION 10. President of the Corporation. -
The President of the 
6 
corporation shall be appointed by the President of the Philippines for a term a term 
7 
of six (6) years: Provided, that he/she shall be a person of good moral character, 
8 
unquestionable integrity and of known probity, a holder of a degree in law, public 
9 
administration, urban planning, development studies, business or economics, or 
10 
other related course with special training in housing and urban development 
11 
programs, preferably in shelter finance management, from a reputable college or 
12 
university: Provided further, that he/she must have expertise and experience of at 
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least ten (10) years in business, finance, the professions, development of housing 
14 
projects, organization of housing associations, and management of shelter finance 
15 
programs and other related activities. He/she shall represent the corporation in all 
16 
its dealings with other offices, agencies and instrumentalities of the government 
17 
and with all persons and entities, public or private, domestic or foreign. He/she 
18 
shall exercise such other powers, functions, and duties as may be delegated by the 
19 
Board and shall receive such reasonable compensation, allowances and other 
20 
emoluments as the Board may determine. 
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SECTION 11. Powers and Duties of the President of the Corporation. -
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The President of the corporation shall prepare the agenda of the Board of 
24 
Directors, execute and administer the policies and resolutions approved by it, and 
25 
direct and supervise the operations and management of the corporation. Subject to 
26 
the approval by the Board in the case of managerial positions and above and 
27 
subject to the confirmation by the Board in the case of positions below managerial 
28 
level, the President shall appoint the personnel of the corporation, prescribe their 
29 
duties and qualifications, in accordance with existing civil service laws, rules and 
30 
regulations, to the end that only competent personnel may be employed, and when 
31 
warranted, remove, suspend or otherwise discipline them for cause. 
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SECTION 12. Exemption from Tax, Legal Process and Lien. - All laws to 
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the contrary notwithstanding, the corporation and all its assets and properties, all 
35 
appropriations, funds and amortizations collected and all accruals thereto and 
36 
income or investment earnings therefrom, as well as all transactions, supplies, 
37 
equipment, papers or documents shall be exempt from any tax, assessment, fee, 
38 
charge, or customs or import duty and all assets and properties of the corporation 
39 
shall likewise be exempt from all kinds of national or local taxes, fees or charges. 
40 
No tax measure of whatever nature hereinafter enacted shall apply to the 
41 
corporation, unless it expressly revokes the declared policy of the State in Section 
42 
2 hereof granting tax exemption to the corporation and the socialized housing 
43 
programs it administers. 
Any tax assessment against the corporation and its 
44 
programs shall be null and void. 
45 
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The corporation shall not be subject to attachment, garnishment, levy or seizure 
47 
by or under any legal or equitable process whatsoever, either before or after receipt 
48 
by the person or persons entitled thereto. 
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All' transactions, agreements, contracts or documents executed in line with the 
2 
CMP and other social housing programs to be administered by SHDFC shall also 
3 
be exempt from the payment of taxes, such as but not limited to capital gains tax, 
4 
donor's tax, documentary stamp tax and registration fees, including fees required 
5 
for the issuance of transfer certificates of title. 
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SECTION 13. Abolition of the SHFC and Transfer of its Powers and 
8 
Functions, Rights, Assets, and Liabilities. - The SHFC is hereby abolished. 
9 
Within six (6) months from the effectivity of this Act, the powers and functions of 
10 
the SHFC and the programs under its administration, in particular the CMP, and 
11 
such other related social housing programs being implemented by it, shall be 
12 
transferred to and be exercised by the corporation. The corporation shall, by virtue 
13 
of this Act, be subrogated to all the rights and assume all the contracts and 
14 
liabilities of the SHFC and all its pertinent funds and appropriations, including 
15 
unexpended allocations, records, property, assets, equipment and personnel as are 
16 
necessary: Provided, that the existing officers and employees of the SHFC shall 
17 
continue to assume their posts in a holdover capacity until their new appointments 
18 
are issued. 
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SECTION 14. Structure and Staffing Pattern. - The position structure and 
21 
staffing pattern of the corporation shall be subject to the approval of the DBM. To 
22 
ensure the continued implementation of the CMP and the other social housing 
23 
programs during the period of transfer and transition, the SHFC personnel who are 
24 
performing the functions transferred to the SHDFC shall continue to perform their 
25 
duties; Provided, that the said personnel may, at their option, retire or be separated 
26 
from the service for which they shall be entitled to the benefits provided by law: 
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Provided however, that the employees' retirement benefit under SHFC, if any, 
28 
shall not in any way be diminished or modified in whatever manner at the time of 
29 
retirement or separation. 
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SECTION 15. Capitalization. - The initial capital of the corporation shall 
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be Fifty Billion (P50,OOO,OOO,OOO.OO) Pesos consisting of the following: 
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a. Total assets of SHFC, including mortgage receivables ofNHMFC under the 
35 
Trust Agreement; 
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b. CISF A remaining balance; and, 
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c. Annual general appropriations. 
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SECTION 16. Appropriations. -
The amount needed for the initial 
42 
implementation of this Act shall be charged against the current year's 
43 
appropriation for the CMP and the funds for the AKPFP being administered by the 
44 
SHFC. 
Thereafter, such sums as may be necessary for the continued 
45 
implementation ofthis Act shall be included in the General Appropriations Act. 
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SECTION 17. Iflterim Applicability of Existing Policies, Guidelifles, and 
48 
Rules. - Existing policies, guidelines, rules and regulations with respect to the 
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functions of the SHFC which have been transferred to the SHDFC shall continue to 
2 
be applicable and in effect until amended or modified accordingly. 
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SECTION 18. Audit. - The Chairman of the Commission on Audit shall 
5 
appoint and assign to the corporation a Resident Auditor and other subordinate 
6 
personnel, responsible to and removable only by the said Commission on Audit 
7 
Chairman, to perform audit duties, without prejudice, however, to the power of the 
8 
Board of Directors to contract another mode of independent audit service, in 
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addition to that provided by the Commission on Audit as provided for under 
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Presidential Decree No. 1445, otherwise known as the Government Auditing Code 
11 
of the Philippines. The Auditor shall submit, through the Commission, an annual 
12 
report on the financial condition and result of the operations of the corporation to 
13 
the President of the Republic of the Philippines and to the Senate and the House of 
14 
Representatives. 
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SECTION 19. Reports. - The corporation shall submit an annual report to 
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the President of the Philippines and to both chambers of the Congress of the 
18 
Philippines. 
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SECTION 20. Suppletory Application of the Corporation Code. - The 
21 
provisions of the Corporation Code shall have suppletory application on matters 
22 
not provided for in this Act. 
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SECTION 21. Implementing Rules and Regulations. - The implementing 
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rules and regulations to effectively carry out the provisions of this Act shall be 
26 
adopted and promulgated by the Board of Directors of the corporation not later 
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than ninety (90) days after the approval of this Act which shall be published in at 
28 
least one (1) national newspaper of general circulation. 
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SECTION 22. Repealing Clause. - All laws, decrees, executive orders, or 
31 
rules and regulations and other issuances, or parts thereof which are inconsistent 
32 
with or contrary to the provisions of this Act or its purposes are hereby repealed, 
33 
amended, or modified accordingly. 
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SECTION 23. Separability Clause. - If, for any reason, any provision of 
36 
this Act, or the application thereof to any person or circumstances, is held invalid 
37 
or unconstitutional, the remaining provisions not affected thereby shall continue to 
38 
be in full force and effect. 
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SECTION 24. Effectivity. - This Act shall take effect fifteen (15) days after 
41 
its complete publication in the Official Gazette or in at least two (2) national 
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newspapers of general circulation. 
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Approved, 
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