THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
) 
OF THE PHILPPINES 
) 
5 
P?I\Y -4 
P3 53 
i. 
lL2- 
S E N A T E  
1996 
S. B. No. 
Introduced by Senator Biazon 
EXPLANATORY NOTE 
The Asian crisis of 1997 brought hardships to many Filipinos, despite 
claims that our country weathered the storm fairly well and better than our Asian 
neighbors, Hardest hit, perhaps, were our countrymen who were just barely 
making ends meet before the crisis hit. Included among this segment are those 
who have availed of low-cost and socialized housing offered on a supply-dictated 
basis at the behest of the Ramos administration. 
Thus, despite the enactment of RA 8501 to remedy the problem of unpaid 
mortgages and defaulting housing loan borrowers, only a measly 19,000 availed 
of the condonation program out of more than 180,000 defaulting accounts. 
This measure seeks to provide fresh hope to those who have failed to 
avail of the provisions of RA 8501 but wish to keep their homes and pay their 
loans at rates affordable and in keeping with their current economic status. 
While from the perspective of creditors, borrowers must stick to the 
agreement originally drafted and signed by both parties when the loan was 
availed, such scenario at this time is far from realistic, given the prevailing socio- 
economic conditions of the country. It is perhaps best purely to look at this 
problem from a more humanitarian and compassionate point of view than from a 
purely economic standpoint. A country's laws, policies, rules, et cetera, are 
created not to make life a rigid line for its citizens to toe, but to improve the 
quality of life for its people. As such, this bill responds to such a need from the 
many borrowers and their families affected by a crisis that has already inflicted 
much suffering on their lives. 
Apart from the previously stated premises, this measure also seeks to 
Given the foregoing, passage of this bill is earnestly urged 
rescue the ailing National Shelter Program. 
R 
Senator 


THIRTEENTH CONGRESS 
First Regular Session 
OF THE PHlLlPP 
‘;I 
’ 
G- 
*- 
< 
S E N A T E  
1996 
’ 
S. B. No. 
OF THE REPUBLIC 
1 
NES 
1 
5 
MRY -4 P 3 5 3  - 
Introduced by Senator Biazon 
AN ACT 


(GFl’s) under the National Shelter Program of the government shall be left to 
the discretion of the respective boards of such government financing 
institutions; 
d) A borrower-applicant may be allowed to use the total accumulated value of 
hislher membership contribution or savings with the GSIS, SSS, or HDMF to 
pay in full or in part hislher housing loan. 
e) 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 (e 1,500.00) for a period of three (3) years from the approval 
of the application, after which, 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, helshe shall 
voluntarily surrender hislher property without need of judicial proceedings; 
f) In case of incapacity of a borrower, hislher legal heirs and successors-in- 
interest may assume payment of hislher outstanding housing loan; and 
g) Loan restructuring under this Act may be availed of only once. 
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. 
SECTION 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 take out; 
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 
consolidatedltransferred in the name of the government financing institution 
(GFI). 
SECTION 4. 
Remedies Agqinst Delinquent Accounts. The government 
financing institutions shall continue to exercise their right to foreclose properties covered 
by accounts excluded in sub-paragraphs (a) through (d) under Section 3 hereof or of 
delinquent accounts of borrowers who shall fail to avail of the benefits of this Act and 
that such foreclosure proceedings shall be exempt from publication and from the 
payment of filing fees, capital gains tax and documentary stamp tax: Provided, that in 
lieu of publication, posting of the date and place of auction shall be made in at least 
three (3) conSpicuous public places similar to that provided for under Act 3135; 
Provided further, that notice to the borrower at his last known address shall likewise be 
made. 


SECTION 5. Declaration of Dividends. The declaration of dividends of the 
funds managed by the GSIS, SSS, and HDMF shall be limited to their members who 
have not availed of the restructuring program under this Act. 
SECTION 6. lncentive for Prompt Payment of Monthly Amortization. Upon 
the effectivity of this Act, all accounts whose monthly amortizations are paid on time 
shall be entitled to a reasonable discount on loan interest. 
SECTION 7. lmplementing 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. 
SECTION 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 on housing and Urban Development based on the proportional 
representation of the parties or coalitions therein. 
The Oversight Committee shall review and approve the lmplementing Rules and 
Regulations. 
It shall also review the performance of the government financing 
institutions and agencies involved in the implementation of this Act. 
SECTION 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. 
SECTION I O .  Effectivity Clause. This Act shall take effect fifteen (15) days after 
its complete publication in the Official Gazette or in at least (2) national newspapers of 
general circulation. 
Approved.