FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
-- \, 136 
s. No. -----.:=~ 
Introduced by Senator FRANKLIN M. DRILON 
EXPLANATORY NOTE 
One of the primary responsibilities of government is the promotion of a 
just and dynamic social order that will ensure prosperity and free the people 
from poverty. Towards this end, the Constitution mandates that the State 
provide "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." (Sec. 9, Art. XIII of the Constitution) 
While the past Congresses have dutifully tried to respond to the 
constitutional mandate, the national shelter program has had no considerable 
impact on solving the problem of homelessness. 
This may be attributed to the fact that the various shelter agencies, 
though imbued with a single purpose, have not been able to act in synch. 
Moreover, because of the many agencies involved in addressing the problem of 
homelessness, a great number of our deserving but underprivileged citizens 
who desire to avail of housing assistance from government would not know 
where to go and how to proceed with the processing of their applications for 
housing loan. 
For these reasons, the creation of single, strong, purposeful and highly 
motivated governmental housing entity specifically, a Department of Housing 
and Urban Development becomes a must. 
The proposed Department of 
Housing and Urban Development shall serve as the primary policy planning, 
programming, 
coordinating, implementing, and regulating arm of the 
Government which will be tasked to promote, develop and regulate dependable 
networks of housing, urban planning and resettlement programs and projects. 
Its creation will do much to lessen the burden of the homeless by 
providing a single entity which can facilitate and expedite the availability of 
housing projects and loans. 
With a singular Department of Housing there 
would no longer be a need for a housing applicant to go from one government 
agency to a,nother to pursue his application. The only agency that he would be 
dealing with is the proposed Department of Housing which could veritably 
develop into a "one stop-shop for the homeless." 
The early passage of this bill is therefore earnestly sought. 


FIFTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
SENATE 
S. No. 136 
Introduced by Senator FRANKLIN M. DRILON 
AN ACT 
CREATING THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, 
DEFINING ITS MANDATE, POWERS AND FUNCTIONS, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines III 
Congress assembled: 
Section 1. Short Title. - This Act shall be known as the "Department of 
Housing and Urban Development Act." 
Section 2. Declaration Policy. - The State shall pursue the realization of a 
modern, humane, economically viable and environmentally sustainable society 
where the urbanization process is manifest in towns and cities being centers of 
productive: economic activity, led by market forces; where urban areas have 
affordable housing, sustainable physical and social infrastructure and services 
facilitated under a democratic and decentralized system of governance; where 
urban areas provide the opportunities for an improved quality of life and the 
eradication of poverty; and where there is a high degree of complementarity 
between urban and rural communities. 
Section 3. Principles of Sector Governance. - The stipulated policy shall be 
pursued and realized in accordance with principles that will guide the definition 
of government functions in the sector; its relationship with the private sector; the 
vertical compartmentalization 
of government functions 
among 
levels 
of 
governance, national and local; and the horizontal compartmentalization of 
national government functions, These principles that will define and delineate the 
functions, responsibilities and accountabilities of various national government 
agencies are as follows: 
a. Steering Role of the National Government in the Sector. The national 
government shall perform a steering role in the urban development and 
housing sector. 
1. 
The national government shall strengthen its role in guiding, 
mobilizing and facilitating in housing and urban development. It 
shall define the urban development vision and provide a housing 
and urban development framework that will guide the investments 
and activities of the private sector, It shall provide policies on 
spatial 
integration, 
urbanization, 
urban 
environmental 
management, urban redevelopment, urban. land management, 
housing development and other related concerns to facilitate 
private enterprise and participation, It shall formulate and enforce 
a minimum set of regulations that will ensure the establishment of 
a level playing field in the provision of urban infrastructure and 
services and in the Iocational choices of investors, and prevent 
1 


, 
2. 
urban decay, congestion, diseconomies of scale and environmental 
degradation of urban areas. 
The national government shall provide policies that will mobilize 
public and private sector resources toward a self sustaining 
housing finance system. 
b. Continuing Devolution of Functions to Local Governments. The national 
government and local governments shall act as partners in housing and 
urban development. Functions, and the corresponding authority and 
accountability shall be continuously devolved to local government units, 
such devolution to be guided by the following: 
1. 
The delineation of functions between the national government and 
local governments shall be such that inefficiencies are removed, 
access to public services is improved, and plans, programs and 
services are responsive to local needs and opportunities. For this 
purpose, functions that are location specific in their benefits and 
costs shall, to the extent possible, be devolved to local 
governments. 
2. 
The determination of the proper level of government to which a 
functions will be devolved shall be determined by the extent of the 
geographical effects of the benefits and the cost of undertaking 
such function. 
3. 
Local governments shall implement national government policies 
in their respective localities. Location specific functions that are to 
be devolved to local governments are those that relate to the 
provision of public goods and services. Local governments shall to 
the extent possible, . encourage the private sector to assume 
primary responsibility for production of public goods, and limit 
their functions to enforcing standards and regulations or 
providing incentives. 
4. 
Local governments shall have full autonomy in housing and urban 
development planning and management consistent with national 
policies, strategies and regulatory framework. 
5. 
The national government shall be the facilitator, independent 
monitor and performance evaluator. National government shall 
formulate national standards and rules to guide local governments 
in the formulation of localized standards. The promulgation and 
enforcement of standards and regulations will be undertaken by 
local governments. 
c. Maximum Participation of the Private Sector and Communities in 
Housing and Urban Development. The government shall provide policies 
to' maximize private sector participation in housing and urban 
development and to mobilize public and private sector resources toward 
a self-sustaining housing and urban development finance system. The 
national government, through local governments, shall ensure that 
communities are involved in the formulation of housing and urban 
development policies and plans that will impact upon them, their 
livelihood and their living conditions. Full community participation in 
housing and urban development policies, programs and projects of 
government shall be encouraged. 
d. Responsiveness to the shelter needs of the urban poor communities. The 
government shall directly address the concerns and needs of the urban 
poor communities by formulating the policies, providing and mobilizing 
resources, and designing as well as implementing programs and 
intervention that will address urban homelessness and unemployment. 
Government shall facilitate the establishment of a finance system that 
enables all sectors of society to have the opportunity to access funds 
2 


and facilitate the provision of adequate shelter, security of tenure and 
appropriate infrastructure, where subsidies, if provided, are transparent 
in nature and targeted at those in need. 
e. Clear Horizontal Compartmentalization and Coordination of Functions 
Among National Government Agencies. The Department of Housing and 
Urban Development, created under this Act, shall be the primary entity 
for policy formulation and coordination of all housing and urban 
development functions. It shall define the delineation of housing and 
urban development functions and responsibilities of and relationship 
among national government agencies to promote efficiency and 
effectiveness, clarify accountability, and ensure synchronization. 
f. 
Policy and Coordinating Role of the Department of Housing and Urban 
Development. 
The 
role 
of the Department 
IS 
to 
support the 
accomplishment of the sector vision, and, in particular, encourage more 
opportunities to improve the lives of the urban poor. 
Section 4. Definition of Tenns. -As used in this Act, the following terms 
shall mean: 
a. Attachment - refers to the lateral relationship between the department 
.and the attached agency or corporation for purposes of policy and 
program coordination and as further defined under the Administrative 
Code. 
b. Devolution - the transfer of responsibility, authority and accountability 
for the performance of defined functions from the national government 
to local governments. 
c. Land Use Plan - refers to the document, formulated by the loci 
government in consultation with its stakeholders, that defines or 
provides guidelines on the allocation, utilization, development and 
management of all lands within a given territory or jurisdiction 
according to the inherent qualities of the land itself and supportive of 
economic, demographic, socio-cultural and environmental objectives. 
d. Secondary Mortgage Market -
refers to the system, which entails 
purchase, acquisition, discounting, or refinancing of retail loan and 
mortgage packages or other similar instruments. Once purchased these 
instruments in turn are traded in the financial market through the 
issuance and or sale of bonds, promissory notes, debentures, 
conveyances, and other financial instruments or participation therein, 
backed by the same pool of mortgages and other assets. 
e. Shelter - refers to the system and its components which establish the 
residential quality of life, including housing, utilities, access to social 
services and other community facilities, security, and other aspects 
related to an individual's residence. 
f. Urban Development - pertains to the process of occupation and use of 
land or space for such activities as residential, industrial, commercial 
and the like, necessary to carry out the functions of urban living. It 
entails the building or rebuilding of more or less permanent structures 
over land that is often withdrawn or converted from its original use, 
resulting in the creation of a built environment. 
g. Urban Development Planning -
also called city planning or town 
planning, is a process that involves the planning of diverse elements 
that comprise an urbanized area, including its physical infrastructure, 
environment, housing, transportation, and management of land use and 
urban growth. 
h. Urban Land Management -
refers to the range of government 
interventions, including policies, incentives, regulation and titling, land 
3 


use planning and zoning, land development, public information and 
conflict resolution that will promote the optimization and most efficient 
use of urban land, including appropriate land valuation to achieve 
efficiency in use, promote access, support economic productivity, ensure 
sustainable development and protect individual rights. 
1. Urban Renewal or Redevelopment - the process of planned renewal, 
physical and socio-economic revitalization of outworn, old, derelict areas 
of towns and cities, as well as preservation of historical assets through 
redevelopment and rehabilitation. 
J. Zoning Ordinance - refers to the set of rules, regulations and specific 
procedures and requirements promulgated by the local government that 
will guide land use and land development and the development of built 
environment within the jurisdiction of the local government. 
CHAPTER 1 
DEPARMTENT OF HOUSING AND URBAN DEVELOPMENT 
Section 5. Creation of the Department of Housing and Urban Development. -
There is hereby created the Department of Housing and Urban Development, 
hereinafter referred to as the Department. 
Section 6. Powers and Functions. -The Department shall perform the 
following functions: 
a. Formulate the national urban development and shelter policy and 
strategy in coordination and consultation with the stakeholders, and 
ensuring its consistency with the National Development Plan; 
b. In consultation with the stakeholders, formulate the urban development 
and shelter planning framework, establish and operate a national urban 
development and shelter planning system, and develop the necessary 
planning guidelines, procedures and urban development standards that 
will define and delineate the roles of all stakeholders, and guide the 
planning, standards localization, promulgation and enforcement of 
rules, and service delivery programs of national government and local 
gqvernments, and facilitate private sector investment; 
c. Formulate housing finance policies, and recommend and facilitate the 
development of mechanisms that promote the establishment of a self-
sustaining private sector led housing finance system; 
d. Formulate and 
implement a 
shelter program 
for 
urban 
poor 
communities that will promote their social and economic welfare, and 
mobilize resources and encourage stakeholder participation in the 
provision of urban services for the poor; 
e. Provide assistance to and capability building of local governments in 
urban development, urban redevelopment and urban management in 
support of national policies and strategies in the sector, as well as 
strengthen the role of independent component cities and provincial 
governments as the primary entities for urban development planning 
and management at the local level; 
f. Develop and establish a sector performance monitoring and assessment 
mechanism, and monitor and independently report on the performance 
of the sector, national government agencies, and local governments in 
housing and urban development to enable continuing improvements in 
sector policy and strategy formulation; 
g. Delineate areas for priority development as urban renewal areas and 
prepare programs for their regeneration; 
4 


h. Support devolution and decentralization· where local governments in 
partnership with communities, non-government organization and private 
groups assume the functions of urban renewal and regeneration; 
1. Exercise administrative investigatory powers over local governments to 
ensure their faithful compliance with housing and urban development 
laws, standards and guidelines, as well as their judicious and fair 
application of local housing and urban development and housing 
ordinances, and require the submission by local governments of 
pertinent documents and information, as may be necessary in the 
judicious and effective conduct of investigation; 
J. Develop and implement the comprehensive and integrated housing 
program provided for under this act; 
k. Formulate and enforce general and specific policies for housing 
development and resettlement; 
1. 
Prescribe guidelines and standards for the reservation, conservation and 
'utilization of public lands identified for housing and resettlement; 
m. Exercise the right of eminent domain or acquire by purchase privately 
owned lands for purposes of housing development, resettlement and 
related services and facilities; 
n. Develop and undertake housing development and/ or resettlement 
projects through joint ventures or other arrangements with public and 
private entities; 
o. Discharge all responsibilities of the government, on behalf of the 
department, as may arise from treaties, agreements, and other 
commitments on housing and resettlement to which it is a Signatory, 
including the determination of forms of assistance for housing 
development to be extended through multilateral or bilateral assistance 
programs; 
p. Promote housing development by providing technical assistance; 
q. Purchase, acquire, sell, discount, refinance, or otherwise deal in home 
mortgages or participations therein under such terms and conditions as 
may be prescribed by the board of directors of the corporation; 
r. Own, lease, purchase or otherwise acquire, sell or otherwise dispose of, 
property, real or personal, as may be necessary and appropriate for the 
conduct of its business; 
s. Enter into and perform such contracts with any person or entity, public 
or private, as may be necessary, proper or conducive to the attainment 
or furtherance of the objectives and purposes of this act; 
t. Receive donations, grants, and bequests and utilize the same for the 
attainment of its objectives. Such donations, grants and bequests shall 
be exempt from the payment of transfer taxes and be fully deductible 
from the gross income of the donor or grantor for income tax purposes; 
u. Promulgate such rules and regulations and to do and perform any and 
all things as may be necessary and proper to carry out its 
responsibilities, powers and functions under this Act; 
v. Perform such other related functions as may be mandated by law. 
Section 7. Mandate. -
The Department shall be the primary national 
government entity responsible for the management of housing and urban 
development. It shall be the main planning and policy-making, program 
coordination, and performance monitoring entity for all housing and urban 
, 
development concerns. 
Section 8. Organizational structure. - The department shall consist of the 
offices of the secretary, the undersecretaries and assistant secretaries, the 
5 


department services, bureaus, regional offices, the attached agencies, and their 
constituent units. 
CHAPTER 2 
DEPARTMENT PROPER 
Section 9. Office of the Secretary. -
The Office of the Secretary shall 
consist of the secretary, and his immediate staff. 
Section 10. Powers and functions of the Secretary. - The Secretary shall: 
a. Advise 
the 
President in 
issuing 
executive 
orders, 
regulations, 
proclamations and other issuance relative to matters under the 
jurisdiction of the department; 
b. Establish policies and standards for the efficient and effective operations 
of the Department in accordance with the approved programs of the 
government; 
c. Promulgate rules, regulations and other issuance necessary in carrying 
out the Department's mandate, objectives, policies, plans, programs and 
projects; 
d. Exercise supervision and control over all functions and activities of the 
Department; 
e. Exercise disciplinary powers over officers and employees of the 
department in accordance with law including their investigation and the 
designation of a committee or officer to conduct such investigation; 
f. Appoint all officers and employees of the department except those whose 
appointments are vested in the president or in some other appointing 
authority; 
g. Delegate authority' for the performance of any administrative or 
substantive functions to subordinate officials of the Department; and 
h. Perform such other functions as may be provided by law or assigned by 
·the President. 
The Secretary shall serve as an ex officio, non-voting member of the 
National Economic and Development Authority (NEDA) Board, the governing 
boards of the Social Security System (555), the Government Service Insurance 
System (GSIS) and the Public Estates Authority (PEA). He shall also be a member 
of the NEDA's Committee on Infrastructure (INFRACOM), 
of the Social 
Development Committee (SDC) and the body authorized to formulate, prescribe, 
or amend guidelines under Republic Act No. 6957 or the Build-Operate-Transfer 
Law. 
The Secretary shall chair the governing board of the Home Development 
Mutual Fund (HDMF). 
Section 11. The Undersecretaries and Assistant Secretaries. - The Secretary 
shall be assisted by two (2) undersecretaries, one (1) for operations and one (1) for 
plans and support services, and three (3) Assistant Secretaries who shall all be 
appointed by the President upon the recommendation of the Secretary. 
The 
assistant secretaries shall be career officers. They shall perform the powers and 
functions as provided for in Section 10 & 11, Chapter 2, Book IV of the 
Administrative Code of 1987. 
The Secretary is hereby authorized to delineate and assign the respective 
functional areas of responsibility of the undersecretaries and assistant secretaries 
and assign them as required. 
6 


CHAPTER 3 
DEPARTMENT SERVICES 
Section 12. Department Service, Character and Head. The department 
services shall be essentially staff in character each of which shall be headed by a 
staff director. 
Section 13. Financial Management Service. -The Financial Management 
Service shall: 
a. Formulate the medium-term and annual expenditure program for the 
Department and prepare, execute and administer the Department's 
annual budget; 
b. Develop and implement approaches, methodologies and procedures for 
ensuring efficiency in the allocation and utilization of budgetary and 
other resources of the Department; 
c. Provide accounting, financial management, disbursement and cashiering 
services to the Department and ensure the submission of the 
appropriate financial and physical performance reports and financial 
statements; 
d. Monitor and make recommendations on the financial and physical 
performance of the Department's programs, projects and activities; and 
e. Perform such other related functions as may be assigned by the 
Secretary. 
Section 14. Administrative Services. -
The Administrative Service shall 
provide the Department with efficient and effective services relative to personnel, 
human resources development, records management and custodial work, 
supplies and inventory management, procurement, physical assets management, 
and other related administrative functions as may be assigned by the Secretary. 
Section 15. Legal Service. - The Legal Service shall: 
a. Provide the Department, its officials and personnel with legal counseling 
services; 
b. Provide assistance to the Secretary in handling cases affecting the 
Department and in the investigation of administrative cases involving 
Department personnel; 
c. Provide assistance to the Secretary and other Department personnel in 
the preparation of legislative proposals and legal issuances affecting the 
sector or the Department; 
d. Review and make recommendations to the Secretary on the legal and 
legislative implications of plans, programs and activities affecting the 
sector or the Department; and 
e. Perform such other related functions as may be assigned by the 
S~cretary. 
Section 16. Public Relations and Information Service. - The Public Relations 
and Information Service shall; 
a. Formulate and implement a public information and relations program 
that will promote public and stakeholder knowledge of and feedback on 
the policies, regulations, incentives, opportunities and programs and 
projects in the housing and urban development sector; 
7 


b. Prepare, produce and publish materials to support such public 
information and public relations program; 
c. Establish collaborative networks for the dissemination of information 
and generation of feedback on sectoral concerns; and 
d. Perform such other related functions as may be assigned by the 
Secretary. 
Section 17. Information and Communications Technology Service. -
The 
Information and Communications Technology Service shall: 
a. Formulate and implement an information and communications 
technology plan for the sector that will ensure the speedy generation, 
organization, and processing of data and production of analytic 
information to support planning, policy formulation, performance 
monitoring and assessment and transaction processing systems of the 
Department; 
b. Define the design of the integrated information systems and their 
functional specifications, and undertake the management of the 
development, operation and maintenance of applications; 
c. Establish collaborative electronic data sharing and communications 
linkages with other departments, 
agencies, 
industry and local 
government units to ensure the generation of comprehensive, up-to-date 
and accurate data and promote their wider use in decision making; 
d. Undertake continuing user training and assistance to improve computer 
literacy and promote the sophisticated use of information technology in 
planning, analysis, transaction processing and decision making; 
e. Be responsible for the maintenance and provision of support services to 
all Department employees in the use of information technology; 
f. Conduct continuing studies on best uses of information and 
communications technology in the housing and urban development 
sector; and 
g. Perform such other functions as may be assigned by the Secretary. 
CHAPTER 4 
PLANS, POLICIES AND MONITORING OFFICE 
Section 18. Plans, Policies and Monitoring Office. -The Plans, Policies and 
Monitoring Office (PPMO), shall be headed by an Assistant Secretary and shall be 
the central government policy, planning and monitoring think tank for housing 
and resettlement, and urban planning, development and regeneration. The Office 
shall be responsible for the: 
a. Formulation of national housing policy, urban and regional development 
policies, and resettlement policy; 
b. Updating of national urban development and housing framework; 
preparation of national shelter plan and agency corporate plan; 
c. Conducting research and development in housing technologies and into 
housing and urban development; 
d. Monitoring the effectiveness of government policies and programs in 
housing delivery and urban development, including those of the 
attached agencies; 
e. Development of performance indicators for housing and urban 
development, develop the performance indicators and program targets 
for key shelter agencies and local governments; 
8 


f. Monitoring key shelter agencies' performance against targets as well as 
the accomplishment of national shelter plan and adherence to the urban 
development and housing framework; 
g. Integration of housing and urban development data banks with those of 
'other government agencies; and 
h. Monitor the performance of local government programs in housing and 
urban development. 
Section 19. Bureaus under the PPMO. -The Assistant Secretary for Plans, 
Policies and Monitoring shall supervise the following: 
a. Plan Policies and Programs Bureau. The Plans, Policies and Programs 
Bureau shall: 
1. Formulate, review and update, in consultation with national 
government agencies, local governments, private sector, communities 
and other stakeholders, national plans, objectives and policies for 
housing and urban development, specifIcally the National Urban 
Development and Housing Framework and the National Shelter 
Program; 
2. Establish and implement a national housing and urban development 
planning system and coordinate the preparation and timing of the 
sectoral plans of national government agencies with the local 
development plans of local government units, ensuring their 
consistency with the National Urban Development and Housing 
Framework, the National Shelter Program and the Medium-Term 
Philippine Development Plan; 
3. Design programs for the provision of capacity building assistance to 
local governments in housing and urban development planning, 
investment programming, formulation' of zoning ordinances, plan 
administration and performance assessment; 
4. Formulate policies and design interventions that will directly address 
the shelter concerns of the urban poor communities, including the 
formulation of guidelines on eviction and relocation; 
5. Standardize planning data and sector information requirements 
under a uniform data classification and storage and through 
geographic information systems; 
6. Formulate and implement a research and development agenda and 
mobilize public and private sector resources to generate new 
knowledge; develop and/or adopt new technologies; identify and 
,design 
new 
products 
and 
services, 
to 
support 
continuing 
. improvement in housing and urban development regulation, 
production, and service delivery; 
7. Undertake continuing studies on the research and development 
requirements of the housing and urban development sector, for the 
purpose of, but not limited to, policy development, planning and 
standards formulation; and 
8. Perform such other functions as may be assigned by the Secretary. 
b. Monitoring and Evaluation Bureau. The Monitoring and Evaluation 
Bureau shall: 
1. Formulate an effective monitoring and performance evaluation 
system and undertake the overall monitoring and performance 
assessment of housing and urban development projects of the 
department, its attached agencies, local government units, and other 
entities; 
9 


2. Monitor and evaluate the performance of the sector particularly on 
the consistency of programs, projects and activities of national 
government agencies, local government units, industry and other 
stakeholders with the National Urban Development and Housing 
Framework, National Shelter Strategy, sector public investment 
programs and the policies of the Department; 
3. Develop and operate a sector performance monitoring and evaluation 
system ~nd monitor, evaluate and independently report on the 
performance of the sector and that of local governments, industry, 
national government and other key sector stakeholders; 
4. Recommend changes and coordinate action needed to ensure the 
accomplishment of the objectives of the National Urban Development 
and Housing Framework, National Shelter Strategy, sector public 
investment programs and the policies of the Department; 
5. Regularly monitor the corporate and operational performances of all 
the organic bureaus, attached agencies and corporations, and make 
recommendations thereon; and 
6. Perform such other related functions as may be assigned by the 
'Secretary. 
c. Housing Finance Development Bureau. The Housing Finance and 
Development Bureau shall: 
1. Formulate 
policies and implement schemes to 
encourage 
a 
sustainable market-oriented housing finance system that will ensure 
greater private sector participation and adequate flow of private funds 
into the housing industry; 
2. Design the most appropriate mechanism to increase transparency 
and efftciency in the use of public funds, including the creation of a 
socialized housing fund or other mechanisms to administer up-front 
grants or amortization support, and design the implementing system 
and procedures for the program maximizing the principles of 
decentralization and devolution; 
3. Undertake continuing studies for the improvement of the institutional 
framework and administrative operations for housing finance; and 
4. Perform such other functions as may be assigned by the Secretary. 
CHAPTERS 
URBAN DEVELOPMENT AND HOUSING OPERATIONS OFFICE 
Section 20. The Urban Development and Housing Operations Office 
(UDHOO). - The Urban Development and Housing Operations Office (UDHOO), 
shall be headed by the Undersecretary for Operations who shall discharge the 
following duties and responsibilities: 
a. Administration of homeless assistance advances/ grants to LGUs, NGOs, 
and private communities for temporary or emergency housing in 
response to man-made or natural calamities; 
b. Development of the capacity of local governments to plan, implement 
and monitor housing, land management, urban development and urban 
redevelopment programs; 
c. Development and administration of the national government subsidy 
program for social housing; 
d. Provision of technical and administrative support to, management and 
implement foreign assisted projects at the central level; and 
e .. Exercise administrative supervision and control over the housing and 
land use regulatory office and the regional offices. 
, 
10 


Section 21. Housing and Land Use Regulatory Office (HLURO). - The quasi-
judicial powers and functions with respect to housing, urban development and 
land use control shall be exercised through the housing and land use regulatory 
office. 
Section 22. Powers and Functions of the Housing and Land Use Regulatory 
Office. - The HLURO shall: 
a. 
Formulate, review and update national policies and standards, 
guidelines and regulations relative to land use for implementation and 
enforcement by local government units; 
b. 
Develop urban development planning and urban development, land use, 
zoning and urban management standards and guidelines for the 
formulation of local development plans, land use plans and zoning 
ordinances, and for local development administration and urban 
management by local governments, ensuring the integration of the 
spatial 
and 
socia-economic 
aspects 
of development, 
promoting 
consultation and consensus, and improving development quality; 
c. 
Formulate national standards and regulation relative to the development 
of condominium and subdivision projects, which will serve as guide for 
the enforcement of such regulation by the provincial governments and 
independent cities; 
d. 
Formulate zoning and other land use control standards and guidelines 
which shall govern the development and implementation of local land 
use plans and zoning ordinances of municipalities and component cities; 
the zoning components of civil works and infrastructure projects of the 
national, regional and local governments located within the geographical 
jurisdiction of the province or independent component city; subdivision 
or estate development projects of the public and private sectors; and 
urban renewal plans, programs and projects; Provided, that these 
standards and guidelines shall respect the classification of public lands 
for forest purposes as certified by the Department of Environment and 
Natural Resources; 
e. 
M0nitor, 
evaluate, 
investigate and independently report on the 
performance of local governments, the private sector, and other 
.stakeholders in the aspects of housing development, land use 
management, and their regulation; 
f. 
Issue rules and regulations to enforce the land use policies as prescribed 
by existing laws on land use and such other laws regulating the use of 
land, including the regulatory aspect of the Urban Land Reform Act and 
all decrees relating to the value of land and improvements and their 
rental, in their respective geographical areas of jurisdiction; 
g. 
Develop and install the housing and land use development oversight 
monitoring system and undertake reserve compliance monitoring 
functions deemed vital by the Secretary; 
h. 
Formulate and implement real estate consumer education and 
protection programs; 
i. 
Adopt rules of procedure for the conduct of its business for approval of 
the secretary; 
J. 
Conduct public hearings relating to its functions; 
k. 
Promote, encourage, coordinate and assist private enterprises and 
government agencies and instrumentalities in planning, developing and 
coordinating housing and urban development plans and programs by 
furnishing legal, technical and professional assistance; 
11 


1. 
Develop and implement upon approval of the Secretary prototype 
projects supportive of its regulatory functions either by itself or as part 
of an inter-agency group or by contract with such public or private 
entities; 
m. 
Charge and collect reasonable fees in the performance of its functions; 
n. 
Issue orders after conducting appropriate investigation for the cessation 
or closure of any use or activity and to issue orders to vacate or 
demolish any building or structure that it determines to have violated or 
failed to comply with any of the laws, executive orders, presidential 
issuances and directives being implemented by it, either on its own 
motion or upon complaint of any interested party; 
o. 
To administer oaths, summon parties to a controversy, issue subpoenas 
requiring attendance and testimony of witnesses or the production of 
such books, 
papers, contracts, 
records, 
agreements and other 
documents of similar nature as may be material to a just determination 
'of the matters under investigation or hearing conducted in pursuance of 
this act; 
p. 
Regulate real estate trade and business; 
q. 
Register subdivision lots and condominium projects; 
r. 
Issue license to sell subdivision lots and condominium units m the 
registered units; 
s. 
Approve performance bonds and suspension of license to sell; 
t. 
Register dealers, brokers and salesmen engaged in the business of 
selling subdivision lots or condominium units; 
u. 
Revoke registration of dealers, brokers or salesmen for cause; 
v. 
Approve mortgage on any subdivision lot or condominium unit made by 
the owner or developer; 
w. 
Grant permits for the alteration of plans and the extension of period for 
completion of subdivision or condominium projects; 
x. 
Approval of the conversion to other purposes of roads and open spaces 
found within the project which have been donated to the city or 
municipality concerned; 
y. 
Hear and decide cases on unsound real estate business practices, 
claims for refund against project owners, developers, dealers, brokers or 
salesmen, cases of specific performance and other related cases arising 
from contractual or statutory obligations of owners, dealers, brokers, or 
salesmen towards lot or unit buyers; 
z. 
Impose administrative fines and/or penalties for violation of this act, 
and other laws implemented by the department including pertinent rules 
and regulations, orders, decisions and/ or rulings; provided that the 
maximum fines or penalties to be imposed shall not exceed Five 
Hundred Thousand Pesos (P500,OOO.OO); Provided further; that the 
Secretary may adjust such rates not more than once every three (3) 
years; 
aa. 
To determine and order the payment by the losing party of the cost of 
litigation incurred by the winning party and prescribe the manner in 
which such payments shall be made; 
bb. 
To deputize any law enforcement agency in the execution of the fmal 
orders, rulings or decisions; and 
cc. 
Perform such other related functions as may be assigned by the 
Sef:retary . 
SECTION 23. Decisions of the HLURO. -
Decisions, orders or resolutions 
of the H1URO hearing officers shall be appealable to the Secretary within fifteen 
(15) days from receipt of the decision. However the Secretary may motu proprio 
review any decision or action of the HLURO before the same becomes final. 
12 


CHAPTER 6 
THE REGIONAL OFFICES 
Section 24. Regional Offices. -
The Department is hereby authorized to 
establish, operate and maintain a Department-wide regional office in each of the 
country's administrative regions. Each Regional Office shall be headed by a 
Regional Director and shall have, within its administrative region, the following 
functions: 
a. Implement laws, policies, plans, rules, regulations and programs of the 
department in the concerned region; 
b. Implement the local government housing and urban development 
capacity building programs of the Department in their respective 
regions; 
c. Ensure the consistency of the over-all regional development goals and 
programs 
with the 
National 
Urban 
Development and 
Housing 
Framework, and the National Shelter Program, and vice-versa; similarly 
between Department programs and regional plans of other government 
agencies; 
d. Review all local development and land use plans of provinces and 
independent cities for purposes of ensuring compliance with laws within 
thirty (30) days from receipt thereof; 
e. Undertake the independent monitoring and review of sector performance 
and the performance of national government, local governments, 
industry and other stakeholders in the regions, and recommend 
appropriate action thereon; 
f. 
Monitor, investigate and assess compliance to approved subdivision and 
condominium plans; and for the purpose, impose fines/penalties and, 
on, its own motion or upon complaint of any interested party, after the 
conduct of appropriate investigation, issue notices of violations and 
Cease and Desist Orders for noncompliance thereof; 
g. 'Coordinate the housing and urban development planning process in the 
regions to ensure the delivery of various activities and services such as 
titling, issuance of permits for subdivision plans,' the provision of social 
and livelihood services, and other services related to housing and urban 
development; 
h. Maintain a regional database and information system for the sector in 
the region; 
1. Undertake a public information program to provide the industry, general 
public and other stakeholders with information on national and local 
government policies, regulations and programs, as well as to establish a 
consultative mechanism to serve as a forum for continuing planning and 
evaluation of settlement programs and projects; 
J. Implement, monitor and evaluate policies, rules and regulations 
governing resettlement, relocation/ eviction or demolition due to for 
government projects which will involve the eviction or demolition of 
structures of homeless and underprivileged citizens, and recommend 
appropriate action thereon; 
k. Ensure that local government units institute preventive measures 
against squatting and address other concomitant problems, such as 
rural to urban migration; 
1. 
Monitor and evaluate the implementation of government's programs and 
projects which would require housing provision and/or relocation and 
resettlement activities, and recommend appropriate action thereon; 
13 


m. Administer homeless assistance advances/grants to LGUs, NGOs and 
private communities for temporary and emergency housing, in response 
to man-made and natural calamities; 
n. Implement innovative, clearly defined, transparent and on-budget 
housing subsidy mechanisms for the homeless and underprivileged in 
the regions to enhance accessibility to housing; 
o. Registration 
of incorporation 
of home-owners 
associations 
and 
condominium corporations; and 
p. Perform such other functions as may be assigned by the Secretary. 
CHAPTER 7 
ATTACHED AGENCY AND ADVISORY COMMITTEE 
Section 25. Attached Agency. -
The HOME DEVELOPMENT MUTUAL 
FUND (HDMF) is hereby attached to the Department for policy and program 
coordination. The Fund shall continue its function of providing a savings systems 
for public and private sector employees with housing as its primary investments, 
provided for in P.D. 1752, as amended by E.O. 35 and Republic Act 7742. 
The Secretary shall in concurrent capacity, be the ex-officio chairperson of 
the HDMF. 
SECTION 26. Advisory Committees. -The Secretary shall have the power to 
establish Ad Hoc advisory committees, consisting of key representatives from the 
private sector, urban poor communities and other marginalized groups, academe, 
local governments, and national government to provide a forum for private sector 
participation and dialogue on key housing and urban development issues and 
policies. 
CHAPTER 8 
FUNCTIONS OF LOCAL GOVERNMENTS IN RELATION 
TO HOUSING AND URBAN DEVELOPMENT 
Section 27. Continuing Devolution of functions to Local Governments. -The 
national government, 
through the 
Department of Housing and Urban 
Development, and in conSUltation with the Department of Interior and Local 
Government and the local governments, shall formulate and implement a 
continuing devolution program for housing and urban development sector 
functions, responsibilities, authority and accountability, in accordance with the 
principles of sector governance stipulated in this Act. 
Section 28. Devolution of Rule Enforcement Functions to Provinces and 
Independent Component Cities. -The following regulatory functions of the Housing 
and Land Use Regulatory Board as provided for in Executive Order No. 648, dated 
07 February 1981, as amended by Executive Order No. 90 dated 17 December 
1986, are .hereby devolved to provincial governments, independent component 
city governments and the cities and municipalities of the Metropolitan Manila 
Area; Provided that all rule promulgation and enforcement functions and 
activities of local government units, are in accordance with the prescribed 
regulatory framework and policies as well as guidelines issued by the Department 
of Housing and Urban Development: 
a. Review, evaluate and approve or disapprove comprehensive local 
development plans, local land use plans and zoning ordinances of 
component cities and municipalities; the zoning components of civil 
14 


works and infrastructure projects of national, regional and local 
governments; subdivision, condominium or estate development projects 
including industrial estates, of the public and private sectors; and urban 
renewal and regeneration plans, programs and projects; Provided that 
the review and approval of such comprehensive local development plans, 
local land use plans and zoning ordinances shall respect the 
classification of public lands for forest purposes as certified by the 
Department of Environment and Natural Resources; and Provided that 
the claSSification of specific alienable and disposable lands by the 
Bureau of Lands shall be in accordance with the relevant zoning 
ordinance of the local government where such lands are located; and the 
proVisions of RA 6657 with regard to the lands distributed, and issued 
notice of coverage under the Comprehensive Agrarian Reform Program 
(CARP) as certified by the Department of Agrarian Reform; Provided, 
Further, that nothing in this Section shall be construed as repealing, 
amending or modifying in any manner, the provisions of RA 6657; 
b. Registration of subdivision lots and condominium projects; issuance of 
license to sell subdivision lots and condominium units in the registered 
units; approval of performance bond and the suspension of license to 
sell; approval or mortgage on any subdivision lot or condominium unit 
made by owner or developer; granting of permits for the alteration of 
plans and the extension of period for completion of subdivision or 
condominium projects, subject to the standards and requirements of the 
Department; 
c. Impose fines and penalties as may be allowed under existing laws or 
Department policies, and guidelines; 
d. Conduct public hearings and consultations on the promulgation of 
regulation; 
e. Formulate and adopt rules and procedures for rule enforcement; 
f. Provide information to the Department necessary in the monitoring of 
local urban development and housing in accordance with the report 
content and formatting guidelines of the Department; and 
g. Perform such other related regulatory functions as may be provided for 
by law. 
CHAPTER 9 
TRANSITORY PROVISIONS 
Section 29. Dissolution of Existing Housing Agencies and Corporations. -
To integrate all the functions and activities of the government, as well as 
minimize duplication of work and thus achieve economy, efficiency and 
effectiveness of operation in the management of housing and urban development, 
the Housing and Urban Development Coordinating council (HUDCC), the 
Presidential Committee for Mass Housing, the National Housing Authority (NHA), 
the National Home Mortgage Finance Corporation (NHMFC), the Home Insurance 
Guaranty Corporation (HIGC) and the Housing and Land Use Regulatory Board 
(HLURB) are hereby abolished within six (6) months from the effectivity of this act 
subject to Section 33 of this Act. 
Section 30. Transfer of Power and Functions. - The powers and functions of 
the abolished agencIes and corporations are hereby transferred to the 
Department. 
Section 31. Transfer of Rights, Assets and Liabilities. -
The Department 
shall, by virtue of this Act, be subrogated to all rights and assume all the 
liabilities of the Housing and Urban Development Coordinating Council, 
15 


Presidential Commission on Mass Housing and all other agencies, corporations of 
the government whose functions and powers have been transferred to the 
Department, and all their pertinent funds, records, property, assets, equipment 
and such personnel, as may be necessary, including unexpended portions of their 
appropriations and/or allocations. all contracts and liabilities of said offices, 
agencies, and government units are hereby transferred to and assumed by the 
department and shall be acted upon in accordance with the auditing code and 
other pertinent laws, rules, and regulations. 
SECTION 32. Staffing Pattern. -The Secretary shall, with the end in view of 
creating a lean but effective organization, prescribed and approved the 
organizational framework and staffing pattern within sixty (60) days after the 
approval of this act. The organization, staffing, and compensation standards shall 
be based on existing budgeting and compensation rules and regulations. 
The authorized positions created therein shall be filled by regular appointments 
by the president or the secretary as the case may be: provided, that, in the filling 
of positions created, preference shall be given to the personnel of abolished 
agencies: provided, however, that such individuals comply with the qualification 
standards set by the civil service commission for the positions that they shall be 
appointed to: provided, finally, that, if such individuals possess the same 
qualifications, seniority shall be given priority. 
Section 33. Transition Period. -
All transfer of functions, assets, funds, 
equipment, property, transactions and personnel in affected national government 
agencies; and the formulation and implementation of the internal organic 
structures, staffing patterns, operating systems and revised budgets of the 
Department, shall be completed within six (6) months; provided, that the officers 
and employees of the abolished offices, agencies, and government units shall 
continue to assume their posts in holdover capacity until such time as the 
Department has been organized and the new officers and employees have been 
appointed pursuant to the provisions of this act. 
SECTION 34. Gratuity. -Employees separated from the service as a result 
of the abolition or reorganization under the provisions of this act shall, within one 
(1) month from their separation, be paid the money value of his accumulated 
vacation and sick leave, and such retirement gratuity as may be due him under 
existing retirement laws. Any of the employees and laborers who do not qualify 
under any existing retirement law shall be paid one hundred fifty percent (150%) 
of their monthly basic salary for every year of service in the government, payable 
in lump sul?; Provided however that those who avail of such privileges shall start 
their government service anew if subsequently absorbed and government owned 
entity. 
CHAPTER 10 
IMPLEMENTATION AUTHORITY AND FUNDING 
Section 35. Implementing Authority. - The Secretary of the Department is 
hereby authorized to undertake the implementation of the provisions of this Act 
and implement the necessary organizational changes within the specified six (6) 
month transition period. 
Section 36. Funding. - The amount in excess of the unreleased balance of 
the budgets of the Department which is needed for the initial implementation of 
this Act, as may be determined by the Secretary in the case of the Department of 
Housing and Urban Development shall be released by the Department of Budget 
16 


and Management within thirty (30) days upon submission by the Department and 
the Commission of their respective budget estimates. 
CHAPTER 11 
MISCELLANEOUS PROVISIONS 
Section 37. 
Mandatory Review of the Implementation of this Act. - The 
Department shall conduct and submit a report to Congress a review of the 
implementation of this Act, at the end of the second year after the effectivity of 
this Act for implementation at the national government level, and at the end of 
the fifth year with respect to the devolution of functions to local governments. 
Section 38. Repealing Clause. - All laws, ordinances, rules, regulations, 
and other issuances or parts thereof, which are inconsistent with the provisions 
of this Act, are hereby repealed or modified accordingly. 
Section 39. Separability Clause. - Any portion or provision of this Act that 
may be declared unconstitutional shall not have the effect of nullifying other 
portions or' provisions hereof as long as such remaining portions or prOVISIOns 
can still subsist and be given effect in their entirety. 
Section 40. Effectivity. -
This Act shall take effect after fifteen (15) days 
following its publication in at least two (2) newspapers of general circulation. 
Approved, 
17