Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 5259,

Introduced by
OFW Family Party-List Representative ROY V. SENERES

EXPLANATORY NOTE

Time and again, the matter of the widening gap between the rich and poor
in this country is being bewailed, But among the root causes of the widening gap
is the unbridled and uncontrolled and unregulated imposition by owners/lessors of
commercial spaces of exorbitant, sky high rentals. More often than not, small and
medium entrepreneurs fold-up after a while because whatever profits they derive
from their small and medium business enterprises are being eroded or gobbled-
up by the tyrannically imposed amounts of rentals.

Most of the small and medium business entrepreneurs are long time
‘operators as well as new small and medium business operators whose dream of
generating profits out of their business are immediately diminished by the
exorbitant cost of rentals. Some of these small and medium business operators
are retirees from government and private employment and/or their children who
would wish to embark on new business ventures. They include OFW families and
other families coming from the middle class.

It is universally known that small and medium enterprises (SMEs) have
always been the backbone of the economies of highly developed countries in all
parts of the world but in this country where there is lack of government support
we virtually slay the opportunities of said entities even before they could start.

Many of these SMEs who also belong to the working class desire to afford
their workers with wages that are in accordance with the minimum wage law but
are having difficulty to do so because their profits are already being eaten up at
the outset by extremely greedy landlords.

It is therefore imperative that government
between landlords or lessors and lessees pel
business of SMEs,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

5259

HOUSE BILL NO.

Introduced by HON. ROY V. SENERES

AN ACT
TO REGULATE THE COST OF RENTAL AND OTHER CHARGES BETWEEN
LESSORS AND LESSEES OF COMMERCIAL ESTABLISHMENTS FOR THE
PURPOSE OF NARROWING THE GAP BETWEEN THE RICH AND THE POOR
AND IN THE PROCESS IMPROVING THE ECONOMY

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title -This Act shall be known as the “Rental Control
Law in Commercial Establishments”.

SEC. 2. Coverage -This Act shall cover owners of establishments such as
shopping malls, department stores, stalls, buildings which houses and/or offer for
rent spaces for commercial purposes.

SEC. 3. Declaration of Policy - This Act shall be in furtherance of
provisions of the 1987 Constitution, to wit:

1. Section 9, Article II, as State policy: “The State shall promote a just
and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full
employment, rising standard of living, and an improved quality of life
for all.”

2. Section 19, Article II, provides that: “The State shall develop a self-
reliant and independent national economy effectively controlled by

Filipinos.”


3. Section 20, Article II, which provides that: “The State recognizes the
indispensable role of the private sector, encourages private enterprise,
and provides incentives to needed investments.”

4. Section 3, paragraph 4, Article XIII, which provides that: “The State
shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production
and the right of enterprises to reasonable returns of investment, and
to expansion and growth.

SEC. 4. Definition of Terms. ~ For purposes of this Act, the following

terms shall be defined as:

a). “Small Enterprise” shall refer to 2 business entity whose asset base is

over P1.0 million but not more than P5.0 million;

b). "Medium Enterprise” refers to a business entity whose asset base is

over P5.0 million but not more than P50.0 million;

©). “Lessor” shall refer to a person who leases or lets a property to

another;

4). “Lessee” shall refer to a person who holds the lease of a property;

SEC. 5. Creation of a Regulatory Commission. - Pursuant to the

preceding section and in order to attain the objectives and purposes of this Act,
an independent commission is hereby created, to be known as the Commercial
Establishment Rental Regulatory Commission (CERRC), which shall hereinafter be
referred to as the Commission, and shall be organized after the approval of this
Act.
For budgetary purposes, the Commission shall be under the Office of the
President.
(a) Composition. - The Commission shall be composed of a
Chairperson and two (2) Associate Commissioners. The Chairperson
and Commissioners shall be citizens and residents of the

Philippines, at least forty 40 but not more than sixty (60) years of


©

(d)

(e)

age, of good moral character and of recognized probity and
independence. The Chairperson and two (2) Associate
Commissioners shall be of recognized competence in the field of
law, banking, economics or finance, commerce, accounting or
management. They must have actively practiced their professions
for at least ten (10) years, but must not have been candidates for
any elective national or local office in the immediately preceding
elections, whether regular or special.

Term of Office. - The Chairperson and the Associate Commissioners
shall be appointed by the President of the Philippines. The term of
office of the Chairperson and the Associate Commissioners shall be
six (6) years without reappointment. In case a vacancy occurs
before the expiration of the term of office, the appointment to such
vacancy shall be only for the unexpired term of the predecessor, In
no case shall any Member be appointed or designated in a
temporary or acting capacity,

Prohibition and Disqualifications, ~ The Chairperson and Associate
Commissioners shall not, during their tenure, hold any other office
of employment. They shall strictly avoid conflict of interest in the
conduct of their office.

Compensation of Commissioners. - The Chairperson of the
Commission shall hold the rank of and shall have the privileges and
compensation equivalent to that a Department Secretary, while the
Associate Commissioners shall each hold the rank of and shall have
the privileges and compensation equivalent to that of a Department
Undersecretary.

Quorum. = All three (3) members of the Commission shall

constitute a quorum and the affirmative vote of two (2) shall be


necessary for the adoption of any rule, ruling, order, resolution,
decision or other acts of the Commission.

(f) Staff. - The Commission shall appoint an adequate staff which shall
be headed by an Executive Director, fix the compensation in
accordance with the Revised Compensation and Position
Classification Law and determine their status, qualification and
duties. The Executive Director shall be appointed by the President
and shall have relevant experience in any of the fields of law,
economics, banking, commerce, finance or management for at
least ten (10) years. Provided, That the Executive Director shall be
a Career Executive Service Officer (CESO). The members of the
technical staff, except those performing purely clerical functions,
shall possess at least a Bachelor's Degree in the following lines of
specialization: economics, law, banking, accounting, finance,
commerce or management.

SEC. 6. Original and Exclusive Jurisdiction, Powers and Functions.

- The Commission shall have original and exclusive jurisdiction to adopt,
formulate and implement policies, guidelines and rules regulating the imposition
of rentals to avoid instances of charging exorbitant rental amounts by commercial
establishments.

SEC. 7. Penalty. - Any violation of this Act shall be punished with a fine
of not less than Fifty Thousand Pesos (P50,000.00) or imprisonment of not less
than six (6) months or both at the discretion of the court. If the offense is
committed by a corporation, firm, association, partnership, or other entity, the
penalty shall be imposed upon the guilty officer or officers of such commercial
establishments or entity.

SEC. 8. Appropriations. - The amount necessary to implement the

provisions of this Act shall be included in the annual General Appropriations Act,


However, for the initial budgetary requirements of the Commission, the amount
of Fifty million pesos (P50,000,000.00) is hereby appropriated.

SEC. 9. Repealing Clause. - All laws, decrees, executive orders, rules
and regulations inconsistent herewith, are hereby repealed or modified
accordingly.

SEC. 10. Separability Clause. - If any provision of this Act is held invalid
or declared unconstitutional, the other provisions which are not affected thereby
shall remain valid and subsisting.

SEC, 11. Effectivity, - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in two (2) newspapers of general
circulation, whichever comes first.

Approved,