THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
Hrst Regular Session 
1 
Introduced by Senator Franklin M. Drilon 
EXPLANATORY NOTE 
The 1987 Philippine Constitution provides : 
“Article I1 
Declaration of Principles and State Policies 
x x x x  
x x x x  
x x x x  
“Sec. 9. 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, a rising standard of living, and an 
improved quality of life for all. 
Sec. 10. The State shall promote social justice in all phases of 
national development.” 
“Article XI11 
Social Justice and Human Rights 
x x x x  
x x x x  
x x x x  
“Sec. 9. 
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 d ecent h ousing and b asic s ervices t o underprivileged and homeless 
citizens in urban centers and resettlement areas. It shall also promote 
adequate 
employment opportunities to 
such 
citizens. In 
the 
implementation of such program the State shall respect the rights of small 
property owners.” 
No progress or degree of industrialization can be achieved without solving, or at 
least containing, 
the perennial problem on housing, urban planning and human 
settlement, a reflection of the government and society, in compliance with the afore- 
quoted constitutional mandate. 
The plight of the homeless should not be ignored. Many deserving but 
underprivileged applicants for housing benefits are often deterred from pursuing their 
desire of having a place which they can call their home by reason of the sheer magnitude 
of the paperwork and red tape involved in obtaining loans for the purpose. It is 


respectfully submitted that, the creation of the Department of Housing will do so 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. It is envisioned that with the 
Department of Housing there would no longer be a need for a housing applicant to go 
from one government agency to another 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.” 
It shall serve as the primary policy planning, programming, coordinating, 
implementing, regulating and administrative entity of the Executive branch of the 
Government to promote, develop and regulate dependable networks of housing, urban 
planning qnd resettlement programs and projects. 
For the foregoing reasons, the early passage of this bill is earnestly sought. 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
first Regular Session 
1 
S E N A T E  
S.B. No. If 
, 
Introduced bv Senator Franklin M. Drilon 
AN ACT 
DEFINING THE VISION AND POLICIES OF THE GOVERNMENT I N  THE HOLUSING 
AND URBAN DEVELOPMENT SECTOR, 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 Phikppines in Congress 
assembled: 
CHAPTER 1 
SHORT TITLE, VISION, POLICY AND PRINCIPLES 
Section 1. Short Title. - This Act shall be known as the "Department of Housing and 
Urban Development Act of 2004". 
Section 2. Declaration of Usion and Pokies, -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. Principes of Sector Governance, -The stipulated vision and 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: 
3.1 
Steering Role of the National Government in the Sector. 
The national 
government shall pe~orm 
a steering role in the urban development and housing sector. 
a> 
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 locational choices of investors, and prevent 
urban decay, congestion, diseconomies of scale and environmental degradation 
of urban areas. 


b) The national government shall provide policies that will mobilize public 
and private sector resources toward a self sustaining housing finance system. 
3.2. 
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: 
a) 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. 
b) 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. 
c) 
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. 
d) 
Local governments shall have full autonomy in housing and urban 
development planning and management consistent with national policies, 
strategies and regulatory framework. 
e) 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. 
3.3. 
Maximum Partl;cl;oation of the Private Sector and Communities in Houshg 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. 
3.4. 
Responsiveness to the sheker needs of the urban poor communit7es. 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 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. 
3.5. 
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 
2 


agencies to promote efficiency and effectiveness, clarify accountability, and ensure 
synchronization. 
3.6. 
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. 
CHAPTER 2 
DEFINITION OF TERMS 
Section 4. DefinitYons, -As used in this Act, the following terms shall mean: 
4.1. 
Devolution - the transfer of responsibility, authority and accountability for 
the performance of a defined functions from the national government to local 
governments. 
4.2. 
Urban Land Management - refers to the range of government 
interventions, including policies, incentives, regulation and titling, land 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, i promote access, support economic productivity, 
ensure sustainable development and protect individual rights. 
4.3. 
Land Use Plan - refers to the document, formulated by the locl 
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. 
4.4. 
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. 
4.5. 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 structuresiover land that is often withdrawn or converted 
from its original use, resulting in the creation of a built environment. 
4.6. 
Urban Development Planning - also called city planning or town planning, 
is a process that involves the planningiof diverse elements that comprise an urbanized 
area, including its physical infrastructure, environment, housing, transportation, and 
management of land use and urban growth. 
4.7. 
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. 
4.8. 
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. 
4.9. 
Zoning Ordinance - refers to the set of rules, regulations and specific 
procedures and requirements promulgated by the local government that will guide land 
3 


use and land development and the development of built environment within the 
jurisdiction of the local government. 
4.10. 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. 
CHAPTER 3 
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 Func~ons. 
1 - The Department shall perform the following 
functions: 
6.1, 
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; 
6.2. 
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 
governments, and facilitate private sector investment; 
6.3. 
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; 
6.4. 
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; 
6.5. 
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; 
6.6. 
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; 
6.7. 
Delineate areas for priority development as urban renewal areas and 
prepare programs for their regeneration; 
6.8. 
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; 
6.9. 
Exercise administrative investigatory powers over local governments to 
ensure their faithful compliance with housing and urban development laws, standards 
4 


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; 
6. 10. Develop and implement the comprehensive and integrated housing 
program provided for under this act; 
6.11. Formulate and enforce general and specific policies for housing 
development and resettlement; 
6.12. Prescribe guidelines and istandards for the reservation, conservation and 
utilization of public lands identified for housing and resettlement; 
6.13. Exercise the right of eminent domain or acquire by purchase privately 
owned lands for purposes of housing i development, resettlement and related services 
and facilities; 
6.14. Develop and undertake housing development and/or resettlement projects 
through joint ventures or other arrangements with public and private entities; 
6.15. 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 determinatioh of forms 
of assistance for housing development to be extended through multilateral or bilateral 
assistance programs; 
6.16. Promote housing development by providing technical assistance; 
6.17 
To 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; 
6.18. To 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; 
6.19. To enter into and petform such contracts with any person or entite, 
public or private, as may be necessary, proper or conducive to the attainment or 
furtherance of the objectives and purposes of this act; 
6.20. 
To 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; 
6.21. 
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; and 
6.22. 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. Organkational structure. 
The department shall consist of the offices of 
the secretary, the undersecretaries and assistant secretaries, the department 
services, 
bureaus, regional offices, the attached agencies, and their constituent units. 
5 


CHAPTER 4 
DEPARTMENT PROPER 
Section 9. 
Ofice of the Secretav. - The Office of the Secretary shall consist of 
the secretary, and his immediate staff. 
Section 10. Powers and functions of the Secretaty 
The Secretary shall: 
(1) Advise the President in issuing executive orders, regulations, proclamations and 
other issuance relative to matters under the jurisdiction of the department; 
(2) 
Establish policies and standards for the efficient and effective operations of the 
Department in accordance with the approved programs of the government; 
(3) 
Promulgate rules, regulations and other issuance necessary in carrying out the 
Department’s mandate, objectives, policies, plans, programs and projects; 
(4) 
Exercise 
supervision and control over all 
functions and activities of the 
De pa rtm en t; 
(5) 
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; 
(6) 
Appoint all officers and employees of the department except those whose 
appointments are vested in the president or in some other appointing authority; 
(7) 
Delegate authority for the performance of any administrative or substantive 
functions to subordinate officials of the Department; and 
(8) 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 
(SSS), the Government Service Insurance System (GSIS) and the Public Estates Authority 
(PEA). The Secretary. 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 
(H DM F) . 
Section 11. The Undersecretafles and Assistant Secretafies. - 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 I V  
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. 
CHAPTER 5 
DEPARTMENT SERVICES 
6 


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 Sewice, -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) 
ensuring efficiency in the allocation and utilization of budgetary and other resources of , 
the Department; 
Develop and implement approaches, methodologies and procedures for 
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. Lega/Serwice. -The legal Service shall: 
a) 
Provide the Department, its 
services; 
b) 
Provide assistance to the 
Department and in the investigation of 
personnel; 
officials and personnel with legal counseling 
Secretary in handling cases affecting the 
administrative cases involving Department 
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; 
e) 
Perform such other related functions as may be assigned by the 
Secretary. 
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; 
b) 
Prepare, produce and publish materials to support such public information 
and public relations program; 
7 


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; 
9 
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 6 
PLANS, POLICIES AND MONITORING OFFICE 
Section 18. Plans, Pokies and Monitoring ORce. -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; 
8 


(e) Development of petformance indicators for housing and urban development, 
develop the petformance indicators and program targets for key shelter agencies and 
local governments; 
(f) Monitoring key shelter agencies' performance against targets as well as the 
accomplishment of national shelter plan and adherence to the urban devejopment and 
housing framework; 
(9) 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 deve I o pm en t , 
Section 19. Bureaus under the PPMO. -The Assistant Secretary for Plans, Policies and 
Monitoring shall supervise the following: 
(1) 
Plarq Policies and Programs Bureau. 
The Plans, Policies and Programs 
a) 
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; 
Bureau shall: 
b) 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; 
c) 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; 
d) 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; 
e) Standardize planning data and sector information requirements under 
a uniform data classification and storage and through geographic information 
systems; 
9 
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; 
g) 
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 
h) Perform such other functions as may be assigned by the Secretary. 
(2) 
Monitoring and Evaluation Bureau. 
The Monitoring and Evaluation 
Bureau shall: 
9 


a) Formulate an effective monitoring and performance evaluation system 
and undertake the overall monitoring and performance assessment of housing 
ang urban development projects of the department, its attached agencies, local 
government units, and other entities; 
b) 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; 
c) Develop and operate a sector performance monitoring and evaluation 
system and monitor, evaluate and independently report on the performance of 
the sector and that of local governments, industry, national government and 
other key sector stakeholders; 
d) 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; 
e) Regularly monitor the corporate and operational performances of all 
the organic bureaus, 
attached agencies and corporations, and make 
recommendations thereon; and 
9 Perform such other related functions as may be assigned by the 
Secretary. 
(3) 
Housing Finance Development Bureau. 
The Housing Finance and 
Development Bureau shall: 
a) 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; 
b) Design the most appropriate mechanism to increase transparency and 
efficiency 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; 
c) Undertake continuing studies for the improvement of the institutional 
framework and administrative operations for housing finance; 
d) Perform such other functions as may be assigned by the Secretary. 
CHAPTER 7 
URBAN DEVELOPMENT AND HOUSING OPERATIONS OFFICE 
Section 20. The Urban Development and Housing Operations ORce. - The Urban 
Development and Housing Operations Office 
(UDHOO), 
shall be headed by 
the 
Undersecretary for Operations who shall discharge the following duties and responsibilities : 
(1) 
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; 
10 


(2) Development of the capacity of local governments to plan, implement and 
monitor housing, land management, urban development and urban redevelopment 
programs; 
(3) 
Development and administration of the national government subsidy 
(4) 
Provision of technical and administrative support to, management and 
program for social housing; 
implement foreign assisted projects at the central level; and 
(5) Exercise administrative supervision and control over the housing and land 
use regulatory office and the regional offices. 
CHAPTER 8 
HOUSING AND LAND USE REGULATORY OFFICE 
Section 21. 
Housing and Land Use Regulatory OHce (HLURO). - 7he 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 Ofice, - 
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 socio-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) 
Monitor, 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; 
9 
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 
11 


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; 
1) 
Adopt rules of procedure for the conduct of its business for 
approval of the secretary; 
1) 
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; 
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) 
functions; 
Charge and collect reasonable fees in the petformance of its 
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; 
0) 
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) 
registered units; 
Issue license to sell subdivision lots and condominium units in the 
s) 
Approve performance bonds and suspension of license to self; 
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; 
12 


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 bpsiness 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 dFpartment 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 
final orders, rulings or decisions; and 
cc) 
Secretary. 
Perform such other related functions as may be assigned by the 
SECTION 23. 
Decklons of the HLURO. - Decisions, orders or resolutions of 
the HLURO hearing officers shall be appealable to the Secretary within fifteen (15) days from 
receipt of the decision. However the Secretary may motu propio review any decision or action 
of the HLURO before the same becomes final. 
CHAPTER 8 
THE REGIONAL OFFICES 
Section 24. Regional Ofices - 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: 
Implement laws, policies, plans, rules, regulations and programs of the 
a) 
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; 
13 


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; 
9 
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 non- 
compliance 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; 
i) 
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 
sewe as a forum for continuing planning and evaluation of settlement programs and 
projects; 
j> 
Implement, monitor and evaluate policies, rules and regulations 
governing resettlement, relocationjeviction 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; 
I) 
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; 
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; 
0) 
Registration of incorporation of 
homeowners associations and 
condominium corporations; and 
p) 
Perform such other functions as may be assigned by the Secretary. 
CHAPTER 9 
AlTACHED AGENCY AND ADVISORY COMMIlTEE 
Section 25. ARached Agency. - The HOME DEVELOPMENT MUTUAL FUND 
(HDMF) is hereby attached to the Department for policy and program coordination. 
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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-oficio 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 10 
FUNCTIONS OF LOCAL GOVERNMENTS I N  RELATION TO HOUSING AND URBAN 
DEVELOPMENT 
Section 27. Contli7uing 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 Uties, -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: 
28.1 
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 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. 
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; 
28.2 
15 


28.3 Impose fines and penalties as may be allowed under existing laws or 
Department policies, and guidelines; 
28.4 
Conduct public hearings and consultations on the promulgation of 
regulation; 
28.5 
Formulate and adopt rules and procedures for rule enforcement; 
28.6 
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 
28.7 Perform such other related regulatory functions as may be provided for by 
law. 
CHAPTER 11 
TRANSITORY PROVISIONS 
SECTION 29. 
Dissohtron of €xisting ffousihg 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 (NHVFC), 
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 R@hts, Assets and LiabiLties. - 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, 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. 
StaHng 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 
The 
organization, staffing, and compensation standards shall be based on existing budgeting and 
compensation rules and regulations. 
within sixty (60) days after the approval of this act. 
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 sta,ndards 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 
16 


. 
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 sum; Protdded however, that those who avail of such privileges shall start 
their government service anew if subsequently absorbed and government owned entity. 
CHAPTER 12 
IMPLEMENTATION AUTHORITY AND FUNDING 
Section 35. Jinplemenf/i7g Authorfw, -- 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. Fundlig, - 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 apd Urban 
Development shall be released by the Department of Budget and Management within thirty 
(30) days upon submission by the Department and the Commission of their respective budget 
estimates. 
CHAPTER 13 
MISCELLANEOUS PROVISIONS 
Section 37. Mandatory Retdew of the Implementation of thk 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 a t  the end of the fifth year with respect to the devolution of functions to 
local governments. 
Section 38. Repealing Ciause, - 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. Effectlvii’y, -This Act shall take effect fifteen (15) days after its publication 
in at least two (2) newspapers of general circulation. 
Approved, 
17