Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

i}
HOUSE BILL NO. 2561

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

The shortage of affordable housing affects all sectors of society
especially our public school teachers when an independent survey
revealed that more than ninety thousand (90,000) public school
teachers have no homes to call their own.

Majority of these public school teachers cannot afford their own
homes at market prices since they earn a gross monthly income of
P10,000 or less. In addition to this, more than 20% of our public
school teachers have unemployed spouses and thus, bears the burden
of providing for their family.

There had been efforts to solve this problem by providing for a
special homing facility through the state pension fund. However, its
implementation got caught up in the web of politics and never
materialized. Thus, it is imperative that we provide for a stable
housing program for our teachers through legislation.

This bill seeks to institute a housing program for teachers by
providing funds through loans at affordable interest and long-term
repayment period, which our teachers can use to purchase a housing
unit of their own choice. It also seeks to involve the private sector in
providing housing units exclusively for teachers through the grant of
fiscal incentives.

In view of the foregoing, the passage of this bill is earnestly
sought.

=e"

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

1
HOUSE BILL NO. 2561

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT
, TO PROVIDE FOR A HOUSING PROGRAM FOR TEACHERS

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

SECTION 1. Title. This Act shall be known as the "Teacher’s
Housing Program.”

SEC. 2. Declaration of Policy. It is hereby declared the policy
of the State to uplift the living conditions of teachers and promote a
housing program to enable them to acquire their own housing units.
To this end, the State affirms its commitment to strength, promote,
and support the component activities of housing production and
finance to order to enable teachers to acquire decent housing and
basic services at the lowest affordable price.

SEC. 3. Coverage. The Program shall cover the teachers of
the Department of Education (DepEd) with a permanent status.

SEC. 4. Role of Government Housing and Financing
Agencies. To ensure the accomplishment of the objectives under this
program, the hereunder mentioned housing agencies shall perform the
following in addition to their respective existing powers and functions:

(a) The National Housing Authority shall undertake special
housing projects for teachers. In addition, it may also
provide technical and other forms of assistance to private
developers in the development of housing projects;

(b) The National Home Mortgage Finance Corporation shall
provide the mortgage market for teacher’s housing
through the purchase of teacher’s housing mortgages
and/or issuance of securities. It shall administer the funds
provided for housing loans and developer assistance under


(PI50,000.00) with an interest rate of not exceeding twelve
percent (I2 percent) per annum as originate by the funding
agencies or their accredited financial institutions. Such
loans shall be assigned to the Fund immediately after
origination for which the Fund shall issue promissory
notes.

At least forty percent (40%) of the yearly appropriation for the
Programs shall be for the loan guarantee. The Home Guarantee
Corporation shall undertake the guarantee system under this act and
shall act as the administrator and trustee of the fund. The HGC shall
issue the appropriate guidelines within one (1) year from the approval
of this Act.

SEC. 7. Fiscal Incentives for Private Sector participation
in Teacher’s Housing. Private sector developers who participate in
the development of teacher's housing shall be entitled to the following
fiscal incentives:

(a) Exemption from income taxes for housing projects
exclusively dedicated for teachers;

(b) Exemption from capital gains tax on housing projects
exclusively dedicated for teachers;

(c) Exemption from documentary stamp tax for all project
related documentation;

(d) Exemption from value-added tax for the project
concerned;

(e) Exemption from transfer taxes for both raw and completed
projects; and

(f) | Exemption from donor’s tax for lands certified by the local
government units to have been donated to teacher's
housing purposes.

Provided, that upon application for exemption, the housing
development plan shall have already been approved by the appropriate
government agencies concerned: Provided further, that all the savings
acquired by virtue of this provision shall be used to minimize the cost
of the housing units subject to the implementing guidelines to be
issued by the Housing and Urban Development Coordinating Council.


this Act as well as long-term funds provided by the
Government Service Insurance System and the Home
Development Mutual Fund for teacher’s housing.

(c) The Home Guaranty Corporation shall design an
appropriate guarantee scheme to encourage financial
institutions and private developers to undertake mass
housing production for teachers. It shall administer the
Guarantee System Fund as provided for under this Act.

(d) The Government Service Insurance System and the
Development Mutual fund shall be the primary provider of
funds for long-term housing mortgages.

SEC. 5. Role of the DepEd. The Department of Education
shall undertake the implementation of the program among its teachers
and shall ensure collection of amortization payments through a salary
deduction scheme. In line with this, the DepEd shall:

(a) Create a Teacher’s Housing Secretariat which shall issue
and collect the necessary documentation, receive and
process application, and transfer the same to the
appropriate housing agencies;

(b) Deduct amortization from their teachers on a monthly
basis and remit the same to the appropriate agency.

SEC. 6. Program Financing Scheme. In the implementation
of the Teacher’s Housing Program, the following shall consist the
financing scheme:

(a) Housing Loans for Teachers which shall be used for any of
the following purpose:

1. Purchase of a lot and construction of a residential unit

thereon;
2. Purchase of any of the following:
i. brand new or old existing units;
ii housing properties mortgaged with any
institution;

' iii housing assets being disposed off through
public


bidding or negotiated sale;

3. ° Purchase of a fully developed lot within a residential
area;

4. Construction of completion of a residential unit on a
lot owned by the beneficiary;

5. Home improvement or any alteration in an existing
residential unit;

6. Restructuring of an existing housing loan in any
government housing of financial institution, provided
that the account is updated.

Loans provided under this program shall be computed based on
a net take home pay which shall not be lower than Three Thousand
Pesos (P3,000.00). The interest rate on the loan shall not be more
than twelve percent (12%) per annum and shall be fixed for the entire
term of the loan. Provided, that if the borrower defaults on his
amortization payment for reasons of his own doing, the financing
agency may subject the borrower to a regular interest ratea for the
periods that he is in default.

To increase the benefits provided to teachers, loans under this
scheme shall not be subject to such charges, fees or premiums except
minimum processing fees to be charged by the appropriate agencies.

Loans provided for teachers earning less than twelve thousand
pesos (P12,000.00) per month shall not be less than sixty percent
(60%) of all available funds allotted for this purpose. At least forty
five percent (45%) of the year appropriation for the Program shall be
for Housing Loans.

(b) Developer Assistance fund, Proponents or developers of
housing projects exclusively for teachers and with a selling
cost not exceeding One Hundred Twenty Thousand pesos
(P120,000.00) per house and/or lot package which shall be
available exclusively for teachers, may avail of a financing
loan not exceeding eighty percent (80%) of the entire
project cost. The National Home Mortgage and Finance
Corporation, in coordination with the HUDCC, shall issue
the appropriate guidelines for this purpose.

At least fifteen percent (15%) of the early appropriation for the
program shall be for developer financing: Provided, that the unused
funds for developer financing shal! be utilized for Housing Loans.

(c) Guarantee System Fund. There is hereby created a
guarantee system fund for Teacher’s Housing Loans not
exceeding One Hundred Fifty Thousand Pesos


The Department of Finance, in consultation with the Housing and
Urban Development Coordinating Council, shall prepare the necessary
implementing guidelines for the proper implementation of the tax
exemption mentioned in this section within one (I) after the approval
of this Act.

SEC. 8. Funding Source. The Government Service Insurance
System and the Home Development Mutual Fund shall contribute a
total of Two Billion Pesos (P2,000,000,000) for the _ initial
implementation of the Program. Thereafter, each institution shall
allocate at least ten percent (10%) of their annual investible funds for
long-term teachear’s housing mortgages and shall be made available
to the National Home Mortgage and Finance Corporation under terms
which ensure their repayment. The National Government shall
contribute One Billion Pesos (PI,000,000,000) annually for the
continuous implementation of the Program.

SEC. 9. Appropriation. The amount necessary to carry out
the purposes of this Act shall be included in the General Appropriations
Act of the year following its enactment into law and every year
thereafter.

SEC. 10. Separability. If for any reason, any provision of this
Act is declared invalid or unconstitutional, the remaining provisions not
affected thereby shall continue to be in full force and effect.

SEC. 11. Effectivity. This act shall take effect fifteen (15) days
after its complete publication in at least two (2) national newspapers
of general circulation.

Approved,