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Republic of the Philippines

VAs
HOUSE OF REPRESENTATIVES Hea RECEIVED
3 paTesAuG 11 2

Quezon City

Eighteenth Congress
Second Regular Session

House Bill No. 7405

Introduced by Representatives
ESTRELLITA B, SUANSING and HORACIO P. SUANSING, JR.

EXPLANATORY NOTE

Section 9, Article XIII of the 1987 Constitution states that “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, decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement
areas.

The national government hopes to be able to provide a house for every
underprivileged and homeless Filipino family through the National Housing,
Development, Production and Financing Program. The program aims to
address the housing needs of Filipino families, generate, and mobilize funds
for housing purposes, ensure that support mechanisms are available and
accessible and guarantee the development of a strong, sustainable, and
affordable housing finance system. It encourages the participation of both
public and private sectors

To ensure that the objectives of the program are met by 2040, this
measure ensures that there will be continuous and sufficient funding.

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

SING REP. Ht \CIO P. SUANSING, JR.

1* District, Nueva Effja istrict, Sultan Kudarat


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
Second Regular Session

House Bill No. 7405

Introduced by Representatives
ESTRELLITA B, SUANSING and HORACIO P. SUANSING, JR.

AN ACT

PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT, PRODUCTION
AND FINANCING PROGRAM, AND PROVIDING FUNDS THEREFOR

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

SECTION 1. Title. - This Act shall be known as the “National Housing
Development, Production and Financing (NHDPF) Act.”

SEC. 2. Declaration of Policy. - It is hereby declared a policy of the state to:

(a)

(b)

()

(a)

Undertake, in cooperation with the private sector, a continuing
program of housing and urban development which shall make
available at affordable cost, decent housing and basic services
especially to the underprivileged and homeless citizens;

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 economy
activity and is led by market forces; where urban and rural areas have
affordable housing, sustainable physical and social infrastructure
and services facilitated under the democratic and decentralized
system of governance; and where urban and rural areas provide the
opportunities for an improved quality of life and eradication of poverty;

Ensure that poor dwellers shall be provided with appropriate and
innovative housing program and support mechanisms to discourage
further growth of blighted communities; and

Encourage on-site development, whenever feasible, in the
implementation of housing programs and shall promote the creation
of new settlements with basic facilities and utilities and development
of sustainable urban renewal programs.


Cognizant of the role of housing as stimulus of economic growth and
development, it is hereby declared a State policy to strengthen, promote and
support the component activities of housing production and finance by
ensuring continuous and sustained funding support to scale-up the
implementation of the major components of the National Housing
Development and Production Program.

SEC. 3. Objectives. - Towards this end, the State shall:

(a) Increase housing production by forging partnership among housing
stakeholders to address the housing needs of Filipino families by
2040.

(b) Generate and mobilize funds for housing purposes of Filipino families,
giving priority to the homeless and underprivileged

(c) Ensure the provision of support mechanisms/subsidy program to
improve access of Filipino families to a variety of housing options

(4) Guarantee the development of a strong, sustainable, accessible and
affordable housing finance system.

(e) Encourage public and private sector participation in the
implementation of government National Housing Development and
Production Financing Program.

SEC. 4. National Housing Development Production Program
Implementation. - Consistent with the aforementioned policy and objectives,
the Department of Human Settlements and Urban Development (DHSUD) and
its attached Key Shelter Agencies, shall intensify the implementation of the
vital components of the National Housing Development Production and
Financing Program. The implementation of this program shall be carried out
by the following agencies:

(a) National Housing Authority (NHA) - The sole national government
agency tasked to implement and develop the following housing
programs intended for the bottom 30% of the income population:

(1) Resettlement - This program addresses the requirements of
families affected by (a) government infrastructure projects, (b)
those living along danger areas, and (c) those affected by
Supreme Court Mandamus. It entails the provision of vertical
(from 5 to 15-storey residential building) and/or horizontal
housing units, community facilities socio-economic and other
community support programs.

The program also involves the implementation of
local/regional resettlement projects as joint National
Government-Local Government Units (LGUs) outside Metro

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(b)

(2)

(3)

(4)

(5)

Manila involving families in danger areas, those affected by
infrastructure projects, indigenous peoples and former rebels.

‘The government infrastructure agencies shall submit an
inventory of Informal Settler Families to be affected by their
projects and their location to the appropriate housing agencies
at least two years prior to its implementation and shall
incorporate in their respective project costs the amount needed
for the relocation and resettlement of affected families.

Government Employees Housing Program - This program is
intended to provide decent and affordable housing to low-
salaried government employees.

Settlements Upgrading - This program aims to address the
security of tenure and infrastructure requirements of informal
settlements on government-owned lands proclaimed or
designated as socialized housing sites.

Housing Program for Calamity Victims - This program is
intended to respond to the housing needs of low- and marginal-
income and/or informal shelter families for transitional and/or
permanent shelter affected by calamities such as typhoons,
landslides, earthquakes, and fires for relocation to safe areas.

Land Banking - This refers to the acquisition of land, which
includes idle government lands, at values based on existing use
in advance of actual need to promote planned development and
socialized housing programs with a view to distribute the land
to qualified socialized housing beneficiaries.

It covers survey and titling of individual lots for disposition
to qualified occupants, infrastructure development, housing
construction and rehabilitation of existing project sites.

Social Housing Finance Corporation (SHFC) - Mandated to undertake
social housing programs that will cater to the formal and informal

sectors in the 1o

and

income bracket and to take charge of developing
administering social housing programs, particularly the

Community Mortgage Program and its different modalities:

QQ)

Community Mortgage Program (CMP) - This is a mortgage
financing program, which assists legally organized associations
of underprivileged and homeless citizens to purchase and
develop a tract of land under the concept of community
ownership. The primary objective of the program is to assist
residents of blighted or depressed areas to own the lots they
occupy, or where they choose to relocate to, and eventually
improve their neighborhood and homes to the extent of their
affordability. The different modalities of the CMP are as follows:

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ii,

iv.

Sectoral CMP - A CMP modality that caters to the different
sectoral groups including but not limited to the basic
sector groups needing resettlement assistance. A sectoral
group represents a group or coalition of persons who
share similar concerns and interests and intend to avail
of resettlement assistance from SHFC, including
Indigenous Peoples (Ips), Indigenous Cultural
Communities (ICCs) and other ethnic minority groups.

Housing for Peace Process and Nation Building CMP - A
CMP modality which would lead to the achievement of
national peace and development through the provision of
housing to former rebels/rebel returnees (FR/RR). This
also includes rebuilding damaged or destroyed homes in
post-conflict areas of internally displaced persons (IDPs).

Post-Disaster Rehabilitation and Reconstruction CMP - A
CMP modality which provides assistance to community
housing projects in times of disaster. This program allows
the communities to immediately embark on house
construction and site development which adhere to the
minimum standards and specifications of the design and
structural components of disaster-resilient housing
projects, as well as materials.

Industrial Workers CMP - A CMP modality intended
primarily for low-income employees of companies
engaged in agro-industrial, industrial processing zone,
tourist, recreational, commercial and other enterprises.

Site Upgrading/Development CMP - A CMP modality
intended to provide site development and
housing/building construction loans for projects whose
lands are donated by private or public entities applicable
to both on-site or resettlement projects.

Mixed-Use CMP - A CMP modality aimed at developing a
self-sustaining community by having a balanced mix of
residential and commercial spaces, well-developed
infrastructure and recreational amenities along with
green and open spaces and wellness areas. Under this
modality, 9% of the project area shall be allotted for green
spaces and 1% for friendly facilities for persons with
disabilities (PWDs).

(c) National Home Mortgage Finance Corporation (NHMFC) — A government
corporation mandated to increase the availability of affordable housing
loans to finance the Filipino homebuyers on their acquisition of housing


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units through the development and operation of a secondary market for
home mortgages.

(1)

Securitization — This refers to the development of the secondary
market for home mortgages and other housing related
receivables, conveyances and financial instruments and the
development/promotion of and investments in housing-related
financial instruments and investment vehicles and the capital
markets thereof. Furthermore, this would also increase and
sustain funds available for housing and home development.

(4) Department of Human Settlements and Urban Development (DHSUD)
- The primary national government entity responsible for the
management of housing, human settlements and urban development
including the implementation of the following programs:

()

(2)

Public Housing - This is a housing program that is owned
and/or managed by the government for the purpose of providing
security of tenure to the underserved families including but not
limited to the development of proclaimed socialized housing
sites intended to promote the establishment of new towns, new
settlements, and urban renewal.

The term “underserved families” refer to those who are
disadvantaged in terms of access to basic services because of
inability to pay or other disparities by reason of economic or
social status, ethnicity, geographical isolation, and other
circumstances.

Subsidy — This is a financing assistance scheme intended to
enhance the affordability of well-targeted and most financially
incapable segment of the society. It is a grant extended to
qualified low-income beneficiaries under the National Housing
Development and Production Financing Program under any of
the following alternative subsidy schemes:

Extension of Interim Shelter Fund to each of the family-
beneficiaries which they can use to find safe residency and
livelihood to support their families, pending the completion
of their housing units in the relocation sites;

ii, Payment for upfront cost equivalent to 5% of the project
cost (e.g. mortgage insurance, titling, etc.); and

iii, Monthly payment subsidy for the first five (5) years of the
loan period in accordance with Section 3 (a) of Republic Act
No. 6846 or the Social Housing Support Fund Act. The
department shall be authorized to establish the
qualification and income requirements of borrowers who
will qualify for the amortization support subsidy.

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The DHSUD, in coordination with the LGUs and other
national government agencies, shall be authorized to
formulate the criteria and guidelines to select the
beneficiaries that may qualify for the subsidy program.

(3) Public Rental Housing ~ This program involved the extension of
fiscal assistance of up to a maximum of 50% of the total
construction cost for the National Government Agencies (NGAs)
and Local Government Units (LGUs) that shall construct and
operate public rental accommodation to eligible low-income
families and housing safety net for the vulnerable sectors (e.g.
senior citizens, persons with disabilities, etc.).

The DHSUD shall formulate the guidelines in the
implementation of pubic rental housing assistance including
the adoption of the lease/rental buy-back scheme.

(4) Survey of proclaimed lands for socialized housing and inventory
of government idle lands — This involves the survey of all
occupied government lands proclaimed by the President as
suitable for socialized housing and conduct of inventory of
government lands which have been idle for more than ten (10)
years, except lands owned by the GOCCs and government
financial institutions engaged in shelter financing as part of its
fiduciary obligations to its members and/or taken possession of
in their ordinary conduct of business.

(5) Such other program components as may be determined by the
DHSUD.

SEC. 8. Appropriations by the National Government. - The amount of One
Hundred Thirty-Five Billion, One Hundred Fourteen Million Pesos
(P135,114,000,000.00) or such amount necessary to carry out the provisions
of this Act is hereby authorized to be appropriated annually through the
General Appropriations Act over a period of twenty (20) consecutive years
commencing form the year immediately succeeding the effectivity of this Act
or until such time that the total fund requirements provided for in this Act
shall have been fully released.

A total amount of Two Trillion, Six Hundred Sixty-Seven Billion, Two
Hundred Ninety-Three Million Pesos (P2,667,293,000,000.00) covering the
continuing requirement of this Act shall be appropriated to the DHSUD and
Key Shelter Agencies for the implementation of the following component
programs of the NHDPF Program:

(a) One trillion, seven hundred twenty-two billion, four hundred forty-six
million pesos (P1,722,446,000,000.00) for the implementation of the
following programs of the NHA:

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(b)

()

(a)

(1)

(2)

(3)

(4)

(5)

Eight hundred billion and six hundred ninety million pesos
(P800,699,000,000.00) to finance the Resettlement Program
under Section 4{a)(1) of this Act;

Five hundred forty-three billion and four hundred nineteen
million pesos (P543,419,000,000.00) as subsidy for
Government Employees Housing under Section 4 (a)(2) of this
Act;

One hundred sixty-four billion and two hundred sixty-five
million pesos (P164,265,000,000.00) for the Settlements
Upgrading under Section 4 (a)(3) of this Act;

One hundred one billion and seven million pesos
(P101,007,000,000.00) for the Housing Program for Calamity
Victims under Section 4 (a)(4) of this Act; and

Sixty-three billion and __ fifty-six million _ pesos
(P63,056,000,000.00) for the Land Banking under Section 4
(a)(5) of this Act.

Four hundred fifty-three billion, two hundred million pesos
(P453,200,000,000.00) for the implementation of the Community
Mortgage Program under Section 4 (b)(1) of this Act.

Fifty billion (P50,000,000,000.00) for the Capitalization of NHMFC
‘under Section 4 (c).

Four hundred seventy-six billion, six hundred forty-seven million
pesos (P476,647,000,000.00) for the implementation of the following
programs of the DHSUD, as follows:

()

(2)

‘Three hundred sixty-five billion, nine hundred seventy-nine
million pesos (P365,979,000,000.00) to finance the Public
Housing under Section 4 (d)(1) of this Act;

Righty-nine billion, one hundred thirty-one million pesos
(P89,131,000,000.00) as subsidy under Section 4 (d)(2), as
follows:

i. Eighteen billion, five hundred thirty-one million pesos
(P18,531,000,000.00) as interim shelter finance assistance
for the informal settler-families who will be relocated
(Section 4 (d)(2)(i) of this Act);

ii, Sixty-three billion, seven hundred ninety-six million pesos
(P63,796,000,000.00) as upfront subsidy (Section 4
(d)(2)(ii) of this Act); and

iii. Six billion, eight hundred four million _ pesos
(P6,804,000,000.00) as amortization support (Section
4(d)(2)(iii) of this Act).


(3) Twenty billion, four hundred fifty-six million pesos
(P20,456,000,000.00) to finance public rental housing under
Section 4 (d)(3) of this Act; and

(4) One billion, eighty-one million pesos (P1,081,000,000.00) to
finance survey of proclaimed lands and conduct of inventory of
government idle lands suitable for socialized housing under
Section 4 (d)(4) of this Act.

SEC. 6. LGU Sources of Funds. - Section 43 of Republic Act No. 7279 on
Socialized Housing Tax is hereby amended to read as follows:

“SEC. 43. Socialized Housing Tax. - Consistent with the
constitutional principle that the ownership and enjoyment of
property bear a social function and to raise funds for the
Program, all local government units are hereby authorized to
impose an additional one-half percent (0.5%) tax on the
assessed value of all lands in urban areas. The proceeds from
the imposition of Socialized Housing Tax shall accrue to the
special funds of the LGUs, which shall be used for the
development of socialized housing projects and construction
and estate management of public rental housing of the LGUs.

SEC. 7. Implementation of the Securitization, Capital and Secondary
Mortgage Operations Program. - The NHDP Securitization for the
development of the secondary market for home mortgages of and other
housing related receivables, conveyances and financial instruments and the
development/promotion of and investments in new housing related financial
instruments and investment vehicles and the capital markets thereof, to
increase and sustain funds available for housing and home development shall
be implemented as follows:

(a)

(b)

(

(a)

The NHMFC shall be the sole implementing agency for the NHDP
securitization.

‘The NHMFC, in coordination with the DHSUD, Department of Finance
(DOF) and Bangko Sentral ng Pilipinas (BSP) and other concerned
agencies and private sector organizations, shall formulate a program,
the proceeds of which shall accrue to the Centralized Housing Fund.
The mortgages to be generated as a result of the implementation of
the component programs of the NHDP Program shall be sold and
transferred to the NHMFC, which shall also serve as asset pool for
securitization.

‘The NHMFC, as the sole agency for the implementation of the NHDPA
Securitization, shall manage the whole securitization process which
includes the following activities:

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(1) Determining the eligibility criteria for the asset pool;

(2) Defining the preliminary structure of the notes, bonds, and or
instruments to be issued, and third parties to be hired; and

(3) Education /briefing of target investors for all the issues.

(e) The NHMFC and NHDPFA-issued bonds, notes and securities shall be
exempt from the registration requirements under the Securities
Regulation Law in order to accelerate the issuance of its housing
related securities/financial instruments and, thus, more reasonably
provide the necessary fund for housing developments.

() Transactions by banks involving the purchase and sale of housing
bonds, debentures and such other similar instruments shall be
exempt from the twenty percent (20%) final tax on income,
documentary stamp tax, gross receipts tax, and value added tax.

(g) The investors’ yield or income from any socialized housing or
economic housing-related bond or asset-backed securities (ABS)
issued by NHMFC directly or through a special purpose entity under
the Securitization Act shall be exempt from income tax. Such
issuances shall enjoy all the tax exemptions granted under Republic
Act No. 9627 or the Securitization Act of 2004 pursuant to the State’s
policy of promoting the securitization of mortgage and housing-related
receivables of government housing agencies, to generate investment
and accelerate the growth of the housing finance sector, especially for
socialized and economic housing.

(h) Bonds purchased by private real estate developers shall be considered
as an alternative compliance to the balanced housing requirements
under Section 18 of RA 7279, as amended by RA 10884, subject to
the rules promulgated by the Department of Human Settlements and
Urban Development.

(i) The Philippine Guaranty Corporation created pursuant to Executive
Order No. 58, (S. 2018) shall guaranty payment of the balance
outstanding and due on the guaranteed principal obligation, plus
interest and yields thereon up to eleven percent (11%) per annum for
socialized housing packages, ten percent (10%) per annum for low-
cost housing packages, nine and one half percent (9.5%) per annum
for medium-cost housing packages and eight and one half percent
(8.5%) per annum for open housing packages.

SEC. 8. Capitalization of National Home Mortgage Finance Corporation
(NHMFC). - The authorized capital stock of the NHMFC is hereby increased
from P5,500,000,000.00 to P50,000,000,000.00 to expand its leveraging
capacity based on the volume of mortgage loans being serviced to improve its
profitability by reducing the average cost of its fund made available for home
lending programs.


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The capital of the NHMFC shall be Fifty Billion Pesos
{P50,000,000,000.00), to be fully subscribed by the Government of the
Republic of the Philippines, hereafter referred to as the Government: Provided,
That the P25,000,000,000.00 of the capitalization shall be funded from the
General Appropriations Act and the remaining P25,000,000,000.00 shall be
funded from the declared dividends of the NHMFC in favor of the National
Government. For this purpose, any and all declared dividends of the NHMFC
in favor of the National Government shall be deposited in a special account
in the General Fund, and earmarked for the payment of NHMFC’s increase in
capitalization, Such payment shall be released and disbursed immediately
and shall continue until the increase in capitalization has been fully paid.

SEC. 9. Tax Exemptions. - The NHMFC shall be exempt from all national,
provincial, municipal and city taxes on income derived from its governmental
functions, specifically income from its activities or transactions in the exercise
of its mandates.

SEC. 10. Multi-Year Obligational Authority. -The Secretary of the DHSUD
and Heads ofits attached housing agencies, pursuant to the National Housing
Development, Production and Financing Program, projects and
appropriations approved by Congress, shall, subject to the provisions of
existing laws and regulations, including those of the Commission on Audit
and other such terms and conditions most favorable to the government, be
given multi-year obligational authority for housing program or project which
will take more than one year to complete that requires multi-year
appropriations

SEC. 11. Private Sector Participation. - To fast track the approval and
implementation of housing projects and reduce the cost of socialized and low-
cost housing units, the Bureau of Internal Revenue, the Department of
Agriculture, the National Irrigation Authority, the Philippine Coconut
Authority, the Sugar Regulatory Administration, the Department of Agrarian
Reform, the Department of Environment and Natural Resources, the Mines
and Geosciences Bureau, the Laguna Lake Development Authority, the
Department of Interior and Local Government, the Local Government Units,
the Land Registration Authority and the Department of Human Settlements
and Urban Development shall facilitate the release of the required housing-
related permits, licenses, certifications and tax exemptions/rulings in
accordance with Republic Act No. 11032 or An Act Promoting Ease of Doing
Business and Efficient Delivery of Government Services Amending for the
Purpose Republic Act 9485 Otherwise Known as the Anti-Red Tape Act of
2007 and for Other Purposes, and Executive Order No. 45 (s. 2001).

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In case the responsible officers of the agencies concerned fail or refuse
to dispose of the application within the periods prescribed under RA 11032,
the applicable administrative and criminal liability as stated in Section 22 of
RA 11032 shall be imposed.

All the incentives enumerated under Section 20 of Republic Act No.
10884 or An Act Strengthening the Balanced Housing Development Program,
Amending for the Purpose Republic Act No. 7279, as Amended, Otherwise
Known as the Urban Development and Housing Act of 1992 shall be extended
to the private sector engaged in socialized and low-cost housing development
including the construction and estate management of public rental housing.

‘The participation of owners and/or developers in any of the component
programs of the NHDPFA shall be treated as one of the manners of compliance
to the balanced housing requirements subject to the conditions set forth
under RA 10884.

SEC. 12. Collection Efficiency. - In order to improve collection efficiency,
the NHA, SHFC and NHMFC shall have authority to foreclose mortgages,
and/or evict beneficiaries in accordance with existing laws.

SEC. 13. Penal Clause. - Any person who violates any provision of this Act
shall be imposed the applicable administrative and criminal liability as stated
in Section 22 of RA 11032 or the Ease of Doing Business and Government
Service Delivery Act of 2018.

SEC. 14. Implementing Rules and Regulations. - The DHSUD shall
promulgate rules and regulations necessary for the implementation of this
‘Act.

SEC. 15. Repealing Clause. - All laws, decrees, executive orders,
proclamations, rules and regulations, and the issuances, or parts thereof
which are inconsistent with the provisions of this Act are hereby repealed,
amended or modified accordingly

SEC. 16. Separability Clause. ~ 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. 17. Effectivity Clause. This Act shall take effect fifteen (15) days after
its complete publication in the Official Gazette or in a newspaper of general

circulation.

Approved,

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