Sixteenth Congress
irst Regular Session

HOUSE BILL No. 604

Introduced by Honorable Erlinda M. Santiago

EXPLANATORY NOTE

Section 9, Article XIII of the 1987 Constitution provides: “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. xxv.”

For the underprivileged, housing is variously a place on a city pavement, a
part of a room in a dilapidated tenement, a hut in a slum, or a small illegal
structure on land suited to squatter resettlement and encroachment.

As an option for eradicating homelessness, this bill seeks to establish a
self-help homebuilding mechanism to be known as the “Bayanihan
Homebuilding Program”. Under this program, qualified beneficiaries and
volunteers will be directly involved in the construction of their homes. Like the
bayanihan concept, beneficiaries and volunteers will render hours of labor as
part of their investment. Since the construction of houses will cost less to build,
the savings will go to monthly amortization payments.

Another feature of the proposed measure is to give eligible beneficiaries
an option to avail of the Graduated Amortization Payment (GAP) Scheme
subject to the guidelines of the financial institutions concerned. Under the GAP
Scheme, principal payments of the principal obligation are deferred on the first
few years of the loan to help the beneficiaries. This is to ease the predicament of
homebuyers who are unable to cope with meager financial resources when
availing of a housing loan.

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

ERLINDA M. SANTIAGO


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

Sixteenth Congress
First Regular Session

HOUSE BILLNO. 6014

Introduced by Honorable Erlinda M. Santiago

AN ACT
ESTABLISHING A BAYANIHAN HOMEBUILDING PROGRAM FOR
LOW INCOME GROUPS THROUGH GRADUATED
AMORTIZATION PAYMENT (GAP) SCHEME AND FOR OTHER
PURPOSES.

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 “Bayanihan

Homebuilding Program Act of 2013”.

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State to promote the national shelter program and to implement a continuing
program of socialized housing which will make available, at affordable cost,
decent housing and basic services to low-income families in urban centers and
rural areas, Towards this end, a self-help homebuilding mechanism, the

Bayanihan Homebuilding Program, shall be established.

SEC. 3. Objectives. — The objectives of this Act shall be as follows:
a) Enhance the capability of low-income groups to acquire decent
and low-cost housing units through the introduction of self-help homebuilding,

mechanisms and facilities which will render affordable such acquisitions;


b) _Eradicate homelessness and poverty housing by means of

constructing simple, decent and affordable housing for low-income families;

c) Enjoin the active participation of local government units and

encourage people’s effective participation in the development process of

socialized housing programs through adequate measures for house

construction in their respective areas;

d) — Serve the housing requirement of the underprivileged and those
gainfully employed, and the members of the funding agencies such as the
Government Service Insurance System (GSIS), Social Security System (SSS),

and Home Development Mutual Fund (HDMF/PAG-IBIG).

SEC. 4. Definition of Terms. — As used in this Act, the following

terms shall mean:

a) “Affordable cost” refers to the most reasonable price of land and
shelter based on the needs and financial capability of Bayanihan

Homebuilding Program beneficiaries and appropriate financing scheme.

b) “Graduated Amortization Payment” refers to the mode of
payment wherein principal payments are deferred on the first few years of the
term of the loan and designed to enhance the affordability to the beneficiary
through a mechanism of increasing monthly amortization over the term of the
loan.

c) “Socialized housing” refers to housing programs and projects
covering houses and lots or home lots only undertaken by the government or
the private sector for the underprivileged and homeless citizens which shall
include sites and services development, long term financing, liberalized terms
on interest payments and such other benefits in accordance with the provisions

of this Act.

d) “Slum or blighted area” refers to any area where dwellings

predominate which, by reason of dilapidation, overcrowding, faulty


arrangement or design, lack of ventilation, light or sanitation facilities, or any

combination of these factors, are detrimental to safety, health or morals.

e) | “Bayanihan Homebuilding” refers to the cooperative endeavor of
volunteers and qualified beneficiaries of this Act to invest time and labor for

the construction of their simple, decent and affordable homes.

f)  “Underprivileged and homeless citizens” refers to beneficiaries

of this Act and to individuals or families residing in urban and urbanizable
areas whose income or combined household income falls within the poverty
threshold as defined by the National Economic and Development Authority,
and who do not own their homes. This shall include those who live in

makeshift dwelling units and do not enjoy security of tenure.

SEC. 5. Eligibility Criteria for Bayanihan Homebuilding Program
Benefi

s. — To qualify for the Bayanihan Homebuilding Program, a
beneficiary:

a) Must be a Filipino citizen;

b) Must be an underprivileged and homeless citizen, as defined in
Section 4 (f) of this Act, or if gainfully employed, must be a member of the
SSS, GSIS, or HDMF/PAG-IBIG, who applies for a socialized housing loan
not exceeding One hundred eighty thousand pesos (P180,000.00);

ce) Must not own any real property, whether in the urban or rural

areas;

d) Must not be a professional squatter or a member of a squatting

syndicate; and

e) Must render at least 400 hours of volunteer labor for the

construction of his own house.

SEC. 6. Registration of Bayanihan Homebuilding Program
Beneficiaries. — The Housing and Urban Development Coordinating Council

(HUDCC), in coordination with the local government units, shall design a


system for the registration of qualified Bayanihan Homebuilding Program
beneficiaries.

The local government units, within one (1) year from the effectivity of
this Act, shall identify and register all beneficiaries within their respective

localities.

SEC. 7. Participation of Volunteers. — Volunteers who are willing to
render community service in the construction of homes for beneficiaries under
this Act may participate and register in the Bayanihan Homebuilding Program
subject to the requirements set by the local government units concerned within
their respective localities.

SEC. 8. Graduated Amortization Payment (GAP) Scheme. — All
duly accredited government financial institutions granting socialized housing
loans to eligible Bayanihan Homebuilding Program beneficiaries shall adopt
and implement the graduated amortization payment as the mode of payment

for such loans.

The graduated increase in the amortization payment over the term of
the loan shall be computed in accordance with the following conditions

subject to the guidelines of duly accredited government financial institutions:

1) The initial payment of amortizations shall be made within thirty

(30) days upon occupancy of the home unit;

2) The monthly amortization payments for the first ten (10) years

shall be fixed at a minimum amount of Five hundred pesos (P500.00);

3) The graduated increase in the amortization payment not
exceeding Two hundred fifty pesos (P250.00) shall commence on the eleventh

year and every three (3) years thereafter;

4) The amortization payments shall not exceed forty percent (40%)
of the borrower's net disposable income. For this purpose, the net disposable
income shall be defined as the gross verifiable monthly income less statutory

deductions and amortizations of outstanding loan obligations. The monthly


income shall be based on the income tax return(s) (ITR) with W-2 Form(s)
duly received by the Bureau of Internal Revenue (BIR) or other documents
acceptable to duly accredited government financial institutions.

SEC. 9. Loan Period. — The loan period shall not be more than thirty-
five (35) years and shall be shortened correspondingly to the difference
between the age of the borrower at the time of loan approval and retirement

age.

SEC. 10. Interest Rate. — The government financial institutions (GFIs)
shall charge the borrowers a fixed rate of nine percent (9%) per annum for the

term of the loan.

SEC. 11. Agency Responsibilities. — Anent the implementation of the
Bayanihan Homebuilding Program, and subject to the limitations and
requirements of their respective charters and other existing laws, and without
impairing their financial or required reserve positions, the following agencies

are directed as follows:

a) National Housing Authority (NHA). — The NHA shall be the
government agency engaged in direct shelter production. It shall focus its
efforts in providing housing assistance to the lowest 30% of urban income-
earners through slum upgrading, squatter relocation, development of sites and
services, and construction of core-housing units. In addition, it shall
formulate the mechanism for the participation of the registered Bayanihan
Homebuilding Program beneficiaries and volunteers in the construction and
building of their home units. Further, it shall promote the use of indigenous,
alternative and low cost construction materials and technologies for socialized

housing.

b) Home Development Mutual Funds (HDMF/PAG-IBIG). — The
HDME/PAG-IBIG shall administer provident fund contributions collected
from member employees and employers, utilizing funds not required for
provident benefits for housing loans for members, and , in addition, will be

charged with the development of saving schemes for home acquisition.


ce) Department of the Interior and Local Government (DILG). — The
DILG shall facilitate coordination and ensure smooth implementation of the

Bayanihan Homebuilding Program at the local government level.

SEC. 12. Implementing Rules and Regulations. ~ The Chairman of
the HUDCC in coordination with the NHA, HDMF/PAG-IBIG and DILG
shall promulgate rules and regulations necessary for the implementation of

this Act.

SEC. 13. Separability Clause. — If any part or provisions of this Act
shall be held unconstitutional or invalid, other parts or provisions hereof

which are not affected thereby shall continue in full force and effect.

SEC. 14. Repealing Clause. — Any law, decree, rules and regulations,
executive orders or parts thereof inconsistent with this Act are hereby repealed

or modified accordingly.

SEC. 15. Effectivity.— This Act shall take effect fifteen (15) days after
its publication in at least two (2) newspapers of general circulation in the

Philippines.

Approved,