FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
7 
JUL-3 
/ !  ~ i 2  
First Regular Session 
) 
S E N A T E  
Senate Bill No. 672 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
The scarcity of affordable housing affects all sectors of society, especially 
our public school teachers. An independent survey revealed that public school 
teachers have no homes to call their own. 
Majority of our public school teachers cannot afford to purchase their own 
homes at market prices since they earn a gross monthly income of P10,OOO or 
less. In addition to this, more than 20% of our public school teachers have 
unemployed spouses, and thus, bear the burden of providing for their families. 
There had been efforts to solve this problem by providing for a special 
housing facility through the state pension fund. However, its implementation 
never fully 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 rates and long-term repayment period. 
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. 
EJERCITO ESTRADA 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) “;a 
JljL -3 
2 
First Regular Session 
) 
S E N A T E $  
Senate Bill No. 4372 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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: 
Tit/e. This Act shall be known as the “Teacher’s Housing 
SECTION I. 
Program Act.” 
SEC 2. Declaration of Po/icy. 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; 
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 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 
(b) 


shall administer the Guarantee System Fund as provided for under 
this Act. 
The Government Service Insurance System and the Development 
Mutual fund shall be the primary provider of funds for long-term 
housing mortgages. 
(d) 
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; 
Deduct amortization from their teachers on a monthly basis and 
remit the same to the appropriate agency. 
(b) 
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. 
2. 
3. 
4. 
5. 
6. 
Purchase of a lot and construction of a residential unit thereon; 
Purchase of any of the following: 
I. 
ii 
iii 
Purchase of a fully developed lot within a residential area; 
Construction of completion of a residential unit on a lot 
owned by the beneficiary; 
Home improvement or any alteration in an existing 
residential unit; 
Restructuring of an existing housing loan in any government 
housing of financial institution, provided that the account is 
updated. 
brand new or old existing units; 
housing properties mortgaged with any institution; 
housing assets being disposed off through public 
bidding or negotiated sale; 
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,OOO.OO). 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 rates 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,OOO.OO) 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,OOO.OO) per house andlor 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 shall 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 (Pl50,OOO.OO) with an interest rate of not exceeding 
twelve percent (12 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 
Private sector developers who participate in the development of 
Housing. 
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 


(9 
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. 
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 teachers’ 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 
(Pl,OOO,OOO,OOO) 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. Separabilify 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 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,