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Republic of the Philippines DATE: AUS. 0 5 20
HOUSE OF REPRESENTATIVES ae
Quezon City
EIGHTEENTH CONGRESS

Second Regular Session

House Bit No. 7291

Introduced by HON. JOY MYRA S. TAMBUNTING

EXPLANATORY NOTE

For the past few decades, labor surplus and low income in rural areas have forced laborers to
migrate to urban centers in the country in search for work opportunities. Due to the lack of
affordable housing options in urban centers, these migrants tend to settle informally along
waterways, under bridges and power lines. Aside from this, the Philippines is frequently hit by
seismic activity, typhoons and other natural disasters every year which leads to destruction of
homes.

The current Philippine housing demand exceeds supply with almost 6 million homes needed to
be built for impoverished Filipinos, most of which are in the country’s capital—Metro Manila. This
number increases yearly as the country’s population is steadily increasing and families across the
country are displaced due to numerous calamities and armed conflict in the countryside.

Despite this huge backlog in housing, the National Housing Authority is creating less units than
expected to address the country’s backlog. In 2019, NHA completed only 117,167 of the 203,471
intended housing for victims of the Typhoon Yolanda which happened to leave more than 1 milion
families homeless.

This proposed measure seeks to address the country’s housing backlog by ensuring continuous
funding for the implementation of National Housing Development and Production Financing
Program. It also aims to increase housing production through creating partnership with housing
stakeholders to address the housing needs of Filipino families. It will also provide for support
mechanisms to families so as to improve their access to variety of housing options.

On behalf of the people of Parafaque City’s Second District, and for the common good of the
Filipino people, the approval of the said measure is earnestly sought.

C

District, Parafiaque City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 7291

Introduced by HON. JOY MYRA S. TAMBUNTING

AN ACT
PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT, PRODUCTION AND
FINANCING PROGRAM, AND REGULARIZING ITS APPROPRIATION FOR ITS
IMPLEMENTATION

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 "National Housing Development Act."
Section 2. Declaration of Policy. — It is hereby declared a policy of the state to:

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;

b) 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 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;

d) 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; and

e) strengthen, promote and support the component activities of housing production and finance
by ensuring continuous/sustained funding support to scale-up the implementation of the major
components of the National Housing Development and Production Program.

Section 3. Statement of Objectives. — Towards this end, the State shall:


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

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

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

(d) 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.

Section 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 undertakings to address the resettlement
requirements of Local Government Units (LGUs) outside Metro 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.

(2) Government Employees Housing Program — this program is intended to provide decent
and affordable housing to low-salaried government employees.

(3) 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.

(4) 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.

(5) 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,

B. Social Housing Finance Corporation (SHFC) - mandated to undertake social housing programs
that will cater to the formal and informal sectors in the low-income bracket and to take charge of
developing and administering social housing programs, particularly the Community Mortgage
Program and its different modalities:

(1) 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:

a)

b)

°)

qd)

e)

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 conflct-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.

f) 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 % of project area for friendly facilities
of Persons with Disabilities (PWD)

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 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 new 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.

D. 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:

(1) 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" refers 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.

(2) 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:

i. 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

iit, Monthly payment subsidy for the first five years of the loan period in
accordance with Section 3 (a) of RA 6846 or the Social Housing Support Fund
Act. The department shall be authorized to establish the qualification and


(3)

income requirements of borrowers who will qualify for the amortization support
subsidy.

‘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.

Public Rental Housing — this program involves 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, person with disabilities, etc.).

The DHSUD shall formulate the guidelines in the implementation of public rental housing

(4)

(5)

@

assistance including the adoption of the lease/rental buy-back scheme.

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,

Such other program components as may be determined by the DHSUD

Section 5. Appropriations by the National Government. - The amount of One Hundred
Thirty billion Pesos (P130,000,000.00) or such amount necessary to carry out the provision of this
‘Act is hereby authorized to be appropriated annually through the General Appropriations Act over
a period of twenty (20) consecutive years commencing from 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.

Atotal 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:

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 NHA:

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

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

d. One hundred one billion and seven million pesos (PI0I,007,000,000.00) for the
Housing Program for Calamity Victims Section 4(4) of this Act; and

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

(2) 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(6) of this
Act.

(3) Fifty billion (P50,000,000,000.00) for the Capitalization of NHMFC under Section 4(8)
of this Act.

(4) 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

a, Three hundred sixty-five billion, nine hundred seventy-nine million pesos
(P365,979,000,000.00) to finance the Public Housing under Section 4 (8);

b. Eighty-nine billion, one hundred thirty-one million pesos (P89,131,000,000.00) as
subsidy under Section 9, broken down as follows:

b.1 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 under Section 4 (9a)

b.2 — Sixty-three billion, seven hundred ninety-six million pesos
(P63,796,000,000.00) as upfront subsidy under Section 4(9b)

b.3._ Six billion, eight hundred four million pesos (P6,804,000,000.00) as
amortization support under Section 4 (9c)

c. Twenty billion, four hundred fifty-six million pesos (P20,456,000,000.00) to finance
public rental housing under Section 4(10); and

d. One billion, eighty-one million (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 (11).

Section 6. LGU Sources of Funds. Section 43 of RA 7279 on Socialized Housing Tax is hereby
amended, to read as follows:

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.

Section 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:

1, The NHMFC shall be the sole implementing agency for the NHDP securitization; and

2. The NHMFC in coordination with the DHSUD, DOF and BSP and other concerned agencies,
instrumentalities, and private sector organizations, shall formulate a program, the
proceeds of which shall accrue to the Centralized Housing Fund.

3. 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 NHMFC, which shall also
serve as asset pool for securitization.

4. The NHMFC as the sole agency for the implementation of the NHDPA Securitization shall
manage the whole securitization process which includes the following activities:
determining the eligibility criteria for the asset pool; defining the preliminary structure of
the notes, bonds and or instruments to be issued, third parties to be hired; and
education/briefing of target investors for all the issues.

5, 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.

6. 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 stamps tax, gross receipts tax and value added tax.

7. 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.

8. 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.

9. 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 a 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.


Section 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 pesos to
P50,000,000,000.00 pesos 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.

The capital of the National Home Mortgage Finance Corporation (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.

Section 9. Tax Exemptions, - The NHMFC shall be absolutely 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.

Section 10. Multi-Year Obligational Authority. - The Secretary of the DHSUD and Heads of
its 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.

Section 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 the 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 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).

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 lability as stated in Section 22 of RA 11032 shall be imposed.

All the incentives enumerated under Section 20 of Republic Act 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.

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

Section 13. Implementing Rules and Regulations. — The DHSUD shall promulgate rules
and regulations necessary for the implementation of this Act.

Section 14, 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.

Section 15. 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.

Section 16, Effe Clause. - This Act shall take effect fifteen (15) days after its complete
Publication in at least two (2) national newspapers of general circulation.

Approved,