13th ~ O N ~ ~ E S S  
OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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S E N A T E  
S. BILL NO. 
Introduced by Senator Ralph G. Recto 
EXPLANATORY NOTE 
Under the Constitution, it is the policy of the State to 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. This is the animating spirit behind 
this proposal which seeks to establish a Socialized and Low-Cost Housing 
Loan Restructuring Program. 
The beneficiaries of the restructuring program under this proposal 
would be those with socialized housing loans or loans amounting to Two 
Hundred Twenty-five Thousand Pesos (P225,OOO.OO) and below, and low- 
cost housing loans or loans amounting to over Two Hundred Twenty-five 
Pesos (P225,OOO.OO) but not exceeding Five Hundred Thousand Pesos 
(P500,OOO.OO) with any of the government financing institutions and 
agencies involved in the National Shelter Program (NSP). 
Recognizing the role of housing as a catalyst for economic growth 
and developmeKi, it is important to note that the state also adopts the 
policy of not only strengthening but also promoting and supporting the 
component activities of housing production and finance. 
In view of the foregoing, the im 
approval of this bill is 
earnestly urged. 
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13th CONGRESS OF THE RE~U~LIC 1 
OF THE PHILIPPINES 
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Firsf Regular Session 
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'04 JUL -6 
All :54 
SENATE 
S. BILL NO. 
Introduced b y  Senator Ralph G. Recto 
AN ACT 
RESTRUCTURING PROGRAM, PROVIDING THE MECHANIS~S THEREFOR, AND 
FOR OTHER PURPOSES 
TO 
ESTABLISH 
A 
SOCIALIZED 
AND 
LOW-COST 
HOUSING 
LOAN 
Be it enacted b y  the Senate and House of Representatives of the 
Philippines in Congress assembled: 
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SECTION 1. Title. This Act shall be known as the "Socialized and Low- 
Cost Housing Loan Restructuring Act of 2004." 
SEC. 2. Restructuring of Delinquent Socialized and Low-Cost Housing 
Loan Accounts. - In keeping with the Constitutional mandate for the State 
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to undertake a continuing program of urban land reform and housing 
that will make available at affordable cost decent housing and basic 
services, there is hereby established a Socialized and Low-Cost Housing 
Loan Restructuring Program. Under this program: 
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(a) 
for three (3) years from the effectivity of this Act, all 
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socialized housing loans or loups amounting to Two 
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Hundred Twenty-five Thousand Pesos (P225.000.00) 
and 
below, and all low-cost housing loans or loans amounting 
to over Two Hundred Twenty-five Pesos (P225,OOO.OO) but 
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not 
exceeding 
Five 
Hundred 
Thousand 
Pesos 


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(P500,OOO.OO) with any of the government financing 
institutions and agencies involved in the National Shelter 
-P+ogram (NSP), including but not limited to, the 
Government Services Insurance System (GSIS), Home 
Development Mutual Fund (HDMF), National Home 
Mortgage 
Finance 
Corporation 
(NHMFC), Home 
Guaranty Corporation (HGC), and the National Housing 
Authority (“A), 
that have at least a six (6)-month unpaid 
monthly amortization, are hereby declared covered by 
the benefits of this restructuring program notwithstanding 
that the same account has availed of the benefits of a 
previous restructuring or condonation program and even 
if the annual total family income of the borrower- 
application exceeds Three Hundred Thousand Pesos 
(P300,OOO.OO); 
an application for restructuring shall only be charged a 
processing fee which shall be lower than those charged 
under previous restructuring or condonation programs 
and no downpayment shall be required for a borrower to 
apply for the benefits of this restructuring program; 
all penalties and surcharges shall be condoned upon 
filing of the restructuring application under this Act: 
Provided. that all accrued interests shall be added to the 
remaining balance of the principal, the aggregate of 
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(c) 


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which shall be considered as the new principal amount: 
Provided, further, that waiver of penalties, surcharges and 
accrued interests for accounts subject of buy-back or 
other default arrangements with government financing 
institutions (GFls) under the National Shelter Program of 
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the.-government shall be left to the discretion of the 
respective boards of such GFls: 
a borrower-applicant may be allowed to use the total 
accumulated value of his/her membership contribution or 
savings with the GSIS, SSS or HDMF to pay in full or in part 
his/her housing loan; 
the term of a housing loan account being applied for 
restructuring may be extended for a period longer than its 
original term in order to lower the amount of the monthly 
amortization to a maximum of One Thousand Five 
Hundred Pesos (P1,500.00) for a period of three (3) years 
from the approval of the application, after which, the 
monthly amortization will revert back to its original 
amount. The unserviced portion ensuing from the three 
(3)-year lowered monthly amortization shall be paid on 
the last year of the term of the housing loan along with 
the last monthly amortization. 
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in case of incapacity of a borrower, his/her legal heirs 
and successors-in-interest may assume payment of his/her 
outstanding housing loans; and 
loan restructuring under this Act may be availed of only 
once. 
All corresponding penalties and surcharges which NHMFC 
may have to pay its funders as a result of the implementation 
of this Act shall be automatically adjusted and condoned. 
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SEC. 3. Exclusion from Coverage. - In no instance shall the following 
housing loan accounts be covered by this Act: 
any account without a single payment since take out; 
an account whose housing unit has been abandoned by the 
borrower-owner for more than two (2) years; 
an account whose housing unit has remained unoccupied for 
a period of at least two (2) years; 
an account whose housing unit is occupied by a third party 
other than the original registered beneficiary; and 
an account that has been foreclosed, the title of which has 
already been consolidated/transferred in the name of the 
GFI. 


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SEC. 4. Remedies Against Delinquent Accounts. - The GFIs shall 
continue to exercise their right to foreclose properties covered by 
accounts excluded in sub-paragraphs [a) through [d) under Section 3 
hereof or of delinquent accounts of borrowers who shall fail to avail of the 
benefits of this Act and that such foreclosure proceedings shall be exempt 
from publication and from the payment of filing fees, capital gains tax 
and documentary stamp tax: Provided, that in lieu of publication, posting 
of the date and place of auction shall be made in at least three (3) 
conspicuous public places similar to that provided for under Act 3135: 
Provided, further, that notice to the borrowers at his last known address 
shall likewise be m-ade. 
SEC. 5. Declaration of Dividends. - The declaration of dividends of 
the funds managed by the GSIS, SSS and HDMF shall be limited to their 
members who have not availed of the restructuring program under this 
Act. 
SEC. 6. Incentive for Prompt Payment of Monthly Amortization.. - 
Upon the effectivity of this Act, all accounts whose monthly amortizations 
are paid on time shall be entitled to a reasonable discount on loan 
interest. 
SEC. 7. Implementing Rules and Regulations. - There is hereby 
created an inter-agency comniittee headed by the Housing and Urban 
Development Coordinating Council and composed of all the government 
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institutions and agencies enumerated in Section 2 hereof tasked to 
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promulgate the implementing rules and regulations within sixty (60) days 
from the effectivity of this Act. 
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SEC. 8. Congressional Oversight Committee. - There is hereby 
created a Congressional Oversight Committee composed of the 
Chairman of the House Committee on Housing and Urban Development 
and the Chairman of the Senate Committee on Urban Planning, Housing 
and Resettlement, five (5) members of the Senate and six (6) members of 
the House of Representatives. The members from the Senate shall be 
appointed by the Senate President from among the members of the 
Senate Committee on Urban Planning, Housing and Resettlement based 
on the proportional representation of the parties or coalitions therein. The 
members from the House of Representatives shall be appointed by the 
Speaker 
-. from among the members of the House Committee on Housing 
and Urban Development based on the proportional representation of the 
parties or coalitions therein. 
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The 
Oversight Committee shall review and approve the 
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Implementing Rules and Regulations. It shall also review the performance 
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of the GFls and agencies involved in the implementation of this Act. 
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SEC. 9. Repealing Clause. - All laws, executive orders, rules or 
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regulations, or any part thereof, inconsistent with any provisions of this Act 
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are hereby repealed or modified accordingly. 


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Approved, 
SEC. 10. Effectivity Clause. - This Act shall take effect fifteen (15) 
days after its complete publication in the Official Gazette or in at least 
two (2) national newspapers of general circulation.