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EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

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= Introduced by Representative Rufus B. Rodriguez
7268

House Bill No.

EXPLANATORY NOTE
Section 9 of Article XIII of the Constitution provides:

“The State shall, by law, and for the common good, undertake, in
cooperation with the public 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 resettements areas. It shall
also promote adequate employment opportunities to such citizens.
In the implementation of such program the State shall respect the
rights of small property owners.”

Unfortunately, this provision of the Constitution has not been implemented properly with
data from the Philippine Statistics Authority (PSA) showing that there are around 4.5 million
homeless people in our country, three million of which are in Metro Manila.

According to Habitat for Humanity, nearly four million families in the Philippines are living
in unsafe, unsanitary and unsustainable conditions. And that by 2030, the housing backlog will
increase to about 6.5 million units.

To address and solve this problem, Habitat suggests that partnership between the
Philippine government, private land developers, corporations and other organizations is key.

This bill seeks to provide a solution to the housing problem of the country.

In view of the foregoing, immediate approval of this measure is eamestly requested.

RUFUS B. ROBRIGUEZ


EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez

House Bill No. 7268

AN ACT
PROVIDING FOR A NATIONAL HOUSING DEVELOPMENT, PRODUCTION AND
FINANCING PROGRAM, 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,
Production and Financing 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 govemance; and where urban and rural areas provide the
‘opportunities for an improved quality of life and eradication of poverty; c) ensure that poor
dwellers shall be provide with appropriate and innovative housing program and support
mechanisms to discourage further growth of blighted communities; and 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,

Cognizant of the rule 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/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,

©) 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
intensity the implementation of the vital components of the national Housing Development
Production and Financing Production. The implementation of this program shall be carried out
by the following agencies:

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.

4) 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 5-
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 Govemment-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 refocation and
resettlement of affected families.

2) Goverment Employees Housing Program ~ this program is intended to provide
decent and affordable housing to low-salaried government employees

3) Settlement Upgrading — this program aims to address the security of tenure and
infrastructure requirements of informal settlement on govemment-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 for 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 an end 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 low-income bracket and to
take charge of developing and administering social housing programs, particularly the
Community Mortgage Program and its different modalities

8) 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) Sector 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
concems and interests and intend to avail to resettlement assistance from SHFC,
including Indigenous Peoples (IPs), indigenous Cultural Communities (ICCs) and
other ethnic monitory groups.

b) 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 retumees (FR/RR). This also includes
rebuilding damaged or destroyed homes in post conflict-areas of internally
displaced persons (IDPs).

c) Post-Disaster Rehabilitation and Reconstruction CMP - a CMO 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.

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

e) 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 shali be
allotted for green spaces and 1 % of project area for friendly facilities of Persons
with Disabilities (PWD)

National Home Mortgage Finance Corporation (NHMFC) - A govemment 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.

7. 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 investment in new housing-related financial
instrumental and investment vehicles and the capital markets thereof. Furthermore, this
would also increase and sustain funds available for housing and home development.

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

8. Public Housing — this is a housing 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 sited intended to promote the
establishment of new towns, new settlement, and urban renewal.


9. 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 @ grant extended
to qualified low-income beneficiaries under the National Housing Development and
Production Financing program under any of the following altemative subsidy schemes

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

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

©) Monthly payment subsidy for the first five years of the load 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 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 guideless to select the beneficiaries
that may qualify for the subsidy program

40. 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
assistance including the adoption of the lease/rental buy-back scheme.

11. Survey of prociaimed 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 member/or taken possession of in their ordinary conduct of business.

42. Such other program components as may be determined by the DHSUD.

Section 5. Appropriations by the National Government. The amount of One Hundred
Thirty-Five billion, One Hundred Fourteen Million Pesos (PHP135,114,000,000.00) 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 fully released.

A total amount of Two Trillion, Six Hundred Sixty-Seven Billion, Two Hundred Ninety-Three
Million Pesos (PHP 2,667,293,000,000.00) 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

4. One Trillion, seven hundred twenty-two billion, four hundred forty-six million pesos
(PHP 1,722,446,000,000.00) For the implementation of the following programs of
NHA\

A) Eight hundred billion and six hundred ninety million pesos (PHP 800,689,000,000.00)
to finance the Resettlement Program under Section 4(1) of this Act;


B) Five hundred forty-three billion and four hundred nineteen million pesos (PHP
543,419,000,000,00) as subsidy for Goverment Employees housing under 4(2) of this
Act;

©) One hundred sixty-four billion and two hundred sixty-five million pesos (PHP
464,265,000,000.00) For the Settlements Upgrading under Section 4(3) of this Act,

D) One hundred one billion and seven million pesos (PHP 101,007,000,000.00) for the
housing Program for Calamity Victims Section 4(4) of this Act; and

&) Sixty-three billion and fifty-six million pesos (PHP 63,056,000,000.00) FOR THE Land
Banking under Section 4(5) of this Act.

2. Four hundred fifty-three billion, two hundred million pesos (PHP 453,200,000,000.00) for
the implementation of the Calamity Morigage Program under section 4(6) of this Act

3. Fifty billion (PHP 50,000,000,000,00) for the Capitalization of NHMFC under Section 4(8)
of this Act.

4. Four hundred seventy-six billion, six hundred forty-seven million pesos (Php
476,647,000,000.00) for the implementation of the following programs of the DHSUD

A) Three hundred sixty-five billion, nine hundred seventy-nine million pesos (Php
365,979,000,000.00) 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 (Php 18,531,00,000.00) as
interim shelter finance assistance for the informal settler-families who will be relocated
under Section 4 (9a)

b. 2 Sixly-three billion, seven hundred ninety-six milion pesos (Php _63,796,000,000.00)
as upfront subsidy under Section 4 (9b)

b. 3 Six billion, eight hundred four million pesos (Php 6,804,000,000.00) as amortization
support under Section 4 (Sc)

C.) Twenty billion, four hundred fifty-six million pesos (Php 20,456,000,000.00) to finance
public rental housing under housing under Section 4(10); and

D.) One billion, eighty-one million (Php 1,081,000,000.00) 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:

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:

4. 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 and private sector organizations, shall formulate a program, the proceeds of
which shalll 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 poo! 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 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 Securitization Act of 2004 pursuant to the State's policy of promoting the
securitization of mortgage and housing-related receivables of govemment 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 Settlement 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%0 per annum for medium-cost housing
packages and eight and one half percent (8.5%) per annum per 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 PHP 5,500,000,000.00 Pesos
to PHP 50,000,000,000.00 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 (PHP 50,000,000,000.00), to be fully subscribed by the Government of the Republic of
the Philippines, hereafter referred to as the Government: provided, the


PHP25,000,000,000.00 of the capitalization shall be funded from the General Appropriations
‘Act and the remaining PHP 25,000,000,000.00 shall be funded from the declared dividends of
the NHMEC 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
Sccount 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 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 jaws and regulations including those of the Commission on Audit
land 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
intemal 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 Goverment, the Local Government Units, the Land Registration Authority an the
Department of Human Settlement and Urban Development shail 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 liability 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 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,
‘SHEC, and NHMFC shall have the 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. ~ Ail iaws, decrees, executive orders, proclamations, rules
and regulation and the issuances, or part thereof which are inconsistent with the provisions of
this Act, are hereby repealed, amended or modified accordingly.


Section 15. Penal Clause. - Any person who violates any provisions 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.

Section 16. Separability Clause. - If for any reason, any provisions of this Act declared
invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be
in full force and effect.

Section 17. Effectivity. - This Act shall take effect fifteen (15) days following completion of
its publication in at least two (2) newspapers of general circulation

Approved,