CHAPTER 6

KEY SHELTER AGENCIES AND LAWS ON HOUSING

Chapter Duration Chapter Outline

Week 6 (6 hours) • Introduction

• Key Shelter Agencies in the Philippines
Word Bank o Department of Human Settlements and Urban Development
o National Housing Authority
Joint Venture agreements o National Home Mortgage Finance Corporation
Real estate o Social Housing Finance Corporation
Informal Settlers Families o Home Development Mutual Fund (PAGIBIG)
Community mortgage • Other Laws on Housing
Rent o Republic Acts
Affordable cost o Executive Orders
Idle lands o Administrative Orders
Improvements o Memorandum Circular
Joint venture o Proclamation
Land assembly o Presidential Decree
Land banking • Summary
Land swapping • Exercises
Socialized housing
Security of tenure
Squatting syndicates Learning Objectives

After this chapter, you are expected to:

1. Familiarize the agencies catering to the housing needs of the Filipinos,
including their brief history, functions, and programs
2. Learn the Philippine Laws concerned in housing

A. Introduction

Every country has hopes to provide a comfortable

FIGURE 6.1. Know the Government Housing Agencies
in the Philippines
shelter for all its citizens despite the battle of economic
status. As specified at Securing the Future of Philippine
Industries (STFPI), the Philippine house sector aims to
eliminate the housing backlog by the year 2030. To reach
that goal, the government formed housing agencies that
will help Filipinos be closer to their dream homes without
risks. Now that real estate Philippines is progressively in
prospering brick by brick, it opened doors of opportunities
toward a sustainable growth that will lead to affordable
prices for the country’s households.
 The respective housing agencies have these main objectives: increase housing production to 12
percent sustainable annual volume growth; implement comprehensive government for targeted segments;
improve regulatory housing environment; generate and mobilize funds for end-user financing. These
agencies also generated systematic programs to find ways on Filipino housing concerns.17

B. Key Shelter Agencies in the Philippines

B.1. Department of Human Settlements and Urban Development (DHSUD)

–Kagawaran ng Pananahanang Pantao at Pagpapaunlad ng Kalunsuran

The Department of Human Settlements and Urban Development or

DHSUD is the executive department of the Philippine government responsible
for the management of housing and related development in the Philippines.

The law creating the Department of Human Settlements and Urban

Development (DHSUD), Republic Act No. 11201, was signed into law by
President Rodrigo Duterte on February 14, 2019 in an effort to ensure that
underprivileged and homeless citizens have an access to "adequate, safe,
secure, habitable, sustainable, resilient, and affordable home." The signing of
the law was announced to the public by the government on February 19, 2019.
The DHSUD was a merger of the Housing and Urban Development Coordinating Council (HUDCC)
and the Housing and Land Use Regulatory Board (HLURB), with the former becoming defunct and the
latter reorganized as the Human Settlements Adjudication Commission (HSAC). The law was a
consolidation of House Bill 6775 and Senate Bill 1578 which were passed by the House of Representatives
and the Senate on October 10 and November 12, 2018 respectively. The Implement Rules and Regulations
(IRR) for RA 11201 was signed on July 19, 2019. A five-month transition period will begin with a projected
full implementation of the law by January 1, 2020.

B.1.1. Role and Functions

The new department is delegated as the primary national government entity responsible
for the management of housing, human settlement, and urban development.

It is also mandated to be the "sole and main planning and policy-making, regulatory,
program coordination performance monitoring entity for all housing settlement and urban
development concerns, primarily focusing on the access to and the affordability of basic human
needs."

"It shall develop and adopt a national strategy to immediately address the provision of
adequate and affordable housing to all Filipinos, and shall ensure the alignment of the policies,

17
FlatX PH. 10 October 2019. “Know the Government Housing Agencies in the Philippines.”
https://medium.com/@FlatXRealtyServices/know-the-government-housing-agencies-in-the-philippines-
c89561a61e5b
programs, and projects of all its attached agencies to facilitate the achievement of his objective,"
the law read.

The Department of Human Settlements and Urban Development has the power to
exercise policy development, coordination, monitoring and evaluation; environmental, land use
and urban planning and development; housing and real estate development regulation; and
homeowners association and community development.

The department, under RA 11202, is allowed to enter into contracts, joint venture
agreements or understanding, public-private partnerships, and memoranda of agreement or
understanding, either domestic or foreign, under such terms and conditions deemed proper and
reasonable.

It can also receive, take and hold by bequest, device, gift, purchase or lease, either
absolutely or in trust for any of its purposes from foreign and domestic sources, any asset, grant
or property, real or personal, subject to such limitations provided under existing laws and
regulations.

It is also mandated to discharge all responsibilities of government that may arise from
treaties, agreements, and other commitments on human settlement and urban development to
be extended through bilateral or multilateral loans and programs.

The department can also determine, fix, and collect reasonable amounts to charge as fees and
charges necessary for the effective implementation of all laws, rules and regulations enforced by
the department and impose reasonable fines and penalties for violation thereof.

It also has the power to recommend new legislation and amendments to existing laws as
may be necessary for the attainment of government's objectives in housing.

Duterte's new law also gives the new department the authority to promote, accredit and
regulate the use of indigenous materials and technologies in the housing construction.

It can also implement prototype projects in housing and urban development

undertakings, with the right to exercise the power of eminent domain, when necessary.

The Department of Human Settlements and Urban Development is also tasked to open
roads of subdivisions to the public, when the general welfare requires it upon consultation with
stakeholders.

Under RA 11201, the HLURB is reconstituted as the Human Settlements Adjudication

Commission (HSAC) attached to the department for policy, planning and program coordination
only.

B.1.2. Composition
The department is composed of Office of the Secretary, and various bureaus, services and
regional offices. Eduardo del Rosario was appointed as the first secretary of the executive
department by President Rodrigo Duterte.
 The Department of Human Settlements and Urban Development is led by a Secretary,
assisted by three Undersecretaries and the Assistant Secretaries appointed by the President.

The commission is composed of five commissioners chosen by the President.

The existing employees of HUDCC and HLURB will enjoy security of tenure and will be
absorbed by the department or the HSAC.

The law also created the National Human Settlements Board that will be chaired by the
secretary of the new department.

Other board members include the director general of the National Economic and
Development Authority; Finance, Budget, Public Works, and Local Government departments; and
the head of each attached agency of the new department. 18

B.1.3. HUDCC and HLURB

Since the DHSUD is a merger of the Housing and Urban Development Coordinating
Council (HUDCC) and the Housing and Land Use Regulatory Board (HLURB), this section will
discuss the previous roles and functions of the two agencies, respectively.

A. Housing and Urban Development Coordinating Council (HUDCC)

The Housing and Urban Development Coordinating Council of the Philippines,

abbreviated as HUDCC, was the umbrella agency of various housing and development
offices of the Government of the Republic of the Philippines. It was established by
President Corazon Aquino through Executive Order No. 90, Series of 1986. 19 Under the
immediate control and supervision of the President of the Philippines, it was charged with
main function of coordinating the activities of the government housing agencies to ensure
the accomplishment of the National Shelter Program. Among its functions were as
follows:

✓ Formulate national objectives for housing and urban development and to design
broad strategies for accomplishment of these objectives;
✓ Determine the participation and coordinate the activities of the key government
housing agencies in the national housing program;
✓ Monitor, review and evaluate the effective exercise by these agencies of their
assigned functions;
✓ Assist in the maximum participation of the private sector in all aspects of housing
and urban development;

18
Gita, Ruth Abbey. “Department of Human Settlements and Urban Development Created.” Sunstar. 19 February
2019.
19
Foundation, ITC@Arellano Law. "Housing and Urban Development Coordinating Council". lawphil.net.
Retrieved 7 July 2016.
 ✓ Recommend new legislation and amendments to existing laws as may be
necessary for the attainment of government’s objective in housing;
✓ Formulate the basic policies, guidelines and implementing mechanisms for the
disposal or development of acquired or existing assets of the key housing
agencies;
✓ Exercise or perform other powers and functions as may be deemed necessary,
proper or incidental to the attainment of its purpose and objectives.

- Section 3. Executive Order No. 90 Series of 1986

✓ Reaffirming mass housing as a centrepiece program in the poverty alleviation

efforts of the government and further strengthening the Housing and Urban
Development Coordinating Council
✓ Serves as the lead agency to in formulating the national objectives, policies and
strategies for housing and urban development;
✓ Coordinate and monitor the activities of all government agencies undertaking
housing projects, including those of Local Government Units (LGUs), to ensure
the accomplishment of the goals of the government’s housing program;
✓ Encourage the maximum participation of the private sector in all aspects of
housing and urban development;
✓ Formulate the basic policies, guidelines and implementing mechanisms for the
disposal or development of acquired or existing assets of the key housing
agencies which are not required for the accomplishment of their basic mandates;
✓ Identify, plan and secure local and foreign funding for housing programs and
projects;
✓ Provide directions to the Housing and Land Use Regulatory Board (HLURB) to
ensure rational land use for the equitable distribution and enjoyment of
development benefits.
✓ Recommend new legislation and amendments to existing laws as maybe
necessary for the attainment of government’s objectives in housing;
✓ Undertake other functions as provided by existing laws that are not contrary to
the above-mentioned.

- Executive Order No. 20 Series of 2001

B. Housing and Land Use Regulatory Board (HLURB)

The Housing and Land Use Regulatory Board (HLURB) was the country’s primary
government agency tasked with providing technical support in matters including, but not
limited to: housing regulations, land development and homeowners’ associations, and
settlement of land disputes. HLURB operated via a triad of strategies: policy development,
 planning and regulation. Its services cater to home buyers, developers, homeowners’
associations, brokers and local government units.20
Part of HLURB’s undertaking was to enforce policies on land use all the while
promoting inclusive growth and economic advancement, social justice and environmental
protection for the equitable distribution and enjoyment of development benefits.

HLURB started in September 19, 1973 (a year after the declaration of Martial
Law), when Pres. Ferdinand Marcos via Executive Order no. 419 declared the creation of
the Task Force on Human Settlements which served as a framework plan for the country
that would locate priority areas for human settlement initiatives. Under Presidential
Decree no. 933 signed in May 13, 1976 by the same president, the Human Settlements
Commission was created to facilitate land reform programs in that time. Presidential
Decree no. 1396 of 1978 renamed it to Human Settlements Regulatory Commission and
was given an initial budget release of P100 million. It was reorganized as the Human
Settlements Regulatory Commission by virtue of Executive Order no. 648 in 1981 under
the same regime.

In December 17, 1996, the commission was identified in Executive Order no. 90
as one of the government agencies essential for the six-year National Shelter Program
under Pres. Corazon Aquino – it was at this time that the name was changed to what we
now know as the Housing and Land Use Regulatory Board. To update, BALAI Filipino
(Building Adequate, Livable, Affordable, and Inclusive Filipino Communities) is Pres.
Rodrigo Duterte’s 10-year national housing strategy program that brings together key
shelter agencies (including HLURB) in order to improve the performance of the housing
sector.

B.2. National Housing Authority

The National Housing Authority (NHA) is a government

agency responsible for public housing in the Philippines. It is administered
in housing production for financially challenged families It is organized as
a government-owned and controlled corporation under the Department of
Human Settlements and Urban Development as an attached agency.

To develop a comprehensive and integrated program, housing

development, resettlement, sources and schemes of financing and
delineation of government and private sector participation are the functions
of the agency under Presidential Decree 757 dated 31 July 1975. By 2025,
NHA shall have addressed 23% of the housing need by building affordable, livable, adequate, and inclusive
communities with basic services and socio-economic opportunities.21

B.2.1. Programs

20
Comprehensive Guide to HLURB. Lamudi. https://www.lamudi.com.ph/hlurb-comprehensive-guide/. Accessed
28 June 2020.
21
National Housing Authority. http://nha.gov.ph/about/. Accessed 01 July 2020
1. Informal Settlers Families (ISFs)
 Involves relocation and resettlement of families living in or along danger areas in
Metro Manila particularly those along waterways such as creeks, rivers, and
esteros.
 Undertaken through in-city low-rise housing development utilizing government-
owned land or off-city resettlement (outside Metro Manila) where in-city project
plans are not feasible.
 Also covers the implementation of alternative in-city project schemes proposed
by Program Stakeholders (Informal Settler Families)

2. Resettlement Programs

ISFs in Metro Manila

 Addresses the resettlement requirements of families affected by infrastructure

projects in Metro Manila and those living along danger areas in nearby provinces
of Rizal, Cavite, Laguna, Bulacan, Pampanga and Bataan
 Entails the provision of housing units, community facilities, socio-economic and
other community support programs.

Regional Resettlement Program

• Involves the implementation of local/regional resettlement projects as joint

National Government and Local Government undertakings.
• Addresses the resettlement requirement of Local Government Units (LGUs)
outside Metro Manila involving families in danger areas, those affected by
infrastructure projects, calamities, and for indigenous people.

3. Emergency Housing Assistance Program

 To provide quick response cash assistance to qualified low- and marginal-income
families affected by natural or man-made calamities, for the purpose of
augmenting their funds for the repair or their house-structures.
 The program covers qualified families whose houses were either partially
damaged or totally destroyed by a natural or man-made calamity such as
typhoons, floods, earthquake, volcanic eruption, fire, chemical disasters,
terrorism, and other forms of catastrophe or disaster as may be defined by future
actual experience

4. Settlements Upgrading Program

 Intended to address the security of tenure and infrastructure requirements of
informal settlements on government land and proclaimed or designated as
socialized housing sites.
  Covers survey and titling of individual lots for disposition to qualified occupants,
infrastructure development, housing construction and rehabilitation of existing
project sites.

5. AFP-PNP Housing Program

 The program is intended to provide decent and affordable housing to low-salaried
personnel of the Armed Forces of the Philippines (AFP), Philippines National
Police (PNP), Bureau of Jail Management and Penology (BJMP), Bureau of Fire and
Protection (BFP), and the Bureau of Corrections (BuCor).

6. Local Housing Programs

 Covers the implementation of cost-recoverable socialized housing projects in
urban and urbanizable areas in all congressional districts.
 This is mandated under RA 7835 or the Comprehensive and Integrated Shelter
Financing Act of 1994 (CISFA) and may be implemented for various housing
options, land acquisition or land tenure assistance schemes, and assistance for
survey and titling, provision/installation and repair of project components and
community facilities.

B.3. National Home Mortgage Finance Corporation (NHMFC)

If one is looking for home mortgage government guidance, National

Home Mortgage Finance Corporation has its sets of duties. NHMF is
responsible for operating viable secondary home mortgage market and
monitor performance and implementation of the Community Mortgage
Program (CMP) by its solely owned subsidiary, the Social Housing Finance
Corporation (SHFC).

National Home Mortgage Finance Corporation aims to provide

liquidity to the housing sector through securitization of mortgage and as
well as assets through: promoting stability to the housing finance system
starting with active participation in the capital market; establishing efficient and effective organization with
professional workforce utilizing best practices; maintaining adeptness in operation and productiveness in
financial management to ensure program sustainability, and managing subsidiaries effectively.

The National Home Mortgage Finance Corporation was created in 1977 by virtue of Presidential
Decree 1267, with the mandate of increasing 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. Consistent with this mandate NHMFC bought mortgages
originated by private financial institutions and eventually sold them back to the public through the
issuance of mortgage backed financial instruments.22

B.4. Social Housing Finance Corporation (SHFC)

The Social Housing Finance Corporation (SHFC) is a Philippine

Government agency to undertake social housing programs that will cater
to the formal and informal sectors in the low - income bracket and shall
take charge of developing and administering social housing program
schemes, particularly the CMP (Community Mortgage Program) and the
AKPF (Abot Kaya Pabahay Fund) Program (amortization support program
and development financing program). SHFC was created through
Executive Order No. 272 (E.O.272), which directs the transfer of the CMP, AKPF Program, and other social
housing powers and functions of the National Home Mortgage Finance Corporation to the SHFC.

Under E.O. 272, the SHFC shall be the lead government agency to undertake social housing
programs that will cater to the formal and informal sectors in the low-income bracket and shall take
charge of developing and administering social housing program schemes, particularly the CMP and the
AKPF Program (amortization support program and development financing program). By 2022, SHFC shall
have provided 530,000 organized homeless and low-income families with Flexible, Affordable, Innovative,
and Responsive (FAIR) shelter solutions to their housing needs.

B.4.1. The Birth of CMP

During the 1980s, unlawful occupancy of vacant lots was rampant in urban areas as
residential space prices continued to rise beyond the reach of poor families. Land has become
more limited due to higher urban population, increased construction of government
infrastructures, and competing commercial use. These challenges resulted in evictions of families,
pushing them to live precariously under extremely unhealthy conditions in the crevices of the
cities such as waterways, railway tracks, foreshores, and even dumpsites.

Thus, the birth of CMP in 1988 came as a bright ray of hope for ISFs because it provided
them with better access to affordable housing loans. The program was launched that year to give
flesh to the social justice provision of the newly promulgated 1987 Constitution, Article XIII of
which commands the State to undertake “a continuing program of urban land reform and housing
which will make available at affordable cost, decent housing and basic services to under-
privileged and homeless citizens.” CMP was intended to be an asset redistribution scheme where
homeless low-income families could acquire land through affordable mortgage financing and hold
it in the concept of community ownership. The program aimed to help the urban poor - mainly
communities of informal settler families (ISFs) - acquire security of land tenure through the
purchase of the land they had been living on, or the lots to where they shall be relocated to, and

22
National Home Mortgage Finance Corporation.
https://icrs.gcg.gov.ph/profiles/nhmfc/?sector=Government%20Financial%20Institutions%20Sector&keyword=.
Accessed 01 July 2020.
 thereby share in the prosperity that the country was expected to generate after the People Power
Revolution. No one was to be left behind.

The concept of “community mortgage” was first introduced in Cebu by peoples’

organizations and community-based organizations in the early 1980s. When he was appointed
commissioner of Presidential Commission for the Urban Poor (PCUP), Francisco Fernandez and
like-minded advocates pushed for the institutionalization of the community mortgage program.
Teodoro Katigbak, the chairperson of the Housing and Urban Development Coordinating Council
(HUDCC) then, supported the proposal by creating an inter-agency committee composed of
representatives from HUDCC, National Home Mortgage Finance Corporation (NHMFC), Home
Guaranty Corporation, and the PCUP. This committee concluded after a thorough analysis that
the existing Unified Home Lending Program (UHLP) was inaccessible to ISFs who were not
members of either Government Service Insurance System (GSIS), Social Security System, or Pag-
ibig Fund; hence, they pushed for the creation of CMP.

In August 1988, CMP was formally institutionalized under NHMFC by then President
Corazon Aquino as the answer to the deprivation of the ISFs. Due to its exceptional performance
- the poor were found capable and willing to repay their CMP loans - the program was formally
adopted as the flagship program for socialized housing under the Urban Development and
Housing Act of 1992. To encourage landowners to participate by selling their land to urban poor
communities, the law provided the former additional incentives in the form of exemption from
payment of capital gains tax. Although fully implemented and operational, stable source of
funding came only after two years when Republic Act 7835 or the Comprehensive and Integral
Shelter Financing Act of 1994 was enacted.

In 2004, halfway through the implementation of CMP, civil society organizations, policy-
makers and other stakeholders clamored for the establishment of a new office that would solely
focus on social housing finance and community development schemes for low-income groups
such as CMP. According to them, placing CMP under a mere task force unit of the NHMFC did not
give justice to the gravity of the need for affordable housing. Moreover, the NHMFC was primarily
engaged in promoting secondary mortgage market for private sector housing, thus it did not have
the proper mandate to administer CMP. Then President Gloria Macapagal Arroyo heeded the plea
of CSOs by creating the Social Housing Finance Corporation (SHFC) as a separate entity by virtue
of Executive Order 272. This EO transferred the stewardship of the CMP to the corporation in
2005.

SHFC now functions as a separate corporation registered with the Security and Exchange
Commission with corporate flexibilities in operations such as adoption of policies that considers
the limitations and capabilities of ISFs and sourcing of funds for the program. CMP has since grown
by leaps and bounds under its new corporate administrator. 23

23
Social Housing Finance Corporation. https://www.shfcph.com/Mandate.html. Accessed 01 July 2020.
B.5. Home Development Mutual Fund or Pag-IBIG

–Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno

The Home Development Mutual Fund (abbreviated as HDMF), more

popularly known as the Pag-IBIG Fund ((Pagtutulungan sa Kinabukasan: Ikaw,
Bangko, Industriya at Gobyerno, English: Cooperation for the Future: You, the
Bank, Industry and the Government) is a Philippine government-owned and
controlled corporation under the Department of Human Settlements and
Urban Development responsible for the administration of the national savings
program and affordable shelter financing for Filipinos employed by local and
foreign-based employers as well as voluntary and self-employed members. It
offers its members short-term loans and access to housing programs.24

B.5.1. History
Pag-IBIG was founded to answer the national need for savings program and affordable
housing financing by virtue of Presidential Decree 1530 which was signed on June 11, 1978.25 Its
original purpose was solely as a provident fund to encourage savings among Filipinos, but it was
later decried as a duplicate to the functions of Social Security System and Government Service
Insurance System. It was also criticized by the labor sector describing the required contribution
as oppressive, by employers that opposed to any additional contribution in behalf of workers, and
by the academe as a representation of injustice of the incumbent Marcos regime. By March 1979,
the fund was administered by the National Home Mortgage Finance Corporation (NHMFC), a
government corporation mandated to increase availability of housing loans to Filipino workers.

B.5.2. Membership
In 2009, the Republic Act of 9679, otherwise known as Home Development Mutual Fund
Law of 2009, was passed into law. It expanded coverage requiring mandatory membership of all
employees regardless of status, which would include self-employed persons, regardless of trade,
business or occupation with an income salary of at least P1,000. It also included overseas Filipino
workers and voluntary membership available to all Filipino immigrants, Filipinos naturalized in
other countries, and permanent Filipino residents abroad.
Membership to the fund is exclusive to all Filipino citizens who are or ought to be covered
by the Social Security System (SSS), provided that actual membership in the SSS shall not be a
condition precedent to the mandatory coverage in the fund. It shall include, but are not limited
to:

• A private employee, whether permanent, temporary, or provisional who is not over sixty
(60) years old;

24
Adea, Florencio B., Orendain, Marilou O. “Revisiting Pag-Ibig Fund.” Philippine Daily Inquirer. Retrieved 07
April 2019.
25
"Presidential Decree No. 1530, s. 1978 | GOVPH". Official Gazette of the Republic of the Philippines.
Retrieved 2019-04-07.
• A household helper earning at least ₱1,000 a month. A household helper is any person who
renders domestic services exclusively to a household such as a driver, gardener, cook,
governess, and other similar occupations;
• A Filipino seafarer upon the signing of the standard contract of employment between the
seafarer and the manning agency, which together with the foreign ship owner, acts as the
employer;
• A self-employed person regardless of trade, business or occupation, with an income of at
least ₱1,000.00 a month and not over sixty (60) years old;
• An expatriate who is not more than sixty (60) years old and is compulsorily covered by the
Social Security System (SSS), regardless of citizenship, nature and duration of employment,
and the manner by which the compensation is paid. In the absence of an explicit exemption
from SSS coverage, the said expatriate, upon assumption of office, shall be covered by the
Fund.
• An expatriate shall refer to a citizen of another country who is living and working in the
Philippines.
• All employees who are subject to mandatory coverage by the Government Service
Insurance System (GSIS), regardless of their status of appointment, including members of
the judiciary and constitutional commissions;
• Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection,
the Bureau of Jail Management and Penology, and the Philippine National Police;
• Filipinos employed by foreign-based employers, whether they are deployed locally or
abroad or a combination thereof.
B.5.2.1. Voluntary Membership
Membership is also extended to individuals of at least 18 years old but not more than 65
years old under their voluntary membership program. However, the said individual shall be
required to comply with the set of rules and regulations for Pag-IBIG members including the
amount of contribution and schedule of payment. In addition, they shall be subject to the
eligibility requirements in the event of availment of loans and other programs/benefits
offered by the Fund.
The following shall be allowed to apply for voluntary membership:

• Non-working spouses who devote full-time to managing the household and family
affairs, unless they also engage in another vocation or employment which is subject
to mandatory coverage, provided the employed spouse is a registered Pag-IBIG
member and consents to the Fund membership of the non-working spouse;
• Filipino employees of foreign government or international organization, or their
wholly owned instrumentality based in the Philippines, in the absence of an
administrative agreement with the Fund;
• Employees of an employer who is granted a waiver or suspension of coverage by the
Fund under RA 9679;
• Leaders and members of religious groups;
 • A member separated from employment, local or abroad, or ceased to be self-
employed but would like to continue paying his/her personal contribution. Such
member may be a pensioner, investor, or any other individual with passive income or
allowances;
• Public officials or employees who are not covered by the GSIS such as Barangay
Officials, including Barangay Chairmen, Barangay Council Members, Chairmen of the
Barangay Sangguniang Kabataan, and Barangay Secretaries and Treasurers;
• Such other earning individuals/groups as may be determined by the Board by rules
and regulations.

B.5.3. Benefits of the Fund

7. Housing Loan
The most popular program benefit of the Pag-IBIG Fund offers assistance to its members
by providing affordable financing for their housing needs. HDMF accomplishes this by working
in partnership with the local Real Estate Developers and arranging affordable loans to real
estate buyers (Pag-IBIG members).
The loan had a lower interest rate compared to the prevailing rate in the market and
payable in longer terms. Pag-IBIG Fund offers a home loan at a low interest rate of 4.5% (for
₱450,000 loan) with a loan term of up to 30 years. A qualified member can get a maximum
loan amount of up to ₱ 6 Million.
8. Short-term Loan
Similar to the Government Service Insurance System (GSIS) and Social Security System,
the HDMF also offers financial assistance to qualified member by granting short -term loan.
There are two types of loans members are qualified to avail:

✓ Multi-purpose Loan (MPL)

This program aims to provide financial assistance to members for house repair,
minor home improvement, home enhancement, tuition or educational expenses,
health and wellness, livelihood; or other purposes. To avail the program, a member
must made at least twenty-four (24) month membership savings, or the total savings
is equivalent to twenty-four (24) membership savings and must have at least one (1)
contribution within the last six (6) months as of month prior to date of loan
application.
For members who have withdrawn their contributions due to membership
maturity, the reckoning date of the updated 24 contributions shall be the first
contribution following the month the member qualified to withdraw his MS due to
membership maturity. If a member has an existing Pag-IBIG Housing Loan, the
account must not be in default as of date of application. Should a member have an
existing multi-purpose and/or calamity loan, the account/s must not be in default as
of date of application.
 ✓ Calamity Loan
For members affected by unforeseen calamity like flood, fire, tropical cyclones/
typhoons, volcanic eruption and other similar cases. Members can borrow up to 80%
of their Total Accumulated Value (TAV) subject to the terms and conditions of the
program. Calamity Loan Interest rate is 5.95% per annum. The loan is amortized over
24 months, with a grace period of 3 months. Paying period begins on the 4th month
following their check date.
9. Provident Savings
Membership contributions to the Pag-IBIG fund is a member's individual savings,
which a member can withdraw at the maturity date. Pag-IBIG Fund makes clear that
members' contributions, plus that their employer will earn dividend. All that money,
called Total Accumulated Value (contributions plus dividend) can be withdrawn when it
reaches maturity or 240 months of contributions for at least 45 years old. Unlike the
money in a bank regular savings where the interest rate is given, member's earnings in
the fund is not readily foreseen ahead of time. It essentially participating in investment
and membership earnings will depend on the overall performance of that investment.

B.6. Home Guaranty Corporation

The Home Guaranty Corporation (HGC) is a government-owned and

controlled corporation (GOCC) under the administrative supervision of the
Housing and Urban Development Coordinating Council (HUDCC).

Since its creation in 1950 as the Home Financing Commission, HGC has
institutionalized a viable system of credit guaranties that has become an
integral component of the government’s shelter program. 26

HGC takes the risk out of private investment in housing by providing risk covers and fiscal incentives
to housing credits extended by developers, banks and other financing institutions. The more HGC
guarantees—the more private funds flow for housing and urban development.

With the enactment of Republic Act No. 8763, or the Home Guaranty Corporation Act of 2000, the
authorized capital of HGC was increased from P2.5 billion to P50 billion and its corporate life extended to
another 50 years.

B.6.1. Mandates

• To guarantee the payment of any and all forms of mortgages, loans and other forms of credit
facilities and receivables arising from financial contracts exclusively for residential purposes and
the necessary support facilities (provided they have been issued HGC Guarantees);

26
Cayanan, Arthur S. “A Study of the Performance and Financial Reporting Practices of the Philippine Government-
Owned and Controlled Corporations, Home Guaranty Corporation (HGC).
 • To assist private developers to undertake socialized, low and medium cost mass housing projects
by encouraging private funds to finance such housing projects through a viable system of long-
term mortgages, guaranties and other incentives;

• To promote homebuilding and landownership, giving primary preference to the homeless and
underprivileged sectors of the society;

• To promote housing by the aided self-help method;

• To pursue the development and sustainability of a secondary mortgage market for housing.

- Republic Act No. 8763 (2000)

• To administer the Cash Flow Guaranty System of the Abot-Kaya Pabahay Fund.

- Republic Act No. 6846 (1990)

Social Housing Support Fund Act
(Abot Kaya Pabahay Fund Act)

• To supervise and regulate building and loan associations.

- Republic Act No. 8763 (2000)

Republic Act No. 8791 (2000)
General Banking Law

Learning Activity 6.1.

➢ Make a list in table form showing the agencies attached to DHSUD along with
their brief descriptions.

C. Other Laws on Housing

C.1. REPUBLIC ACTS

1. Republic Act No. 9653: Rent Control Act (2009)

Whether you’re a landlord or a tenant, learning about the Rent Control Act of 2009 should
be imperative for you, especially in cases of conflict. Basically, this law covers housing rentals
across the country and protects around 1.5 million renters nationwide from a sudden increase in
rental rates.

RA 9653 or the “An Act Establishing Reforms in the Regulation of Rent of Certain
Residential Units, Providing the Mechanisms Therefore and For Other Purposes” was approved in
2009. It expired on December 31, 2013, but was since been repeatedly extended by the Housing
and Urban Development Coordinating Council (HUDCC), the government agency tasked to
 oversee the law’s implementation. Its latest extension was from January 1, 2018, until December
31, 2020.27

To simplify the provisions of the Rent Control Act of 2009, the salient points that you have
to know about is summarized as follows:

Law Coverage

✓ All residential units in the National Capital Region and other highly urbanized cities, where
the total monthly rent for each residential unit ranges from P1.00 to P10,000.00 as of the
effectivity of the Rent Control Act, without prejudice to existing contracts
✓ All residential units in all other areas, where the total monthly rent for each residential
unit ranges from P1.00 to P5,000.00 as of the effectivity of the Rent Control Act, without
prejudice to existing contracts.

Rent refers to the rental rate alone, exclusive of utility charges that may be charged to the renter.
The coverage isn’t limited to “house and lots.”

Law Exemptions

In commercial spaces, which include those used for home industries, retail stores, or other
business purposes, living in the unit is also not covered by the law.
Rent-to-own agreements are exempt from the coverage. They are governed by separate
binding contracts, and therefore, do not fall under the Rent Control Act.
Housing units with monthly rates above Php10,000 are not covered. As the Rent Control Act
of 2009 exempt these units from coverage, it means an increase in rental rates will be allowed
by law provided that it is mutually agreed on by tenant and landlord. Both parties can freely
negotiate and agree on the rate and frequency of increase.

Salient Features of the Rent Control Act (2009)

✓ Limitations on the Increase in Rent

o Residential units charging monthly rent of up to P4,999.00 cannot increase the
rental price by more than two percent (2%) per year
o Housing units charging monthly rent of P5,000 to P8,999, meanwhile, are not
allowed to increase rates by more than seven percent (7%) per year, if the unit is
occupied by the same tenant.
o According to the provisions of the Rent Control Act, houses for rent charging
monthly rent of P9,000 up to P10,000 are not allowed to increase rates by more
than eleven percent (11%) per year, if the unit is occupied by the same tenant.
o Rental accommodations offered to students such as boarding houses,
dormitories, rooms, and bed spaces are only allowed to increase rents once a
year, even if a new renter occupies the unit within the same year.

27
What You Need to Know About Rent Control Law. 17 July 2019. https://www.lamudi.com.ph/journal/what-you-
need-to-know-about-the-rent-control-law/
 o For 1 year from the effectivity of the law, no increase shall be imposed on the
rent of any residential unit covered by the law.
o After such period until 31 December 2013, the rent cannot be increased by more
than 7% annually as long as the unit is occupied by the same lessee. In the case
of boarding houses, dormitories, rooms and bed spaces offered for rent to
students, the rent cannot be increased more than once per year.
o When the residential unit becomes vacant, the lessor may set the initial rent for
the next lessee.
o After the lapse of said period, the Housing and Urban Development Coordinating
Council (HUDCC) has the authority to continue the regulation of the rental of
certain residential units:
 To determine the period of regulation and its subsequent extensions if
necessary
 To determine the residential units covered
 To adjust the allowable limit on rental increases per annum, taking into
consideration, among others:
o National Statistics Office (NSO) census on rental units o Prevailing rental
rates
o Monthly inflation rate on rentals of the immediately preceding year,
and
o Rental price index.
✓ Payment of Rent
o Rent should be paid in advance within the first 5 days of every current month or
the beginning of the lease agreement, unless the lease contract provides for a
later date of payment.
o The lessor cannot demand more than 1-month advance rent.
✓ Deposit
o The lessor cannot demand more than 2 months deposit. It is illegal to demand
one-month advance, two months deposit.
o The deposit should be kept in a bank under the lessor's account name for the
entire duration of the lease agreement. Any interest that may accrue on the
deposit will be given to the lessee when the lease contract expires.
o If the lessee fails to pay rent, electric, telephone, water or such other utility bills,
or destroys any house components and accessories, said deposit and interest will
be forfeited in favor of the lessor in the amount commensurate to the pecuniary
damage.
✓ Assignment of Lease and Subleasing
o The lessee cannot assign the lease over the whole or any portion of the residential
unit, without the written consent of the owner/lessor.
o The lessee cannot sublease the whole or any portion of the residential unit,
without the written consent of the owner/lessor.
o The lessee cannot accept borders or bed spacers without the written consent of
the owner/lessor.
 ✓ Grounds for Evicting Tenants
o Assignment of lease or subleasing, including the acceptance of boarders or bed
spacers, without the written consent of the owner/lessor.
o The renter has three (3) months’ worth of unpaid rent
o Legitimate need of the owner/lessor to repossess the leased property for his/her
own use, or for the use of any immediate member of his/her family, as a
residential unit, provided:
 The lease for a definite period has expired;
 The lessor has given the lessee a formal notice 3 months in advance; and
 The owner/lessor cannot lease the property or allow a third party to use it for
at least 1 year from the time of repossession.

"Immediate members of family of the lessor” are limited to his/her spouse and
direct descendants or ascendants, by consanguinity or affinity.

o Lessor’s need to make necessary repairs of the leased property by reason of an

existing order of condemnation issued by appropriate authorities.

 After said repair, the ejected lessee will have the first preference to lease the
same premises. However, the new rent shall be reasonably commensurate with
the expenses incurred for the repair.

 If the residential unit is condemned or completely demolished, the lease of the

new building will no longer be subject to the said first preference rule

o Expiration of the period of the lease contract.

Penalty for the Violation of the Rent Control Act (2009)

o A fine of not less than P25,000.00 but not more than P50,000.00, or imprisonment of not
less than 1 month and 1 day to not more than 6 months, or both.

Effective implementation of the law and information dissemination can benefit millions of
Filipino renters of houses, apartments, and condominium units. The law can also help in settling
issues and avoid further escalation, leading to unforeseen legal implications.

2. Republic Act No. 9507: Socialized and Low-cost Housing Loan Restructuring and Condonation
Act (2008) and its IRR

3. Republic Act No. 9397: Disposition of Lands for Socialized Housing (2006)

4. Republic Act No. 9341: Rent Control Act (2005)

5. Republic Act No. 8501: Penalty Condonation (1998)

6. Republic Act No. 8437: Rent Control Law (1997)

7. Republic Act No. 7835: Comprehensive and Integrated Shelter Financing Act or CISFA (1994)

8. Republic Act No. 7279: Urban Development and Housing Act (1992)
The law aims, among others, to:

✓ make available to underprivileged and homeless citizens decent housing at affordable

cost;
✓ provide for rational use and development of urban land;
✓ regulate and direct urban growth and expansion towards a disperse urban net and more
balanced urban-rural interdependence;
✓ provide for an equitable land tenure system that shall guarantee security of tenure to
program beneficiaries but shall respect the rights of small property owners and ensure
the payment of just compensation;
✓ encourage more effective people’s participation in the urban development process; and
✓ improve the capability of the LGU in undertaking urban development and housing
programs and projects.

Definition of Terms:

o "Affordable cost" refers to the most reasonable price of land and shelter based on the
needs and financial capability of Program beneficiaries and appropriate financing
schemes;
o "Areas for priority development" refers to those areas declared as such under existing
statutes and pertinent executive issuances.
o "Blighted lands" refers to the areas where the structures are dilapidated, obsolete and
unsanitary, tending to depreciate the value of the land and prevent normal development
and use of the area.
o "Consultation" refers to the constitutionally mandated process whereby the public, on
their own or through people's organizations, is provided an opportunity to be heard and
to participate in the decision-making process on matters involving the protection and
promotion of its legitimate collective interest, which shall include appropriate
documentation and feedback mechanisms;
o "Idle lands" refers to non-agricultural lands urban and urbanized areas on which no
improvements, as herein defined, have been made by the owner, as certified by the city,
municipal or provincial assessor;
o "Improvements" refers to all types of buildings and residential units, walls, fences,
structures or constructions of all kinds of a fixed character or which are adhered to the
soil but shall not include trees, plants and growing fruits, and other fixtures that are mere
superimpositions on the land, and the value of improvements shall not be less than fifty
percent (50%) of the assessed value of the property;
o "Joint venture" refers to the commitment or agreement by two (2) or more persons to
carry out a specific or single business enterprise for their mutual benefit, for which
purpose they combine their funds, land resources, facilities and services;
o "Land assembly or consolidation" refers to the acquisition of lots of varying ownership
through purchase or expropriation of the purpose of planned and rational development
and socialized housing programs without individual property boundary restrictions;
o "Land banking" refers to the acquisition of land at values based on existing use in advance
of actual need to promote planned development and socialized housing programs;
o "Land swapping" refers to the process of land acquisition by exchanging land for another
piece of land of equal value, or for shares of stock in a government or quasi-government
corporation whose book value is of equal value to the land being exchanged, for the
purpose of planned and rational development and provision for socialized housing where
land values are determined based on land classification, market value and assessed value
taken from existing tax declarations: Provided, That more valuable lands owned by private
persons may be exchanged with less valuable lands to carry out the objectives of this Act;
o "Land use plan" refers to the rational approach of allocating available resources as
equitably as possible among competing user groups and for different functions consistent
with the development plan of the area and the Program under this Act;
o "On-site development" refers to the process of upgrading and rehabilitation of blighted
slum urban areas with a view of minimizing displacement of dwellers in said areas
o "Professional squatters" refers to individuals or groups who occupy lands without the
express consent of the landowner and who have sufficient income for legitimate housing.
The term shall also apply to persons who have previously been awarded home lots or
housing units by the Government but who sold, leased or transferred the same to settle
illegally in the same place or in another urban area, and non-bona fide occupants and
intruders of lands reserved for socialized housing. The term shall not apply to individuals
or groups who simply rent land and housing from professional squatters or squatting
syndicates;
o "Resettlement areas" refers to areas identified by the appropriate national agency or by
the local government unit with respect to areas within its jurisdiction, which shall be used
for the relocation of the underprivileged and homeless citizens;
o "Security of tenure" refers to the degree of protection afforded to qualified Program
beneficiaries against infringement or unjust, reasonable and arbitrary eviction or
disposition, by virtue of the right of ownership, lease agreement, usufruct and other
contractual arrangements;
o "Slum Improvement and Resettlement Program or SIR" refers to the program of the
National Housing Authority of upgrading and improving blighted squatter areas outside
of Metro Manila pursuant to existing statutes and pertinent executive issuances;
o "Small property owners" refers to those whose only real property consists of residential
lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities
and eight hundred square meters (800 sq.m.) in other urban areas;
o "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;
o "Squatting syndicates" refers to groups of persons engaged in the business of squatter
housing for profit or gain;
o "Underprivileged and homeless citizens" refers to the 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 housing facilities. This shall include
those who live in makeshift dwelling units and do not enjoy security of tenure;
o "Unregistered or abandoned lands" refers to lands in urban and urbanizable areas which
are not registered with the Register of Deeds, or with the city or municipal assessor's
office concerned, or which are uninhabited by the owner and have not been developed
or devoted for any useful purpose, or appears unutilized for a period of three (3)
consecutive years immediately prior to the issuance and receipt of publication of notice
of acquisition by the Government as provided under this Act. It does not include land
which has been abandoned by reason of force majeure or any other fortuitous event:
Provided, That prior to such event, such land was previously used for some useful or
economic purpose;
o "Urban areas" refers to all cities regardless of their population density and to
municipalities with a population density of at least five hundred (500) persons per square
kilometers;
o "Urbanizable areas" refers to sites and lands which, considering present characteristics
and prevailing conditions, display marked and great potential of becoming urban areas
within the period of five (5) years; and
o "Zonal Improvement Program or ZIP" refers to the program of the National Housing
Authority of upgrading and improving blighted squatters’ areas within the cities and
municipalities of Metro Manila pursuant to existing statutes and pertinent executive
issuances.

Coverage

The Program shall cover all lands in urban and urbanizable areas, including existing areas
for priority development sites, and in other areas that may be identified by the local government
units as suitable for socialized housing.

Exemptions

The following lands shall be exempt from the coverage of this Act:

(a) Those included in the coverage of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law;
(b) Those actually used for national defense and security of the State;
(c) Those used, reserved or otherwise set aside for government offices, facilities and other
installations, whether owned by the National Government, its agencies and
instrumentalities, including government owned or-controlled corporations, or by the
local government units: Provided, however, That the lands herein mentioned, or portions
thereof, which have not been used for the purpose for which they have been reserved or
set aside for the past ten (10) years from the effectivity of this Act, shall be covered by
this Act;
 (d) Those used or set aside for parks, reserves for flora and fauna, forests and watersheds,
and other areas necessary to maintain ecological balance or environmental protection, as
determined and certified to by the proper government agency; and
(e) Those actually and primarily used for religious, charitable, or educational purposes,
cultural and historical sites, hospitals and health centers, and cemeteries or memorial
parks. The exemptions herein provided shall not apply when the use or purpose of the
abovementioned lands has ceased to exist.

SOCIALIZED HOUSING

Eligibility Criteria for Socialized Housing Program Beneficiaries:

✓ Must be a Filipino citizen;
✓ Must be an underprivileged and homeless citizen
✓ Must not own any real property whether in the urban or rural areas; and
✓ Must not be a professional squatter or a member of squatting syndicates.

Basic Services

Socialized housing or resettlement areas shall be provided by the local government unit
or the National Housing Authority in cooperation with the private developers and concerned
agencies with the following basic services and facilities:

✓ Potable water;
✓ Power and electricity and an adequate power distribution system;
✓ Sewerage facilities and an efficient and adequate solid waste disposal system;
and
✓ Access to primary roads and transportation facilities.

Livelihood Component

To extent feasible, socialized housing and resettlement projects shall be located near
areas where employment opportunities are accessible. The government agencies dealing with the
development of livelihood programs and grant of livelihood loans shall give priority to the
beneficiaries of the Program.

URBAN RENEWAL AND RESETTLEMENT

This shall include the rehabilitation and development of blighted and slum areas and the
resettlement of Program beneficiaries.

Action Against Professional Squatters and Squatting Syndicates

The local government units, in cooperation with the Philippine National Police, the
Presidential Commission for the Urban Poor (PCUP), and the PCUP accredited urban poor
organization in the area, shall adopt measures to identify and effectively curtail the nefarious and
illegal activities of professional squatters and squatting syndicates.

Any person or group identified as such shall be summarily evicted and their dwellings or
structures demolished, and shall be disqualified to avail of the benefits of the Program. A public
official who tolerates or abets the commission of the abovementioned acts shall be dealt with in
accordance with existing laws.

Professional squatters or members of squatting syndicates shall be imposed the penalty

of six (6) years imprisonment of a fine of not less than Sixty thousand pesos (P60,000.00) but not
more than One hundred thousand pesos (P100,000), or both, at the discretion of the court.

Eviction and Demolition

Eviction or demolition as a practice shall be discouraged. Eviction or demolition, however,

may be allowed under the following situations:

(a) When persons or entities occupy danger areas such as esteros, railroad tracks, garbage
dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks, roads, parks,
and playgrounds;

(b) When government infrastructure projects with available funding are about to be
implemented; or

(c) When there is a court order for eviction and demolition.

In the execution of eviction or demolition orders involving underprivileged and homeless

citizens, the following shall be mandatory:

1) Notice upon the effected persons or entities at least thirty (30) days prior to the date
of eviction or demolition;

(2) Adequate consultations on the matter of settlement with the duly designated
representatives of the families to be resettled and the affected communities in the areas where
they are to be relocated;

(3) Presence of local government officials or their representatives during eviction or

demolition;

(4) Proper identification of all persons taking part in the demolition;

(5) Execution of eviction or demolition only during regular office hours from Mondays to
Fridays and during good weather, unless the affected families consent otherwise;

No use of heavy equipment for demolition except for structures that are permanent and
of concrete materials;

(7) Proper uniforms for members of the Philippine National Police who shall occupy the
first line of law enforcement and observe proper disturbance control procedures; and
 (8) Adequate relocation, whether temporary or permanent: Provided, however, That in
cases of eviction and demolition pursuant to a court order involving underprivileged and homeless
citizens, relocation shall be undertaken by the local government unit concerned and the National
Housing Authority with the assistance of other government agencies within forty-five (45) days
from service of notice of final judgment by the court, after which period the said order shall be
executed: Provided, further, That should relocation not be possible within the said period,
financial assistance in the amount equivalent to the prevailing minimum daily wage multiplied by
sixty (60) days shall be extended to the affected families by the local government unit concerned.

COMMUNITY MORTGAGE PROGRAM

The Community Mortgage Program (CMP) is a mortgage financing program of the

National Home Mortgage Finance Corporation 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.

To achieve the foregoing objectives, UDHA sought to promote the following strategies:

1. Strategies for land acquisition that called for varying degrees of government
intervention which includes:

a. community mortgage;

b. land swapping;

c. land consolidation;

d. land banking;

e. joint venture agreements; and

f. expropriation

2. Balanced housing by requiring developers to allot a certain percentage of the total area
or cost of their projects to socialized housing.

3. Incentives in the form of simplifying accreditation and financing procedures to

fully tap the private sector in producing socialized housing.

4. Grant of exemptions from certain types of taxes to socialized housing developers.

5. Espousal of consultation and community participation.

6. Related strategy to stimulate economic growth and promoting socio-economic

development in the countryside.
9. Republic Act No. 10884: Balanced Housing Program Amendments Act (2016)

This Act amends Republic Act No. 7279, otherwise known as the Urban Development and
Housing Act of 1992. This Act which, is a consolidation of Senate Bill No. 2947 and House Bill No.
4116 was finally passed by the Senate and the House of Representatives on February 3, 2016 and
May 23, 2016, respectively. The following provisions are hereby amended in this Act:

(a) Section 3 of Republic Act No. 7279 is hereby amended by redefining paragraph (r) to read as
follows:

"(r) ‘Socialized housing’ refers to housing programs and projects covering houses and lots
or homelots only, or residential condominium units 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."

(b) Section 18 of Republic Act No. 7279 is hereby amended to read as follows:

"Sec. 18. Balanced Housing Development. - The Program shall include a system to be
specified in the Framework plan whereby owners and/or developers of proposed
subdivision and condominium projects shall be required to develop an area for socialized
housing equivalent to at least fifteen percent (15%) of the total subdivision area or total
subdivision project cost and at least five percent (5%) of condominium area or project
cost, at the option of the developer, in accordance with the standards as provided by
law: Provided, That proposed socialized subdivision projects and proposed socialized
condominium projects shall be exempt from this requirement. For this purpose, the
Housing and Urban Development Coordinating Council and the National Economic and
Development Authority shall jointly determine and set separate socialized housing price
ceilings for socialized subdivision and socialized condominium projects which shall be
mandatorily reviewed or revised every two (2) years. The balanced housing development
as herein required may also be complied with by the owners and/or developers
concerned in any of the following manner:

"(a) Development of socialized housing in a new settlement;

"(b) Joint-venture projects for socialized housing with either the local government
units or any of the housing agencies or with another private developer, or with a
nongovernmental organization engaged in the provision of socialized housing and
duly accredited by the Housing and Land Use Regulatory Board, but if the
developer has failed to complete the development of the project, the owner
and/or developer of the main subdivision or condominium project shall be
solidarily liable only to the extent of compliance to the balanced housing
requirement regardless of the provisions of their joint venture agreement; or

"(c) Participation in a new project under the community mortgage program.

 "The Housing and Land Use Regulatory Board is hereby mandated to submit to Congress
an annual report on the compliance hereof by the owners and/or developers of
subdivision and condominium projects.

"Any person violating any provision of this section shall be imposed a fine of not less than
five hundred thousand pesos (₱500,000.00), for the first offense: suspension of license to
do business for a period of three (3) to six (6) months and a fine of not less than five
hundred thousand pesos (₱500,000.00), for the second offense; and cancellation of
license to do business for the third offense."

(c) Section 20 of Republic Act No. 7279 is hereby amended to read as follows:

"Sec. 20. Incentives for Private Sector Participating in Socialized Housing. — To encourage
greater private sector participation in socialized housing and further reduce the cost of
housing units for the benefit of the underprivileged and homeless, the following
incentives shall be extended to the private sector:

"(a) Reduction and simplification of qualification and accreditation requirements

for participating private developers;

"(b) Creation of one-stop offices in the different regions of the country for the
processing, approval and issuance of clearances, permits and
licenses: Provided, that clearances, permits and licenses shall be issued within
ninety (90) days from the date of submission of all requirements by the
participating private developers;

"(c) Simplification of financing procedures; and

"(d) Exemption from the payment of the following;

"(1) Project-related income taxes;

"(2) Capital gains tax on raw lands used for the project;

"(3) Value-added tax for the project contractor concerned;

"(4) Transfer tax for both raw completed projects; and

"(5) Donor’s tax for lands certified by the local government units to have been
donated for socialized housing purposes.

"Provided, That a socialized housing certification issued by the Housing and Land Use
Regulatory Board shall be sufficient for the purpose of availment of tax
exemption: Provided, further, That upon application for exemption, a lien on the title of
the land shall be annotated by the Register of Deeds: Provided, Furthermore, That the
 socialised housing development plan has already been approved by the appropriate
government agencies concerned: Provided, finally, That all the savings realized by virtue
of this provision shall accrue in favor of the beneficiaries subject to the implementing
guidelines to be issued by the Housing and Urban Development Coordinating Council."

10. Batas Pambansa Blg. 220

The Housing and Land Use Regulatory Board (HLURB) has been tasked by Batas Pambansa
Blg. 220 to set the minimum requirements for socialized housing units, and the technical design
and standards to see to it that the units are affordable, livable and technically of sound structure.

HLURB Board Resolution No. 974 sets the minimum size floor size for a condominium to
be 22 sqm.

On the other hand, Resolution No. 973 sets the standards for single detached,
duplex/single attached and row houses. The resolution adjusted the minimum gross floor area of
a single detached, duplex or row house at 32 sqm.

A unit with a loft should have a minimum gross floor area of 28 sqm. The loft, defined as
“a partial, intermediate floor in a one-storey or room of a residential unit of a subdivision” should
be at least 50 percent of the base structure and should have a clear ceiling height of not less than
1.8 meters above and below it.

A two-storey structure should have a minimum gross floor area of 32 sqm. It should be at
least a 16 sqm per floor structure with a dimension of 4 meters by 4 meters.

The resolution also prescribed the ceiling height for a habitable room: a minimum
headline clearance of 2 meters from the finished line to the ceiling line.

SOCIALIZED HOUSING

(a) Definition

Socialized housing refers to housing programs and projects covering houses and lots or
lots undertaken by the government or private sector for underprivileged and homeless citizens.

The programs include sites and services development, long-term financing, and
liberalized terms on interest payments.

Underprivileged and homeless citizens refer to the beneficiaries or individuals or families

in urban and urbanize areas who do not own housing facilities, and whose income or combined
household incomes fall within the poverty threshold defined by the government.

For a family of five, the monthly poverty threshold was P9,064 in 2015, according to the
Philippine Statistics Authority.
 (b) Price ceiling and Floor Area

For socialized subdivision projects, single detached housing, duplex and single attached
housing and row houses have a price ceiling ranging from P480,000 to P580,000 and gross floor
area ranging from 22 sqm to 32 sqm.

The price ceiling for socialized condominium projects ranges from P600,000 to
P750,000, depending on the size and location.

For the National Capital Region, San Jose del Monte City in Bulacan Province, Cainta and
Antipolo City in Rizal Province; San Pedro City in Laguna, Carmona and the Cities of Imus and
Bacoor in Cavite Province, the ceiling is P700,000 for 22 sqm and P750,000 for 24 sqm

For other areas, the ceiling is P 600,000 for 22 sqm and P 650,000 for 24 sqm

Sources: Republic Act No. 727, hlurb.gov.ph, hudcc.gov.ph, Bella Vita website

C.2. EXECUTIVE ORDERS

1. Executive Order No. 105: Approving and Directing the Implementation of the Program for
“Provision of Group Home/Foster Home for the Neglected, Abandoned, Abused, Detached, and
Poor Older Persons with Disabilities” (2002)

2. Executive Order No. 20: Reaffirming Mass Housing as a Centerpiece Program in the Poverty
Alleviation efforts of the Government and further strengthening the Housing and Urban
Development Council (2001)

3. Executive Order No. 258: Prescribing Time Standards in the Issuance of Permits for Housing
Projects (2000)

4. Executive Order No. 45: Prescribing Time Periods for Issuance of Housing Related Certifications,
Clearances and Permits, and Imposing Sanctions for Failure to Observe the Same (2001) and its
IRR

5. Executive Order No. 159: Declaring Mass Housing as Centerpiece Program of the Estrada
Administration and Constituting the Presidential Commission for Mass Housing (1999)

6. Executive Order No. 170: Establishing the Revolving Funds for Housing Projects of Local
Government Units (1999)

7. Executive Order No. 71: Devolving the Powers of the Housing and Land Use Regulatory Board
to approve Subdivision plans to Cities and Municipalities pursuant to R.A. np. 7160, otherwise
known as the Local Government Code of 1991 (1993)

8. Executive Order No. 72: Providing for the Preparation and Implementation of Comprehensive
Land Use Plans of Local Government Units Pursuant to the Local Government Code of 1991 and
other Pertinent Laws (1993)
 9. Executive Order No. 129: Establishing an Institutional Mechanism to Curtailment of the
Activities of the Professional Squatting Syndicated and Professional Squatters and Intensifying the
drive against them (1993)

10. Executive Order No. 357: Strengthening the Existing Coordinating Mechanism of the National
Shelter Program of the Government Under Executive Order No. 90 dated December 17, 1986
(1989)

11. Executive Order No. 90: Identifying the Government Agencies Essential for the National
Shelter Program and Defining their Mandates, creating the Housing and Urban Development
Coordinating Council, Rationalizing funding sources and lending mechanisms for home mortgages
and other purposes (1986)

C.3. ADMINISTRATIVE ORDERS

1. Administrative Order No. 44: Streamlining the process of Permits, Certifications, Clearances,,
and Licenses for Hosing and Resettlement Projects in Yolanda-Affected areas, Directing all
Government Agencies concerned to observe the same and Imposing Sanctions for Non-
compliance

C.4. MEMORANDUM CIRCULAR

1. Memorandum Circular No. 87, Series of 2015: Directing all National Government Agencies and
Instrumentalities, including Government-Owned or Controlled Corporations, to Submit an
Inventory of their respective Idle Lands, and Creating an Inter-Agency Task Force to Identify Lands,
and sites for Socialized Housing.

2. Memorandum Circular No. 112, Series of 2006: Housing Fair for Employees in the Public Sector

C.5. PROCLAMATION

1. Proclamation No. 662: Declaring the month of October as the National Shelter Month (1995)

C.6. PRESIDENTIAL DECREE

1. Presidential Decree No. 957: Regulating the Sale of Subdivision Lots and Condominium,
Providing Penalties for Violation Thereof (1976) and its IRR

Presidential Decree No. 957 otherwise known as “Subdivision and Condominium Buyer’s
Protective Decree” was initiated by the late President Ferdinand Marcos on July 12, 1976 and
applied with the latest revised implementing rules and regulations in 2009.

The primary purpose of this decree is to protect the buyers of condominium projects and
subdivision developments against misrepresentations and fraudulent activities of developers,
sellers and operators.

Nowadays, real estate competition among developers, agents and operators is becoming
stiffer. Some of these people would do anything just to close the deal with their clients. And the
idea of “doing just anything” to close the deal is a double-edged sword.
 To do anything good to benefit both parties (the client and the seller) is what’s ideal and
just. However, what if only one-party benefits more in the transaction? In this case, it is usually
the seller.

This happens when sellers (property developers, operators, brokers and salespersons)
over-promise something to clients but under-deliver, deceive the client by fraudulent
presentation or by simply feeding the client with information which are not true, incomplete or
incomprehensive.

There were (and still are) numerous complaints against these unscrupulous activities of
property developers, operators, brokers and salespersons reported to different government
agencies. Thus, this decree, PD 957, was passed to resolve these problems and to protect the
welfare of the property buyers.

D. Summary
The Department of Human Settlements and Urban Development or DHSUD, created under
Republic Act No. 11201 in an effort to ensure that underprivileged and homeless citizens have an
access to "adequate, safe, secure, habitable, sustainable, resilient, and affordable home is
the executive department of the Philippine government responsible for the management of
housing and related development in the Philippines. It is a merger of the Housing and Urban
Development Coordinating Council (HUDCC) and the Housing and Land Use Regulatory Board
(HLURB), with the former becoming defunct and the latter reorganized as the Human Settlements
Adjudication Commission (HSAC).
Executive Order no. 90 primarily enabled the creation of the Housing and Urban Development
Coordinating Council (HUDCC) – the (previously) main government body responsible for all
housing sector efforts. HUDCC manages the overall administration and supervision of the key
shelter agencies namely: Home Development Mutual Fund (HDMF), Home Guaranty
Corporation (HGC), National Housing Authority (NHA), National Home Mortgage Finance
Corporation (NHMFC), Social Housing Finance Corporation (SHFC).
The Housing and Land Use Regulatory Board, together with all the other agencies, was working
towards providing viable and affordable housing programs for the Filipino people.
The Home Development Mutual Fund (HDMF) was established on June 11, 1978 under
Presidential Decree no. 1530. Also known as Pag-IBIG Fund , it is the country’s national savings
program that provides assistance in affordable shelter financing for Filipino workers. It generates
savings through member’s contributions and lends, both to individuals and corporations.
The government owned and controlled Home Guaranty Corporation (HGC) encourages banks,
developers and financial institutions to let individual home buyers loan cash while at the same
time issues guarantees to the lending private sectors. HGC provides guarantees and fiscal
incentives for housing loans extended by financial institutions. The corporation, first known as
Home Financing Commission, was created by virtue of Republic Act no. 580 in September 15,
1950.
For low income families who lack the capacity to procure a housing loan, the National Housing
Authority (NHA) engages in low-cost housing production and development, resettlement and
 sourcing of home financing. NHA originates from the merging of the People’s Homesite
Corporation and the National Housing Commission on October 4, 1947. It was tasked to develop
and implement a comprehensive and integrated housing program which shall embrace, among
others, housing development and resettlement, sources and schemes of financing, and
delineation of government and private sector participation.
The National Home Mortgage Finance Corporation (NHMFC), created in 1977 under Presidential
Decree 1267, is the major government corporation created as a secondary mortgage institution.
It is mandated to make more affordable housing loans available to Filipino homebuyers. It does
so by operating a feasible home mortgage market made up of public and private financial
institutions. With the approval of the Securitization Act of 2004 and improvements in the financial
sector, opportunities to engage in securitization have opened up. The NHMFC has taken this
opportunity to undertake securitization as a strategy to expand home finance. This is the Fannie
Mae and Freddie Mac of the Philippines.
The Social Housing Finance Corporation (SHFC) was created in January 20, 2004 under Executive
Order no. 272. It is a subsidiary of NHMFC. The corporation is mandated to propagate housing
programs for formal and informal settlers in the low-income groups. It is involved in lending to
developers, individuals, and municipalities. Its programs are Abot Kaya Pabahay Fund
Development Loan Program, Community Mortgage Program, Localized Community Mortgage
Program and High-Density Housing Program.

E. Exercises

What have you learned?

Exercise 6.1.