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PRESIDENTIAL DECREE NO. 1267
PRESIDENTIAL DECREE NO. 1267 -
CREATING A NATIONAL HOME MORTGAGE FINANCE CORPORATION DEFINING ITS
POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES
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WHEREAS,
further measures are necessary to optimize the effective use of funds
and resources committed by the Government in response to the housing
problem;chanroblesvirtualawlibrary
WHEREAS, there is an urgent need to effectively increase the level of
government funds committed to the housing effort by establishing a
secondary market for home mortgages which will enable home financing
institutions to optimize the leverage of funds earmarked for housing
and home development;chanroblesvirtualawlibrary
WHEREAS, the development of a secondary mortgage market requires the
support and assistance of the Government and the private sector as well.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree:cralaw:red
Section 1. Corporate Body. — There is hereby created
a body corporate to be known as the National Home Mortgage Finance
Corporation, hereafter referred to as the "Corporation".
Section 2. Place of Business. — The Corporation shall
have its principal place of business in Metropolitan Manila, but may
have such branches and agencies in other places as may be necessary for
the proper conduct of its business.
Section 3. Capitalization. — The Corporation shall
have an authorized capital stock of Five Hundred Million Pesos
(P500,000,000.00) divided into 500,000 shares with a par value of One
Thousand Pesos (P1,000.00) per share, to be subscribed and paid for by
the Government of the Republic of the Philippines.
Section 4. Purpose of the Corporation. — The primary
purpose of the Corporation shall be to develop and provide for a
secondary market for home mortgages granted by public and/or private
home financing institutions.
Section 5. Powers and Functions. — The Corporation
shall have the following powers and functions:cralaw:red
a. To purchase, acquire, sell, discount, refinance,
or otherwise deal in home mortgages or participations therein under
such terms and conditions as may be prescribed by the Board of
Directors of the Corporation;chanroblesvirtualawlibrary
b. Subject to the provisions of Section 7 hereof, to
borrow funds from domestic or foreign private or public financial
institutions as may from time to time be required for its operations,
and to issue bonds, promissory notes, debentures, and other debt
instrument in local or foreign currency; chanroblesvirtualawlibrary
c. To own, lease, purchase or otherwise acquire, sell
or otherwise dispose of, property, real or personal, as may be
necessary and appropriate for the conduct of its business;chanroblesvirtualawlibrary
d. To invest the funds or monies of the Corporation
not invested in mortgage loans in securities issued by the National
Government, Central Bank of the Philippines and other government
entities, including government-owned and controlled corporations the
servicing and repayment of which are fully guaranteed by the Republic
of the Philippines;chanroblesvirtualawlibrary
e. To enter into and perform such contracts with any
person or entity, public or private, as may be necessary, proper or
conducive to the attainment or furtherance of the objectives and
purposes of the Corporation;chanroblesvirtualawlibrary
f. To adopt, alter and use a corporate seal; to sue
and be sued; and generally, to exercise all the powers of a corporation
under the Corporation Law which are not inconsistent herewith; and
g. To promulgate such rules and regulations and to do
and perform any and all things as may be necessary and proper to carry
out its responsibilities, powers and functions under this Decree.
Section 6. Medium and Long-Term Loans. — Any
provisions of law, circular or regulation to the contrary
notwithstanding, banks are hereby empowered to grant medium and
long-term loans for housing and home development with maturity periods
nor exceeding thirty (30) years.
Section 7. Borrowing Power. — With the prior approval
of the Monetary Board and the President of the Philippines, the
corporation may borrow from foreign public or private financial
institutions such amount as may from time to time be required for its
operations, or issue bonds, promissory notes, debentures, certificates
of indebtedness, and other debt instruments in foreign currency.
Notwithstanding the provisions of any law to the contrary, the Central
Bank is hereby authorized to extend loans and advances to the
Corporation under Section 88 of Republic Act No. 265, as amended,
otherwise known as the Central Bank Charter, subject to such terms and
conditions as may be prescribed by the Monetary Board.
No part of the proceeds of domestic and/or foreign borrowings shall be
used for operating expenses of the Corporation.
The bonds, promissory notes, debentures, certificates of indebtedness
and other debt instruments issued in local or foreign currency shall be
at such interest rates, maturities and other terms and conditions as
the Corporation may be determine. The debt instruments may be secured
by the assets of the Corporation and shall be fully exempt, both as to
principal and interest, from any all taxes imposed by the Government or
any of its subdivision. The debt instruments shall be fully negotiable
and shall be unconditionally guaranteed both as to principal and
interest by the government of the Republic of the Philippines, which
guaranty shall be indicated on the face thereof.
A sinking fund is hereby created for the payment of the Corporation's
bonds issued under the provisions hereof in such manner that the total
contribution thereto accrued as at such rate of interest as may be
determined by the Secretary of Finance in consultation with the
Monetary Board, shall be sufficient to redeem the bonds of maturity.
The said fund shall be under custody of the Central Bank of the
Philippines which shall invest the same in such manner as the Monetary
Board may approve; shall charge all expenses of such investment to the
said sinking fund, and shall credit the same with the interest on
investments and other incomes belong to it. chanroblesvirtualawlibrary
A standing annual appropriation is hereby made out of any general funds
in the National Treasury in such amount as may be necessary to provide
for the sinking fund created herein and for the interest on bonds
issued by the Corporation by virtue hereof.
Section 8. Investment of Funds. — Funds of the
Corporation not invested in home mortgages shall be kept in cash on
hand, or on deposit, or invested in securities issued by the National
Government, Central Bank of the Philippines, and other government
entities, including government-owned and controlled corporations, the
servicing and the repayment of which are fully guaranteed by the
Republic of the Philippines.
Section 9. Board of Directors. — The powers and
functions of the Corporation shall be exercised by a Board of
Directors, hereinafter referred to as the "Board", which shall be
composed of the following:cralaw:red
a. The Secretary of Finance, who shall be the
Chairman of the Board. Whenever the Secretary of Finance is unable to
attend the meeting of the Board, he shall designate an undersecretary
as his alternate, but who shall not act as Chairman.
b. The President of the Corporation, who shall be the
Vice-Chairman.
c. The Governor of the Central Bank of the
Philippines. Whenever the Governor of the Central Bank of the
Philippines is unable to attend the meeting of the Board, he shall
designate the Senior Deputy Governor or any Deputy Governor to act as
his alternate. chanroblesvirtualawlibrary
d. The Chairman, National housing Authority. Whenever
the Chairman of the National Housing Authority is unable to attend the
meeting of the Board, he shall designate the General Manager to act as
his alternate.
e. The Commissioner of the Budget. Whenever the
Commissioner of the Budget is unable to attend the meeting of the
Board, he shall designate a Deputy commissioner to act as his
alternative.
Section 10. Powers of the Board. — The Board shall
have the following powers:cralaw:red
a. To formulate policies, rules and regulations to
carry out effectively the functions of the Corporation under this
Decree.
b. To direct the management, operations and
administration of the corporation.
c. To authorize such expenditures by the Corporation
as are in the interest of the effective administration and operations
of the Corporation.
d. On recommendation of the President of the
Corporation, to appoint and fix the remunerations and other emoluments
of subordinate officers and personnel of the Corporation and to remove
or otherwise discipline such officers or employees for cause, as
provided by law: Provided, however, That positions which are policy
determining, primarily confidential, or considered by the Board as
highly technical in nature, as determined by the President of the
Philippines, shall not be subject to the Civil Service Law and Rules.
e. To exercise such other powers as may be necessary
to accomplish the purposes for which the Corporation was organized.
Section 11. Meetings. — The Board shall meet at least
once every two (2) weeks. Special meetings may be revoked by the
Chairman or, in his absence, the Vice-Chairman, to consider such
subjects or matter as may be necessary under the circumstances.
A majority of the directors shall constitute a quorum for the
transaction of corporate business.
Section 12. Remunerations for Attendance of Meetings.
— The members of the Board or their respective alternates, except the
President of the Corporation, shall be entitled to per diems for every
meeting actually attended in such amount as the Board may deem
appropriate but not exceeding P500.00 per meeting nor P2,000.00 in any
one month.
Section 13. President. — The Chief Executive Officer
of the Corporation shall be the President who shall be appointed by the
President of the Philippines for a term of six (6) years unless sooner
removed for caused or by reason of incapacity. He must be of good moral
character, of unquestionable integrity, and responsibility, and must be
of recognized competence in any of the fields of economics, banking,
finance, commerce or industry. He shall be assisted by an Executive
Vice President and such other officers as may be necessary for the
efficient operation of the Corporation.
Section 14. Powers and Duties of the President. — The
President of the Corporation shall have the following duties and
responsibilities:cralaw:red
a. To prepare the agenda for meetings of the Board,
and to submit for the consideration of the Board policies and measures
which he believes are necessary to carry out the purposes and
objectives of the Corporation.
b. To execute and administer the policies and
measures adopted by the Board.
c. To direct and supervise the operation and internal
administration of the Corporation. He may delegate certain of his
administrative responsibilities to other executive officers of the
Corporation, subject to such rules and regulations as may be
promulgated by the Board, and to exercise such other powers as may be
vested in him by the Board.
Section 15. Remuneration of the President. — The
salary of the Corporation shall be fixed and determined by the Board of
Directors as provided in Section 10(d). The Board may authorize the
payment of allowances and other emoluments to the President of the
Corporation. chanroblesvirtualawlibrary
Section 16. Appointment of Personnel. — All other
officers and employees of the corporation shall be appointed by the
Board upon the recommendation of the President of the Corporation.
Section 17. Auditor. — The Chairman of the Commission
on Audit shall act as the ex-officio auditor of the Corporation and, as
such, is empowered to appoint a representative who shall act as the
auditor of the Corporation. He shall also appoint the necessary
personnel to assist said representative in the performance of his
duties. The Auditor of the Corporation and personnel under him may
removed only by the Chairman of the Commission on Audit.
Section 18. Coordination of Policy. — The Corporation
shall coordinate its policies and regulations with those of the Central
Bank of the Philippines, National Economic and Development Authority,
National Housing Authority, and all other agencies of the Government
involved in home building and development and mortgage financing.
The Central Bank of the Philippines may exempt the Corporation from the
Coverage of its regulations governing quasi-banking functions.
Section 19. Authority of the Monetary Board. — In the
furtherance of the objectives of this Decree, and whenever prevailing
conditions warrant, the Monetary Board may direct and require banking
institutions to set aside or allocate a part of their savings and time
deposits for loans to finance the purchase and/or acquisition,
construction, repair, improvement or development of houses and/or lots
used for the construction of residential houses.
Section 20. Tax Exemption. — Notwithstanding the
provisions of any general or special law to the contrary, the
Corporation, its properties and transactions except income shall be
exempt from the payment of all taxes, duties, fees and other charges
including costs, service and filing fees, appeal bonds, supersedeas
bonds in any other court in administrative proceedings.
Section 21. Repealing Clause. — All laws, decrees,
executive orders, rules and regulations inconsistent herewith are
hereby repealed, amended or modified accordingly.
Section 22. Separability Clause. — If for any reason
any section or provision of this Decree is declared to be
unconstitutional or invalid, the other provisions hereof nor affected
thereby shall continue in full force and effect.
Section 23. This Decree shall take effect immediately.
DONE in the City of Manila,
Philippines, this 21st day of December, in the year of Our Lord
nineteen hundred and seventy-seven.
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