REPUBLIC ACT NO. 7835 - AN
ACT PROVIDING FOR A COMPREHENSIVE AND INTEGRATED SHELTER AND URBAN
DEVELOPMENT FINANCING PROGRAM BY INCREASING AND REGULARIZING THE YEARLY
APPROPRIATION OF THE MAJOR COMPONENTS OF THE NATIONAL SHELTER PROGRAM,
INCLUDING THE ABOT-KAYA PABAHAY FUND UNDER REPUBLIC ACT NO. 6846,
AUGMENTING THE AUTHORIZED CAPITAL STOCK AND PAID-UP CAPITAL OF THE
NATIONAL HOME MORTGAGE FINANCE CORPORATION (NHMFC) AND THE HOME
INSURANCE AND GUARANTY CORPORATION (HIGC), IDENTIFYING OTHER SOURCES OF
FUNDING AND APPROPRIATING FUNDS FOR THE PURPOSES
Section 1. Title. — This Act shall be known as the
"Comprehensive and Integrated Shelter Financing Act of 1994."
Sec. 2. Declaration of Policy. — It is hereby
declared a policy of the State to undertake, in cooperation with the
private sector, a continuing program of urban land reform and housing
which will make available, at affordable cost, decent housing and basic
services to underprivileged and homeless citizens in urban centers and
resettlement areas.
In recognition of the role of housing as catalyst 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.
Sec. 3. Statement of Objectives. — Towards this
end, the State shall:
(a) Ensure continuous funding support to vigorously
implement the government's programs for urban and rural housing,
resettlement, the development of sites and services, and the renewal of
blighted areas;
(b) Enhance the capability of low-income groups to
acquire decent and low-cost housing units through the introduction of
support mechanisms and facilities which shall render affordable such
acquisitions;
(c) Provide for a strong and sustainable housing
finance program with complementary support systems, which will pump
prime, build up and strengthen available sources of cheap and long-term
capital;
(d) Increase the public and private sectors'
participation in the investment of their funds into the mainstream of
housing finance for developmental and end-user financing requirements
of the National Shelter Program;
(e) Enjoin the active participation of the local
government units in the socialized housing programs through adequate
measures for housing development in their respective areas;
(f) Strengthen the capital base and optimize the
resources of the National Government and the government's housing
institutions towards a balanced, coordinated and integrated shelter
delivery system;
(g) Serve the housing requirement of all the
underprivileged and those gainfully employed but are not members of any
funding agencies such as GSIS, SSS, and Pag-IBIG; and
(h) Focus the government's full financial, technical
and manpower resources in addressing the shelter needs of the lowest
thirty percent (30%) of the population and with the private sector's
cooperation, the higher socioeconomic percentiles of our country's
population.
Sec. 4. National Shelter Program Implementation. —
Consistent with the aforementioned policy and objectives, the Housing
and Urban Development Coordinating Council (HUDCC), through the
respective agencies, shall intensify the implementation of the vital
components of the National Shelter Program requiring government
budgetary assistance as follows:
(a) Resettlement Program. — This program shall
involve land acquisition and site development by the National Housing
Authority to generate serviced homelots for families displaced from
sites earmarked for government infrastructure projects, those occupying
danger areas such as water ways, esteros, railroad tracks and those
qualified for relocation and resettlement assistance under Republic Act
No. 7279. To sustain this program, the NHA shall engage in land
banking activities to ensure availability of land.
(b) Medium-Rise Public and Private Housing. — This
shall entail the construction of medium-rise residential buildings by
the government and/or private developers in all high-density urban
areas of the country to maximize the utilization of scarce, high-cost
urban land, except in areas where there are existing arrangements on
housing and/or land utilization prior to the effectivity of this
Act. Low-income families and other beneficiaries as defined in
Republic Act No. 7279 shall gain access to the program either through
direct sale with homebuyers' financing assistance or through lease
arrangement depending on the affordability of the intended
beneficiaries.
Implementation of this program shall be carried out by the following
agencies:
(1) The National Housing Authority (NHA). — The NHA
is hereby mandated to formulate policies and guidelines pertinent to
the implementation of the Medium-Rise Public and Private Housing
Programs. It shall likewise take over portions of military lands in
Metro Manila and other urban areas, except those previously identified
and segregated for specific purposes pursuant to pertinent legal
issuances for the development of Medium-Rise Housing. It is
likewise mandated to formulate, adopt and promulgate systems that will
enable the private sector to participate in the Medium-Rise Housing
Program of the government to augment current rental housing stock;
(2) The National Home Mortgage Finance Corporation
(NHMFC). — The NHMFC is hereby mandated to provide homebuyer's
financing, to formulate and implement a schedule of amortization
payments for the Medium-Rise housing facilities and implement schemes
that would ensure an effective and efficient recovery and collection of
government investments in the program;
(3) The Local Government Unit (LGU) or the Public
Estates Authority (PEA). — Upon the completion of all public rental
housing facilities constructed under this program, the LGU or the PEA
shall assume the administration of the said facilities to include the
implementation of the Estate Management Policies and to ensure the
efficient and effective recovery and collection of rental and other
fees due the government from the beneficiaries of the public housing
program. It shall maintain the physical integrity of the public
rental housing facilities including those of its immediate
environs. The HUDCC, NHA and PEA are mandated to formulate the
policies and guidelines, rules and regulations in the administration
and management of the public rental housing facilities, in consultation
with the LGU and the Presidential Commission for the Urban Poor; and
(4) The Presidential Commission for the Urban Poor
(PCUP). — The PCUP is hereby mandated to coordinate with the NHA, and
the concerned LGU or the PEA in the identification and processing of
qualified beneficiaries of public rental housing facilities provided
for in this Act. The PCUP shall likewise formulate and implement
preoccupancy educational programs to enable the beneficiaries of the
program to adapt to medium-rise living conditions, and shall organize
them into homeowners associations which would ensure proper day-to-day
maintenance of said facilities.
(c) Community Mortgage Program. — Under R.A. No.
7279, this program, through the National Home Mortgage Finance
Corporation (NHMFC), shall assist organized community associations to
acquire tenure and ownership of the land they are presently occupying
adverse against the interests of landowners. Financing at very
low interest rate is granted to beneficiaries to purchase the land as a
whole and to improve the sites.
(d) Cost Recoverable Programs. — These programs shall
involve the development of sites with housing component and the
provision of serviced homelots through joint-venture schemes with the
private sector or local government units. Program beneficiaries
shall fully repay on installment basis the financial assistance granted
for the purchase of the housing units.
(e) Local Housing. — To ensure the equitable
distribution of housing benefits across the country, the NHA is hereby
tasked to implement cost-recoverable socialized housing projects in
selected urban and urbanizable areas in all congressional
districts. Criteria for the selection of sites shall be
formulated by the HUDCC and NHA pursuant to Republic Act No. 7279.
Sec. 5. Trust Fund for the National Housing
Authority. — To enable the National Housing Authority to carry out the
programs mandated under this Act, specifically the Medium-Rise Public
and Private Housing and the Local Housing Programs, a Trust Fund to be
managed and administered by the NHA is hereby created. The mechanics of
said Trust Fund shall be formulated by the NHA, the Department of
Finance, the Department of Budget and Management and other concerned
agencies in accordance with pertinent policies and subject to auditing
and accounting procedures of the Commission on Audit.
Sec. 6. Capitalization of National Home Mortgage
Finance Corporation (NHMFC). — The authorized capital stock of the
NHMFC is hereby increased from Five hundred million pesos
(P500,000,000) to Five billion five hundred million pesos
(P5,500,000,000) to expand its leveraging capability based on the
volume of mortgage loans being serviced, to improve its profitability
by reducing the average cost of its funds made available for
home-lending programs, and to enable the NHMFC to maintain the
debt-to-equity ratio of 10:1. Thus, Sec. 3 of Presidential
Decree No. 1267 is hereby amended to read as follows:
"Sec. 3. Capitalization. — The Corporation shall have
an authorized capital stock of Five billion five hundred million pesos
(P5,500,000,000) divided into Five million five hundred thousand
(5,500,000) shares of common stocks with a par value of One thousand
pesos (P1,000) per share, to be fully subscribed and paid by the
Government of the Republic of the Philippines.
"There shall be a continuing annual appropriation to be remitted to the
Corporation starting from calendar year 1995, and subsequently
thereafter until the entire authorized capital stock shall have been
fully paid: provided, however, that the National Government loan relent
to the corporation in the amount of US$76.73 Million under the World
Bank Financed Housing Sector Project is hereby converted to equity."
Sec. 7. Capitalization of Home Insurance and
Guaranty Corporation (HIGC). — The authorized capital stock of the HIGC
is hereby increased from One billion pesos (P1,000,000,000) to Two
billion five hundred million pesos (P2,500,000,000) to strengthen the
capability of the Corporation in the provision of guarantee,
loan/credit insurance and other incentives to assist home
building/development and to sustain housing finance: provided, however,
that the aggregate amount of the outstanding guaranty obligations shall
not, at any one time, exceed twenty (20) times the capital and surplus
of the HIGC.
Accordingly, Section s 3 and 5 of Executive Order No. 535 are hereby
amended to read as follows:
"Sec. 3. The authorized capital of the Corporation
shall be Two billion five hundred million pesos (P2,500,000,000),
divided into Two million five hundred thousand (2,500,000) shares of
common stocks, with a par value of One thousand pesos (P1,000) per
share to be fully subscribed and paid by the Government of the Republic
of the Philippines."
"There shall be a continuing annual appropriation of at least Three
hundred million pesos (P300,000,000) starting 1995 and subsequently
thereafter until the entire authorized capital stock of the Corporation
shall have been paid in full.
"Sec. 5. The Republic of the Philippines hereby
guarantees to payment by the Corporation both of the principal sums and
interests of the bonds, debentures, collateral, notes or other such
obligations of the Corporation, issued or incurred by virtue of its
Charter and this Executive Order and shall pay such principal sums and
interest in the event that the Corporation fails to do so: provided,
however, that the aggregate amount of the outstanding obligations shall
not, at any one time, exceed twenty (20) times the capital and surplus
of the Corporation.
"In such event, the Republic of the Philippines shall succeed to all
the rights of the holders of such bonds, debentures, collateral, notes
or other instruments to the extent of the payments made, unless the
sums so paid by the Republic of the Philippines shall be refunded by
the Corporation within a reasonable time."
Sec. 8. Expanding the Scope and Usage of the
Abot-Kaya Pabahay Fund. — To be more responsive to the need of
enhancing affordability of low-income families to acquire housing and
to provide a strong support for the operation of a secondary mortgage
market system by the NHMFC as a stable source of long-term funds for
housing finance, the Abot-Kaya Pabahay Fund shall be made a continuing
support system of the National Shelter Program, with its scope, usage
and coverage accordingly expanded.
The existing total budgetary allocation of Two Billion Five Hundred
Million Pesos (P2,500,000,000) of the Abot-Kaya Pabahay Fund under
Republic Act No. 6846 shall be increased to Five Billion Five Hundred
Million Pesos (P5,500,000,000) and shall be appropriated until such
time that the total funding required under this Act shall have been
released.
(a) Additional One Hundred Million Pesos
(P100,000,000) annually to the cash flow guarantee to extend the
mortgage insurance coverage for housing loans within the lowest
interest loan package under the Unified Home Lending Program as a
cushion against loan delinquency and ensure a viable cash flow for
agencies extending housing loans.
(b) Annual allocation of Five Hundred Million Pesos
(P500,000,000) as liquidity and interest/subsidy support to the
secondary mortgage market operation of NHMFC to serve as an alternative
mechanism for sourcing housing funds, tapping in the process private
and public long-term development funds.
The Abot-Kaya Pabahay Fund shall be allocated annually among its
various components in the following amounts:
P300 Million — Cash flow guarantee;
P500 Million — Interest subsidy and
liquidity support;
P200 Million — Amortization
support; and
P100 Million — Development
financing.
The Housing and Urban Development Coordinating Council (HUDCC) shall,
from time to time, determine the income ceilings and the loanable
amounts for both levels (a) and (b) borrowers and the
socialized/low-cost housing limit eligible for development financing.
The Abot-Kaya Pabahay Fund shall bear the cost of its administration
and development in such amount and/or limits as the administering
agencies shall deem appropriate, but not exceeding three percent (3%)
of the net assets of the previous year. Expenses for organization
and initial operation shall be provided by the administering agencies
as advances, subject to reimbursement.
Sec. 3, paragraphs, 1, 2, 3, and 4, and Sec. 7 of R.A. No. 6846
are hereby amended accordingly.
Sec. 9. Appropriations by the National Government.
— The corresponding amounts specified hereunder shall be appropriated
annually for a period of five (5) years or until such time that the
total fund requirement provided for in this Act shall have been fully
released specifically for the following programs:
(a) Five Billion and Two Hundred Million Pesos
(P5,200,000,000) to finance the Resettlement Program under Sec. 4(a)
of this Act;
(b) Three Billion Pesos (P3,000,000,000) as subsidy
for land acquisition, construction and implementation of the
Medium-Rise Public and Private Housing Program mandated under Sec. 4(b) of this Act;
(c) Twelve Billion Seven Hundred Eighty Million Pesos
(P12,780,000,000) for the community mortgage program under Sec. 4(c)
of this Act;
(d) Two Billion Five Hundred Forty-Two Million Pesos
(P2,542,000,000) for the cost recoverable program under Sec. 4(d) of
this Act; and
(e) Three Billion Pesos (P3,000,000,000) for the
Local Housing Program under Sec. 4(e) of this Act.
There shall be a continuing annual appropriation in the total amount of
not less than Five Billion Pesos (P5,000,000,000) starting from the
fiscal year 1995 and every fiscal year thereafter until such time that
the total funding requirement under this Act shall have been fully
released: provided, however, that any fund in excess of the total
funding requirements under this Act that may be derived from any or all
of the sources provided herein, shall be used to augment the NHA's
Resettlement Program fund to cushion the impact of displacement arising
from eviction and demolition as provided in Sec. 28 of R.A. No.
7279, to wit:
(a) When persons or entities occupy danger areas such
as esteros, railroad tracks, garbage dumps, river banks, 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.
SECTION 10. Fund Sources. — The National Government
is hereby mandated to allocate and appropriate the necessary funds for
the continuing requirements of this Act, including whatever funds which
may be made available from, but not limited to, the following sources:
(A) Proceeds from documentary stamp tax: provided,
that Sec. 22(a) of Republic Act No. 7660 shall be amended to read as
follows:
"Sec. 22. The incremental revenues from the increase
in the documentary stamp taxes under this Act shall be set aside for
the following purposes:
"(a) Twenty-five percent (25%) of the incremental
revenues in 1994 and 1995 under this Act shall be automatically
appropriated for the Unified Home Lending Program under Executive Order
No. 90 particularly for mass-socialized housing to be allocated as
follows: fifty percent (50%) for mass-socialized housing; thirty
percent (30%) for the community mortgage program administered by the
National Home Mortgage Finance Corporation; and twenty percent (20%)
for land banking and development to be administered by the National
Housing Authority: provided, that not more than one percent (1%) of the
respective allocations hereof shall be used for the administrative
expenses: provided, further, that incremental revenues not appropriated
in 1994 and 1995 shall be carried over to succeeding years until
allocations herein provided shall have been fully exhausted."
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(B) Forty percent (40%) of the mandatory fifty
percent (50%) share of the National Government from the annual
aggregate gross earnings of the Philippine Amusement and Gaming
Corporation (PAGCOR), as provided for in Section 12 of Presidential
Decree No. 1869, beginning 1996.
(C) Twelve percent (12%) of all the proceeds of any
sale, after deducting all expenses related to the sale, of portions of
Metro Manila military camps shall be used to finance mass social
housing projects for underprivileged and homeless citizens of the
country. Sec. 8 of Republic Act No. 7227, thereforee, is
hereby amended accordingly.
(D) All fund sources outlined in Republic Act No.
7279, not accruing to the local government units, to wit:
(1) A minimum of fifty percent (50%) from the annual
net income of the Public Estates Authority to be used by the National
Housing Authority to carry out its program of land acquisition for
resettlement purposes;
(2) Proceeds from ill-gotten wealth not otherwise
previously set aside for any other purpose;
(3) Loans, grants, bequests and donations, whether
from local or foreign sources; and
(4) Proceeds from the sale or disposition or
alienable public lands in urban areas.
(E) Proceeds from forfeited customs bonds; and
(F) A maximum of fifty percent (50%) of savings from
the budgeted amount for debt servicing.
SECTION 11. Other Fund Sources. — The following
non-budgetary funding sources shall be used to augment those mentioned
in the preceding section in the implementation of a Comprehensive and
Integrated Shelter and Urban Development Financing Program:
(a) Ten percent (10%) of the mandatory annual
contributions by Philippine Charity Sweepstakes Office to the charity
fund as provided for in Sec. 6 of R.A. No. 1169 shall be channeled
to socialized and low-cost housing;
(b) All unused agri-agra allocation funds from banks
in the preceding year shall be invested in socialized and low-cost
housing: provided, that the used agri-agra portion has been solely
devoted to agricultural or agrarian reform credit; and
(c) The Bangko Sentral ng Pilipinas shall make
available its rediscounting facilities to institutions or entities
providing financing for socialized and low-cost housing in amounts and
rates to be determined by the Monetary Board, taking into consideration
the policy of the State as enunciated in this Act.
SECTION 12. Audit. — The Commission on Audit shall be
the ex-officio Auditor of all the funds provided for in this Act and
is, accordingly, empowered to designate and appoint its
representative(s) and other subordinate personnel to perform such
necessary audit duties as the Commission shall direct. They shall
be responsible to and shall only be removed by the Commission on Audit.
SECTION 13. Reports and Funding Program. — The
National Shelter Agencies are hereby mandated to submit semi-annual
reports of their operations, fund usage and performance to the Office
of the President and Congress. They shall likewise submit to
Congress their plans and funding programs for the succeeding year not
later than the first quarter of the current year.
SECTION 14. Sunset Review. — As the need arises, the
Congress shall conduct a sunset review of the accomplishments and
impact of the National Shelter Program as well as the performance of
its implementing agencies for purposes of determining whether or not
the programs and the corresponding appropriations mentioned in this Act
deserve to be continued based on a cost-benefit analysis thereof.
If the result of the review is unfavorable to any program or its
appropriate implementing program, then the Committee of Congress that
has legislative jurisdiction over such entity shall not report
favorably any bill or resolution which authorizes the enactment of a
new budget authority on such entity.
For purposes of this Act, the term "sunset review" shall mean, with
respect to any government program, a systematic evaluation by the
committees of the Senate and House of Representatives which have
legislative jurisdiction over such programs, with the assistance of
appropriate agencies and congressional support agencies, to determine
the merits of the program, justify its continuation rather than
termination or its continuation at a level less than, equal to, or
greater than the existing level. Such review shall be undertaken
in the scope and the detail the committee having jurisdiction deems
appropriate and shall include, but not limited to, an assessment of the
degree to which the original objective of the program has been
achieved, of the problem it was intended to address, and the costs and
benefits of the program.
SECTION 15. Implementing Rules and Regulations. — The
HUDCC shall promulgate rules and regulations necessary for the
implementation of this Act.
SECTION 16. Repeal. — All laws, decrees, executive
orders, proclamations, rules and regulations and the issuances, or
parts thereof which are inconsistent with the provisions of this Act,
are hereby repealed, amended or modified accordingly.
SECTION 17. Separability. — If for any reason, any
provision of this Act is declared invalid or unconstitutional, the
remaining provisions not affected thereby shall continue to be in full
force and effect.
SECTION 18. Effectivity. — This Act shall take effect
fifteen (15) days after its complete publication in at least two (2)
national newspapers of general circulation.
Approved: December 16, 1994
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