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

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Title. – This Act shall be known as the “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 measure or 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 pending 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 home lots 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 or 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 approve its profitability by reducing the average cost of its
funds made available for how-lending programs, and to enable the NHMFC to maintain the debt-to-equity
ratio of 10:1. Thus, Section 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 Guaranty Corporation (HIGC). – The authorized capital stock of
the HIGC is hereby increased from One billion pesos (71,000,000,000) 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, Sections 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 such
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 system 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.

Section 3, paragraphs 1, 2, 3, and 4, and Section 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 Section 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 Section 4(b) of this Act;

(c) Twelve billion seven hundred eighty million pesos (P12,780,000,000) for the community mortgage
program under Section 4(c) of this Act;

(d) Two billion five hundred forty-two million pesos (P2,542,000,()00) for the cost recoverable program
under Section 4(d) of this Act; and

(e) Three billion pesos (P3,000,000,000) for the Local Housing Program under Section 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 Section 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.

SEC. 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 Section 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.”

“x x x”

(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. Section 8 of Republic Act No. 7227, therefore, 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 of 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.

SEC. 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 Section 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.

SEC. 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.

SEC. 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.

SEC. 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.

SEC. 15. Implementing Rules and Regulations. – The HUDCC shall promulgate rules and regulations
necessary for the implementation of this Act.

SEC. 16. Repeal. – All laws, decrees, executive orders, proclamations, rules and regulations and other
issuances, or parts thereof which are inconsistent with the provisions of this Act, are hereby repealed,
amended or modified accordingly.

SEC. 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.

SEC. 18. Effectivity. – This Act shall take effect fifteen (15) days after its complete publication in at least
two (2) national newspapers of general circulation.

Republic Act 7160

This Act shall be known and cited as the “Local Government Code of 1991”.

SECTION 17. Basic Services and Facilities. – (a) Local government units shall endeavor to be self-reliant
and shall continue exercising the powers and discharging the duties and functions currently vested upon
them. They shall also discharge the functions and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local government units shall likewise exercise such other
powers and discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

(1) For a Barangay:

(i) Agricultural support services which include planting materials distribution system and operation of farm
produce collection and buying stations;

(ii) Health and social welfare services which include maintenance of barangay health center and day-care
center;

(iii) Services and facilities related to general hygiene and sanitation, beautification, and solid waste
collection;

(iv) Maintenance of katarungang pambarangay;

(v) Maintenance of barangay roads and bridges and water supply systems;

(vi) Infrastructure facilities such as multi-purpose hall, multi-purpose pavement, plaza, sports center, and
other similar facilities;
(vii) Information and reading center; and

(viii) Satellite or public market, where viable;

(2) For a Municipality:

(i) Extension and on-site research services and facilities related to agriculture and fishery activities which
include dispersal of livestock and poultry, fingerlings, and other seeding materials for aquaculture; palay,
corn, and vegetable seed farms; medicinal plant gardens; fruit tree, coconut, and other kinds of seedling
nurseries; demonstration farms; quality control of copra and improvement and development of local
distribution channels, preferably through cooperatives; interbarangay irrigation systems; water and soil
resource utilization and conservation projects; and enforcement of fishery laws in municipal waters
including the conservation of mangroves;

(ii) Pursuant to national policies and subject to supervision, control and review of the DENR,
implementation of community-based forestry projects which include integrated social forestry programs
and similar projects; management and control of communal forests with an area not exceeding fifty (50)
square kilometers; establishment of tree parks, greenbelts, and similar forest development projects;

(iii) Subject to the provisions of Title Five, Book I of this Code, health services which include the
implementation of programs and projects on primary health care, maternal and child care, and
communicable and non-communicable disease control services; access to secondary and tertiary health
services; purchase of medicines, medical supplies, and equipment needed to carry out the services
herein enumerated;

(iv) Social welfare services which include programs and projects on child and youth welfare, family and
community welfare, women’s welfare, welfare of the elderly and disabled persons; community-based
rehabilitation programs for vagrants, beggars, street children, scavengers, juvenile delinquents, and
victims of drug abuse; livelihood and other pro-poor projects; nutrition services; and family planning
services;

(v) Information services which include investments and job placement information systems, tax and
marketing information systems, and maintenance of a public library;

(vi) Solid waste disposal system or environmental management system and services or facilities related to
general hygiene and sanitation;

(vii) Municipal buildings, cultural centers, public parks including freedom parks, playgrounds, and other
sports facilities and equipment, and other similar facilities;

(viii) Infrastructure facilities intended primarily to service the needs of the residents of the municipality and
which are funded out of municipal funds including, but not limited to, municipal roads and bridges; school
buildings and other facilities for public elementary and secondary schools; clinics, health centers and
other health facilities necessary to carry out health services; communal irrigation, small water impounding
projects and other similar projects; fish ports; artesian wells, spring development, rainwater collectors and
water supply systems; seawalls, dikes, drainage and sewerage, and flood control; traffic signals and road
signs; and similar facilities;

(ix) Public markets, slaughterhouses and other municipal enterprises;

(x) Public cemetery;

(xi) Tourism facilities and other tourist attractions, including the acquisition of equipment, regulation and
supervision of business concessions, and security services for such facilities; and

(xii) Sites for police and fire stations and substations and municipal jail;

(3) For a Province:

(i) Agricultural extension and on-site research services and facilities which include the prevention and
control of plant and animal pests and diseases; dairy farms, livestock markets, animal breeding stations,
and artificial insemination centers; and assistance in the organization of farmers’ and fishermen’s
cooperatives and other collective organizations, as well as the transfer of appropriate technology;

(ii) Industrial research and development services, as well as the transfer of appropriate technology;

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement
of forestry laws limited to community-based forestry projects, pollution control law, small-scale mining law,
and other laws on the protection of the environment; and mini-hydroelectric projects for local purposes;

(iv) Subject to the provisions of Title Five, Book I of this Code, health services which include hospitals and
other tertiary health services;

(v) Social welfare services which include programs and projects on rebel returnees and evacuees; relief
operations; and population development services;

(vi) Provincial buildings, provincial jails, freedom parks and other public assembly areas, and similar
facilities;

(vii) Infrastructure facilities intended to service the needs of the residents of the province and which are
funded out of provincial funds including, but not limited to, provincial roads and bridges; inter-municipal
waterworks, drainage and sewerage, flood control, and irrigation systems; reclamation projects; and
similar facilities;

(viii) Programs and projects for low-cost housing and other mass dwellings, except those funded by the
Social Security System (SSS), Government Service Insurance System (GSIS), and the Home
Development Mutual Fund (HDMF); Provided, That national funds for these programs and projects shall
be equitably allocated among the regions in proportion to the ratio of the homeless to the population;

(ix) Investment support services, including access to credit financing;

(x) Upgrading and modernization of tax information and collection services through the use of computer
hardware and software and other means;

(xi) Inter-municipal telecommunications services, subject to national policy guidelines; and

(xii) Tourism development and promotion programs;

(4) For a City:

All the services and facilities of the municipality and province, and in addition thereto, the following:

(i) Adequate communication and transportation facilities;

(ii) Support for education, police and fire services and facilities;

(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure projects and
other facilities, programs and services funded by the National Government under the annual General
Appropriations Act, other special laws, pertinent executive orders, and those wholly or partially funded
from foreign sources, are not covered under this section, except in those cases where the local
government unit concerned is duly designated as the implementing agency for such projects, facilities,
programs, and services.

(d) The designs, plans, specifications, testing of materials, and the procurement of equipment and
materials from both foreign and local sources necessary for the provision of the foregoing services and
facilities shall be undertaken by the local government unit concerned, based on national policies,
standards and guidelines.

(e) National agencies or offices concerned shall devolve to local government units the responsibility for
the provision of basic services and facilities enumerated in this section within six (6) months after the
effectivity of this Code.

As used in this Code, the term “devolution” refers to the act by which the National Government confers
power and authority upon the various local government units to perform specific functions and
responsibilities.

(f) The National Government or the next higher level of local government unit may provide or augment the
basic services and facilities assigned to a lower level of local government unit when such services or
facilities are not made available or, if made available, are inadequate to meet the requirements of its
inhabitants.

(g) The basic services and facilities hereinabove enumerated shall be funded from the share of local
government units in the proceeds of national taxes and other local revenues and funding support from the
National Government, its instrumentalities and government-owned or -controlled corporations which are
tasked by law to establish and maintain such services or facilities. Any fund or resource available for the
use of local government units shall be first allocated for the provision of basic services or facilities
enumerated in subsection (b) hereof before applying the same for other purposes, unless otherwise
provided in this Code.

(h) Regional offices of national agencies or offices whose functions are devolved to local government
units as provided herein shall be phased out within one (1) year from the approval of this Code. Said
national agencies and offices may establish such field units as may be necessary for monitoring purposes
and providing technical assistance to local government units. The properties, equipment, and other
assets of these regional offices shall be distributed to the local government units in the region in
accordance with the rules and regulations issued by the Oversight Committee created under this Code.

(i) The devolution contemplated in this Code shall include the transfer to local government units of the
records, equipment, and other assets and personnel of national agencies and offices corresponding to
the devolved powers, functions, and responsibilities.

Personnel of said national agencies or offices shall be absorbed by the local government units to which
they belong or in whose areas they are assigned to the extent that it is administratively viable as
determined by the said oversight committee: Provided, That the rights accorded to such personnel
pursuant to civil service law, rules and regulations shall not be impaired: Provided, further, That regional
directors who are career executive service officers and other officers of similar rank in the said regional
offices who cannot be absorbed by the local government unit shall be retained by the National
Government, without any diminution of rank, salary or tenure.
(j) To ensure the active participation of the private sector in local governance, local government units
may, by ordinance, sell, lease, encumber, or otherwise dispose of public economic enterprises owned by
them in their proprietary capacity.

Costs may also be charged for the delivery of basic services or facilities enumerated in this sect

1. What are local housing boards?

Local housing boards are local special bodies tasked to formulate, develop, implement, and monitor
policies on the provision for housing and resettlement areas, and on the observance of the right of the
underprivileged and homeless to a just and humane eviction and demolition.

2. Why were they created?

a) Constitution. Local housing boards bring together two salient mandates in the Article on Social Justice
and Human Rights, to wit: the undertaking to establish a continuing program of urban land reform and
housing and to respect the right of urban or rural poor dwellers to be evicted in a just and humane
manner, and the observance of the right of the people and their organizations to effective and reasonable
participation at all levels of social, political, and economic decision-making, see 1987 CONST., Secs. 9,
10, 16, art. XIII.

b) Statutes. The Local Government Code of 1991 declared that territorial and political subdivisions of the
State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of
national goals, Section 2 (a). Local government units were encouraged to be self-reliant and to continue
exercising the powers and discharge the duties and functions as are necessary, appropriate, or incidental
to efficient and effective provision of basic services and facilities, Section 17 (a). Emphatically, the
responsibility to develop low-cost housing and mass dwelling projects were given to provinces and cities.

The Urban Development and Housing Act of 1992 provided a blueprint for socialized housing and just
and humane eviction/demolition processes at the local government level. In this regard, local government
units were charged with the responsibility to implement the UDHA in their respective localities, Section 39.

Consistent with the constitutional mandate, the UDHA ensured more effective peoples’ participation in the
urban development process, Section 2 (e).

c) Environmental Scan. Six years of trying to implement the UDHA yielded very marginal results in terms
of actual increases in land and housing allotted to the urban poor. One reason for this dismal record is the
lack of political will and institutional capability on the part of most local governments to undertake
socialized housing programs.

Likewise, while the UDHA spells out “local government units” as its main implementing entity, urban poor
sectoral advocates who call for effective peoples’ participation at the local government level are at a loss
as to which particular department or division of their respective LGUs will provide such a genuine
opportunity.

d) Conclusion. While a few local governments have actually caused the establishment of housing boards
by simply passing an ordinance to that effect, national legislation would make the establishment of such a
board mandatory, with clearly defined functions and membership. Local housing boards are envisioned to
provide urban poor communities, POs and NGOs, more direct participation in the planning and
implementation of local housing programs.
3. What shall be the composition of local housing boards?

The local housing board in a city or municipality shall be composed of the following:

a) The City/Municipal Mayor as Chairperson;

b) The Vice-Mayor as Vice-Chair;

c) The Chairperson of the Sangguniang Panglungsod/Bayan Committee on Housing and Urban

Development or its equivalent as Member;

d) The City/Municipal Planning and Development Coordinator as Member;

e) The City/Municipal Engineer as Member;

f) A duly-designated representative of the Housing and Urban Development Coordinating Council

(HUDCC);

g) A duly designated representative of the Presidential Commission for the Urban Poor (PCUP);

h) A representative from the private or business sector;

i) Representatives from peoples’ organizations operating in the city or municipality, who shall constitute
not less than one-fourth (1/4) of the members of the fully-organized Board: Provided, that a PO already
represented in any local special body and/or local housing board may be concurrently represented in any
local housing board; and

j) Representatives from the non-governmental organizations operating in the city or municipality, who
shall constitute not less than one-fourth (1/4) of the members of the fully-organized Board: Provided, that
an NGO already represented in any local special body and/or local housing board may be concurrently
represented in any local housing board.

4. How many members could the board have?

There are 5 members who should come from the local government ranks, with 1 member coming from the
national government, and 1 member from the private or business sector. There should be at least 5
members from each of the PO and NGO ranks, to comprise a total of 17 members of the board. Note that
the PO and NGO representatives each comprise not less than ¼ of the total members of the fully-
organized board.

As it stands, the Naga City Board has 20+ members; Dumaguete – 14; Pasay City – 9; Kalookan
City – 10; Mandaluyong – 6.

5. What is the basis for the minimum representation requirement of POs and NGOs?

The “two-quarters” representation of POs and NGOs in local housing boards was inspired by
the substantial representation given to representatives of affected sectors in local school boards (50%)
and the local development councils (at least 25%) by Sections 98 and 107 of the Local Government
Code. Under Section 107, NGOs were given at least one-fourth (1/4) representation in local development
councils. The bill creates additional one-fourth (1/4) representation for peoples’ organizations as well.
Also, the most functional model of local housing boards at present establishes at least 50%
representation from POs and NGOs. (See Section 8, Naga City Ordinance No. 98-033)

6. What is the nature of a local housing board?

The board is a local special body independent of both the executive and legislative branches of local
government. But its independence is not meant to create another body politic or “little local government”
which is beyond the reach of local chief executives and the sanggunian; nor are its powers and functions
meant to undermine socialized housing initiatives of the national government.

For this reason, the bill sets up the board with the participation of no less than the mayor and vice-mayor
as Chair and Vice-Chair respectively, and two officials directly under the Office of the Mayor, namely the
City/Municipal Planning and Development Officer and the City/Municipal Engineer. The Sanggunian Chair
of the Committee on Housing and Urban Development or its equivalent and a representative from the
Housing and Urban Development Coordinating Council sit as members.

6a. How would a local housing board be different from urban poor affairs offices (UPAO) set up by
certain local government units?

Urban poor affairs offices or UPAOs are directly under the Office of the Mayor and are mainly policy
implementors. Local housing boards will set up the policy which, in turn, will be carried out by these
UPAOs.

7. What are the functions of local housing boards?

Its functions may be classified as follows:

a) Policy-Making. The boards shall prepare local shelter plans which shall form part of, and are consistent
with, their respective corresponding city/municipal development plans. These shelter plans shall be the
general framework which effectively provides a step-by-step procedure by which cities and municipalities
could formulate solutions to its housing problems.

b) Representation. The boards should delegate at least one representative to their respective local
development councils.

c) Technical Assistance. The boards should assist city/municipal development councils in the formulation
of their respective comprehensive land use plans.

d) Regulatory. The boards shall approve preliminary and final subdivision schemes and development
plans of subdivisions in accordance with the Subdivision and Condominium Buyers’ Protective Decree
and Batas Pambansa 220 and its implementing rules and regulations.

As part of its regulatory powers, the boards shall act as demolition clearinghouse and also require the
submission of and approve Compliance Reports prior to the undertaking of an eviction and demolition of
underprivileged and homeless citizens, pursuant to Section 28 of the UDHA.

e) Ministerial. The boards shall: i. conduct and inventory all lands within their respective localities; and ii.
identify sites for socialized housing; and iii. register UDHA beneficiaries.

f) Monitoring. The boards shall: i. monitor the nature and progress of land development projects it has
approved; and ii. ensure compliance with the Balanced Housing Requirement.

g) Advisory/Recommendatory. The boards shall advise the sanggunian on matters of local taxation which
may affect the local government socialized housing program.
The boards shall also recommend formulated schemes for the acquisition and disposition of lands within
their localities for socialized housing purposes. For approval of LCEs.

The boards shall recommend partnership arrangements with the national government on housing for the
underprivileged and homeless. For approval of LCEs.

The boards shall also act as the primary entity tasked to advise LCEs on matters of sourcing of funds for
socialized housing.

h) Coordination. The boards shall coordinate with government agencies and instrumentalities performing
functions which may affect housing and urban development.

i) Reportorial. The boards shall submit to the President, Congress, and the DILG an annual report on its
implementation of the UDHA.

8. How often shall the boards meet?

The boards shall meet at least once a month or as often as may be deemed necessary. The presence of
the Chair or Vice-Chair and the majority of its members shall constitute a quorum.

9. How will the boards function when they are not in session?

Local housing boards shall create their respective executive committees to represent them and act in
their behalf when they are not in session. The executive committee shall be composed of the mayor as
Chair, the vice-mayor as Vice-Chair, the chairperson of the committee on housing and urban
development or its equivalent, the representative of the private or business sector, and representatives
from the POs and NGOs already represented in the boards.

10. Where will the LHB get its budget?

The cities and municipalities shall appropriate at least one percent (1%) of their Internal Revenue
Allotment for the year, for the operations and activities of the boards.

11. Who is responsible for organizing the LHB?

Mayors of cities and municipalities shall be responsible for organizing their respective local housing
boards within ninety (90) days from effectivity of the Act. Failure to organize a local housing board may
subject the mayor to disciplinary action under the Local Government Code, or criminal action under the
UDHA. Failure to constitute the local housing board within the 90-day period shall be prima facie
evidence of unjustified failure or refusal to do so.

12. Who shall create the implementing rules and regulations for the Act?

The Housing and Urban Development Coordinating Council (HUDCC) and the Department of Interior and
Local Government (DILG), in consultation with concerned government agencies, the private sector, and
POs and NGOs, shall formulate rules and regulations necessary to effectively implement any or all of the
provisions of the Act, including, among others, matters on resource generation and mobilization for
socialized housing purposes, schemes of local government housing assistance, and accreditation and
selection of representatives of the private sector, NGOs and POs to the local housing board.

13. Will this proposed measure curtail the powers of the Sanggunian insofar as approval of: a)
local development plans; and b) development permits and subdivision plans are concerned?

No.

a) The power of the Sanggunian to approve local development plans is still maintained. The local shelter
plans to be formulated by the boards shall be consistent with and form part of the local development
plans. Also, while a member of the board shall be a representative in the local development council,
whatever draft local development plan the local development council may come up with would still be
subject to Sanggunian approval. Lastly, insofar as formulation of comprehensive land use plans are
concerned, it is clear that the boards only serve to assist local development councils in the formulation
process.

b) The power of the Sanggunian to approve subdivision plans and development permits shall indeed be
transferred to the local housing board. For this reason, the repealing clauses state that Sections 447 (a)
(2) (x) and 458 (a) (2) of the Local Government Code are sought to be repealed.

The technical intricacies that go with approving applications for development permits and subdivision
plans require a less politicized atmosphere. The responsibility to screen such applications also takes
away the Sanggunian from its essential task of enacting local legislation. This, perhaps, is the reason why
in Quezon City, for instance, a Subdivision Unit under the Office of the Mayor actually does the
processing of the issuance of the development permit, and makes recommendations for its
approval/disapproval.

Based on a study conducted by the Social Development Research Center of De La Salle University, from
April 1993 to April 1998, a total of 295 development permit applications were processed, but only 67 or
roughly 23% were issued with corresponding city ordinances. Notably, some DPs await action from the
Sanggunian. The efficiency of screening applications could be improved if the responsibility would be
placed upon a body dealing specifically with housing concerns.