REPUBLIC ACT NO.

9397             March 18, 2007

AN ACT AMENDING SECTION 12 OF REPUBLIC ACT NO. 7279, OTHERWISE KNOWN AS THE
URBAN DEVELOPMENT AND HOUSING ACT OF 1992, AND FOR OTHER PURPOSES

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

SECTION 1. Section 12 of Republic Act No. 7279, otherwise known as the "Urban Development and
Housing Act of 1992," is hereby amended to read as follows:

"SEC. 12. Disposition of Lands for Socialized Housing. - The National Housing Authority, with
respect to lands belonging to the National Government, and the local government units with
respect to the other lands within their respective localities, shall coordinate with each other to
formulate and make available various alternative schemes for the disposition of lands to the
beneficiaries of the Program. These schemes shall not be limited to those involving transfer of
ownership in fee simple but shall include lease, with option to purchase, usufruct or such other
variations as the local government units or National Housing Authority may deem most expedient
in carrying out the purposes of this Act."

"Consistent with this provision, a scheme for public rental housing may be adopted.

"Disposition of lands, including any improvements thereon, owned by the National Government or
any of its agencies or instrumentalities and/or the local government units through direct
negotiated sale to the occupants thereof without need of public bidding shall be allowed subject to
the following conditions:

"a) The lands are within a residential zone as classified by the local government unit
concerned;

"b) The lands are certified to be for socialized housing purpose by the Housing and Urban
Development Coordinating Council;

"c) The occupants are qualified beneficiaries in accordance with Section 16 and are
registered as such in accordance with Section 17 of this Act;

"d) The cost of said lands shall be made affordable to the beneficiaries, taking into
consideration their income and land valuation required in Section 13 of this Act;

"e) Any subsequent disposition of the said land shall be subject to the limitations provided
in Section 14 of this Act; and

"f) The occupants have resided on the said lands subject to the prohibitions provided in
Section 30 of this Act."

SEC. 2. Separability Clause. - If any part or provision of this Act shall be held unconstitutional or invalid,
other provision hereof that are not affected thereby shall continue to be in full force and effect.

SEC. 3. Repealing Clause. - All laws, presidential decrees, executive orders, rules, regulations, or parts
thereof which are not consistent with this Act, are hereby repealed, amended or modified accordingly.

SEC. 4. Effectivity. - This Act shall take effect fifteen (15) days after its publication in at least two
newspapers of general circulation.
Approved,

JOSE DE VENECIA, JR. MANNY VILLAR

Speaker of the House of President of the Senate
Representatives

This Act which is a consolidation of Senate Bill No. 2518 and House Bill No. 3834 was finally passed by
the Senate and the House of Representatives on January 30, 2007 and January 29, 2007, respectively.

ROBERTO P. NAZARENO OSCAR G. YABES

Secretary General Secretary of Senate
House of Represenatives

Approved: MAR 18, 2007

GLORIA MACAPAGAL-ARROYO
President of the Philippines

While parties are not precluded from invoking facts or events to prevent or defer execution or
enforcement of a final and executory judgment where such facts or events constitute a supervening cause
rendering such enforcement or execution impossible or unjust,   RA No. 7279 is not the supervening
25

cause that would prevent the inevitable eviction of petitioners from the subject premises. As respondent
appellate court correctly ruled, Sec. 44, Art. XII, of RA No. 7279 cannot be applied in petitioners' favor for
their failure to identify and prove themselves to be program beneficiaries under the law. The fact that
petitioners claim to be homeless and underprivileged citizens living in an urban or urbanizable area as the
terms are as the terms are defined under the law does not automatically entitle them to invoke the
moratorium provision on eviction. As worded, Sec. 44, Art. XII, categorically applies the moratorium to
program beneficiaries or those who possess the qualifications set forth in Sec. 16, Art. V, namely, (a)
must be Filipino citizens; (b) must be underprivileged and homeless citizens, as defined in Sec. 3, Art. I,
of the Act; (c) must not own any real property whether in the urban or rural areas; and, (d) must not be
professional squatters or members of squatting syndicates.

Persons who meet the foregoing eligibility criteria may then be included in the list of eligible socialized
housing program beneficiaries upon their registration in accordance with the procedure set forth in
the Implementing Rules and Regulations Governing the Registration of Socialized Housing
Beneficiaries issued by the Department of Interior and Local Government and the Housing and Urban
Development Coordinating Council. However, the listing is without prejudice to certain validation
procedures to determine full eligibility that may be adopted by the government shelter agency or the local
government unit responsible for the socialized housing program/project in the locality concerned.   Clearly
26

then, to be considered a program beneficiary under RA No. 7279 requires much more than one's own
personal determination but compliance with the proper validation procedures. Petitioners do not claim to
have complied with these validation procedures.

G.R. No. 115039 September 22, 1998

BARTOLO SERAPION, AGUSTINA ESPIRITU, ROSA HERMOGENES, BASILISA TRAZONA, DANIEL
SANGALANG, GERARDO PRINCIPE, PRIMITIVA MONTARAY, and FELICIDAD
TRAZONA, petitioners, 
vs.
COURT OF APPEALS and MAGDALENA BATIMANA ALBERTO assisted by her husband
BUENAVENTURA ALBERTO, respondents.

-----------------------------------

In closing, we find it fitting to advert to the following pronouncements made in the case of Martires vs.
Court of Appeals   : 21

While we sympathize with the millions of our people who are unable to afford the basic
necessity of shelter, let alone the comforts of a decent home, this sympathy cannot
extend to squatting, which is a criminal offense. Social justice cannot condone the
violation of law nor does it consider that very wrong to be a justification for priority in the
enjoyment of a right. This is what the petitioner wants us to grant him. But we cannot
heed his unjust plea because the rule of law rings louder in our ears.

G.R. Nos. 78036-37, 3 August 1990.

G.R. No. 120132 December 4, 1995

CRISANTA GALAY, ET AL., petitioners, 

vs.
COURT OF APPEALS and VIRGINIA WONG, represented by her Administrator, ATTY. REYNALDO B.
HERNANDEZ, respondents.

---------------------------------

PRESIDENTIAL DECREE No. 772 August 20, 1975

PENALIZING SQUATTING AND OTHER SIMILAR ACTS

WHEREAS, it came to my knowledge that despite the issuance of Letter of Instructions No. 19 dated
October 2, 1972, directing the Secretaries of National Defense, Public Works and Communications,
Social Welfare and the Director of Public Works, the PHHC General Manager, the Presidential Assistant
on Housing and Rehabilitation Agency, Governors, City and Municipal Mayors, and City and District
Engineers, "to remove all illegal constructions including buildings on and along esteros and river banks,
those along railroad tracks and those built without permits on public and private property, "squatting is still
a major problem in urban communities all over the country;

WHEREAS, many persons or entities found to have been unlawfully occupying public and private lands
belong to the affluent class;

WHEREAS, there is a need to further intensity the government's drive against this illegal and nefarious
practice;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby decree and order:
Section 1. Any person who, with the use of force, intimidation or threat, or taking advantage of the
absence or tolerance of the landowner, succeeds in occupying or possessing the property of the latter
against his will for residential commercial or any other purposes, shall be punished by an imprisonment
ranging from six months to one year or a fine of not less than one thousand nor more than five thousand
pesos at the discretion of the court, with subsidiary imprisonment in case of insolvency.

If the offender is a corporation or association, the maximum penalty of five years and the fine of five
thousand pesos shall be imposed upon the president, director, manager or managing partners thereof.

Section 2. This decree shall take effect immediately.

Done in the City of Manila, this 20th day of August, in the year of Our Lord, nineteen hundred and
seventy-five.

-----------------------------

Republic Act No. 8368             October 27, 1997

Repealed PD 772

AN ACT REPEALING PRESIDENTIAL DECREE NO. 772, ENTITLED "PENALIZING SQUATTING AND
OTHER SIMILAR ACTS."

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 "Anti-Squatting Law Repeal Act of 1997."

Section 2. Repeal. – Presidential Decree No. 772, entitled "Penalizing Squatting and Other Similar Acts"
is hereby repealed.

Section 3. Effect on pending cases. – All pending cases under the provisions of Presidential Decree No.
772 shall be dismissed upon the effectivity of this Act.

Section 4. Effect on Republic Act No. 7279. – Nothing herein shall be construed to nullify, eliminate or
diminish in any way Sec. 27 of Republic Act No. 7279 or any of its provisions relative to sanctions against
professional squatters and squatting syndicates.

Section 5. Effectivity. – This Act shall take effect thirty (30) days after its publication in two (2) newspapers
of national circulation.

Approved: October 27, 1997.

------------------------------------

REPUBLIC ACT NO. 7279

 
 

AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URBAN

DEVELOPMENT AND HOUSING PROGRAM, ESTABLISH THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES.
 
 

ARTICLE I 
TITLE, POLICY, PROGRAM AND DEFINITION OF TERMS 

Section 1. Title. — This Act shall be known as the "Urban Development and Housing Act of
1992."chan robles virtual law library

Sec. 2. Declaration of State Policy and Program Objectives. — It shall be the policy of the State
to undertake, in cooperation with the private sector, a comprehensive and continuing Urban
Development and Housing Program, hereinafter referred to as the Program, which shall:

(a) Uplift the conditions of the underprivileged and homeless citizens in urban areas and in
resettlement areas by making available to them decent housing at affordable cost, basic
services, and employment opportunities; 
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(b) Provide for the rational use and development of urban land in order to bring about the
following: 
(1) Equitable utilization of residential lands in urban and urbanizable areas with particular
attention to the needs and requirements of the underprivileged and homeless citizens and not
merely on the basis of market forces;
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(2) Optimization of the use and productivity of land and urban resources; 
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(3) Development of urban areas conducive to commercial and industrial activities which can
generate more economic opportunities for the people; 

(4) Reduction in urban dysfunctions, particularly those that adversely affect public health, safety
and ecology; and 

(5) Access to land and housing by the underprivileged and homeless citizens; 

(c) Adopt workable policies to regulate and direct urban growth and expansion towards a
dispersed urban net and more balanced urban-rural interdependence; 
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(d) 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; 
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(e) Encourage more effective people's participation in the urban development process; and 

(f) Improve the capability of local government units in undertaking urban development and
housing programs and projects. 

Sec.  3. Definition of Terms. — For purposes of this Act: 

(a) "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;
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(b) "Areas for priority development" refers to those areas declared as such under existing
statutes and pertinent executive issuances.
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(c) "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.chanrobles virtual law library 

(d) "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; 

(e) "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; chan robles virtual law library

(f) "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; chan robles virtual law library

(g) "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; 

(h) "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; chan robles
virtual law library

(i) "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; 

(j) "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; 

(k) "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; 
(l) "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, and with
provisions for basic services as provided for in Section 21 hereof;

(m) "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 homelots 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; 

(n) "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; 

(p) "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;

(q) "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; 

(r) "Socialized housing" refers to housing programs and projects covering houses and lots or
homelots 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; 

(s) "Squatting syndicates" refers to groups of persons engaged in the business of squatter

housing for profit or gain; 

(t) "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; chan robles virtual law library

(u) "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; chan robles virtual law library

(v) "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;

(w) "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 

(x) "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. 

ARTICLE II 
COVERAGE AND EXEMPTIONS 
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Sec.  4. 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.chanrobles virtual law library 

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Sec.  5. 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; 
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(b) Those actually used for national defense and security of the State; 
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(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.chanrobles virtual law library 

ARTICLE III
NATIONAL URBAN DEVELOPMENT AND HOUSING FRAMEWORK
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Sec.  6. Framework for Rational Development. — There shall be a National Urban Development
and Housing Framework to be formulated by the Housing and Land Use Regulatory Board
under the direction of the Housing and Urban Development Coordinating Council in coordination
with all local government units and other concerned public and private sectors within one (1)
year from the effectivity of this Act.chanrobles virtual law library 

The framework shall refer to the comprehensive plan for urban and urbanizable areas aimed at
achieving the objectives of the Program. In the formulation of the Framework, a review and
rationalization of testing town and land use plans, housing programs, and all other objectives
and activities of government agencies and the private sectors which may substantially affect
urban land use patterns, transportation and public utilities, infrastructure, environment and
population movement shall be undertaken with the concurrence of the local government units
concerned.chanrobles virtual law library 

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ARTICLE IV 
LAND USE, INVENTORY, ACQUISITION AND DISPOSITION 
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Sec.  7. Inventory of Lands. — Within one (1) year from the effectivity of this Act, all city and
municipal governments shall conduct an inventory of all kinds and improvements thereon within
their respective localities. The inventory shall include the following: 

(a) Residential lands; 
 
(b) Government-owned lands, whether owned by the National Government or any of its
subdivisions, instrumentalities, or agencies, including government-owned or-controlled
corporations and their subsidiaries;
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(c) Unregistered or abandoned and idle lands; and chan robles virtual law library

(d)Other lands. 

In conducting the inventory, the local government units concerned, in coordination with the
Housing and Land Use Regulatory Board and with the assistance of the appropriate
government agencies, shall indicate the type of land use and the degree of land utilization, and
other data or information necessary to carry out the purposes of this Act.chanrobles virtual law
library 

 
For planning purposes, the Housing and Urban Development Coordinating Council shall be
furnished by each local government unit a copy of its inventory which shall be updated every
three (3) years.chanrobles virtual law library 

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Sec.  8. Identification of Sites for Socialized Housing. — After the inventory the local
government units, in coordination with the National Housing Authority, the Housing and Land
Use Regulatory Board, the National Mapping Resource Information Authority, and the Land
Management Bureau, shall identify lands for socialized housing and resettlement areas for the
immediate and future needs of the underprivileged and homeless in the urban areas, taking into
consideration and degree of availability of basic services and facilities, their accessibility and
proximity of jobs sites and other economic opportunities, and the actual number of registered
beneficiaries.chanrobles virtual law library 

Government-owned lands under paragraph (b) of the preceding section 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 and identified as suitable for socialized housing, shall immediately
be transferred to the National Housing Authority subject to the approval of the President of the
Philippines or by the local government unit concerned, as the case may be, for proper
disposition in accordance with this Act.cralaw 

Sec.  9. Priorities in the Acquisition of Land. — Lands for socialized housing shall be acquired in
the following order: 

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies,

including government-owned or -controlled corporations and their subsidiaries; 
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(b) Alienable lands of the public domain; 
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(c) Unregistered or abandoned and idle lands; 

(d) Those within the declared Areas for Priority Development, Zonal Improvement Program
sites, and Slum Improvement and Resettlement Program sites which have not yet been
acquired; 

(e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been
acquired; and 

(f) Privately-owned lands. 

Where open-site development is found more practicable and advantageous to the beneficiaries,
the priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands.chanrobles virtual law library 

Sec.  10. Modes of Land Acquisition. — The modes of acquiring lands for purposes of this Act
shall include, among others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint-venture agreement, negotiated
purchase, and expropriation: Provided, however, That expropriation shall be resorted to only
when other models of acquisition have been exhausted: Provided, further, That where
expropriation is resorted to, parcels of land owned by small property owners shall be exempted
for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be
reverted and escheated to the State in a proceeding analogous to the procedure laid down in
Rule 91 of the Rules of Court.chan robles virtual law library

For the purpose of socialized housing, government-owned and foreclosed properties shall be
acquired by the local government units, or by the National Housing Authority primary through
negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the
land shall be given the right of first refusal.cralaw 

Sec.  11. Expropriation of Idle Lands. — All idle lands in urban and urbanizable areas, as
defined and identified in accordance with this Act, shall be expropriated and shall form part of
the public domain. These lands shall be disposed of or utilized by the Government for such
purposes that conform with their land use plans. Expropriation proceedings shall be instituted if,
after the lapse of one (1) year following receipt of notice of acquisition, the owner fails to
introduce improvements as defined in Section 3(f) hereof, except in the case of force majeure
and other fortuitous events. Exempted from this provision, however, are residential lands owned
by small property owners or those the ownership of which is subject of a pending
litigation.cralaw 

Sec.  12. Disposition of Lands for Socialized Housing. — The National Housing Authority, with
respect to lands belonging to the National Government, and the local government units with
respect to other lands within their respective localities, shall coordinate with each other to
formulate and make available various alternative schemes for the disposition of lands to the
beneficiaries of the Program. These schemes shall not be limited to those involving transfer of
ownership in fee simple but shall include lease, with option to purchase, usufruct or such other
variations as the local government units or the National Housing Authority may deem most
expedient in carrying out the purposes of this Act.cralaw 

Consistent with this provision, a scheme for public rental housing may be adopted.cralaw 

Sec. 13. Valuation of Lands for Socialized Housing. — Equitable land valuation guidelines for
socialized housing shall be set by the Department of Finance on the basis of the market value
reflected in the Zonal valuation, or in its absence, on the latest real property tax
declaration.cralaw 

For site already occupied by qualified Program beneficiaries, the Department of Finance shall
factor into the valuation the blighted status of the lands as certified by the local government unit
or the National Housing Authority.cralaw 

Sec.  14. Limitations on the Disposition of Lands for Socialized Housing. — No land for
socialized housing, including improvements or rights thereon, shall be sold, alienated,
conveyed, encumbered or leased by any beneficiaries as determined by the government
agency concerned.cralaw 
Should the beneficiary unlawfully sell, transfer, or otherwise dispose of his lot or any right
thereon, the transaction shall be null and void. He shall also lose his right to the land, forfeit the
total amortization paid thereon, and shall be barred from the benefits under this Act for a period
of ten (10) years from the date of violation.cralaw 

In the event the beneficiary dies before full ownership of the land is vested on him, transfer to
his heirs shall take place only upon their assumption of his outstanding obligations. In case of
failure by the heirs to assume such obligations, the land shall revert to the Government for
disposition in accordance with this Act. 
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ARTICLE V 
SOCIALIZED HOUSING 
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Sec.  15. Policy. — Socialized housing, as defined in Section 3 hereof, shall be the primary
strategy in providing shelter for the underprivileged and homeless. However, if the tenurial
arrangement in a particular socialized housing program is in the nature of leasehold or usufruct,
the same shall be transitory and the beneficiaries must be encouraged to become independent
from the Program within a given period of time, to be determined by the implementing agency
concerned.chanrobles virtual law library 

Sec.  16. Eligibility Criteria for Socialized Housing Program Beneficiaries. — To qualify for the
socialized housing program, a beneficiary: 

(a) Must be a Filipino citizen; 

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(b) Must be an underprivileged and homeless citizen, as defined in Section 3 of this Act; 
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(c) Must not own any real property whether in the urban or rural areas; and 

(d) Must not be a professional squatter or a member of squatting syndicates. 

Sec.  17. Registration of Socializing Housing Beneficiaries. — The Housing and Urban

Development Coordinating Council, in coordination with the local government units, shall
designed a system for the registration of qualified Program beneficiaries in accordance with the
Framework. The local government units, within one (1) year from the effectivity of this Act, shall
identify and register all beneficiaries within their respective localities.

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Sec.  18. Balanced Housing Development. — The Program shall include a system to be
specified in the Framework plan whereby developers of proposed subdivision projects shall be
required to develop an area for socialized housing equivalent to at least twenty percent (20%) of
the total subdivision area or total subdivision project cost, at the option of the developer, within
the same city or municipality, whenever feasible, and in accordance with the standards set by
the Housing and Land Use Regulatory Board and other existing laws. The balanced housing
development as herein required may also be complied with by the developers concerned in any
of the following manner: 

(a) Development of new settlement; 

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(b) Slum upgrading or renewal of areas for priority development either through zonal
improvement programs or slum improvement and resettlement programs; 
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(c) Joint-venture projects with either the local government units or any of the housing agencies;
or 

(d) Participation in the community mortgage program. 

Sec.  19. Incentives for the National Housing Authority. — The National Housing Authority,
being the primary government agency in charge of providing housing for the underprivileged
and homeless, shall be exempted from the payment of all fees and charges of any kinds,
whether local or national, such as income and real taxes. All documents or contracts executed
by and in favor of the National Housing Authority shall also be exempt from the payment of
documentary stamp tax and registration fees, including fees required for the issuance of transfer
certificates of titles.chanrobles virtual law library 

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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 sectors: 

(a) Reduction and simplification of qualification and accreditation requirements for participating

private developers; 
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(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; 
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(c) Simplification of financing procedures; and 

(d) Exemption from the payment of the following: 

(1) Project-related income taxes; 

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(2) Capital gains tax on raw lands used for the project;
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(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 to
socialized housing purposes. 
Provided, That upon application for exemption, a lien on the title of the land shall be annotated
by the Register of Deeds: Provided, further, That the socialized housing development plan has
already been approved by the appropriate government agencies concerned: Provided, finally,
That all the savings acquired 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. 
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Appropriate implementing guidelines shall be prepared by the Department of Finance, in

consultation with the Housing and Urban Development Coordinating Council, for the proper
implementation of the tax exemption mentioned in this section within one (1) year after the
approval of this Act.chanrobles virtual law library 

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Property owners who voluntarily provide resettlement sites to illegal occupants of their lands
shall entitled to a tax credit equivalent to the actual non-recoverable expenses incurred in the
resettlement, subject to the implementing guidelines jointly issued by the Housing and Urban
Development Coordinating Council and the Department of Finance.chanrobles virtual law
library 

Sec.  21. 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: 

(a) Potable water; 
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(b) Power and electricity and an adequate power distribution system; 
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(c) Sewerage facilities and an efficient and adequate solid waste disposal system; and 

(d)Access to primary roads and transportation facilities. 

The provisions of other basic services and facilities such as health, education, communications,
security, recreation, relief and welfare shall be planned and shall be given priority for
implementation by the local government unit and concerned agencies in cooperation with the
private sector and the beneficiaries themselves.chanrobles virtual law library 

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The local government unit, in coordination with the concerned national agencies, shall ensure
that these basic services are provided at the most cost-efficient rates, and shall set as
mechanism to coordinate operationally the thrusts, objectives and activities of other government
agencies concerned with providing basic services to housing projects.chanrobles virtual law
library 

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Sec.  22. 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. chan robles virtual law
library

Sec.  23. Participation of Beneficiaries. — The local government units, in coordination with the
Presidential Commission for the Urban Poor and concerned government agencies, shall afford
Program beneficiaries or their duly designated representatives an opportunity to be heard and to
participate in the decision-making process over matters involving the protection and promotion
of their legitimate collective interest which shall include appropriate documentation and
feedback mechanisms. They shall also be encouraged to organize themselves and undertake
self-help cooperative housing and other livelihood activities. They shall assist the Government in
preventing the incursions of professional squatters and members of squatting syndicates into
their communities.cralaw 

In instances when the affected beneficiaries have failed to organized themselves or form an
alliance within a reasonable period prior to the implementation of the program of projects
affecting them, consultation between the implementing agency and the affected beneficiaries
shall be conducted with the assistance of the Presidential Commission for the Urban Poor and
the concerned nongovernment organization.cralaw 

Sec.  24. Consultation with Private Sector. — Opportunities for adequate consultation shall be
accorded to the private sector involved in socialized housing project pursuant to this Act. 
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ARTICLE VI 
AREAS FOR PRIORITY DEVELOPMENT, ZONAL IMPROVEMENT PROGRAM SITES AND
SLUM IMPROVEMENT AND RESETTLEMENT PROGRAMS SITES 
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Sec.  25. Benefits. — In addition to the benefits provided under existing laws and other related
issuance to occupants of areas for priority development, zonal improvement program sites and
slum improvement and resettlement program sites, such occupants shall be entitled to priority in
all government projects initiated pursuant to this Act. They shall also be entitled to the following
support services: 

(a) Land surveys and titling at minimal cost; 

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(b) Liberalized terms on credit facilities and housing loans and one hundred percent (100%)
deduction from every homebuyer's gross income tax of all interest payments made on
documents loans incurred for the construction or purchase of the homebuyer's house; 
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(c) Exemption from the payment of documentary stamp tax, registration fees, and other fees for
the issuance of transfer certificate of titles; 

(d) Basic services as provided for in Section 21 of this Act; and 

(e) Such other benefits that may arise from the implementation of this Act. chan robles virtual
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ARTICLE VII 
URBAN RENEWAL AND RESETTLEMENT 
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Sec.  26. Urban Renewal and Resettlement. — This shall include the rehabilitation and
development of blighted and slum areas and the resettlement of Program beneficiaries in
accordance with the provisions of this Act. On-site development shall be implemented whenever
possible in order to ensure minimum resettlement of the beneficiaries of the Program from their
existing places of occupancy shall be undertaken only when on-site development is not feasible
and after compliance with the procedures laid down in Section 28 of this Act.
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Sec.  27. 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, as herein defined.chanrobles
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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.chanrobles virtual law library 

For purposes of this Act, 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.cralaw 

Sec.  28. 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;
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(b) When government infrastructure projects with available funding are about to be
implemented; or 
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(c) When there is a court order for eviction and demolition.chanrobles virtual law library 

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; 
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(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; 
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(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; 

(6) 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. 

This Department of the Interior and Local Government and the Housing and Urban
Development Coordinating Council shall jointly promulgate the necessary rules and regulations
to carry out the above provision.chanrobles virtual law library 

Sec.  29. Resettlement. — Within two (2) years from the effectivity of this Act, the local
government units, in coordination with the National Housing Authority, shall implement the
relocation and resettlement of persons living in danger areas such as esteros, railroad tracks,
garbage dumps, riverbanks, shorelines, waterways, and in other public places as sidewalks,
roads, parks, and playgrounds. The local government unit, in coordination with the National
Housing Authority, shall provide relocation or resettlement sites with basic services and facilities
and access to employment and livelihood opportunities sufficient to meet the basic needs of the
affected families. 
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Sec.  30. Prohibition Against New Illegal Structures. — It shall be unlawful for any person to
construct any structure in areas mentioned in the preceding section.chanrobles virtual law
library 

After the effectivity of this Act, the barangay, municipal or city government units shall prevent
the construction of any kind of illegal dwelling units of structures within their respective localities.
The head of any local government unit concerned who allows, abets or otherwise tolerates the
construction of any structure in violation of this section shall be liable to administrative sanctions
under existing laws and to penal sanctions provided for in this Act. 
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ARTICLE VIII 
COMMUNITY MORTGAGE PROGRAM 
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Sec.  31. Definition. — 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.

Sec.  32. Incentives. — To encourage its wider implementation, participants in the CMP shall be
granted with the following privileges or incentives: 

(a) Government-owned or -controlled corporations and local government units, may dispose of

their idle lands suitable for socialized housing under the CMP through negotiable sale at prices
based on acquisition cost plus financial carrying costs; 
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(b) Properties sold under the CMP shall be exempted from the capital gains tax; and 
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(c) Beneficiaries under the CMP shall not be evicted nor dispossessed of their lands or
improvements unless they have incurred arrangements in payments of amortizations for three
(3) months.chanrobles virtual law library 

Sec.  33. Organization of Beneficiaries. — Beneficiaries of the Program shall be responsible for

their organization into associations to manage their subdivisions or places of residence, to
secure housing loans under existing Community Mortgage Program and such other projects
beneficiaries to them. Subject to such rules and regulations to be promulgated by the National
Home Mortgage Finance Corporation, associations organized pursuant to this Act may
collectively acquire and own lands covered by this Program. Where the beneficiaries fail to form
an association by and among themselves, the National Home Mortgage Finance Corporation
shall initiate the organization of the same in coordination with the Presidential Commission for
the Urban Poor and the local government units concerned. No person who is not a bona fide
resident of the area shall be a member or officer of such association.chanrobles virtual law
library 

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ARTICLE IX 
RELATED STRATEGIES 
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Sec.  34. Promotion of Indigenous Housing Materials and Technologies. — The local
government units, in cooperation with the National Housing Authority, Technology and
Livelihood Resource Center, and other concerned agencies, shall promote the production and
use of indigenous, alternative, and low-cost construction materials and technologies for
socialized housing.chanrobles virtual law library 

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Sec.  35. Transport System. — The local government units, in coordination with the
Departments of Transportation and Communications, Budget and Management, Trade and
Industry, Finance, and Public Works and Highways, the Home Insurance Guaranty Corporation,
and other concerned government agencies, shall device a set of mechanisms including
incentives to the private sector so that a viable transport system shall evolve and develop in the
urban areas. It shall also formulate standards designed to attain these objectives: 

(a) Smooth flow of traffic; 

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(b) Safety and convenience of travel; 

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(c) Minimum use of land space; 

(d) Minimum damage to the physical environment; and 

(e) Adequate and efficient transport service to the people and goods at minimum cost. 

Sec.  36. Ecological Balance. — The local government units shall coordinate with the
Department of Environment and Natural Resources in taking measures that will plan and
regulate urban activities for the conservation and protection of vital, unique and sensitive
ecosystems, scenic landscapes, cultural sites and other similar resource areas.chanrobles
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To make the implementation of this function more effective, the active participation of the
citizenry in environmental rehabilitation and in decision-making process shall be promoted and
encouraged. The local government units shall recommend to the Environmental and
Management Bureau the immediate closure of factories, mines and transport companies which
are found to be causing massive pollution.chanrobles virtual law library 

Sec.  37. Population Movements. — The local government units shall set up an effective
mechanism, together with the appropriate agencies like the Population Commission, the
National Economic and Development Authority and the National Statistics Office, to monitor
trends in the movements of population from rural to urban, urban to urban, and urban to rural
areas. They shall identify measures by which such movements can be influenced to achieve
balance between urban capabilities and population, to direct appropriate segments of the
population into areas where they can have access to opportunities to improve their lives and to
contribute to national growth and recommend proposed legislation to Congress, if necessary.

The Population Commission, the National Economic and Development Authority, and the
National Statistics Office shall likewise provided advanced planning information to national and
local government planners on population projections and the consequent level of services
needed in particular urban and urbanizable areas. This service will include early-warning
systems on expected dysfunctions in a particular urban area due to population increases,
decreases, or age structure changes.cralaw 

Sec.  38. Urban-rural Interdependence. — To minimize rural to urban migration and pursue

urban decentralization, the local government units shall coordinate with the National Economic
and Development Authority and other government agencies in the formulation of national
development programs that will stimulate economic growth and promote socioeconomic
development in the countryside. 
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ARTICLE X 
PROGRAM IMPLEMENTATION 
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Sec.  39. Role of Local Government Units. — The local government units shall be charged with
the implementation of this Act in their respective localities, in coordination with the Housing and
Urban Development Coordinating Council, the national housing agencies, the Presidential
Commission for the Urban Poor, the private sector and other nongovernment organizations. 
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They shall prepare a comprehensive land use plan for their respective localities in accordance
with the provisions of this Act.chanrobles virtual law library 

Sec.  40. Role of Government Housing Agencies. — In addition to their respective existing

powers and functions, and those provided for in this Act, the hereunder mentioned housing
agencies shall perform the following: 

(a) The Housing and Urban Development Coordinating Council shall, through the key housing
agencies, provide local government units with necessary support such as: 
(1) Formulation of standards and guidelines as well as providing technical support in the
preparation of town and land use plans; 
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(2) In coordination with the National Economic and Development Authority and the National
Statistics Office, provide data and information for forward-planning by the local government
units in their areas, particularly on projections as to the population and development trends in
their localities and the corresponding investment programs needed to provide appropriate types
and levels of infrastructure, utilities, services and land use patterns; and 
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(3) Assistance in obtaining funds and other resources needed in the urban development and
housing programs in their areas of responsibility.chanrobles virtual law library 
(b) The National Housing Authority, upon request of local government units, shall provide
technical and other forms of assistance in the implementation of their respective urban
development and housing programs with the objective of augmenting and enhancing local
government capabilities in the provision of housing benefits to their constituents; 

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(c) The National Home Mortgage Finance Corporation shall administer the Community
Mortgage Program under this Act and promulgate rules and regulations necessary to carry out
the provisions of this Act; and 
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(d) The Home Insurance Guaranty Corporation shall design an appropriate guarantee scheme
to encourage financial institutions to go into direct lending for housing.chanrobles virtual law
library 

Sec.  41. Annual Report. — The Housing and Urban Development Coordinating Council and the
local government units shall submit a detailed annual report with respect to the implementation
of this Act to the President and the Congress of the Republic of the Philippines.chanrobles
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ARTICLE XI 
FUNDING 
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Sec.  42. Funding. — Funds for the urban development and housing program shall come from
the following sources: 

(a) A minimum of fifty percent (50%) from the annual net income of the Public Estate Authority,
to be used by the National Housing Authority to carry out its programs of land acquisition for
resettlement purposes under this Act; 
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(b) Proceeds from the disposition of ill-gotten wealth, not otherwise previously set aside for any
other purpose, shall be applied to the implementation of this Act shall be administered by the
National Home Mortgage Finance Corporation; 
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(c) Loans, grants, bequests and donations, whether from local or foreign sources; 

(d) Flotation of bonds, subject to the guidelines to be set by the Monetary Board;

(e) Proceeds from the social housing tax and, subject to the concurrence of the local
government units concerned, idle lands tax as provided in Section 236 of the Local Government
Code of 1991 and other existing laws; 

(f) Proceeds from the date or disposition of alienable public lands in urban areas; and 

(g) Domestic and foreign investment or financing through appropriate arrangements like the
build-operate-and-transfer scheme. 
Sec.  43. Socialized Housing Tax. — Consistent with the constitutional principle that the
ownership and enjoyment of property bear a social function and to raise funds for the Program,
all local government units are hereby authorized to impose an additional one-half percent
(0.5%) tax on the assessed value of all lands in urban areas in excess of Fifty thousand pesos
(P50,000).

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ARTICLE XII 
TRANSITORY PROVISIONS 
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Sec.  44. Moratorium on Eviction and Demolition. — There shall be a moratorium on the eviction
of all program beneficiaries and on the demolition of their houses or dwelling units for a period
of three (3) years from the effectivity of this Act: Provided, That the moratorium shall not apply to
those persons who have constructed their structures after the effectivity of this Act and for cases
enumerated in Section 28 hereof.chanrobles virtual law library 

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ARTICLE XIII 
COMMON PROVISIONS
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Sec.  45. Penalty Clause. — Any person who violates any provision of this Act shall be imposed
the penalty of not more than six (6) years of imprisonment or a fine of not less than Five
thousand pesos (P5,000) but not more than One hundred thousand pesos (P100,000), or both,
at the discretion of the court: Provided, That, if the offender is a corporation, partnership,
association or other juridical entity, the penalty shall be imposed on the officer or officers of said
corporation, partnership, association or juridical entity who caused the violation.chanrobles
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Sec.  46. Appropriations. — The amount necessary to carry out the purposes of this Act shall be
included in the annual budget of implementing agencies in the General Appropriations Act of the
year following its enactment into law and every year thereafter.chanrobles virtual law library 

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Sec.  47. Separability Clause. — If for any reason, any provision of this Act shall be included in
the annual budget of implementing agencies in the General Appropriations Act of the year
following its enactment into law and every year thereafter.chanrobles virtual law library 

Sec.  48. Repealing Clause. — 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 or modified accordingly.
Sec.  49. Effectivity Clause. — This Act shall take effect upon its publication in at least two (2)
national newspapers of general circulation. chan robles virtual law library
 
 

Approved: March 24, 1992