Creation and Powers of National Housing Authority

Constitutional policy and program intent

The decree mandates a comprehensive and integrated housing program under Section 1 to meet the needs of Filipino families for decent dwellings.
The decree treats adequate housing as a constitutional State obligation tied to Article II, Section 7 (social services in housing).
The decree requires prioritizing rationalization of urban land use for housing-related development and resettlement.
The decree directs regulation of housing financing and construction costs to expand housing accessibility.
The decree emphasizes concentrating housing efforts, resources, functions, and activities in a national agency under Section 2.

Housing program framework and priorities

Section 1 requires development of a housing program embracing housing development and resettlement, sources and schemes of financing, and delineation of government and private sector participation.
The program must specify priorities and targets in accordance with the integrated national human settlements plan prepared by the Human Settlements Commission.
In preparation of the program, Section 1 requires considering:
- Management of urban development to promote economic and social well-being and physical mobility, and to facilitate industrial growth and dispersal.
- Conservation of land for housing development and regulation of land use for optimum utilization patterns.
- Organization of public and private resources into financial intermediaries to meet housing demand, including incentives and facilities to broaden private participation.
- Extensive use of building systems maximizing indigenous materials and reducing costs without sacrificing sound engineering and environmental standards.

Creation and governance of NHA

Section 2 creates the National Housing Authority (“Authority”) as a government corporation to develop and implement the housing program.
The Authority’s principal office is in the Greater Manila area, and it may maintain branch offices, agencies, or subsidiaries elsewhere as necessary.
The Authority is placed under the Office of the President and exists for fifty (50) years, with extension allowed.
Section 7 establishes that the Authority is governed by a Board of Directors (“Board”).

Purposes and objectives

Under Section 3, the Authority’s purposes and objectives include:
- Providing and maintaining adequate housing for the greatest possible number of people.
- Undertaking housing, development, resettlement, or other activities that enhance housing provision to every Filipino.
- Harnessing and promoting private participation in housing ventures through capital expenditures, land, expertise, financing, and other facilities for sustained housing industry growth.

Capitalization and funding structure

Section 4 sets the Authority’s authorized capital at five hundred million pesos fully subscribed by the Republic of the Philippines.
Section 4 requires capital payment as follows:
- Fifty million pesos upon approval of the decree, appropriated from National Treasury funds not otherwise appropriated, with five million pesos released upon organization and the balance released as needed.
- Fifty million pesos for every subsequent fiscal year for nine (9) years, included in the general appropriations act.
Section 4 states that assets and balances of appropriations transferred to the Authority under Section 5 are not included in determining Authority capital.

Dissolution of prior housing agencies

Section 5 dissolves specified agencies and bodies, including:
- People’s Homesite and Housing Corporation (PHHC),
- Presidential Assistant on Housing and Resettlement Agency (PAHRA),
- Tondo Foreshore Development Authority (TFDA),
- Central Institute for the Training and Relocation of Urban Squatters (CITRUS),
- Presidential Committee for Housing and Urban Resettlement (PRECHUR),
- Sapang Palay Development Committee,
- Inter-Agency Task Force to Undertake the Relocation of Families in Barrio Nabacaan, Villanueva, Misamis Oriental, and
- all other existing government housing and resettlement agencies, task forces, and ad-hoc committees.
Section 5 transfers to the Authority the dissolved agencies’ powers and functions, balance of appropriations, records, assets, rights, and choses in action.
Section 5 requires the Commission on Audit to make an inventory and evaluation of the dissolved agencies’ properties, equipment, assets, rights, choses in action, obligations, and liabilities.
Section 5 mandates transfer of all urban estates acquired by the Government, the Department of Agrarian Reform, and the People’s Homesite and Housing Corporation to the Authority for administration, development, and disposition, including:
- collection of account receivables,
- payment of liabilities, and
- enforcement of choses in action.
Section 5 requires estate transfers to be estate-to-estate after liquidation by the concerned agency in accordance with existing auditing and accounting rules and regulations.
Section 5 allows qualified and necessary personnel to be transferred to and absorbed by the Authority, subject to Board personnel movement based on a merit and fitness system to be established by the Authority.
Section 5 directs the Authority, through its Board, to effect transfers to ensure the least disruption to ongoing programs and projects, including continued functions of officers and employees until ordered otherwise by the Board.
Section 5 places financial liabilities of dissolved agencies on the National Government, authorizing either:
- issuance of bonds or securities in sufficient amounts (with proceeds appropriated), or
- payment by direct appropriation authorized in an amount determined by the Commission on Audit.

Board composition and decision rules

Section 7 defines the Board composition as including:
- the Secretary of Public Works, Transportation and Communications,
- the Director-General of the National Economic and Development Authority,
- the Secretary of Finance,
- the Secretary of Labor,
- the Secretary of Industry,
- the Executive Secretary, and
- the General Manager of the Authority.
Section 7 provides that the President appoints a chairman from among Board members.
Section 7 allows alternates for Board members (the officials next in rank), whose acts are considered acts of principals, and who have the right to receive benefits.
Section 7 provides that in the absence of the Chairman, the Board elects a temporary presiding officer.
Section 7 requires the General Manager to be appointed by the President, serve on a full-time basis, have managerial ability and recognized authority on housing and/or related fields, and be the Authority’s chief executive officer.
Section 7 requires salaries of the General Manager and Assistant General Manager to be determined by the Board and approved by the President.
Section 7 allows Board members (excluding the General Manager) to receive per diems per meeting actually attended, fixed by the Board, but not exceeding one thousand pesos per month.
Section 7 requires the Board to meet regularly at least once a month; special meetings may be called by the Chairman or by four (4) members.
Section 7 sets quorum at four (4) members and requires decisions to receive concurrence of at least four (4) members.

Authority powers and governance duties

Section 6 requires the Board to exercise powers and functions consistent with the national human settlements plan prepared by the Human Settlements Commission.
Section 6 authorizes the Authority (through the Board) to:
- develop and implement the integrated housing program under Section 1,
- formulate and enforce general and specific policies for housing development and resettlement,
- prescribe guidelines and standards for reservation, conservation, and utilization of public lands identified for housing and resettlement,
- exercise eminent domain or acquire by purchase privately owned lands for housing development, resettlement, and related facilities,
- develop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public and private entities,
- issue bonds or contract loans, credits, or indebtedness (including supplier credit or deferred payment arrangements) for housing program implementation,
- discharge responsibilities arising from treaties, agreements, and commitments on housing and resettlement, including determining forms of assistance extended through multilateral or bilateral programs,
- provide technical assistance for housing development,
- sue and be sued,
- adopt and use a seal judicially noticed,
- enter into contracts whenever necessary under terms and conditions it deems proper and reasonable,
- acquire property rights and interests, and encumber or dispose of them as it deems appropriate,
- invest funds in government or Central Bank of the Philippines-issued and -guaranteed bonds and securities,
- receive donations, grants, and bequests and use them for Authority objectives, with such donations, grants, and bequests exempt from transfer taxes and fully deductible from gross income of the donor or grantor for income tax purposes.
Section 6 empowers the Authority to adopt by-laws supplementing the decree.
Section 6 authorizes the Authority to prescribe and enforce guidelines, standards, and rules to protect home and lot buyers by regulating the real estate trade and business.
Section 6 directs regulation of the relationship between owners and lessees of residential properties under Authority rules and regulations.
Section 6 authorizes promulgation of rules and regulations necessary to implement the decree’s purposes, requiring submission to the President for approval; approved rules have the force and effect of law and take effect immediately after publication three times a week for two weeks in a newspaper of general circulation.
Section 8 requires the Board to:
- formulate, prescribe, and promulgate the implementing rules and regulations required by the decree,
- act on the annual budget and supplemental budgets submitted by the General Manager, with authority to reduce but not increase any item proposed,
- approve organizational structure, staffing pattern, salaries, and powers and duties of personnel submitted by the General Manager,
- enter contracts or agreements necessary for the decree’s purposes and objectives,
- render annual reports to the President and special reports as requested,
- exercise all powers necessary or incidental to attain the decree’s purposes.
Section 9 requires the General Manager (as chief executive officer) to:
- direct and supervise operations and internal affairs, with delegation of administrative responsibilities allowed subject to Board rules,
- prepare Board meeting agendas and submit policies and measures for Board consideration,
- execute and administer Board-approved policies and measures,
- subject to Board approval, fix number and salaries, appoint subordinate officers and personnel, and remove or discipline for cause,
- represent the Authority in dealings with government offices, agencies, instrumentalities, and persons or entities domestic or foreign,
- act on all matters not specifically reserved to the Board by the decree,
- perform other powers and duties vested by the Board.
Section 10 allows the Board to determine organizational structure, while the General Manager—subject to Board approval—appoints subordinate officers, personnel, and consultants if necessary.
Section 10 exempts regular professional and technical personnel of the Authority from the Wage and Position Classification Office rules and from Civil Service Commission examination and/or eligibility requirements, and authorizes the General Manager (subject to Board approval) to determine rates of allowances, honoraria, and additional compensation the Authority may grant.

Attached agencies and completed-project disposition

Section 11 attaches the National Housing Corporation and the Home Financing Commission to the Authority for policy and program coordination.
Section 12 requires the Authority to establish a feasible and effective program for management or disposition of completed housing or resettlement projects it undertakes.
Section 12 directs that completed housing or resettlement projects shall be managed and administered by the Authority unless the Board decides otherwise.

Bonds, government guarantee, and SSS/GSIS treatment

Section 13 authorizes the Authority to issue bonds and other securities to finance the housing program, subject to:
- approval of the Secretary of Finance after consultation with the Monetary Board of the Central Bank of the Philippines.
Section 13 limits bond issuance and sale to only so much as the annual project implementation would require.
Section 13 bars issuance unless eighty percent (80%) of those already issued had been sold.
Section 13 caps total bond and security amount at no more than ten times the Authority’s paid up capital and surplus.
Section 13 authorizes the Authority, in consultation with the Secretary of Finance and the Monetary Board, to prescribe bond terms including form, interest rate, denominations, maturities, negotiability, and call/redemption features.
Section 13 authorizes the Authority to adopt a lottery scheme enunciated under Republic Act Numbered One Thousand as amended for promoting bond sale.
Section 13 exempts bonds and securities issued under the decree, including income, from all kinds of taxes and from attachment, execution, and seizure, with these facts stated on the face of the bonds and securities.
Section 13 requires establishment of a sinking fund such that total annual contributions accrued at an interest rate determined by the Secretary of Finance in consultation with the Monetary Board will redeem the bonds/securities at maturity.
Section 13 provides that the sinking fund is under custody and administration of the Central Bank of the Philippines, which may invest it in Central Bank Certificates of Indebtedness and similar financing schemes subject to Authority approval in consultation with the Secretary of Finance, with proceeds accruing to the Authority.
Section 14 provides a full Republic of the Philippines guarantee for principal and interest of Authority bonds, debentures, collaterals, notes, or other obligations.
Section 14 mandates that if the Authority fails to pay, the Republic shall pay and then succeed to the holders’ rights to the extent of payment, unless the paid amount is refunded by the Authority within a reasonable time.
Section 15 requires SSS and GSIS to absorb all or part of Authority bonds or securities in proportions determined by the National Economic and Development Authority and approved by the President, notwithstanding conflicting charter provisions.
Section 15 provides that upon effectivity, SSS and GSIS cease undertaking mass or group housing through themselves, joint venture, turn-key basis, or any other arrangement; their housing lending is limited to direct lending to individual members for their respective homes.

Disposition of personnel and auditor oversight

Section 16 entitles personnel of dissolved agencies not appointed to an Authority position for reasons not attributable to their conduct, or who elect to discontinue service, to separation and retirement benefits calculated under existing laws and service record:
- payment of the money value of accumulated vacation and sick leave, and
- if qualified to retire, payment of retirement gratuities; otherwise payment of month salary for every year of service in the government.
Section 16 appropriates ten million pesos exclusively for payment of the separation and retirement gratuities and accumulated vacation and sick leaves.
Section 17 provides that the Commission on Audit recommends a representative as the Auditor of the Authority and necessary personnel to assist in performing duties.
Section 17 requires salaries of the Auditor and staff to be fixed by the Board and paid by the Authority.

Rules, reports, corporate law applicability

Section 18 requires the Board to promulgate the necessary rules and regulations for effective implementation and to revise or amend them as necessary.
Section 19 requires the Authority to submit an annual report to the President covering, among others, the housing program implemented, stage of implementation, and the financial position of the Authority, and to submit periodic or other reports as required.
Section 20 applies the Corporation Law to the Authority in so far as its provisions are not inconsistent with the decree’s provisions and policies.

Repeals, separability, and immediate effect

Section 21 repeals, amends, or modifies all provisions of law, decrees, executive orders, ordinances, rules, and regulations inconsistent with the decree.
Section 22 provides separability: if any section or provision is declared unconstitutional or invalid, unaffected sections remain in full force and effect.
Section 23 declares immediate effectivity.