Law Summary
Introduction
Presidential Decree No. 1530 was issued on June 11, 1978, by President Ferdinand E. Marcos to address the acute housing shortage in the Philippines by establishing a system of voluntary contributions aimed at enhancing housing financing for government and private employees.
Declaration of Policy
- Legal Basis: The decree emphasizes the need for adequate housing as mandated by Article II, Section 7 of the Philippine Constitution.
- Objective: To alleviate the housing shortage through massive financing efforts derived from voluntary contributions from employees.
Creation of Home Development Mutual Funds
- Establishment: Two funds are created:
- Government Employees Fund: Managed by the Government Service Insurance System (GSIS).
- Private Employees Fund: Managed by the Social Security System (SSS).
- Contribution Rate: Employees contribute 3% of their basic salaries, with employers matching this amount.
Membership and Contributions
- Membership: Employees contributing to the Fund are considered members and must maintain their contributions to remain in good standing.
- Interest and Dividends:
- Contributions will earn annual interest.
- Members may receive dividends if the Fund's financial condition allows.
Eligibility for Housing Loans
- Application: Members in good standing may apply for housing loans, subject to GSIS or SSS regulations.
- Loan Amount: Loans can cover up to 80% of the appraised property value, with a ceiling of P80,000.00, contingent on the member’s payment capacity.
Fund Management and Investments
- Investment Policy: Funds not required for immediate operations are to be prudently invested.
- Land Contributions: GSIS or SSS can contribute lands and housing units to the Fund, which will also earn interest.
Tax Exemptions
- Exemption Clause: The Fund, along with its interests and dividends, is exempt from all forms of taxes, tariffs, and fees, unless explicitly stated otherwise by future legislation.
Initial Operations and Financing
- Initial Funding: GSIS or SSS must advance necessary operational funds, which will also earn interest.
Membership Status upon Separation
- Separation Conditions: Members who retire, die, become disabled, resign, or are dismissed will cease membership, but may continue under specific conditions.
- Mortgage Continuation: Existing mortgage loans remain valid post-separation, with contributions still required based on the last salary.
Return of Contributions
- Entitlement: Separated members are entitled to a return of contributions per the implementing rules.
Implementation Authority
- Regulations: GSIS and SSS are tasked with promulgating necessary rules to implement the decree.
- Employment Exemptions: Staff employed for Fund administration are not subject to Civil Service laws or regulations.
Repeal of Conflicting Laws
- Conflict Provision: Any existing laws or regulations contrary to this decree are repealed or modified as necessary.
Effectivity
- Effective Date: The decree takes effect upon its approval.
Key Takeaways
- Objective: The decree aims to provide a structured financing mechanism for housing through voluntary contributions.
- Dual Fund Creation: Separate funds for government and private employees ensure targeted support.
- Member Benefits: Members can access housing loans and receive returns on contributions.
- Regulatory Framework: GSIS and SSS are responsible for implementing the decree's provisions, ensuring compliance and operational integrity.
- Tax Exemptions: The Funds enjoy significant tax protections, reinforcing their purpose of enhancing housing accessibility.