AMENDING THE ACT CREATING THE HOME DEVELOPMENT MUTUAL FUND

• Number: Presidential Decree No. 1752
• Sections: 27

Preamble

WHEREAS, the Government, in pursuit of the Constitutional

mandates on the promotion of public welfare through ample social services, as

well as its humanist commitment to the interests of the working groups, in

relation particularly to their need for decent shelter, has established the Home

Development Mutual Fund, under Presidential Decree No. 1530, a system of

employee-employer contributions for housing purposes; and

WHEREAS, there is need to strengthen the Home Development

Mutual Fund and make it more effective both as a savings generation and

home-building program for the gainfully-employed members of the Philippine

society;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers vested in me by the

Constitution, do hereby order and decree the following:

Section 1

SECTION 1. Title. ─ This Act shall be known as the

"Home Development Mutual Fund Law of 1980".

Section 2

SEC. 2. Policy. ─ It is the policy of the Republic

of the Philippines to motivate the employed and other earning groups to better

plan and provide for their housing needs by membership in an integrated,

nationwide savings system established for the said purposes, with contributory

support of the employers, in the spirit of social Justice and the pursuit of

national development.

Section 3

SEC. 3. Fund System. ─ To carry out the purposes of

this Act, there is hereby created the Home Development Mutual Fund of 1980, also

referred to herein as the Fund, a provident savings system for employees,

private and public, who shall be the members, supported by matching

contributions of their respective employers, with housing as the primary

investment. The system may cover self-employed and other working groups, as

herein provided.

The Fund shall be a body corporate, with principal office in Metro-Manila,

and shall replace the Home Development Mutual Fund established under

Presidential Decree No. 1530.

Section 4

SEC. 4. Fund Coverage. ─

Coverage of the Fund shall be mandatory upon all employees covered by the Social

Security System and the Government Service Insurance System, and their

respective employers.

Such coverage may be extended to other wording groups, with or without

employer contributions, as may be determined by the Board of Trustees.

Section 5

SEC. 5. Fund Generation. ─ The Fund shall be

generated by the savings that the covered employees shall contribute for the

purpose every month, and the equal amounts that the employers shall contribute,

based on the following graduated percentages of basic monthly pay, to wit:

One per cent (l%) 1981;

Two per cent (2%) in 1982; and

Three per cent

(3%) in 1983 onward;

provided, however, that for the purpose of this Act, "basic monthly

pay" shall mean not more than P3,000.00.

Section 6

SEC. 6. Membership Term. ─ Membership in the Fund

shall be for a period of twenty (20) years, except when earlier terminated by

reason of retirement, disability, insanity, death, departure from the country or

other, causes as may be provided for by the Board of Trustees.

Resignation, lay-off or suspension from employment may not necessarily

constitute a ground for membership termination, except for suspension of

contributions.,

Section 7

SEC. 7. Waiver or Suspension of

Coverage.─

Coverage of the Fund and/or the payment of monthly

contribution to the same may by rules or resolutions of the Board of Trustees be

waived or suspended by reasons of nature of employment, condition of business,

ability to in a ice contributions and other reasonable considerations.

Section 8

SEC. 8. Provident Character. ─ The Fund shall be

private in character, owned wholly by the members, administered in trust and

applied exclusively for their benefit. All the personal and employer

contributions shall be fully credited to each member, accounted for individually

and transferable in case of change of employment. They shall earn dividends as

may be provided for in the implementing rules. The said amounts shall

constitute the provident fund of each member, to be paid to him, his estate

beneficiaries upon termination of membership, or from which peripheral benefits

for the member may be drawn.

Section 9

SEC. 9. Housing Features. ─ A member of good

standing shall be eligible to apply for a housing loan, with such terms as may

be authorized by the Board of Trustees, taking into account ability to pay.

Section 10

SEC. 10. Corporate Powers. ─ The Fund shall have

the powers and functions specified in this Act and the usual corporate

powers:

To make policies and guidelines, as well as adopt, amend and rescind such

rules and regulations as may "be necessary to carry out the provisions and

purposes of this Act;

To submit annually to the President of the Philippines not later than March

15, and make available to the members of public report covering its activities

in the implementation of this Act,, as well as the state of the Fund during the

preceding year, including information and recommendations for the development

and improvement of the Fund;

To invest its fund, directly or indirectly, in accordance with this Act;

To acquire, utilize, or dispose of, in any manner recognized by law, real or

personal properties to carry out the purposes of this Act;

To set up its own accounting and computer systems; to conduct continuing

actuarial and statistical studies and valuations to determine the financial

viability of the Fund and its projects; to require reports, compilations and

analysis of statistical and economic data, as well as make such other studies

and surveys as may be needed for the proper administration and development of

the Fund;

To have the power of succession; to sue and be sued; to adopt and use a

corporate seal;

To enter into and carry out contracts of every kind and description with any

person, firm or association or corporation, domestic or foreign;

To borrow funds from any source, private or government, foreign or domestic;

To invest, own or otherwise participate in equity in any establishment, firm

or entity; to form, organize, invest in or establish and maintain a subsidiary

or subsidiaries in relation to any of its purposes;

To exercise such powers and perform such, acts as may be necessary, useful,

incidental or auxiliary to carry out the provisions of this Act.

Section 11

SEC. 11. Board of Trustees. ─ The power and

functions of the Fund shall be exercised by a Sorted of Trustees composed of the

Minister of Hunan Settlements as Chairman, the Minister of Finance as

Vice-Chairman, the Minister of the Budget, the Minister of Labor, the Minister

of industry, the Chief Executive Officer of the Fund, two representatives of

private employees, two representatives of private employers, and one

representative of government employees, as members.

The four private sector representatives shall each be appointed by the

President of the Philippines for a term of two years, provided,

however, that of the first set to be appointed, one representative of the

employees and one representative of the employers shall have a term of only one

year. The representative of the government employees shall be approved by the

President of the Philippines for a term of two years.

The members of the Board shall receive a per diem and reasonable

transportation and representation allowances, at par with other government

financial institutions, as may be provided for by the Board of Trustees and

approved by the President of the Philippines.

Until the appointment of another person by the President of the Philippines

upon the recommendation of the Board of Trustees, the President of the National

Home Mortgage Finance Corporation shall be the Chief Executive Officer of the

Fund.

Section 12

SEC. 12. Powers of the Board. ─ The Board shall

have the following powers:

To formulate policies, rules and regulations to carry out effectively the

functions of the Fund under this Act;

To direct the operations and administration of the Fund;

To authorize expenditures of the fund in the interest of effective

administration and operations; to adopt from time to time the budgets for said

purposes;

To approve appointments of personnel; and

To exorcise such other powers as may be necessary to carry into effect the

powers and accomplish, the purposes for which the Fund is established.

Section 13

SEC. 13. Rule-Making Power . ─ The Board of

Trustees is hereby authorized to make and change needful rules and regulations,

which shall be published in accordance with law or at least once in a newspaper

of general circulation in the Philippines, to provide for, but not limited to,

the following matters:

The effective administration, custody, development, utilization and

disposition of the Fund or parts thereof, including payment of amounts credited

to members or to their beneficiaries or estates;

Extension of Fund coverage to other working groups, and waiver or suspension

of coverage or its enforcement for reasons herein stated.

Grounds for and effects of termination of membership other than by

completion of term;

Fund earnings and their distribution, investment and/or plowing back for the

exclusive benefit of the members;

Interim disbursements of accumulated values to members of ameliorative and

similar purposes;

Housing and other loan assistance programs for members;

Adjudication and settlement of claims and disputes and the procedures for

the same on any matters involving the interests of members in the Fund;

Optimize the effectiveness of the initial coverage drive through phased

implementation based on reasonable classifications of employers and/or employee

groups; and

Other matters that, by express or implied provisions of this Act, shall

require implementation by appropriate policies, rules and regulations.

Section 14

SEC. 14. Powers and Duties of Chief Executive

Officer. ─ The Chief Executive Officer of the Fund shall execute and

administer the policies and resolutions approved by the Board of Trustees,

prepare its agenda and direct and supervise the operations and management of the

Fund, subject to the approval of the Board, said officer shall appoint and

assign the personnel of the Fund, remove, suspend or otherwise discipline them

for cause and prescribe their duties and qualifications.

Section 15

SEC. 15. Money Investments. ─ All moneys of the

Fund, as are not needed to meet current administrative and operational

requirements, shall be invested with due and prudent regard for its safety,

growth and liquidity needs.

Section 16

SEC. 16. Tax and Guarantee Benefits. ─

Notwithstanding any provisions of existing law, decree, executive or

administrative order, rule or regulations to the contrary, the Fund and all its

assets, collections, receivables and increments, as well as all distributions

therefrom, whether of contributions ratable income of the Fund, or dividends

paid to or received by the members thereof, or their heirs/beneficiaries, shall

be exempt from the payment of any and all forms of taxes, assessments and other

diaries. All such provident payments shall not be liable to attachment,

garnishment, levy or seizure by or under any legal or equitable process

whatsoever, either before or after receipt by the persons entitled thereto,

except to pay any debt of the covered member to the Fund. In addition, the

Government of the Republic of the Philippines hereby guarantees the payment of

employees’ and employers' contributions and dividends to the members when they

are due.

Section 17

SEC. 17. Administration Costs. ─ The Fund shall

bear the costs of its administration and development, in such amounts and/or

limits as the Board of Trustees may deem appropriate, but not exceeding two

percent (2%) of the net Fund assets of the previous year. Expenses for initial

operation, however, may be provided for by the National Home Mortgage Finance

Corporation, either as advances subject to reimbursement, with or without,

interest, or as subsidy for the development of housing, finance.

Section 18

SEC. 18. Audit. ─ The Chairman of the Commission on

Audit shall act as the ex-officio auditor of the Fund and, accordingly, is

empowered to appoint a representative and other subordinate personnel to perform

and report on such audit duties, responsible to and removable only by the

Commission on Audit Chairman, without prejudice, however, to the power of the

Board of Trustees to contract for another mode of independent audit service, in

addition to that provided by the Commission Audit.

Section 19

SEC. 19. Existing Provident/Housing Plans.─ An

employer and/or employee-group who, at the time this Decree becomes effective

have their own provident and/or employee-housing plans, may register with the

Fund, for any of the following purposes:

For annual certification of waiver or suspension from coverage or

participation in the Fund, which, shall be granted on the basis of verification

that the waiver or suspension does not contravene any effective collective

bargaining agreement and that the features of the plan or plans are superior to

the Fund or continue to be so; or

For integration with, the Fund, either fully or partially

The establishment of a separate provident and/or housing plan after the

effectivity of this Decree shall not be a ground for waiver of coverage in the

Fund; nor shall such coverage bar any employer and/or employee-group from

establishing separate provident and/or housing plans.

Section 20

SEC. 20. Existing Coverage.─ Membership under the

Fund established under Presidential Decree No. 1530, together with amounts and

benefits already accrued to the members, including employers' counterparts, as

well as covering records and documents, shall be transferred, continued and/or

integrated into the new Fund hereby established, subject henceforth to policies

and rules adopted thereunder.

Section 21

SEC. 21. Substitute Retirement Plan. ─ A private

employer shall have the option to treat the coverage by the Fund as a retirement

plan for the employee concerned, within the purview of the Revised Labor Code of

the Philippines, subject, however, to any existing collective bargaining

agreement on the matter.

Section 22

SEC. 22. Remittance of Contributions. ─ It shall be

the duty of every employer to set aside and remit the contributions required

under this Act through the Social Security System and Government Service

Insurance System or in accordance with a mechanism determined by the Board of

Trustees, as may be approved by the President of the Philippines. Every employer

required to set aside and remit such contributions as prescribe shall be liable

for their payment, and non-payment shall further subject the employer to penalty

of three per cent per month of the amounts payable from the date the

contributions fall due until paid.

Section 23

SEC. 23. Penal Provisions. ─ Refusal or failure

without lawful cause or with fraudulent intent to comply with the provisions of

this Decree, as well as the implementing rules and regulations adopted by the

Board of trustees, particularly with respect to registration of employees,

collection and remittance of employee savings as well as employer counterparts

or the correct amount due, within the time set in the implementing rules and

regulations or specific call or extension made by the Fund Management, shall

constitute an offense punishable by a fine of not less, but not more than twice,

the amount involved or imprisonment of not more than six (6) years, or both such

fine and imprisonment, in the discretion of the Court apart from the civil

liabilities and/or obligations of the offender or delinquent. When the offender

is a corporation, the penalty shall be imposed upon the members of the governing

board and the President or General Manager without prejudice to the prosecution

of related offenses under the Revised Penal Code and other laws, revocation and

denial of operating rights and privileges in the Philippines, and deportation

when the offender is a foreigner.

Section 24

SEC. 24. Fund Supervision. ─ Particular aspects of

the Fund's administration may be subject to supervision, or visitation or

verification by appropriate agencies of the Government as may be designated and

authorized by the President of the Philip pines.

Section 25

SEC. 25. Repealing Clause. ─ Any provisions of law,

decree, executive order, rule or regulations as are in conflict or inconsistent

with the provisions and/or purposes of this decree are accordingly repealed,

amended or modified.

Section 26

SEC. 26. Effectivity. ─ The Decree shall take

effect immediately.

Done in the City of Manila, this 14th day of December, in the year of Our

Lord, nineteen hundred and eighty.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JOAQUIN T. VENUS, JR.

Deputy Presidential Executive Assistant

Vol. 25, Vital Documents,

Presidential Decree 1980-1981