WHEREAS, there is an urgent need to effectively increase the level of government funds committed to the housing effort by establishing a secondary market for home mortgages which will enable home financing institutions to optimize the leverage of funds earmarked for housing and home development;
WHEREAS, the development of a secondary mortgage market requires the support and assistance of the Government and the private sector as well;
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:
SECTION 1. Corporate Body. — There is hereby created a body corporate to be known as the National Home Mortgage Finance Corporation, hereafter referred to as the "Corporation".
SEC. 2. Place of Business. — The Corporation shall have its principal place of business in Metropolitan Manila, but may have such branches and agencies in other places as may be necessary for the proper conduct of its business.
SEC. 3. Capitalization. — The Corporation shall have an authorized capital stock of Five Hundred Million Pesos (P500,000,000.00) divided into 500,000 shares with a par value of One Thousand Pesos (P1,000.00) per share, to be subscribed and paid for by the Government of the Republic of the Philippines.
SEC. 4. Purpose of the Corporation. — The primary purpose of the Corporation shall be to develop and provide for a secondary market for home mortgages granted by public and/or private home financing institutions.
SEC. 5. Powers and Functions. — The Corporation shall have the following powers and functions:
SEC. 6. Medium and Long-Term Loans. — Any provision of law, circular or regulation to the contrary notwithstanding, banks are hereby empowered to grant medium and long-term loans for housing and home development with maturity periods not exceeding thirty (30) years.
SEC. 7. Borrowing Power. — With the prior approval of the Monetary Board and the President of the Philippines, the Corporation may borrow from foreign public or private financial institutions such amount as may from time to time be required for its operations, or issue bonds, promissory notes, debentures, certificates of indebtedness, and other debt instruments in foreign currency. Notwithstanding the provisions of any law to the contrary, the Central Bank is hereby authorized to extend loan and advances to the Corporation under Section 88 of Republic Act No. 265, as amended, otherwise known as the Central Bank Charter, subject to such terms and conditions as may be prescribed by the Monetary Board.
No part of the proceeds of domestic and/or foreign borrowings shall be used for operating expenses of the Corporation.
The bonds, promissory notes, debentures, certificates of indebtedness and other debt instruments issued in local or foreign currency shall be at such interest rates, maturities and other terms and conditions as the Corporation may determine. The debt instruments may be secured by the assets of the Corporation and shall be fully exempt, both as to principal and interest, from any and all taxes imposed by the Government or any of its subdivision. The debt instruments shall be fully negotiable and shall be unconditionally guaranteed both as to principal and interest by the Government of the Republic of the Philippines, which guaranty shall be indicated on the face thereof.
A sinking fund is hereby created for the payment of the Corporation's bonds issued under the provisions hereof in such manner that the total contribution thereto accrued as at such rate of interest as may be determined by the Secretary of Finance in consultation with the Monetary Board, shall be sufficient to redeem the bonds of maturity. The said fund shall be under custody of the Central Bank of the Philippines which shall invest the same in such manner as the Monetary Board may approve; shall charge all expenses of such investment to the said sinking fund, and shall credit the same with the interest on investments and other incomes belonging to it.
A standing annual appropriation is hereby made out of any general funds in the National Treasury in such amount as may be necessary to provide for the sinking fund created herein and for the interest on bonds issued by the Corporation by virtue hereof.
SEC. 8. Investment of Funds. — Funds of the Corporation not invested in homo mortgages shall be kept in cash on hand, or on deposit, or invested in securities issued by the National Government, Central Bank of the Philippines and other government entities, including government-owned and controlled corporations, the servicing and the repayment of which are fully guaranteed by the Republic of the Philippines.
SEC. 9. Board of Directors. — The powers and functions of the Corporation shall be exercised by a Board of Directors, hereinafter referred to as the "Board", which shall be composed of the following:
SEC. 10. Powers of the Board. —The Board shall have the following powers:
SEC. 11. Meetings. — The Board shall meet at least once every two (2) weeks. Special meetings may be convoked by the Chairman or, in his absence, the Vice Chairman, to consider such subjects or matters as may be necessary under the circumstances.
A majority of the directors shall constitute a quorum for the transaction of corporate business.
SEC. 12. Remunerations for Attendance of Meetings. — The members of the Board or their respective alternates, except the President of the Corporation, shall be entitled to per diems for every nesting actually attended, in such amount as the Board may deem appropriate but not exceeding P500.00 per meeting nor P2,000.00 in any one month.
SEC. 13. President. — The Chief Executive Officer of the Corporation shall be the President who shall be appointed by the President of the Philippines for a term of six (6) years unless sooner removed for cause or by reason of incapacity. He must be of good moral character, of unquestionable integrity, and responsibility, and must be of recognized competence in any of the fields of economics, banking, finance, commerce or industry. He shall be assisted by an Executive Vice President and such other officers as may be necessary for the efficient operation of the Corporation.
SEC. 14. Powers and Duties of the President. — The President of the Corporation shall have the following duties and responsibilities:
SEC. 15. Remuneration of the President. — The salary of the Corporation shall be fixed and determined by the Board of Directors as provided in Section 10(d). The Board may authorize the payment of allowances and other emoluments to the President of the Corporation.
SEC. 16. Appointment of Personnel. — All other officers and employees of the Corporation shall be appointed by the Board upon the recommendation of the President of the Corporation.
SEC. 17. Auditor. — The Chairman of the Commission on Audit shall act as the ex-officio auditor of the Corporation and, as such, is empowered to appoint a representative who shall act as the auditor of the Corporation. He shall also appoint the necessary personnel to assist said representative in the performance of his duties. The Auditor of the Corporation and personnel under him may be removed only by the Chairman of the Commission on Audit.
SEC. 18. Coordination of Policy. — The Corporation shall coordinate its policies and regulations with those of the Central Bank of the Philippines. National Economic and Development Authority, National Housing Authority, and all other agencies of the Government involved in home building and development and mortgage financing.
The Central Bank of the Philippines may exempt the Corporation from the coverage of its regulations governing quasi-banking functions.
SEC. 19. Authority of the Monetary Board. — In the furtherance of the objectives of this Decree, and whenever prevailing conditions warrant, the Monetary Board may direct and require banking institutions to set aside or allocate a part of their savings and time deposits for loans to finance the purchase and/or acquisition, construction, repair, improvement or development of houses and/or lots used for the construction of residential houses.
SEC. 20. Tax Exemption. — Notwithstanding the provisions of any general or special law to the contrary, the Corporation, its properties and transactions except income shall be exempt from the payment of all taxes, duties, fees and other charges including costs, service and filing fees, appeal bonds, supersedeas bonds in any other court in administrative proceedings.
SEC. 21. Repealing Clause. — All laws, decrees, executive orders, rules and regulations inconsistent herewith are hereby repealed, amended or modified accordingly.
SEC. 22. Separability Clause. — If for any reason any section or provision of this Decree is declared to be unconstitutional or invalid, the other provisions hereof not affected thereby shall continue in full force and effect.
SEC. 23. This Decree shall take effect immediately.
DONE in the City of Manila, Philippines, this 21st day of December, in the year of Our Lord nineteen hundred and seventy-seven.
(Sgd.) FERDINAND E. MARCOS
President of the Philippines
By the President: (Sgd.) JACOBO C. CLAVE Presidential Executive Assistant