AMENDING THE ACT CREATING THE HOME DEVELOPMENT MUTUAL FUND

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. Title. ─ This Act shall be known as the
“Home Development Mutual Fund Law of 1980”.

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.

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.

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.

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.

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.,

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.

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.

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.

SEC. 10. Corporate Powers. ─ The Fund shall have
the powers and functions specified in this Act and the usual corporate
powers:

1. 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;
2. 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;
3. To invest its fund, directly or indirectly, in accordance with this Act;
4. To acquire, utilize, or dispose of, in any manner recognized by law, real or
   personal properties to carry out the purposes of this Act;
5. 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;
6. To have the power of succession; to sue and be sued; to adopt and use a
   corporate seal;
7. To enter into and carry out contracts of every kind and description with any
   person, firm or association or corporation, domestic or foreign;
8. To borrow funds from any source, private or government, foreign or domestic;
9. 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;
10. To exercise such powers and perform such, acts as may be necessary, useful,
    incidental or auxiliary to carry out the provisions of this Act.

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.

SEC. 12. Powers of the Board. ─ The Board shall
have the following powers:

1. To formulate policies, rules and regulations to carry out effectively the
   functions of the Fund under this Act;
2. To direct the operations and administration of the Fund;
3. 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;
4. To approve appointments of personnel; and
5. 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.

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:

1. 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;
2. Extension of Fund coverage to other working groups, and waiver or suspension
   of coverage or its enforcement for reasons herein stated.
3. Grounds for and effects of termination of membership other than by
   completion of term;
4. Fund earnings and their distribution, investment and/or plowing back for the
   exclusive benefit of the members;
5. Interim disbursements of accumulated values to members of ameliorative and
   similar purposes;
6. Housing and other loan assistance programs for members;
7. Adjudication and settlement of claims and disputes and the procedures for
   the same on any matters involving the interests of members in the Fund;
8. Optimize the effectiveness of the initial coverage drive through phased
   implementation based on reasonable classifications of employers and/or employee
   groups; and
9. Other matters that, by express or implied provisions of this Act, shall
   require implementation by appropriate policies, rules and regulations.

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.

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.

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.

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.

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.

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:

1. 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
2. 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.

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.

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.

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.

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.

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.

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.

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