Home Development Mutual Fund

October 19, 2001 FIRB RESOLUTION NO. 002-01 SUBJECT : Home Development Mutual Fund WHEREAS, the Home Development Mutual Fund (HDMF) was primarily created as a socialized savings program for the benefit of low- and middle-income earners and that there is a need to put it at par with other socialized savings programs operated by the Government Service Insurance System and the Social Security System, both of which enjoy outright tax exemption privileges; WHEREAS, the HDMF is in the forefront of the shelter financing program of the government through its provision of affordable loan packages and institutional loans; WHEREAS, the HDMF is mandated to pay guaranteed dividends to its members at an annual fixed rate of seventy percent (70%) of its annual net income; WHEREAS, the payment of the income tax liability of the HDMF on its 2000 net income out of its own resources would have adverse effects on its capability to continuously offer lower interest rates on its various loan programs and impair the dividends to be declared in favor of its members; WHEREAS, there is also a need for the HDMF to initiate programs aimed at more effective and efficient use of its financial resources in order to enhance its financial capability and wean itself away from further dependence on government tax subsidy support; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED to grant tax subsidy to the HDMF in the amount of P752,593,731.00 only, representing its 2000 income tax liability which became due and payable on April 15, 2001; Provided , That the grant of such tax subsidy shall be in accordance with the terms and conditions of Section 13 of the 2001 General Appropriations Act, subject to the availability of funds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Tax Subsidy Provisions Under Executive Order No. 93: Provided further, That the HDMF shall submit the details of its programs on the effective and efficient use of its financial resources to the FIRB on a quarterly basis starting the quarter ending September 30, 2001 or as may be required by the FIRB. ACETID (SGD.) NIEVES L. OSORIO Undersecretary of Finance Presiding Officer FIRB Reference: Joint FIRB-Technical Committee Meeting dated June 21, 1999