Home Development Mutual Fund (HDMF) (2)

December 9, 2008 FIRB RESOLUTION NO. 014-08 SUBJECT MATTER : Home Development Mutual Fund (HDMF) (2) 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; EDISaA 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 2008 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 as well as on the sustenance of its support to the National Shelter Program of the government and impair the dividends to be declared in favor of its members; WHEREAS, HDMF pays its income tax on a quarterly basis with the last quarter return being the adjustment return that will reflect its final income tax liability for the taxable year; aESICD WHEREAS, the tax subsidy earlier granted to the HDMF per FIRB Resolution No. 4-08 (April 21, 2008) in the amount of P1.68 billion does not include the increase in the taxable income of the HDMF; WHEREAS, the remaining balance from the tax subsidy granted is not enough to cover the fourth quarter income tax of the HDMF; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED to grant additional tax subsidy to the HDMF in the amount of TWO HUNDRED SEVENTY FOUR MILLION TWO HUNDRED FOUR THOUSAND FOUR HUNDRED FOUR (P274,204,404.00) only to cover its fourth quarter income tax liability: Provided, however, that the corresponding Certificate of Entitlement to Subsidy (CES) shall be issued only upon submission by the HDMF to the FIRB of its actual fourth quarter income tax liability as reflected in its quarterly/final adjustment income tax return: Provided finally, That the grant of such tax subsidy shall be in accordance with the terms and conditions of Section 14 of the 2008 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. EHaDIC (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer FIRB Reference: Joint FIRB-Technical Committee Meeting dated December 9, 2008.