Honorable Dionisio C. De La Serna

September 28, 1993 Honorable Dionisio C. De La Serna Chairman Housing and Urban Development Coordinating Council 8th Flr. Allied Bank Bldg. Ayala Ave.,Makati, Metro Manila S i r : This refers to your letter of August 5, 1993 relative to the request of the Housing and Urban Development Coordinating Council (HUDCC) for a commitment of the Securities and Exchange Commission to submit to that Office, on a quarterly basis data for the following set of shelter indicators: 1. Number of non-government organizations engaged in housing; 2. Number and amount of community-based financing institutions/schemes. In line with the policy of the Commission to coordinate with other government agencies to serve the best interest of the Government and the public in general, we are very much willing to furnish your Office with lists of SEC registered companies which are engaged in the above-mentioned activities. However, we wish to inform you that SEC registration of stock and non-stock corporations and partnerships does not automatically confer these registered companies the status of Non-Governmental Organizations (NGO's).They partake an NGO personality only upon accreditation with the appropriate Government Agency/Institution. The Commission has no record of duly accredited NGO's. Be informed further that under the Corporation Code non-stock, non-profit corporations as a general rule, are not authorized to engage in economic business activities. The Code provides: "SECTION 87. Definition . For the purpose of this Code, a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers, subject to the provisions of this Code on dissolution. Provided, that any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper ,to be used for the furtherance of the purpose or purposes for which the corporation was organized ,subject to the provisions of this titles." (Emphasis supplied) The Corporation Code further provides: "SECTION 14. Contents of the articles of incorporation . ... xxx xxx xxx 2. ...:Provided, that a non-stock corporation may not include a purpose which would change or contradict its nature as such ; xxx xxx xxx (Emphasis supplied) Thus, non-stock, non-profit corporations are not empowered to venture on economic business activities. However, they may, as incident to their purpose(s),engage in business activities which are reasonably necessary to carry out the purpose(s) for which they are organized, but unlike stock corporations, any profit that may be derived from such business activities are not distributable to their members, but are to be used purely for the furtherance of their corporate purposes. For further particulars on the desired data, you may directly contact Director Jesus M. Medalla and Ms. Teresita Catherine M. Saplala of the Investment Research Department (IRD) of this Commission at the 8th Flr.,SEC Bldg.,EDSA, Mandaluyong, Metro Manila, tel. nos. 70-12-71, 78-21-17, 78-09-31 to 39 local 253, 251. cdll Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman