Condonation of Penalties on Delinquent Housing Loan Accounts with HDMF

June 5, 1990

NATIONAL EMERGENCY MEMORANDUM ORDER NO. 32

PROVIDING FOR THE CONDONATION OF PENALTIES ON DELINQUENT HOUSING LOAN ACCOUNTS WITH HOME DEVELOPMENT MUTUAL FUND SUBJECT TO CERTAIN CONDITIONS

WHEREAS, in support of the National Shelter Program of the government, the Home Development Mutual Fund (Pag-IBIG Fund), a housing and savings fund, extended housing loans to more than 95,000 of its members about 70% of whom are government employees;

WHEREAS, due to economic reasons, fifty percent (50%) of the housing loan accounts are delinquent in the payment of the monthly amortizations to the Fund.

WHEREAS, under the Pag-IBIG Housing Loan programs, a penalty of 1/10 of 1 percent for every day of delay is imposed on all delinquent amortizations until the same shall have been fully paid;

WHEREAS, the existing Restructuring Program being implemented by HDMF by virtue of HDMF Board Resolution No. 88-132, Series of 1988, only grants a penalty condonation ranging from 25% to 60% of the total amount of the penalties due, but not to exceed P100,000.00; Provided, that, penalty condonations not exceeding P10,000.00 shall be subject to the approval by the Commission on Audit (COA), and penalty condonations in excess of P10,000 but not exceeding P100,000.00 shall be subject to the approval by the Office of the President;

WHEREAS, because of this non-condonation of the total penalties due, said Restructuring Program failed to bring in a sizeable amount of Pag-IBIG housing loan accounts;

WHEREAS, Presidential Decree No. 1752, Section 8, describes the character and nature of the Pag-IBIG fund:

"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 or beneficiaries upon termination of membership, or from which peripheral benefits for the member may be drawn."

WHEREAS, an increasing number of Pag-IBIG housing loan borrowers have expressed their desire to update their delinquent accounts but have requested that they be relieved of the burden of paying the total penalties due;

WHEREAS, it has been determined that such condonation of the total penalties due imposed on delinquent Pag-IBIG housing loan accounts will not prejudice the non-borrowing members of the Home Development Mutual Fund, but on the contrary, even encourage a great number of borrowers to update their loan accounts;

WHEREAS, condonation of all unpaid penalties on Pag-IBIG Housing Loan amortizations is one of the measures that may alleviate the plight of the urban poor, and promote the policy of the Government to provide affordable shelter units to the populace and to assist homebuyers in retaining ownership of their housing units, especially at this period of national emergency;

WHEREAS, cognizant of the difficult task of economic reconstruction as cited in Section 2, Republic Act No. 6826, the President under Section 3 (11) thereof is authorized to issue such rules and regulations as may be necessary "[t]o undertake such other measures as may be reasonable and necessary to enable the President to carry out the declared national policy subject to the Bill of Rights and other constitutional guarantees";

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by Republic Act No. 6826, do hereby order:

SECTION 1. Any provision of law to the contrary notwithstanding, all unpaid penalties on Pag-IBIG Housing Loan amortizations under any of the Pag-IBIG Housing Loan Programs as of June 30, 1990 are hereby totally condoned; Provided, that the amortizations that are due and demandable are paid on or before December 31, 1990; PROVIDED FURTHER, that in the event that the borrowers are able to pay only a part of such due and demandable amortizations by December 31, 1990, only the penalty for such portion shall be condoned.

SECTION 2. This National Emergency Memorandum Order shall take effect two (2) days after publication in two (2) national newspapers of general circulation.

DONE in the City of Manila, this 5th day of June, in the year of Our Lord, Nineteen Hundred and Ninety.