Liberalizing the Financing and Credit Terms for Low-Cost Housing Projects of Domestic Corporations and Partnerships

July 15, 1975

PRESIDENTIAL DECREE NO. 745

LIBERALIZING THE FINANCING AND CREDIT TERMS FOR LOW COST HOUSING PROJECTS OF DOMESTIC CORPORATIONS AND PARTNERSHIPS

WHEREAS, the Philippine Constitution provides that the State shall establish, maintain and ensure adequate social services in the field of housing to guarantee the enjoyment of the people of a decent standard living; cdt

WHEREAS, the housing problem of the country has grown into a critical magnitude requiring the immediate and concrete institution of measures which can meet the needs of Filipino families for decent dwellings;

WHEREAS, the need to resolve the housing problem therefore calls for a joint venture between the government and the private sector;

WHEREAS, it is incumbent upon the Government to harness and promote housing ventures in the terms of capital expenditures, land, expertise and financing including the provision for incentives and facilities to broaden the private sector participation in housing investment;

WHEREAS, there are domestic corporations and partnership which are willing or already have plans to provide housing accommodations for their employees and workers but are stymied by financial difficulties particularly by the inability of their employees and workers to pay the amortization or rental rates (in the case of company housing) even at subsidized rates;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby decree and order the following:

SECTION 1.  The GSIS and the SSS shall undertake the necessary measures to liberalize financing and credit terms for low cost housing that may be proposed by domestic corporations and partnership with at least three hundred employees or workers, organized and existing under Philippine laws, operating for profit, exclusively for their employees and workers under any or all of the following schemes:

(a)  Low interest rates.

(b)  Lengthening of repayment period.

(c)  Adoption of graduated amortization scheme in such a way that smaller amortizations are paid during initial period of repayment; and

(d)  Government subsidy of a portion of the interest payment.

SECTION 2.  Domestic corporations or partnerships as defined above which invest a portion of their funds in housing for their employees and workers shall be allowed a fairly reasonable margin of profit if lots and dwelling units are to be sold to the employees and the workers on easy installment terms; or if the dwelling units be leased to the employees and workers on a monthly rental basis.

SECTION 3.  Pursuant to the above incentives, such domestic corporations and partnerships shall enjoy tax exemptions on:

(a)  Real estate taxes on the improvements which will be used exclusively for housing their employees and workers; and casia

(b)  Taxes on income derived from the installment sales of houses to employees and workers of the company or income derived from rentals thereof.

SECTION 4.  All laws, orders and decrees as well as rules and regulations inconsistent herewith are hereby repealed and/or modified accordingly.

SECTION 5.  This Order shall take effect immediately.

DONE in the City of Manila, this 15th day of July, in the year of Our Lord, Nineteen Hundred and Seventy-Five.