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DEVELOPMENT MUTUAL FUND LAW
OF 1980 chanroblesvirtualawlibrary
PRESIDENTIAL DECREE
NO. 1752, AS AMENDED
AMENDING THE ACT
CREATING
THE HOME DEVELOPMENT MUTUAL FUND(As amended by Executive Order No.
35 and Republic Act No. 7742)
WHEREAS,
the Government, in pursuit
of the constitutional mandates on the promotion of public welfare
through
ample social services, as well as its humanist commitment to the
interest
of the working groups, in relation particularly to their need for
decent
shelter, has established the Home Development Mutual Fund under
Presidential
Decree No. 1530, a system of employee-employer contributions for
housing
purposes; and
WHEREAS, there
is a need to strengthen
the Home Development Mutual Fund and make it more effective both as
savings
generation and home-building program for the gainfully-employed members
of the Philippine society;
NOW,
THEREFORE, I, FERDINAND E. MARCOS,President of the Republic of the Philippines, by virtue of the
powers
vested in me by the Constitution, do hereby order and decree the
following:
SEC. 1.
Title. - This Act shall
be known as the "Home Development Mutual Fund Law of 1980."
SEC. 2.
Policy. - It is the
policy of the Republic of the Philippines to motivate the employed and
other earning groups to better plan and provide for their housing needs
by membership in an integrated, nationwide savings system established
for
the said purpose, with contributory support of the employers, in the
spirit
of social justice and the pursuit of national development.
SEC. 3.
Fund-System. - To carry
out the purposes of this Act, there is hereby created the Home
Development
Mutual Fund of 1980, also referred to herein as the Fund, a provident
savings
system for employees, private and public, who shall be the members,
supported
by matching contributions of their respective employers, with housing
as
the primary investment. The system may cover self-employed and other
working
groups, as herein provided.
The Fund shall be a
body corporate, with principal
office in Metro Manila, and shall replace the Home Development Mutual
Fund
established under Presidential Decree No. 1530.
SEC. 4.
Fund Coverage. - Coverage
of the Fund shall be mandatory upon all employees covered by the Social
Security System and the Government Service Insurance System, and their
respective employers: Provided, however, That coverage of the
employees
whose monthly compensation is less than Four thousand pesos (P4,000.00)
shall be voluntary: Provided, further, That upon membership
with
the Fund, their employers shall contribute an amount in accordance with
Section 5 of this Act.
Such coverage
may be extended to other working
groups, with or without employer contributions, as may be determined by
the Board of Trustees. (As amended by R. A. No. 7742).
SEC. 5.
Fund Contributions.
- Covered employees and employers shall contribute to the Fund based on
the monthly compensation of covered employees as follows:
Employees earning
not more than One thousand five
hundred pesos (P1,500.00) per month - one percent (1%).
Employees earning
more than One thousand five hundred
pesos (1,500.00) per month - two percent (2%).
All employers - two
percent (2%) of the monthly compensation
of all covered employees.
For purposes of this
Section, "monthly compensation"
shall mean the basic monthly salary plus cost-of-living allowance
(COLA):
Provided, however, That the maximum monthly compensation to be
used
in computing employee and employer contributions shall not be more than
Five thousand pesos (P5,000.00). The employer shall not be entitled to
deduct from the wages or renumeration of, or otherwise to recover from,
the employee the employer’s contribution. (As
amended by R. A. No. 7742).
SEC. 6.
Membership Term. - Membership
in the Fund shall be for a period of twenty (20) years except when
earlier
terminated by reason of retirement, disability, insanity, death,
departure
from the country or other causes as may be provided for by the Board of
Trustees: Provided, That those who become members of the Fund
after
the effectivity of this Act may withdraw the total accumulated value of
their contributions to the Fund after the tenth or the fifteenth year
of
continuous membership: Provided, further, That said members
have
no outstanding housing loans with the Fund: Provided, finally,
That
this option may be exercised only once and shall not prejudice the
member’s
continuing membership in the Fund.
Resignation, lay-off
or suspension from employment
may not necessarily constitute a ground for membership termination,
except
for suspension of contributions. (As
amended by R. A. No. 7742).
SEC. 7.
Waiver or Suspension of
Coverage. - Coverage of the Fund and/or the payment of monthly
contribution
to the same may, by rules or resolutions of the Board of Trustees, be
waived
or suspended by reasons of nature of employment, condition of business,
ability to make contributions and other reasonable considerations.
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.
SEC. 9.
Housing Features. -
A member of good standing shall be eligible to apply for a housing
loan,
under such terms as may be authorized by the Board of Trustees, taking
into account ability to pay. The Board of Trustees shall institute
policies
to ensure that lower-income members obtain such housing loans.
SEC. 10.
Corporate Powers. -
The Fund shall have the powers and functions specified in this Act and
the usual corporate powers:
(a) To make policies
and guidelines, as well as adopt,
amend and rescind such rules and regulations as may be necessary to
carry
out the provisions and purposes of this Act;
(b) To submit
annually to the President of the Philippines
not later than March 15, a report of its activities and the status of
the
Fund during the preceding year, including information and
recommendations
for the development and improvement thereof, and to furnish each member
of the Fund a Statement of His Accumulated Fund Value at least once a
year;
(c) To invest not
less than seventy percent (70%)
of its investible fund to housing, in accordance with this Act;
(As amended by R. A. No. 7742).
(d) To acquire,
utilize, or dispose of, in any manner
recognized by law, real or personal properties to carry out the
purposes
of this Act;
(e) To set up its
own accounting and computer systems;
to conduct continuing actuarial and statistical studies and valuations
to determine the financial viability of the Fund and its project; to
require
reports, compilations and analysis of statistical and economic data, as
well as make such other studies and surveys as may be needed for the
proper
administration and development of the Fund;
(f) To have the
power of succession; to sue and be
sued; to adopt and use a separate seal;
(g) To enter into
and carry out contracts of every
kind and description with any person, firm or association or
corporations,
domestic or foreign;
(h) To borrow funds
from any source, private or government,
foreign or domestic;
(i) To invest, own
or otherwise participate in equity
in any establishment, firm or entity; to form, organize, invest in or
establish
and maintain a subsidiary or subsidiaries in relation to any of its
purposes;
(j) To exercise such
powers and perform such acts
as may be necessary, useful, incidental or auxiliary to carry out the
provisions
of this Act.
SEC. 11.
Board of Trustees.
- The powers and functions of the Fund shall be exercised by a Board of
Trustees composed of the Minister of Human Settlements as Chairman, the
Minister of Finance as Vice-Chairman, the Minister of the Budget, the
Minister
of Labor, the Minister of Industry, the Chief Executive Officer of the
Fund, two representatives of private employees, two representatives of
private employers, and one representative of government employees as
members.
The four
private sector representatives shall
be appointed by the President of the Philippines for a term of two
years:
Provided, however, That of the first set to be appointed, one
representative
of the employees and one representative of the employers shall have a
term
of only one year. The representative of the government employees shall
be appointed by the President of the Philippines for a term of two
years.
The members
of the Board shall receive a per
diem and reasonable transportation and representation allowance at
par with other government financial institutions, as may be provided
for
by the Board of Trustees and approved by the President of the
Philippines.
Until the
appointment of another person by
the President of the Philippines upon the recommendation of the Board
of
Trustees, the President of the National Home Mortgage Finance
Corporation
shall be the Chief Executive Officer of the Fund.
SEC. 12.
Powers of the Board.
- The Board shall have the following powers:
(a) To formulate policies, rules and
regulations
to carry out effectively the functions of the Fund under this Act;
(b) To direct operations and administration of
the
Fund;
(c) To authorize expenditures of the Fund in the
interest of effective administration and operations; to adopt from time
to time the budgets for said purposes;
(d) To approve appointments of personnel; and
(e) To exercise such other powers as may be
necessary
to carry into effect the powers and accomplish the purposes for which
the
Fund is established.
SEC. 13. Rule-Making Power. -
The
Board of Trustees is hereby authorized to make and change needful rules
and regulations, which shall be published in accordance with law or at
least once in a newspaper of general circulation in the Philippines, to
provide for, but not limited to, the following matters:
(a) The effective administration, custody,
development,
utilization and disposition of the Fund or parts thereof, including
payment
of amounts credited to members or to their beneficiaries or estates;
(b) Extension of Fund coverage to other working
groups,
and waiver or suspension of coverage or its enforcement for reasons
herein
stated;
(c) Grounds for and effects or termination of
membership
other than by completion of term;
(d) Fund earnings and their distribution,
investment
and/or plowing back for the exclusive benefit of the members;
(e) Interim disbursements of accumulated values
to
members of ameliorative and similar purposes;
(f) Housing and other loan assistance programs
for
members;
(g) Adjudication and settlement of claims and
disputes
and the procedures for the same on any matters involving the interests
of members in the Fund;
(h) Optimize the effectiveness of the initial
coverage
drive through phased implementation based on reasonable classifications
of employer and/or employee groups; and
(i) Other matters that, by express or implied
provisions
of this Act, shall require implementation by appropriate policies,
rules
and regulations.
SEC. 14. Powers and Duties of
Chief
Executive Officer. - The Chief Executive Officer of the Fund shall
execute and administer the policies and resolutions approved by the
Board
of Trustees, prepare its agenda and direct and supervise the operations
and management of the Fund. Subject to the approval of the Board, said
officer shall appoint and assign the personnel of the Fund, remove,
suspend
or otherwise discipline them for cause and prescribe their duties and
qualifications.
SEC. 15.
Money Investments.
- All moneys of the Fund as are not needed to meet current
administrative
and operational requirements, shall be invested with due and prudent
regard
for its safety, growth and liquidity needs.
SEC. 16.
Tax and Guarantee Benefits.
- Notwithstanding any provisions of existing law, decree, executive or
administrative order, rule or regulation to the contrary, the Fund and
all its assets, collections, receivables and increments as well as all
distributions therefrom, whether of contributions, ratable income of
the
Fund, or dividends paid or received by the members thereof, or their
heirs/beneficiaries,
shall be exempt from the payment of any and all forms of taxes,
assessments
and other charges. All such provident payments shall not be liable to
attachment,
garnishment, levy or seizure by or under any legal or equitable process
whatsoever, either before or after receipt by the persons entitled
thereto,
except to pay any debt of the covered member to the Fund. In addition,
the Government of the Republic of the Philippines hereby guarantees the
payment of employees’ and employers’ contributions and dividends to the
members when they are due.
SEC. 17.
Administration Costs.
- The Fund shall bear the costs of its administration and development,
in such amounts and/or limits as the Board of Trustees may deem
appropriate,
but not exceeding two percent (2%) of the net Fund assets of the
previous
year. Expenses for initial operation, however, may be provided for by
the
National Home Mortgage Finance Corporation, either as advances subject
to reimbursement, with or without interest, or as subsidy for the
development
of housing finance.
SEC. 18.
Audit. - The Chairman
of the Commission on Audit shall act as the ex-officio auditor
of
the Fund and, accordingly, is empowered to appoint a representative and
other subordinate personnel to perform and report on such audit duties,
responsible to and removable only by the Commission on Audit Chairman,
without prejudice, however, to the power of the Board of Trustees to
contract
for another mode of independent audit service, in addition to that
provided
by the Commission on Audit.
SEC. 19.
Existing Provident/Housing
Plans. - An employer and/or employee group who, at the time this
Decree
becomes effective, have their own provident and/or employee-housing
plans,
may register with the Fund, for any of the following purposes:
(a) For annual
certification of waiver or suspension
from coverage or participation in the Fund, which shall be granted on
the
basis of verification that the waiver or suspension does not contravene
any effective collective bargaining agreement and that the features of
the plan or plans are superior to the Fund or continue to be so; or
(b) For integration
with the Fund, either fully or
partially.
The establishment of
a separate provident and/or
housing plan after the effectivity of this Decree shall not be a ground
for waiver of coverage in the Fund; nor shall such coverage bar any
employer
and/or employee-group from establishing separate provident and/or
housing
plans.
SEC. 20.
Existing Coverage.
- Membership under the Fund established under Presidential Decree No.
1530,
together with amounts and benefits already accrued to the members,
including
employers’ counterparts, as well as covering records and documents,
shall
be transferred, continued and/or integrated into the new Fund hereby
established,
subject henceforth to policies and rules adopted thereunder.
SEC. 21.
Substitute Retirement Plan.
- A private employer shall have the option to treat the coverage by
the Fund as a retirement plan for the employee concerned, within the
purview
of the Revised Labor Code of the Philippines, subject, however, to any
existing collective bargaining on the matter.
SEC. 22.
Remittance of Contributions.
- (a) It shall be the duty of every employer to set aside and
remit
the contributions required under this Act through the Social Security
System
and determined by the Board of Trustees, as may be approved by the
President
of the Philippines. Every employer required to set aside and remit such
contributions as prescribed under this Act shall be liable for their
payment,
and non-payment shall further subject the employer to a penalty of
three
percent per month of the amounts payable from the date the
contributions
fall due until paid.
(b) Failure
or refusal of the employer to
pay or remit the contributions herein prescribed shall not prejudice
the
right of the covered employee to the benefits under this Act.
SEC. 23.
Penal Provisions. -
Refusal or failure without lawful cause or with fraudulent intent to
comply
with the provisions of this Decree, as well as the implementing rules
and
regulations adopted by the Board of Trustees, particularly with respect
to registration of employees, collection and remittance of
employee-savings
as well as the employer counterparts, or the correct amount due, within
the time set in the implementing rules and regulations or specific call
or extension made by the Fund Management shall constitute an offense
punishable
by a fine of not less, but not more than twice, the amount involved or
imprisonment of not more than six (6) years, or both such fine and
imprisonment,
in the discretion of the court, apart from the civil liabilities and/or
obligations of the offender or delinquent. When the offender is a
corporation,
the penalty shall be imposed upon the members of the governing board
and
the President or General Manager, without prejudice to the prosecution
of related offenses under the Revised Penal Code and other laws,
revocation
and denial of operating rights and privileges in the Philippines, and
deportation
when the offender is a foreigner.
SEC. 24.
Visitorial and Enforcement
Powers. - (a) The Fund or its duly authorized representatives may,
at any time, inspect the premises, books of accounts and records of any
person or entity covered by this Act; require it to submit its reports
regularly; and act on violations of any provisions of this Act.
(b)
Particular aspects of the Fund’s administration
may be subject to supervision, visitation or verification by
appropriate
agencies of the government as may be designated and authorized by the
President
of the Philippines.
SEC. 25.
Repealing Clause. -
Any provisions of law, decree, executive order, rules or regulations as
are in conflict or inconsistent with the provisions and/or purposes of
this decree are accordingly repealed, amended or modified.
SEC. 26.
Effectivity. This Decree
shall take effect immediately.
Done in the City
of Manila, this 14th day of December,
in the year of our Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President of the Philippines | 
