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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 1170 -
ESTABLISHING A LAND INVESTMENT TRUST (LIT) AS A MEANS OF IMPLEMENTING
THE NATIONAL SHELTER PROGRAM |
Ministry of Finance
Central Bank of the Philippines
Philippine National Bank
Development Bank of the Philippines
Government Service Insurance System
WHEREAS, the National Government is committed to the objective of providing the prime necessities to every Filipino family namely, food, shelter and clothing;
WHEREAS, the Ministry of Human Settlements hereinafter referred to as "MHS" has initiated and is implementing the Bagong Lipunan Improvement of Sites and Services (BLISS) Program designed to provide housing and livelihood generating services;
WHEREAS, there is a need to support the National Government's Shelter Plan through the MHS by combining the resources in the form of acquired/foreclosed assets of the following institutions: PNB, DBP and GSIS, hereinafter referred to as the "Institutions".
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me under the Constitution, I hereby direct and ordain the following:
1.
LIT Program. — There shall be established a Land Investment Trust (LIT)
Program in the Ministry of Human Settlements (MHS). Such Program shall
be administered, regulated and managed by the MHS or an attached
corporation designated by MHS. For this purpose, the MHS shall provide
staff support to the Program. For CY 1981 an initial amount of
P750,000.00 shall be released to the Program to cover personnel and
operating expenditures including office equipment chargeable against
the Special Activities Fund.
2. Trust
Purpose and Certificates. — The institutions shall transfer in trust at
book value to the LIT Program all acquired/foreclosed assets in the
form of real estate which in the determination of MHS can be used in
the establishment, development and support of housing and land
development projects, or suitable to be sold/exchanged for assets to be
used in housing and land development projects. Such transfers shall be
evidenced by trust certificates to be issued by MHS/LIT in favor of the
Institutions. The trust certificates may be of such class and may
contain such design features corresponding to appropriate financial
packages to be determined by the MHS in consultation with the
Institutions concerned.
3. Development
Fund. — The MHS shall provide for the land development fund and related
expenses. For this purpose, the MHS may source the funds required
therefor through the flotation of bonds and other financial instruments
or arrangements including but not limited to domestic and foreign
borrowings.
4. LIT
Operations. — The LIT Program shall implement the following operations:
a)
Mortgage/Credit Insurance. — The MHS through its attached agencies
shall insure and guarantee housing credits including credits extended
for the acquisition of construction materials, the flotation of bonds
by developers and other such packages related to housing and land
development.
b) Credit
Supervision/Project Management. — The MHS or its attached agencies
shall provide technical assistance and other resources needed to see
housing and land development projects through to their fruitful
completion, such assistance to consist of interim funds underwriting,
technology input services, project and operations management, funds and
collateral controllership, and project turn-around management.
c) Development
Mortgage Operations. — The funds thus generated from the LIT Program
shall also be utilized for developmental mortgage lending to produce a
sufficient housing inventory.
d)
Developmental Equity Operations. — To maximize the utilization of the
LIT, MHS shall pool these funds for direct investments in developmental
projects.
e) Land
Banking Operations. — Landowners/developers will form an association
with land as their capital investment. The land shall be exchanged for
shares of stock of the association and such shares shall be fully
guaranteed by MHS or its attached corporation for purposes of security
against debt, and may be openly traded in a Real Estate Exchange. Funds
for this venture shall be initially provided from the proceeds of the
Urban Land Reform Program per PD No. 1517.
6. Documentation. — In order to ensure effective implementation of the land development undertakings of MHS, the Institutions shall grant to MHS such authorization, titles or rights as may be deemed necessary. MHS shall hold sole custody of such authorizations, titles or rights, and shall execute all necessary documentation to hold the assets in trust.
7. Tax Incentives. — Real estate taxes due on the assets transferred in trust shall remain at the rates and level prior to such transfer. Moreover, sale of the assets by the LIT Program to the buyers/end users shall be exempted from transfer and documentary stamp taxes and gains from investments in the LIT Program made by the Institutions and MHS or its attached agencies shall be exempted from income and gross receipts taxes.
8. Implementing Rules. — The Minister of Human Settlements is hereby vested with authority necessary to promulgate the guidelines and rules to implement/operationalize the LIT Program.
9. Repealing Clause. — Any provision of law, decree, executive order, ordinance, letter of instruction, rules and regulation in consistent herewith are hereby repealed, amended or modified accordingly.
10. Separability Clause. — If for any reason, any section or provision of this Letter of Instruction is declared to be unconstitutional or invalid, the other sections or provisions hereof, which are not affected thereby shall continue to be in full force and effect.
11. Effectivity. — This Letter of Instruction shall take effect immediately.
Done in the City of Manila, this 17th day of October, in the year of Our Lord, nineteen hundred and eighty-one.
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