August 24, 1982

Prime Minister Cesar Virata

Chairman, Executive Committee
Manila
Sir:
This refers to your Memorandum of July 12, 1982 referring to this Commission the Memorandum of the General
Manager of the National Housing Authority dated June 21, 1982 regarding a proposed scheme for the purchase by
the National Home Mortgage Finance Corporation of National Housing Authority mortgages of low-income
families, for comment and recommendations. cdphil
In connection therewith, please be informed that the Revised Securities Act (B.P. Blg. 178) provides:
"SECTION 4.
Requirements of registration of securities. (a) No securities, except of a class in any transaction
under any of the provisions of Section 5 hereof or . . . , shall be sold or offered for sale or distribution to the public
within the Philippines unless such securities shall have been registered and permitted to be sold as hereinafter
provided."
"SECTION 5.
Exempt Securities. (a) Except as expressly provided, the requirement of registration under subsection (a) of Section 4 of this Act shall not apply any of the following classes of securities;
7)
Any security covering any right or interest in real property, including a subdivision lot or a condominium
unit, where the sale or transfer of such security is subject to the supervision and regulation of the Ministry of Human
Settlements or any of its authorized constituent or attached agencies."
The mortgages subject of the proposed transactions are "exempt securities" as defined under the aforesaid provision
of the Revised Securities Act since the National Housing and the National Home Mortgage Finance Corporation are
government agencies supervised and regulated by the Ministry of Human Settlements.
Exempt securities are so classified under the Revised Securities Act because these are issued, sold or transferred by
institutions or organizations over which other government agencies exercise supervisory care. Thus it would be
repetitious for this Commission to require registration of said securities and to exercise additional supervision over
said institutions.
Likewise, this Commission is without authority to act upon Resolution No. 459 passed by the Board of Directors of
the National Housing Authority, said body having been created pursuant to Presidential Decree No. 757 and not
pursuant to the Corporation Code. The additional powers sought thereby cannot be effected through an amendment
of its charter under the Corporation Code but through proper legislative act.
In view of all the foregoing, this Commission submits that it is not in a position to make any recommendations for or
against the subject proposals.
Very truly yours,
(SGD.) MANUEL G. ABELLO
Chairman