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The economic slowdown of 1998 took its toll in the asset recovery program of NHMFC. The Corporation
continuously failed to register positive financial marks. Early on the Estrada Administration, a
Memorandum, dated May 20, 1999 from the President addressed to HUDCC, DOF, DBM and SEC was
issued, constituting them into a Task Force to prepare the appropriate disposition plan for NHMFC.
Then President Estrada issued Executive Order 195 dated December 31, 1999 directing all governmentowned and controlled corporations under the HUDCC and the Presidential Commission on Mass Housing
(PCHM) to prepare their respective Rationalizing and Streamlining Plans. The E.0. also mandated, among
others, NHMFC to re-direct its operations to the development and provision of a secondary mortgage
market to finance mortgage take-out and fast track the disposition of existing mortgages. The E. O.
provided the President policy direction with respect to NHMFC.
In the 1st quarter of 2002, as part of an overall rehab program, NHMFC hired Punongbayan &
Araullo/Ernst & Young (P&A/E&Y) as its Financial Advisor. In the last quarter of the same year, the
Corporation undertook a Restructuring Agreement with the Funders (SSS & HDMF) and started the
processing for the Sale of the Non-Performing Loans (NPLs) of the UHLP portfolio.
In 2003, NHMFC announced the competitive auction sale of the NPLs after pre-qualifying potential
bidders. This sale is part of a strategy that will reposition the Corporation to meet the future affordable
housing needs of the Filipino people. This realignment process actually started during the second quarter
of 2002 with the direct involvement of Senior Management of the NHMFC, SSS, HDMF, HUDCC & the
DOF.
NHMFC realignment included the formal restructuring of its P46 B outstanding debt balance with SSS
and HDMF and obtaining approval from all the required government bodies to implement its plan to
dispose of the portfolio of delinquent loans. This complex approval process required a consensus among
all the parties and took more than one year to achieve.
In June 20, 2004, Executive Order 272 authorized the creation of the Social Housing Finance
Corporation, a wholly-owned subsidiary of NHMFC. One year after, or in June 21, 2005 the Community
Mortgage Program (CMP), and the amortization, as well as the developmental component of the AbotKaya Pabahay Fund (AKPF) Program of NHMFC, was officially entrusted to the SHFC. Mandated to be
the lead government agency to undertake social housing programs for the low-income earners, SHFC has
assumed the implementation of the AKPF and CMP, which for more than 17 years now, has been the most
affordable, long-term microfinance facility to meet land tenure and housing security requirements of those
so-called "poorest of the poor." It is now recognized as the most successful housing program for the
homeless and the underprivileged sector of our society
Because of the Spin-off of the CMP and AKPF programs to SHFC, and the sale of its Non-performing
Loans (NPLs) to Balikatan Housing Finance, NHMFC in September 2006 began the process of
rationalizing its manpower structure. The Plan for Reorganization was approved by DBM and CSC in
November of 2006 and was implemented and completed in June of 2007. The Manpower complement of
NHMFC was reduced by half, with the new structure downsizing its functions related to collection
activities and CMP, and instead focusing more on establishing a Secondary Mortgage Institution.
In August 2007, NHMFC engaged the services of Ernst & Young Transaction Advisory Services Inc. to
act as Financial Advisor, assist in the maiden securitization and lay the building blocks for the
transformation of NHMFC into an SMI. EY TASI conducted due diligence on the low delinquent
accounts of NHMFC and is assisting the corporation in matters of finance, accounting, regulatory and
legal implications of the securitization transaction.
In August 2008, NHMFC brought on board the securitization expertise of Standard Chartered bank as
underwriter and Lead arranger for the maiden securitization issue, along with the Trustee and Special
Purpose Trust, namely, DBP and PNB respectively.
On March 23, 2009, the NHMFC launched the maiden securitization issue of the 2.06 Billion Bahay
Bonds. This is the first residential mortgage backed securities (RBMS) issued in the Philippines by a
government agency. It is significant to note that the NHMFC maiden Bahay Bonds issue took place at a
time when global economic crisis brought about by sub-primed mortgages was at its height. The
transaction was rated AA by the Philippine Rating Services Corporation (PhilRatings) and the bonds were
twice oversubscribed. For this transaction, the NHMFC was given recognition by the Asset Asian Awards
2009 and was awarded the Triple A Award category 2009 Securitization of the Year.
On November 19, 2009, the Board approved the proposed Guidelines on the Housing Loan Receivable
Purchase Program (HLRPP) and grant authority for the NHMFC President to approve all purchases under
the HLRPP. The NHMFC shall purchase the housing loans receivables from the originating institutions
and will be turned into an asset pool for eventual issuance of securities or bonds for sale in the capital
market. With this program, the NHMFC will continue to perform its mandate as a Secondary Mortgage
Institution (SMI) to operate a viable housing finance system thru the securitization of the residential home
mortgages.
On August 2012, NHMFC issued the second of its Bahay Bonds series (BB2). It is the first ever retail
mortgage-backed securities (RMBS) issued in the country and was given a conditional rating of PRS Aa
by the Philippine Rating Services Corporation (PhilRatings). The following year, NHMFC was awarded
by the Philippine Dealing System Holdings Corporation & Subsidiaries (PDS Group) with the Innovative
Listed Corporate Bond Issue of the Year for the pioneering issuance of BB2 Special Purpose Trust.
On March 2013, the NHMFC was awarded ISO 9001:2008 for the Rizal Division after audit stages
conducted by Tv Sd PSB Philippines. On 2014, NHMFC has expanded ISO certification for the
Borrower Counseling System of the Rizal, NCR and Luzon Division, Extra-judicial foreclosure process
(Buyer-Initiated) of the Litigation Division and Release of Title process of the Securities and Mortgage
Custodianship Division
COMPANY PROFILE
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