BUILDING AND LOAN ASSOCIATION

BACKGROUND
Building and Loan Associations (BLAs) are mutual thrift and home financing institutions that are created to encourage savings and the financing of family homes of its member-stockholders. More specifically, the objectives of a BLA are:

  1. To accumulate the savings of its members;
  2. To encourage industry, frugality and home financing among its members; and
  3. To loan its funds to members on the security of unencumbered real estate and with the pledge of their shares of the capital stock owned by such stockholders as collateral security.

BLAs are private corporations duly registered with the Securities and Exchange Commission (SEC). These BLAs enjoy various benefits and privileges. As stated in Section 20 (d) of RA 8763, “When guaranteed by the Corporation (PHILGUARANTEE), such associations including their franchises, capital, reserves, surplus, and their loans, receipts, incomes, shall be exempt from all taxation now or hereafter imposed by the Government.”

SALIENT FEATURES AND BENEFITS

Legal Basis
  • Sec. 20 of R.A. 8763 or “HGC Act of 2000”
Primary Purpose
  • To accumulate the savings of its members
  • To lend the funds to its members for home financing
Government Guarantee
  • PHILGUARANTEE-covered loans carry the sovereign guarantee of the Republic of the Philippines
Loan-to-Collateral Ratio
  • Socialized and Low-cost Housing: 90%
  • Medium-cost Housing: 80%
  • Open Housing: 70%
Tax Exemption
  • When guaranteed by the Corporation (PHILGUARANTEE), such associations including their franchises, capital, reserves, surplus, and their loans, receipts, and incomes, shall be exempt from all taxation now or hereafter imposed by the Government
Loan Purpose
  • Purchase of lot
  • Purchase of house and lot and lot on first occupancy basis
  • House construction
  • Payment of lot balance and house construction
  • Refinancing of existing housing loans
  • Other miscellaneous loans (e.g., Interim loans and Stock loans)

You may click on the image above or you can click here to download a copy of the rules.

RULES AND REGULATIONS ON BUILDING AND LOAN ASSOCIATIONS

The rules and regulations to implement the provision of Section 20 of Republic Act No. 8763 or “The Home Guaranty Corporation Act of 2000” were promulgated to prescribe the policies, guidelines, processes, and procedures that guide the Home Guaranty Corporation (now Philippine Guarantee Corporation) in exercising its power and functions over BLAs.

For inquiries on Building and Loan Associations (BLAs), you may contact the BLA Task Force Secretariat (Mr. Roel P. Burgos or Ms. Felmarose C. Ramos) at 5322-8125.