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DHSUD can't use developer's incentivized compliance funds to rebuild mosques in Marawi City -- DOJ

Published Mar 1, 2026 03:00 pm
The Department of Human Settlements and Urban Development (DHSUD) cannot use the developer’s incentivized compliance funds to rebuild mosques in Marawi City, the Department of Justice (DOJ) said.
In 2017, the then Housing and Land Use Regulatory Board (HLURB), DHSUD’s predecessor, introduced the incentivized mode of compliance under the Balanced Housing Development Program (BHDP) that allows developers to deposit a required amount of cash into trust accounts instead of developing socialized housing projects.
In a legal opinion addressed to DHSUD Secretary Jose Ramon P. Aliling, DOJ Acting Secretary Fredderick A. Vida said Republic Act (RA) No. 7279, the Urban Development and Housing Act of 1992, “does not contemplate the allocation or utilization of any portion of the required compliance to administrative expenses.”
“Allowing this would expand the permissible uses of the funds beyond what the law provides,” Vida pointed out.
He stressed that decisions on settled cases state that administrative issuances must remain within the bounds of their enabling statute and may not enlarge or restrict its coverage.
He said that unless Congress amends RA 7279, “DHSUD cannot, through an administrative issuance, modify the prescribed percentage of participation or broaden the allocation of compliance funds.”
Thus, he said that in the absence of a curative legislation, the allocation of the developers’ incentivized compliance funds for the repair or reconstruction of mosques in Marawi City, or for any purpose not contemplated under the law, “remains without legal basis and therefore shall not proceed.”
The DOJ’s legal opinion was sought by Aliling on the use of the incentivized compliance funds for the reconstruction of the mosques which were damaged during the battle between government forces and a terrorist group in 2017.
Through Board Resolution issued in 2017, the then HLURB directed the withdrawal and release of such funds to finance or subsidize certain socialized housing projects through the implementation of land development, installation of water utility, or power utility, or the construction of non-salable and nonrecoverable housing projects on land owned by the government or donated private land such as housing for Armed Forces of the Philippines (AFP) personnel, public housing, rehabilitation of calamity-stricken communities, housing for street children, indigent elderly and people with disability or other types of projects.
The DHSUD subsequently issued Department Order (DO) No. 2021-004 which amended HLURB BR No. 965 that broadened the allowable allocation and, because of this, the funds were used to help defray the costs of repairing and reconstructing mosques in Marawi City.
However, the release of the funds was suspended in 2022 due to questions on the legality of both the incentivized mode of compliance and its allocation.
The DHSUD then sought a legal opinion from the DOJ.
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