Rights of Long‑Term Informal Settlers vs. Payment Demands by Government Agencies
(Philippine legal perspective — as of 20 July 2025)
Disclaimer: This material is for study and advocacy only. It is not legal advice. Situations differ; consult a lawyer, the Public Attorney’s Office (PAO), or accredited urban‑poor paralegals for counsel on a specific case.
1. Key Concepts and Sources of Law
| Concept | Core References | Essence |
|---|---|---|
| Informal settler family (ISF) | RA 7279 (§3 (g)); DHSUD Memoranda | Urban/rural poor household occupying land without a legal right (no title, lease, or permit). |
| Long‑term occupant | Civil Code Art. 1118 & 1137; Public Land Act (CA 141); RA 10023; jurisprudence | Possession 30 years (extraordinary acquisitive prescription) if the land is alienable & disposable (A & D) public land or private land whose owner slept on rights. |
| Payment/exaction | 1987 Const. Art. VI §28(1); COA Rules on Illegal Exactions; UDHA §33 | Government may collect money only when a law, ordinance, or contract clearly authorises it, and always at affordable cost for socialized housing. |
2. Constitutional Foundations
- Art. III §1 – Due Process: No person shall be deprived of life, liberty or property without due process of law.
- Art. XIII §9 – Urban‑Land Reform & Housing: The State shall, with the private sector, implement a continuous program of decent housing at affordable cost.
- Art. XIII §10 – Eviction Safeguards: Urban/rural poor dwellers shall not be evicted, nor dwellings demolished, except in accordance with law and in a secure, adequate relocation site.
These provisions make housing a social right and impose on every agency the duty to respect tenure, consultations, and affordability before money can be demanded.
3. Statutory & Administrative Framework
3.1 Flagship Laws
| Law | Salient Sections on ISF Payments |
|---|---|
| RA 7279 – Urban Development & Housing Act (1992) | • §2 (d): “Affordable cost” = ≤ 30 % of gross monthly income over a max 30‑yr term. • §9 & §20: Government land may be acquired and awarded at cost (or lower) to qualified ISFs. • §28 (pars. 5–7): No demolition without 30‑day notice, consultation, presence of LGU social workers, etc. • §33: Criminalizes “collecting contributions for a housing project without authority.” |
| RA 8368 (1997) | Repealed Anti‑Squatting Law for ISFs (except professional squatters). De‑criminalizes mere occupation, reducing leverage for coerced payments. |
| RA 10023 – Residential Free Patent Act (2010) | Long‑time occupants of up to 200 m² A & D residential land in cities/municipalities may secure free patent title after 10 years of open, continuous possession. Nullifies future “rent” claims by government. |
| RA 10752 – Right‑of‑Way Act (2016) | For national infrastructure projects: agencies must pay just compensation and fund resettlement; no “rent‑back” scheme. |
| RA 11291 – Magna Carta of the Poor (2019) | Confers an enforceable right to adequate housing; poor may sue to compel compliance. |
| RA 11201 – DHSUD Charter (2018) | Centralises policy; DHSUD and NHA/SHFC issuances must align with constitutional affordability. |
3.2 Implementing Rules & Key Issuances
- DHSUD Department Circular No. 2020‑004: Standard of “affordable cost” = ≤ 30 % of net income; indexation every three years.
- EO 152 (2002) & EO 708 (2008): Adopt Community Mortgage Program (CMP); payments pegged to socialised interest (4.5 % p.a.); no payment = grace periods & mediation before foreclosure.
- NHA Board Res. 5778 (2022): Caps monthly amortisation for “BALAI” units at ₱ 1,500 for the first five years; forbids surcharge interest above 1 %/month.
4. Jurisprudence Spotlight
| Case | G.R. No. / Date | Doctrines on Payments |
|---|---|---|
| Chavez v. NHA | G.R. 164527, 15 Aug 2007 | NHA may fix amortisation only within statutory “affordable” ceiling; courts can void onerous terms. |
| Social Housing Finance Corp. v. Ilagan | G.R. 210517, 13 Oct 2021 | CMP collections are quasi‑public funds; misapplication = illegal exaction reviewable by COA. |
| Concerned Residents of Manila Bay v. Task Force | G.R. 238046, 18 Aug 2020 | Relocation must have access to livelihood; otherwise payment demands are premature. |
| Acuna v. Guce | G.R. 191420, 12 Jan 2016 | Demolition without relocation void; occupants cannot be billed for removal or debris fees. |
| Heirs of Malate v. Gamboa | G.R. 217960, 17 Jun 2019 | Long possession + reclassification to A & D land gives rise to equitable title; LGU cannot demand “occupancy rent.” |
| People v. Rey (Professional Squatting) | G.R. 185472, 10 Dec 2018 | Distinguishes “professional squatter” (no protection) from bona‑fide ISF; only the former may be fined for illegal occupancy. |
5. Enumerated Rights of Long‑Term ISFs Confronted with Payment Demands
Right to Written Basis of Charges Art. III §7 (right to information); COA Circular ‑ Government must identify the law, ordinance, board resolution, or contract clause supporting the amount.
Right to “Affordable Cost” RA 7279 §2 (d); DHSUD Circular — No agency may impose payments > 30 % of net household income over a reasonable term (normally ≤ 30 years).
Right to Due Process & Consultation UDHA §28; RA 11291 — ISFs must be consulted on modes of payment, subsidies, and livelihood support before any collection.
Right to Tenure Security / No Eviction for Non‑Payment Without Court Order Art. XIII §10; Acuna case — Non‑payment alone does not justify summary eviction; agency must obtain a judgement and prove payment terms are valid.
Right to Seek COA Relief Against Illegal Exaction COA Rules on Settlements of Accounts — Beneficiaries can file a taxpayer’s suit or request audit to suspend/return collections made without authority.
Right to Subsidies & Loan Restructuring NHA Res. 2087 (2013); SHFC CMP Guidelines — ISFs who lose income may seek condonation of penalties, term extension, or interest buy‑down.
Right to Acquire Title Through Acquisitive Prescription or Free Patent Civil Code; RA 10023 — After meeting statutory conditions, ISFs can perfect ownership and extinguish any “rent” claims.
Protection Against “Double Charging” RA 7160 (Local Gov’t Code) §130; UDHA §33 — LGUs cannot impose both real‑property tax and location rent on the same parcel absent clear delegation.
Right to Judicial Review & Injunction Rule 65, 1997 Rules of Court — ISFs may challenge payment demand as grave abuse of discretion by filing certiorari/prohibition and seek TRO/PI.
6. Common Payment Demands — and Available Defenses
| Agency Demand | Typical Legal Weakness | ISF Defense & Remedy |
|---|---|---|
| “Occupation fee” by NHA while title processing | UDHA gives NHA only power to collect amortisation after award; no interim occupation fee in charter. | Demand written legal basis; file COA complaint; invoke Chavez v. NHA precedent. |
| “Rental” for living in a ROW clearing area (DPWH) | RA 10752 allows only compensation to occupant, not charges; DPWH has no enabling fee ordinance. | Invoke Right‑of‑Way Act; negotiate for disturbance compensation; elevate to DPWH Task Force ROW. |
| Barangay “donation” before granting certification for relocation | LGUs cannot impose fees not in revenue ordinance (RA 7160 §132). | File complaint with DILG or Ombudsman; request LGU review by Sangguniang Panlalawigan. |
| Surcharges > 1 %/mo on CMP amortisations | EO 152 caps interest; surcharges beyond 12 %/yr void as pactum leonina. | Write SHFC for rate recalculation; seek mediation under CMP Rules. |
| Payment for demolition equipment | UDHA §28 expressly bars charging ISFs for demolition. | File petition for injunction; cite Acuna v. Guce. |
7. Enforcement Pathways
Administrative: DHSUD complaints desk; NHA Grievance Committee; SHFC Customer Assistance & Relief for Evictees (CARE).
Audit: Commission on Audit resident auditors in every agency; may issue Notice of Disallowance and order refund.
Quasi‑Judicial: Housing and Land Use Adjudication Committee (HLURB functions now under DHSUD) — adjudicates housing‑related disputes, including CMP controversies.
Judicial: Regular courts for injunction, declaratory relief; PAO provides free representation to indigent ISFs.
Human‑Rights & Legislative Oversight: Commission on Human Rights for socio‑economic rights violations; Congress or Sanggunian hearings to summon agencies.
8. Practical Checklist for Community Advocates
| Step | What to Do | Why |
|---|---|---|
| 1. Secure Documents | Get billing statements, notices, MOAs, proclamations, tax declarations, & zoning maps. | Establish paper trail & pinpoint legal bases (or lack thereof). |
| 2. Compute “Affordable Cost” | List average household income × 30 %; compare with demanded amount. | Demonstrates statutory ceiling breach. |
| 3. Verify Land Classification | Obtain DENR Certification if public land; confirm A & D status; or check title history via Registry of Deeds. | Determines if free patent or prescriptive acquisition possible. |
| 4. Seek Mediation | Approach NHA Relocation Action Center or LGU Housing Office with community paralegal. | Many disputes settle with re‑pricing or subsidy grant. |
| 5. Elevate to COA / Courts | File COA Suspension Request; or Rule 65 petition if collection persists. | Freezes collection pending adjudication. |
9. Policy Gaps & Emerging Trends (2023‑2025)
- Indexed affordability: Inflation (6–7 % in 2023) eroded “affordable” caps; DHSUD is drafting a Tri‑Annual Housing Price Index.
- Digital payment portals: NHA’s “e‑BALAI” system sped up collections but also triggered automated penalties without human override — flagged by COA in 2024 Audit Observation Memorandum No. 24‑613.
- Climate‑risk resettlement: Post‑“Typhoon Egay” (2024) relocation projects funded by DBM include full subsidy; beneficiaries cannot be billed for land.
- Bills Pending (19th Congress): House Bill HBN‑9590 — proposes absolute condonation of NHA housing arrears incurred before 2020. Senate Bill SBN‑2421 — seeks to classify ISF communities as “Land‑in‑Creation” zones with zero land cost transfer.
10. Conclusion
Long‑term informal settlers enjoy layered protections — constitutional, statutory, and jurisprudential — that strictly limit what payments government agencies may demand. The overarching rule is simple:
No charge is valid unless a specific law or lawful contract authorises it, and even then it must pass the “affordable cost” test and satisfy due‑process safeguards.
Communities that know these rights, document agency actions, and use available administrative and judicial remedies can successfully challenge — and often overturn — illegal exactions.
Further Reading
- Urban Poor Resource Center of the Philippines, Inc., “A Guidebook on the UDHA” (5th ed., 2022).
- Paño & Pelayo, Philippine Housing and Urban Development Law (Rex Book Store, 2021).
- COA Legal Services Opinion No. 2023‑032 — “Authority of NHA to Collect Occupancy Fees.”
(All works publicly available or in law libraries; statutes accessible via the Official Gazette.)