A NUMBER of listed property companies were very enthusiastic with the landmark signing of the Regulations that form part of the framework of the Real Estate Investment Trust (REIT) Act of 2009. The Implementing Rules and Regulations of the Securities and Exchange Commission (SEC), the Revenue Regulation of the Bureau of Internal Revenue (BIR) and Listing Rules of the Philippine Stock Exchange (PSE) were all signed in a special ceremony at the Department of Finance office on Jan. 20, 2020.
“The property firms have long been waiting for industry concerns on REITs to be ironed out. Now that the contentious points have been addressed and the provisions are acceptable to all concerned parties, potential listing applicants have been excited to have their own REITs listed,” said PSE President and CEO Ramon S. Monzon. “In fact, just days after the momentous signing event, the President of the biggest property firm in the country met with us to discuss their REIT listing plans and timetable. When a one trillion peso company wants to be the first to have a REIT listing and a sizeable first one at that, you know that the confidence in this new asset class and the support it will get from property companies will be remarkable,” Monzon explained.
Monzon credits the positive development on REITs to President Rodrigo R. Duterte’s economic team headed by Department of Finance Secretary Carlos G. Dominguez III together with SEC Chairman Emilio B. Aquino and BIR Commissioner Caesar R. Dulay. “There is no question that the regulatory hurdles in operationalizing REITs could not have been resolved if not for Secretary Dominguez’s resolute determination to develop the Philippine capital market. We have to thank and credit Secretary Dominguez for his push to have the REIT regulations available.”
The PSE REIT Listing Rules, which were approved by the SEC, incorporated a policy which mandates reinvestment in real estate and/or infrastructure projects in the Philippines within one year. REIT companies will be required to provide regular reports on the status of the implementation of their Reinvestment Plan.
“Our peers in Asia have had REITs since 15 to 20 years ago. The PSE will be more competitive in the region with this new asset class,” Monzon added.
The PSE will be conducting forums for stockbrokers to acquaint them with the amendments on the REIT regulations. The Exchange will also be incorporating REITs in its investment literacy activities to inform the investing public of the features of REITs and the benefits of investing in this asset type. (PR)