Finance Secretary and PSE Chairman Jose Pardo; SEC Chairperson Emilio Aquino and Commissioner Ephyro Amatong; Undersecretary Antonette Tionko; BIR Commissioner Caesar Dulay; PSE President and CEO Ramon Monzon; fellow workers in government, representatives of the Capital Market Development Council, friends in media.
It has been 11 years since Republic Act 9856—known as the Real Estate Investment Trust or REIT—was signed into law or it lapsed into law.
This law was passed to support the inclusive economic growth of the Philippines and boost infrastructure development. As the law itself states, the REIT Act will broaden participation of Filipinos in real estate ownership in the country, and harness additional resources from the capital market to help finance and develop infrastructure projects.
The REIT is a powerful financial concept, enabling the creation of investment trusts that purchase, develop and operate income-generating real estate assets. The law specifies that a significant portion of the trust shall be publicly held. This creates a secure opportunity for small investors to participate in the growth of property development in the country. This is a big step forward for greater inclusiveness in the financial system.
In order to attract small investors, the law specifies both minimum dividend requirements as well as tax incentives. The dividend requirement is fairly simple. The tax incentives were more problematic. This could be the reason why under the past administration, this concept did not become a reality.
We took on this challenge but had to be sure that the tax incentives would not be prone to abuse. We had to be very clear in our revenue regulations. This is why we needed to recast the existing revenue guidelines.
We likewise wanted to be sure that the large investment funds to be raised using this mechanism will be reinvested exclusively within the country’s real estate and infrastructure sector. The reinvestment requirement is the regulatory framework that ensures that the funds invested by Filipinos will stay in our domestic economy and will contribute to the improvement of our country’s infrastructure, rather than the benefits being squirreled away to other markets and countries. The Securities and Exchange Commission made certain that firm commitments for reinvestment are built into the new implementing rules and regulations.
After consulting stakeholders and incorporating their concerns, we have finally crafted a regulatory framework for the REIT that is right for the Philippines. Today, we bring the law to life. We have amended REIT’s implementing rules and regulations, revenue regulations, and the Philippine Stock Exchange’s Listing Rules. We finally resolved the issues that hindered the Philippine REIT to take off.
Today, we deliver to our economy a powerful financial instrument to fund property development and drive the economy forward. We democratize wealth by opening access for thousands of small investors wanting to be shareholders in secure and profitable real estate projects.
The signing of the new regulations of the REIT Law is proof that this administration is not only pro-poor and pro-middle class. We also aim to provide a business-friendly environment for investors as we are aware that this will translate to more economic gains for all law-abiding Filipinos. This will open up attractive investment opportunities and broaden access to the capital market. This will allow big players in the real estate business to raise more capital to further invest in our country, a win-win situation for all.
A powerful instrument for aggregating capital has just been added to the armory of Philippine development. Our economy’s prospects for rapid and inclusive growth have become even brighter.
Thank you.
@@@