08/04/2009 [ tribune.net.ph ]
One week after the resumption of the third regular session of the 14th Congress, the House of Representatives has approved on third and final reading a bill that would provide a regulatory framework for Real Estate Investment Trusts (REITs) aimed toward capital market development in the Philippines.
House Bill 6379, otherwise known as the "The Real Estate Investment Trust Act of 2009," was approved to democratize wealth by providing small and large investors alike with the opportunity to participate directly in the ownership and financing of large-scale real estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real estate ownership.
Aurora Rep. Juan Edgardo Angara, one of the principal authors of the bill, said the measure would provide investor and the national government a steady income stream since the real estate investment trust is required to declare dividends.
One of the bill’s key provisions is to facilitate the buying and selling of securities of companies representing an interest in income-producing real estate than to directly buy and sell the properties themselves.
It also seeks to allow for cross-border investments that will encourage strategic foreign investments in the capital market and develop the capital market, reinvigorate real property markets and improve investor access to property investments.
The proposed measure also exempts REITs from documentary stamp tax and the adoption of a five-percent cap.
This will result in economic benefits for the country and the Filipino people as it embodies global best practices and seeks to emulate economic success achieved by other countries through the creation of a favorable and conducive environment for the establishment of real estate investment companies.
Other co-authors of HB 6379 are Reps. Abraham Kahlil Mitra (Palawan province), Paul Daza (Northern Samar province), Hermilando Mandanas (Batangas province), Ramon "Red" Durano (Cebu province), Eduardo Nonato Joson (Nueva Ecija province) and Roman Romulo of Pasig City. PNA
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