Real estate bill gets a break

Thursday, September 24, 2009 [ sunstar.com.ph ]

THE chairman of the House committee on economic affairs is hoping that the Real Estate Investment Trust (REIT) Act of 2009 gets enacted into law before Congress goes into recess on Oct. 17.

This, after the Senate and the House of Representatives finally approved the REIT bill in a bicameral conference last Tuesday, said Rep. Ramon “Red” Durano VI (Cebu Province, 5th district) in a phone interview yesterday.

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The REIT bill, drafted by Durano, is the Lower House’s version of a similar proposal filed by Sen. Pia Cayetano.

Durano said the development of REITs in the country will help develop the capital market since it will attract investors.

“The REITs are higher yielding and will provide investors with steady income streams since they are only allowed to invest in income-generating assets,” he said.

Aside from this, the approved version also guarantees investors dividends every year, since the law will provide that 90 percent of the income will have to be distributed as dividends on a yearly basis.

“Only the remaining 10 percent will be imposed with the corporate tax, when in a regular company, they are taxed 100 percent of their income,” Durano said.

Corporate tax imposed on REIT entities is also five percent lower than the regular corporate tax rate of 30 percent.

Initially, the first proposal of the REIT bill would have included a tax exemption for companies that register as REITs, but the Department of Finance did not allow this, he said.

To become a REIT, a company is also mandated to register with the Philippine Stock Exchange as a publicly-traded company within two years from incorporation.

“This way,” Durano said, “ordinary citizens are able to partake of real estate ventures.”

Priority

Certain measures are also being considered under the bill to safeguard the interests of local investors. Durano said local investors are given priority over foreign ones and REITs must also be incorporated in the Philippines to avail themselves of the incentives.

Laws governing corporations in the country registered under the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) will also cover

the REITs.

Since it also involves money, Durano said the Bangko Sentral ng Pilipinas (BSP) will also be involved in formulating the implementing rules and regulations once the REIT is signed into law by the President.

Durano also said that once the REIT is already developed in the country, investors can also expand to infrastructure development, where roads, expressways and bridges can be managed by private companies.

Published in the Sun.Star Cebu newspaper on September 25, 2009.

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Iloilo’s tax system cited by World Bank, Landbank

Friday, September 25, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

ILOILO CITY — The World Bank (WB) and Land Bank of the Philippines are encouraging other local government units (LGU) to follow Iloilo City’s computerized taxation system.

The two financial institutions recently brought officials of Sta. Rosa City, Laguna here to learn the best practices and benefits of Iloilo City’s real property tax administration (RPTA) and Business Tax Enhancement (BTE) projects.

They also held a workshop on revenue improvement and enhancement programs for LGUs focusing on real property and business tax mapping operations.

"We understand that the real property tax administration experience of Iloilo City as part of the Resource Mobilization Component of the Local Government and Finance Development (LOGOFIND) Project has produced very good results which have significantly improved the financial position of Iloilo City," said Christopher Pablo, senior operations officer of WB-Manila.

Mr. Pablo said they used Iloilo City’s RPTA and BTE projects as models to other LGUs because of the city’s success in increasing its revenue collections this year.

Iloilo City mayor Jerry P. Trenas said the City Treasurer’s Office collected P828.98 million from January to August this year, or 86% of this year’s P958.49-million budget estimate.

Business and other taxes amounted to P249 million, or 93% of the P269-million target for the whole year. Real property tax collections amounted to P134 million, or 83% of the P163-million target this year.

Non-tax revenue or various fees collected reached P77 million, which is 98% of the P78.5-million target.

The city-run public markets and slaughterhouse collected P32.5 million, or 94% of the P34.6-million projected collection.

The WB assisted the Iloilo City government in the computerization of the City Treasurer’s and Assessor’s offices. Both offices have initiated tax mapping activities under the WB guidance.

The computerization also streamlined business registration processes in the city. — Francis Allan L. Angelo

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ALI to bid for FTI complex

[ Malaya.com.ph ] September 24, 2009

BY DENNIS GADIL

Property developer Ayala Land Inc. (ALI) yesterday said it will bid for the sprawling Food Terminal Inc. (FTI) Complex in Taguig City but not before completing its evaluation of the potential of the property.

"We’re still studying and carefully evaluating it," ALI president Antonino Aquino said in an interview.

He noted that the government has yet to issue the terms of reference (TOR) for the privatization of the property.

"When our evaluation is finished, we’re going to make an offer," Aquino said at the sidelines of the opening of its newest mall outside Metro Manila, the Marquee Mall in Angeles City.

The government has set a P12.9 billion floor price for the property.

Aquino said FTI is attractive for commercial and residential development.

He, however, ruled out putting up another Ayala mall in the FTI property, citing its proximity to the Market Market mall and Bonifacio High Street in upscale Fort Bonifacio.

"It’s too near to Fort Bonifacio. A mall is not part of the plan," Aquino said.

Aquino said the Ayala mall brand is also going to the Visayas. A new mall is being developed in Davao.

He said Ayala is also going ahead with a plant to put up small-sized community malls all over the country.

The FTI property is the part of the three assets that government wants to privatize this year to help plug a deficit running to P210 billion as of August.

The P210 billion eight-month funding shortfall is P40 billion shy of the full-year deficit target of P250 billion or 3.2 percent of the gross domestic product (GDP).

Finance Secretary Margarito Teves has said only 103 hectares of the 120-hectare FTI complex will be sold through bidding by the fourth quarter.

From an original asking price of P10 billion, the finance department raised the price to P12.9 billion.

Teves said the new valuation meant that the government is looking at not less than P13,000 per square meter.

In June, DOF Undersecretary Crisanta S. Legaspi said 24 of the 103 hectares have been declared a special economic zone. The long-term contracts between the Philippine Economic Zone Authority and locator firms will be honored even after privatization.

Another 79 hectares of the FTI complex are free for development, while the 17 hectares not covered by privatization are owned by the National Food Authority.

The sale of the FTI property accounts for close to half of the government’s target revenue of P30 billion from privatization this year.

The sale of the government’s 40-percent stake in PNOC Exploration Corp., valued at P11 billion, accounts for another big chunk of privation proceeds.

Another item scheduled for auction is the lease of the Philippines’ property in Fujimi, which was acquired as part of Japan’s reparations for damage inflicted in World War II.

The 4,361.85 square-meter Fujimi property, where the Philippine ambassador’s residence is located, is in central Tokyo ’s Chiyoda district.

The commercial and residential district of Chiyoda includes the Imperial Palace and other institutions of the Japanese national government like the legislature, the Supreme Court and the prime minister’s residence.

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Sta. Lucia to build residential, BPO project beside mall

Thursday, 24 September 2009 [ manilatimes.net ]

STA. Lucia Land Inc. plans to build residential and office buildings beside its mall in the province of Rizal.

“We are planning to expand our mall,” Exequiel Robles, president and chief executive of Sta. Lucia, said, referring to the Sta. Lucia East Grand Mall (SLEGM).

He said the 5-hectare parking lot would be transformed into residential and office buildings.

Robles said the office building would cater to business process outsourcing (BPO) companies.

He, however, failed to provide details, such as the cost of the project and the period for construction.

The property developer earlier launched La Breza Towers in Quezon City.

The 22-story building is estimated to cost about P500 million and will have furnished condotel units from the third to the seventh floors, and residential units from the eighth to the 20th floors. It will also include four bi-level penthouse units on the 21st and 22nd floors.

Robles said the project would be completed in 2011. The condotel is 60 percent to 65 percent complete.

He said the units would cost about P70,000 to P80,000 per square meter.

“Our target market is really the family of OFWs in neighboring provinces who want to own a house in Metro Manila,” he said.

This project is also the company’s response to the rising demand for high-end real estate in the city and to the influx of tourists visiting the area.

In a disclosure on Wednesday, Sta. Lucia clarified that its majority shareholder, Sta. Lucia Realty & Development Corp. (SLR), acquired the property five years ago, or before SLR transferred its assets to Sta. Lucia. Sta. Lucia said SLR “had no intention of immediately commencing the project at the time of the property’s acquisition.”

Darwin G. Amojelar

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