BY ALBERT CASTRO
[ Malaya.com.ph ] July 29, 2010
Stakeholders in the newly introduced real estate investment trust (REIT) business yesterday called on the government to speedily implement the REIT law despite its fears of revenue losses.
They said the fears, expressed by Finance Secretary Cesar Purisima during the opening of the two-day REIT summit which ended yesterday, go against the momentum of the market.
The REIT law which was passed last year gives tax incentives to firms dedicated to forming and holding portfolios in real estate companies. The investing public participates by buying or selling unit trust certificates in the REIT companies.
Jaime Ysmael, Ayala Land chief finance officer, said government should look at the long-term benefits from REIT.
The investments generated will create a "multiplier" that will boost government revenues in the long run.
"As was seen in experience, the net effect would be favorable to the economy," he said.
"It is just a matter of dialogue. It is good for the economy," Ysmael said.
Jeffrey Lim, SM Prime Holdings chief finance officer, said the government should weigh the impact of its actions on investors’ sentiments.
"Just among the three of us – SM Prime, Ayala Land, and Robinsons (Land Corp.), we could generate $1 billion in new money coming to the market," he said.
Lim said the REIT is good for the development of the market.
"As was said, it is high time for the Philippines to have REIT," he added.
Former Philippine Stock Exchange president Francis Ed Lim said the revenue concern was considered during the deliberation of the law.
REIT proponents argued that tax concessions will be offset by the long-term rise in collections, citing a third party study presented in one of the technical working committee meetings during the deliberation of the REIT the law.
"The implementation of the law is consistent with the road map of the President... The REIT as designed will help the objectives of the government," said Lim.
"We should look at the long term and not adopt a myopic view," Lim said.
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