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PSE hoping to revive REIT under new gov’t

Posted on May 09, 2016 10:04:00 PM [bworldonline.com]
By Krista A.M. Montealegre, Reporter

WITH the looming change in government leadership, the Philippine Stock Exchange, Inc. (PSE) is keen on reviving key products and services that have been stalled in the last six years.


The trading floor of the Philippine Stock Exchange is seen in this file photo dated Aug. 28, 2014. -- BW FILE PHOTO

PSE President and Chief Executive Officer Hans B. Sicat told reporters over the weekend the local bourse is hoping for an “environment that is a lot more open and forward-looking” once the new leadership takes over.

“When I say forward-looking, when you look at products and services in the capital markets, we should really be trying to work to turn these on locally rather than relying on structured things and since the Philippines is doing well, that is enough,” Mr. Sicat said.

One of the efforts that faced regulatory obstacles was the proposed merger of the country’s equities and fixed-income exchanges, which had been rejected by the Securities and Exchange Commission (SEC).

The PSE is not rushing to make a decision on how to go about the consolidation this time, noting that it is awaiting “if there are any policy changes or views” in light of the election, Mr. Sicat said.

“We are reviewing different approaches whether we continue to buy or build the options for building various parts of the services...These are things we will decide on in the next few months,” he said.

Another key initiative that have failed to take off is the real estate investment trust (REIT). The Aquino government had imposed stringent REIT rules to limit revenue lesions caused by laws that grant generous tax perks.

The REIT Act lapsed into law in December 2009 with none of the major property developers coming forward with their prospective offerings amid issues on ownership and taxation on asset transfers.

The PSE is awaiting the composition of the new economic team before making an aggressive push for this product, Mr. Sicat said.

“The big issue, if you recall, was that the SEC and BIR (Bureau of Internal Revenue) added provisions on the implementing rules and regulations (IRR). It can be as easy as both regencies revising their stand on it because you do have a law and you have a set of IRRs which would have been a good test case for doing REITs,” he said.

“Changing the law or amending the law for REITs is a plan but that’s a medium-term plan. You can turn on the product very quickly,” Mr. Sicat said.

The PSE is crafting a new medium-term plan that will focus on building on the gains of its efforts in the past three years to transform the local bourse into a world-class exchange.

Aside from expanding its menu of products and services, the PSE is enhancing on its technical and human resource capability, and improving its technological capacity in line with its thrust to boost liquidity in the stock market.
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