House OKs REIT bill on 3rd, final reading
abs-cbnNEWS.com | 06/04/2009 5:14 PM
Printer-friendly version | 
Send to friend | 
Share your views
MANILA - The House of Representatives on Wednesday approved on third and final reading a bill that seeks to institutionalize real estate investment trusts (REIT), taking the measure a few steps away from being passed into law.
The Senate has already passed its version of the REIT bill before Congress went into recess last March. The bill will now be discussed in a bicameral conference committee to reconcile both versions, with the resulting report to be ratified by both houses of Congress.
The REIT bill aims to provide the legal and regulatory framework for REITs, or companies that own and operate income-producing real estate assets. Shares of these REITs are to be listed on and traded at the Philippine Stock Exchange (PSE).
According to PSE president and chief executive officer Francis Lim, REITs are becoming widely introduced in Asia, and can be usually found in retail, commercial and industrial sectors.
He added that REITs have also played a major role in building health care facilities, as well as in funding government infrastructure projects in countries like Singapore and the United States.
"The sad reality is that despite being one of the oldest bourses in Asia, our Exchange has lagged behind in terms of developing new products compared with our neighbors. The House's approval of the bill introducing REITs will soon pave the way for investors to become owners of various income-generating properties, as well as to directly benefit from the revenues earned by these REITs," he said.
The REIT bill provides certain tax incentives to encourage investments. To avail of these, however, the REIT must maintain its status as a listed company and annually give out at least 90 percent of its distributable income to shareholders.
During the House committee hearings, legislators discussed ways to ensure investor protection and on how to prevent abuses of the REIT system. The House version of the bill introduced critical provisions to protect investors such as placing a cap on investments in synthetic products, mandating the disclosure of REIT-related material information, and ordering the return of investment if the REIT is delisted in the PSE.
To prevent abuses, the House version also imposed stricter standards on REIT ownership by including a minimum stockholder requirement, a five or fewer rule, and a single ownership limit.
"Our strategy to partner with government is starting to bear fruit. We are thankful to our lawmakers for helping us lay down the foundations for a better and more competitive Philippine capital markets," Lim said.
Versions of the REIT bill were filed by Aurora Rep. Juan Edgardo Angara, Palawan Rep. Abraham Kahlil Mitra, Northern Samar Rep. Paul Daza, Batangas Rep. Hermilando Mandanas, Cebu Rep. Ramon Durano VI, Nueva Ecija Rep. Eduardo Nonato Joson, and Pasig City Rep. Roman Romulo.
The REIT bill was also endorsed to the plenary by Cebu Rep. Ramon Durano, who also chairs the House Committee on Economic Affairs, and Antique Rep. Exequiel Javier, chairman of the House Ways and Means Committee.
In the Senate, the REIT bill was authored by Sen. Edgardo Angara.
"The approvals of capital market-related laws last year and this year are strong proofs that our legislators appreciate the crucial role of the capital market in economic development. We are heartened to know that a good number of our legislators who have studied and worked abroad have decided to join the legislative branch of government, giving them a broader perspective of how our markets fare in the global arena," Lim said.
"This has also made them supportive of the PSE's advocacy for a better set of laws to develop and broaden our stock market," he added.
Comments