The Philippine Stock Exchange (PSE) will undertake a more aggressive drive in pushing for amendments to the real estate investment trust (REIT). Hans B. Sicat, PSE president and chief executive officer, said there is a need to change the "difficult" implementing rules and regulations of the REIT Act to encourage issuers to finally come forward with their respective offerings. "We'll make a fresh push this coming year...We will lobby hard," Sicat told reporters last week.
REITs are companies that own and operate income-generating real estate assets that include offices, apartment buildings, hotels, warehouses, shopping centers and highways. The REIT Act lapsed into law in December 2009, but none of the major developers have come forward with their respective offerings because of the contentious issues on ownership and taxation on asset transfers. "It [REIT] becomes more important now because our colleagues at the Stock Exchange of Thailand are launching their REIT product soon. Global investors who like the REIT product are going to look at that. There is competition for capital and they might be ahead of us," Sicat said. The Bureau of Internal Revenue (BIR) had refused to lower the public float and remove the tax on the investment vehicle that is seen to erode as much as P10 billion in state revenues every year. However, a study conducted by the Philippine Institute for Development Studies show the tax bureau can more than recover in the first year the potential or perceived losses not through taxation but through activities generated by the PSE, Sicat said. "The focus, from a policy perspective, should be supportive of an end-result where we have a deep capital market. If you have a reasonable or low taxation for these products, the BIR will benefit because as volumes go, you will benefit from it," Sicat said
Changes to REIT rules on top of PSE agenda for 2014
