MANILA – Finance Secretary Carlos Dominguez III is amenable to any amendment of the Real Estate Investment Trust (REIT) if there is an assurance that money allocated for this purpose will be used for domestic activities.
The REIT Act lapsed into law in 2009 but has not really moved forward on issues like minimum public ownership and taxation.
Under the law, REITs are required to have a public float of 40 percent in their first two years after listing with the Philippine Stock Exchange (PSE). Public ownership should rise to 67 percent by the third year after listing.
There have been proposals to cut the public float to a little over 30 percent to encourage more real estate businesses to start a REIT.
Lawmakers are now awaiting the Department of Finance’s (DOF) input on possible amendments in the law.
Dominguez said he is open to any amendments on the law if this means money will be used for productive purposes in the domestic market and not overseas.
“They can amend the law, do what they want, but until I am assured that the funds are going to be recycled in a productive way, I will not implement it,” he said.
Dominguez said he wants REITs to infuse the funds for domestic purposes instead of investing these overseas in order to boost the Philippine economy.
Proposals for REIT amendments were not prioritized by the previous administration, thus, investors continue to call for such.
“I don’t know what their reason was but my reason is, I don’t mind giving a tax-free investment if it is reinvested. But if it’s not reinvested and sent to buy property abroad and declared as dividends and will be spent abroad, that doesn’t make sense,” he added.