go through Ashley Erika O. Jose, reporter
The Securities and Exchange Commission (SEC) plans to issue amended rules to the Republic Act No. 9856 in the fourth quarter (Q4).
SEC Chairman Francisco ED: “We are on a tour before rewriting the rules of REIT – REIT’s Implementation Rules and Regulations (IRR) … I think we can release the exposure draft in the third quarter or early in the fourth quarter,” SEC Chairman Francisco ED. Lin told BusinessWorld Last week, on the verge of the 2025 Philippine Investment Conference.
In July, corporate regulators said it plans to amend the Real Estate Investment Trust (REIT) rules to help strengthen the Philippines’ capital market by expanding qualified assets, extending reinvestment periods and attracting wider participation.
Mr. Lin said, for example, the SEC is currently evaluating and enumerating asset-asset qualifications, adding that regulators are also considering the possibility of an extension of the investment maturity.
The REIT is an inventory company designed to own income-generating real estate assets. Under current REIT rules, the proceeds from sales of REIT assets must be reinvested within one year.
“We will look at extending the one-year investment period to a longer period because today, if sponsors raise funds by transferring their assets to REIT companies, they will be limited to reinvesting the infrastructure or real estate assets,” he said.
Lin said the SEC is also looking at other areas where sponsors can leverage the funds they raise in REITs, noting that this will give them flexibility in how they use their earnings.
“We will also look at a simpler registration process if possible,” he added.
For Juan Paolo E. Colet, Managing Director of Bank of China Capital Corp., the market will welcome key changes to the REIT rules, especially the expansion of reinvestment purposes.
“Clearing what is eligible to be a REIT asset and how to apply the requirements for a three-year record. These improvements can help promote more REIT first-time public offerings and may even help recommend.”
Unicepital Securities Equity said in a report: “We believe that the SEC’s proposed amendment to the REIT framework is a constructive step to increase market flexibility and encourage more issuers to enter the REIT space, especially in today’s softer fundraising environment.”
However, Unicapital Securities said this could raise concerns among investors who value REIT’s “predictable” dividend flow.
“We believe that delays in capital deployment may lead to lower dividend growth or temporary reduction in spending and potentially undermine recent investor sentiment,” the report added.
