Finance Secretary Benjamin Diokno has called upon the private sector to bolster the promotion of real estate investment trust (REIT) offerings as a catalyst for economic development.
“As we embark on the monumental task of revitalizing the economy, I call on our partners in the private sector to come up with more REIT offerings involving a wider variety of assets, especially from renewable energy sources,” Diokno said in a recorded message during the 5th REIT Philippines Investor Summit held in Manila on September 19.
A REIT is a stock corporation that allows the public to invest and trade in income-generating real estate assets.
It is a type of investment instrument that provides returns derived from rental income of the underlying real estate asset, which are distributed to the investors in the form of dividends.
The finance chief referred to REITs as ideal tools for boosting investments to power property development in the country and for diversifying investor portfolios.
“As of July 2023, a total of P93.3 billion of capital funds have been raised from the eight REIT offerings in the market, while total market capitalization has amounted to P228.5 billion. REIT investors have also grown by 38 percent, reaching 161,150 in 2022,” Diokno said.
To take advantage of this lucrative sector, the government is pushing for the passage of the Real Property Valuation and Assessment Reform Act which is currently pending in the Senate.
The proposed reform aims to adopt internationally accepted standards and use digital tools to govern real property valuation in the Philippines.
The measure will also empower local government units by enhancing their capacity to generate local revenues from real property.
“I am confident that REIT investments will continue to fuel economic recovery and drive infrastructure modernization, create more business opportunities and invigorate the Philippine capital market,” Diokno said.
