After years of delay, the Philippine Stock Exchange hopes to take real estate investment trusts (REITs) and short-selling off the ground this year, widening its suite of product offering to attract foreign investors.
“There are many good things to look forward to in the next 12 months. We aim for products like short selling and REITs to be launched very soon. We are also optimistic that market conditions will be more favorable for capital raising,” PSE chair Jose Pardo said during the special bell-ringing to welcome the first trading day of the year on Wednesday.
In a recent interview, PSE president Ramon Monzon said the market would need to attract volume, and this could only come from foreign money.
Apart from addressing macroeconomic concerns, he said attracting foreign money could be done with the launch of new products. Fortunately, he said the issue on the REITs had finally been resolved.
REIT gives investors the option to invest directly in the finished products that are already earning money—such as residential and office units, hotels or shopping malls or even infrastructure ventures like toll roads and power plants—and not just the property developer itself. This was meant to attract investors because the Philippine REIT law of 2009 required the distribution of 90 percent of income yearly.
Monzon said the taxation issue on the REIT had already been addressed by the Tax Reform for Acceleration and Inclusion, which was enacted at end-2017 and has been implemented starting last year.—DORIS DUMLAO-ABADILLA