To position RP as a safe haven of investments amid Global Financial Crisis
NOW IS THE MOST PROPITIOUS TIME TO ESTABLISH RP'S REAL ESTATE INVESTMENT TRUST FRAMEWORK - ANGARA

Senator Edgardo J. Angara today convenes Senate and House Reps for a bicameral conference to establish the Real Estate Investment Trust (REIT) law that will boosts RP's position as a safe haven of investments in the Asia-Pacific region amid the Global Credit Crunch.

"Our stock market is considered one of the oldest in Asia; but its inferiority in size is a matter of national embarrassment. Its small size explains in part why it can be quite challenging for many Filipino workers to get a job and for many small companies to expand its business. In other words, the slow development of our stock market mirrors the slow economic development of our country," said Angara who chairs the Senate Committee on Finance.

The main purpose of REIT is to provide small and large investors alike with the opportunity to participate directly in the ownership, financing and management of large-scale real estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real estate ownership.

Since stocks should be listed in a registered exchange, it is easier to buy and sell the securities of said companies representing an interest in income-producing real estate than to directly buy and sell the properties themselves.

"The proposed law would not only allow the Philippines to participate in the globalization of the real estate investment markets, but, more importantly, contribute to the growth and development not only of the capital market but also the national economy through increased investment activities," said Angara.

He added, "The proposal effectively supports the growth of the BPO and tourism industry in the Philippines and will serve to attract foreign direct investments in real estate, thereby stimulating much-needed property and infrastructure development in the Philippines."

REIT provides a tax effective legal structure allowing the public to invest in income generating real estate assets and eventually derive a return from it. Angara also said that establishing REIT in the country would provide liquidity to the real estate market, unlock capital and eventually help the Philippine economy.