Home » Real Estate Laws » RA 9856 - REIT Act of 2009 » Amendments to the IRR of the REIT Act of 2009 proposed by the BIR

Amendments to the IRR of the REIT Act of 2009 proposed by the BIR

A notice with regard to the proposed amendments to the Implementing Rules and Regulations or IRR of Republic Act 9856, otherwise known as the “Real Estate Investment Trust (REIT) Act of 2009” has been posted recently in the SEC website. This more or less confirms that the Secretary of the Department of Finance (DOF) Mr. Cesar V. Purisima and BIR Commissioner Atty. Kim Jacinto-Henares have concerns about the Philippine REIT as mentioned in a recent post by my wife, and they intend to address these through the proposed amendments.

Proposed ammendments

The proposed amendments include the increasing of the minimum public ownership of REIT firms from the original 33.3% to 51%, with a justification that this aims to be consistent with the avowed policy of the law to make the REIT a public company. I wonder what would be the reaction from would be REIT players in the Philippines, let’s wait and see.

Furthermore, it was proposed that –

“… the initial 50% of a REIT’s capital shall be fully invested in the first year in new infrastructure projects and the remaining shall be fully invested in new infrastructure projects on or before the end of the third year of its establishment. Provided further, that none of its capital shall be used to payoff/down existing debts.”

The proposed ammendment on Section 5.1 (a) as stated above would – 

“… ensure that the policy of RA 9856 to use the real estate investment trusts as means to develop infrastructure projects (not merely as means to convert ownership in existing infrastructure to liquid assets), and to prevent companies from deleveraging and by using established REIT merely to payoff existing debts.”

Lastly, the BIR proposed the deletion of Section 1 of Rule 4 of the IRR on the appointment of a Property Manager on the grounds that –

“… the REIT itself should be construed as a property company that is expected to be an expert in dealing with property management. Moreover, this expertise of a REIT in dealing with property is the major consideration of the public in investing with it. Aside from expertise, a REIT has a name and reputation that has positive effect on public perception. Thus, contracting the service of a property manager would be illogical and unreasonable for a REIT. Clearly, the property manager has no place in the REIT structure.”

Request for comments from the public

Pursuant to Section 8 of the REIT Act, the Commission invites the public, especially, the participants in the real estate industry, the stock market and other interested parties in the business sector, to give their comments on the above-mentioned proposed amendments on or before October 29, 2010.

The comments may be e-mailed or hand-delivered, respectively, to the following addresses:


The Director

Corporation Finance Department

SEC Bldg., EDSA, Greenhills, Mandaluyong City

(Re: Comments on REIT amendments)

The full text of the Notice

The full text of the notice as regards to the proposed amendments to the Implementing Rules and Regulations or IRR of the REIT Act of 2009 as posted in the SEC website can be accessed here, or you can get it directly at the SEC website.

To our success and financial freedom!

Jay Castillo
Real Estate Investor

Real Estate Broker License #: 20056
Follow me in Twitter:
Find us in Facebook:Foreclosure Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

PS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Inbox getting full? Subscribe through my RSS Feed instead!

Photo of author
About Jay Castillo
People encounter problems and make mistakes when buying foreclosed properties, and Jay wants to help people avoid those problems/ mistakes. Jay encountered a lot of those, which is why he started this blog in 2008 to serve as a guide where he shares lessons learned, and how to overcome challenges you may encounter when investing foreclosed properties in the Philippines … [Read more]
Avoid losing money, wasted time and effort caused by buying foreclosed properties that have too many problems, with our free 60-item Property Due Diligence Checklist. Grab your free copy now.

Leave a Comment

4 thoughts on “Amendments to the IRR of the REIT Act of 2009 proposed by the BIR”

  1. Hi Jay, greetings!Is it advisable to purchase a foreclosed property for auction with a pending case?I saw a property for aution this Sat. on Star Assets.Just would like to ask your opinion.

    thanks a lot!



Did you miss buying a foreclosed property because it was too late when you saw the listing/ auction schedule?

Here's the solution...



Join over 100,000 smart real estate investors who receive

updated foreclosed property listings, auction schedules,

and real estate investing tips via email, it's free!

No thanks / Already subscribed
We take privacy seriously and we'll never spam you.
Please refer to our Privacy Policy

I'm looking for foreclosed properties in...

Looking for an article?
Click here to search the blog