The House Committee on Economic Affairs on Tuesday, Feb. 7, approved, subject to style and corresponding committee report thereof, a proposed bill amending The Real Estate Investment Trust (REIT) Act of 2009 to ensure the reinvestment of proceeds from the sale of REIT shares in the Philippines.

House Bill (HB) No. 6500, entitled “An Act Amending Section 3, 8, and 9 of Republic Act No. 9856, otherwise known as The Real Estate Investment Trust (REIT) Act of 2009”, was refiled by Cagayan de Oro 2nd District Rep. Rufus Rodriguez in the 19th Congress.

A similar measure—HB 6430–was also filed in the 18th Congress by Rodriguez and Reps. Sharon Garin, Robert Ace Barbers, Wes Gatchalian, Michael Edgar Aglipay, and Jericho Jonas Nograles.

HB 6430, however, had a longer title as it adds the phrase “providing for a reinvestment framework of real estate investment trust (REIT) sponsors.”

HB 6500 is founded on the State’s policy to broaden the Filipinos’ participation in the ownership of real estate.

“There is therefore a need to ensure that the funds invested in these companies are reinvested in the Philippines to secure full domestic participation in the real estate industry,” Rodriguez, who was represented by Cavite 5th District Rep. Roy Loyola, stated in his sponsorship speech during the hearing headed by committee chair Negros Occidental 1st District Rep. Gerardo Valmayor Jr.

The bill aims to add “reinvestment plan” as part of RA 9856’s Section 3 Definition of Terms.

The term refers to “a sworn statement, duly received by the exchange and commission, signed by the sponsor/promoter and the principal shareholder of the REIT firmly undertaking, at the minimum, to reinvest (1) any proceeds realized by the sponsor/promoter from the sale of REIT shares or other securities issued in exchange for income-generating real estate transferred to the REIT.”

It also meant that “any money raised by the sponsor/promoter from the sale of any of its income-generating real estate to the REIT, in any real estate, including any redevelopment thereof, and/or infrastructure projects in the Philippines, within one (1) year from the date of receipt of proceeds or money by the sponsor/promoter.”

The deliberation on the bill showed that the under HB 6500, the term is under Section 3 “GG”, while it was under “FF-1” in HB 6430.

Rodriguez’s bill also aimed to amend Section 8 Requirements of RA 9856, which underscored “the need to protect investors and develop the country's real estate investment industry to make it globally competitive.”

It sought to insert as Section 8.19 the plan to reinvest “sale of REIT shares or other securities issued in exchange for income-generating real estate transferred to REIT and any money raised by the sponsor/promoter from the sale of its income-generating real estate to the REIT, in any real estate, including any redevelopment thereof, and/or infrastructure projects in the Philippines, must be reinvested in the Philippines within one (1) year from the date of receipt of proceeds or money by the sponsor/promoter.”

Rodriguez’s proposal would also amend Section 9 Reportorial and Disclosure Requirements of RA 9856.

Under Section 9.4, the bill read “Reinvestment Plan - The REIT shall submit a reinvestment plan to the exchange and the commission upon registration. Further, the REIT must annually secure a certification from the commission that it is compliant with its reinvestment plan.”