The Department of Finance (DOF) has highlighted the significant contribution of real estate investment trusts (REITs) to the country's economic recovery and infrastructure modernization.

Finance Secretary Benjamin E. Diokno said that REIT investments are playing a vital role in fueling property development as well as creating lucrative and secure investment opportunities for ordinary Filipinos.

“We strongly believe that REIT offerings will continue to propel the growth of the Philippines’ property sector beyond the pandemic and serve as a catalyst for the country’s robust economic recovery,” Diokno said.

As of July 2023, a total of P93.3 billion in capital funds has been successfully raised through eight REIT offerings in the market, leading to a cumulative market capitalization of P228.5 billion.

The number of REIT investors has also seen a substantial growth of 38 percent, reaching 161,150 in 2022.

A REIT functions akin to a stock, representing ownership in real estate properties. By investing in a REIT, individuals can generate income through the rent collected from the properties it possesses.

This investment vehicle provides an avenue to participate in the real estate market without the need to directly acquire properties.

Diokno said infrastructure investments would play a crucial role in driving economic growth over the next five years, emphasizing their significant multiplier effects in stimulating demand and creating a greater number of future-proof, high-quality jobs.

“REITs have proven to be the ideal tool for boosting investments to power property development in the country while opening profitable and secure investment opportunities for everyday Filipinos,” Diokno said.

Furthermore, Diokno said the increasing participation of individual investors, comprising 98 percent of total REIT investors, signifies a significant stride towards achieving greater financial inclusion in the country.

“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,” the finance chief said.

Meanwhile, Diokno announced that under the Marcos administration, there will be an unwavering commitment to implementing structural reforms aimed at unleashing the complete potential of the real estate sector.

One of these significant reforms is the implementation of the Real Property Valuation and Assessment Reform Act.

Diokno said this reform will incorporate internationally recognized property valuation standards, leading to the professionalization of real property valuation practices.

“A credible and transparent valuation system, complemented by the use of digital tools, will boost investor confidence in the land and real estate markets,” he said.

The House of Representatives approved the proposal last December 12, 2022. It is now pending with the Senate Committee on Ways and Means.

“With a little boost, this can be approved before the end of the year,” Diokno said.