REIT Tax Rules To Be Tackled

I read in BusinessWorld Online that the government representatives and the private sector are set to give the long-delayed REIT law another go next week.  The implementation of the REIT or Real Estate Investment Trust (Republic Act 9856) in the Philippines has stalled despite the law being passed in 2009.  The private sector, led by BDO Capital and Investment Corp. President Eduardo V. Francisco, wants more tax exemptions, particularly the VAT of 12%, to be eased, to attract more investors.  Several property big names have already expressed interest in REIT ventures, among them SM Prime Holdings, Inc., Ayala Land, Inc. and Robinsons Land Corp.  However, the Department of Finance does not agree, saying that VAT exemption will lead to billions lost in potential revenue.

REIT has the potential to further make investors excited with investing in real estate.  Let's hope the powers-that-be can finally come to an amicable solution.  

1,000 shares please,
Jon

What's More Important: Housing or Biodiesel Production?

Herminio Teves, a former congressman of the 3rd district of Negros Oriental, has proposed the use of public land for Jatropha propagation to help ease the country's need for power and energy.

Jatropha Biodiesel

The Department of Environment and Natural Resources (DENR) has recently declared 14.2 million hectares of public land as alienable and disposable, and he thinks this could be used to plant Jatropha, a tree that could be used for the production of biodiesel.  Teves calculates that if the public land is utilized for this purpose, it will yield around 99.4 billion kilos of seeds which could produce approximately 25 billion liters of Jatropha raw oil as bunker fuel to power the country's diesel power plants.  He further avers that La Union, which has a public land of 111,646 hectares, will be able to power its 215 megawatt Bawang Diesel Plant, while Zamboanga del Sur, which has 316,648 hectares, can sustain the 55 megawatt Southern Philippines Power Corporation and 100 megawatt Western Mindanao Power Corporation.

Someone told me that in 5 years there will be no more land to sell, and the business of real estate will shift to leasing.  It looks like he knows something I don't.  Maybe licensed real estate brokers should start selling trailer homes, too?


I can live in my car, what about you?
Jon

It Pays To Be Homeless in the Philippines

GK Hope Ball

Philippine Vice President Jejomar Binay bears good news from his short visit to the United States: $350,000 raised during the Gawad Kalinga (GK) Hope Ball which will be used to fund the construction of 150 additional houses for 150 families.  Binay, who is the chariman of the Housing and Urban Development Coordinating Council (HUDCC), added that also during the event, GK turned over 30 houses to 30 families.  He is enthused that GK is now a partner of the national government in addressing the issue of shelter, and that GK would play an important role in the government's bid to address the existing backlog of 3.7 million housing units.

So the homeless gets a house awarded by the government, which they in turn would sell off and go back to squatting on privately-owned lands.  It's like a sick joke, really.  Politicians really ought to have a code of ethics as well as a good set of balls; those squatters need to be dealt with, with compassion and resolve, and by force if need be.




I don't have my own house, does that count?

Jon

Gasoline Prices Went Up Anew!

We're running on Empty!

So the "Big Three" oil companies in the Philippines have raised gasoline and kerosene prices again yesterday.  The increases ranged from P1.40 per liter on premium and unleaded gasoline, and P1 a liter on regular gasoline. Kerosene prices went up by as much as P0.30 a liter, too.  Pilipinas Shell, Chevron Philippines, and Petron Corp., the major oil players in the country, said the price adjustments were due to increases in the international product prices based on the Means of Platt Singapore (MOPS).  With this price hike, gasoline prices in Metro Manila is now averaging P57.50 (about $1.34) per liter of unleaded gasoline, and kerosene at P56 a liter.

Gas prices are inching towards the P60 mark.  Pretty soon, prices of basic commodities will also start going up.  Everything will start getting more expensive while wages remain the same.  In other words, we are going to be able to afford less with the money we have.  Sounds very much like inflation, doesn't it?




Let's go back to the horse and buggy,

Jon

Rent-To-Own: How Does It Really Work?

Before today, I've always wondered about the rent-to-own (also lease-to-own and lease-purchase) scheme and what it really meant.  In most cases I've seen, it's just a very clever wordplay on buying the property, making the buyer think he's paying rent when in truth he's already paying for the monthly amortizations.  Or maybe, I really just didn't know any better.  Well, I can't stay ignorant about this any longer, so I took to reading up on it.  I found a great resource from The Mortgage Professor on what the buyer and seller need to know to make the transaction beneficial to both.

In essence, the lessor and the lessee agrees on a price and a period of time that the lessee may purchase the property.  The lessee then pays 1-5% of the agreed-upon price to the lessor, which will serve as the option money, and is credited to the purchase price should the lessee be able to complete the purchase within the agreed period of time.  The lessee pays rent plus a rent premium (that is also credited to the purchase price) every month.  At the end of the purchase period agreed upon, if the lessee is unable to complete the transaction, the option money plus the rent premiums are forfeited in favor of the lessor.

Make sure to read the full article on the rent-to-own scheme to get a better idea if this is something you'd consider down the road.  If you've always wanted to have your own home but can't afford an outright purchase yet, this may not be such a bad idea after all.

Jon

Makati High-Rise To Go High-Tech!

The Makati City government has ordered owners of high-rise buildings in the city to install seismograms (a.k.a. accelerometers) to monitor ground movement during earthquakes as well as the building's response during typhoons.  Makati mayor Jejomar Binay cited the recently issued memorandum by Secretary Rogelio Singson of the Department of Public Works and Highways (DPWH)* to building officials and local engineers as the reason for this necessity.  The directive also covers buildings under construction as well as those still in the design stage.  City building official and city engineer Nelson Morales issued a memorandum to all developers, contractors, owners, and administrators of high-rise buildings to comply with the said directive.  Buildings completed without the device installed will not be granted occupancy permits by the city government, he said.

*DPWH Memorandum Circular no. 03 (March 31, 2011) Section 105(2) of the National Structure Code of the Philippines, requires the installation of accelerometers or seismograms in structures measuring over 50 meters high.

Ummm... I think they meant seismographs.  Seismograms are the paper records that seismographs spit out.  You don't install paper records!  Sheesh, might as well build the high-rises with toilet paper.




Seis-mo-what?

Jon

It's Quezon City's Fault Too!

Quezon City mayor Herbert Bautista has directed the QC Disaster Risk Management Council to send notice immediately to 42 families living near the West Valley Fault in General Del Pilar St. in Barangay Silangan to voluntarily vacate the area and allow the city hall to relocate them.  The area is considered vulnerable to ground rupture and landslides during earthquakes.  Bautista's order was based on the recommendation of the Philippine Institute of Volcanology and Seismology (Phivolcs) during an inspection of the traces of the fault in Barangays Bagong Silangan and Payatas.  The fault also traverses the city's eastern boundary which passes through the area in Libis.  The city government is keen on declaring the 7-kilometer stretch of the Quezon City areas along the fault system as a danger zone.  Should the residents decline to leave the area, the city government will prepare waivers so they will not be held liable in case disaster strikes.  At present, the city has already identified at least 900 property owners residing within the 5 meter wide buffer zone recommended by Phivolcs.

Which is more important, your property or your life?  I hope the affected residents know better...


It's not our fault,

Jon