RULES AND REGULATIONS IMPLEMENTING THE
PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA) ACT OF 2008

PERA Rule 1 – Title.

These rules shall be referred to as the “Implementing Rules and Regulations of the Personal Equity and Retirement Account (PERA) Act of 2008″ or the “PERA Rules”.

PERA Rule 2 – Declared Policy and Interpretation of the PERA Rules.

These PERA Rules are promulgated pursuant to the declared policy of the State to establish a legal and regulatory framework for voluntary personal retirement plans as a means to promote savings mobilization and capital market development, to contribute to long-term fiscal sustainability through the provision of long-term financing, and to reduce the need for social pension benefits.

Any doubt in the interpretation of these PERA Rules shall be resolved in a manner which would be consistent with the above declared policy.

PERA Rule 3 – Definition of Terms used in the PERA Rules.

As used in these PERA Rules, unless the context requires otherwise, the following terms shall have the following meanings:

(a) “Administrator” is an entity accredited by the Bureau of Internal Revenue (BIR), after prequalification by the concerned Regulatory Authority, who shall be responsible for administering, overseeing and maintaining the records of the individual PERA.

Only an Administrator with a trust license may concurrently perform the functions of an Investment Manager as provided in PERA Rule 4.B.3.

(b) “Contributor” is a person of any age with the capacity to contract and possessing a Tax Identification Number (TIN) who establishes and makes contributions to a PERA. The Contributor, directly or through an Investment Manager, makes investment decisions for his PERA. A person above the age of fifty-five (55) years may still open a PERA, provided that he shall comply with the requirements of the PERA Act of 2008 and these PERA Rules.

(c) “Custodian” is a separate and distinct entity unrelated to the Administrator, accredited by the BSP to take custody of the PERA Assets. The Custodian, which shall operate independently from the Administrator, shall be chosen by the Contributor. The Bangko Sentral ng Pilipinas (BSP) shall impose such accreditation requirements for PERA Custodians as it may deem necessary or appropriate.

PERA Custodians may be classified as cash custodians and securities custodians. The cash custodian shall maintain custody of all funds in connection with the PERA. The securities custodian shall maintain custody of all securities, evidence of deposits or other evidence of investment. An entity may act as cash and securities custodian at the same time provided such entity is accredited by the BSP under PERA Rules 4.C.1.a and 4.C.1.b.

A Contributor, however, may be considered as a securities custodian under a self-custody arrangement for certain PERA products, which are identified by the concerned Regulatory Authority to be non-transferable, non-negotiable and non-withdrawable. Any movement of securities under a self custody arrangement shall be coursed through the Administrator.

Notwithstanding the provisions herein, an entity may be accredited as an Administrator and a Custodian provided that such entity shall be prohibited from acting as both Administrator and Custodian with respect to the same particular PERA account.

(d) “Early withdrawal” shall pertain to (i) any withdrawal of PERA Assets prior to reaching the age of fifty-five (55) years or the death of the Contributor, except when the entire proceeds from such withdrawal are immediately transferred to another PERA Investment Product and/or another Administrator; (ii) any withdrawal of PERA Assets before the Contributor has made contributions to his PERA for at least five (5) years, except when the entire proceeds from such withdrawal are immediately transferred to another PERA Investment Product and/or another Administrator; or (iii) a premature termination as described in Section 11 of the PERA Act of 2008 and PERA Rule 13 below.

(e) “Investment Manager” is a regulated entity, accredited by the concerned Regulatory Authority and authorized by the Contributor, pursuant to a written investment management agreement, to make investment decisions for his PERA. As such, it shall assume fiduciary duty and responsibility for PERA Investments. An Investment Manager shall act with utmost fidelity by observing policies directed towards confidentiality, scrupulous care, safety and prudent management of PERA funds.

(f) “Personal Equity and Retirement Account (PERA)” refers to the voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines.

(g) “PERA Assets” mean the aggregate of the assets in the PERA at any one time, including the cash funds and the PERA investment products into which they are invested and reinvested, and all the income earned therefrom.

(h) “PERA Investment Product” refers to:

i. unit of unit investment trust fund;
ii. share of stock of mutual fund;
iii. annuity contract;
iv. insurance pension product;
v. pre-need pension plan;
vi. government securities;
vii. share of stock or other security listed and traded in a local exchange;
viii. exchange-traded bond; or
ix. any other category of investment product or outlet which the concerned Regulatory Authority may allow for PERA purposes, provided that the product must be non-speculative, readily marketable, and with a track record of regular income payments to investors.

To qualify as a PERA Investment Product, each specific product must be approved by the concerned Regulatory Authority in accordance with the provisions of PERA Rule 5 before its income or distribution can be granted tax incentives and privileges pursuant to the PERA Act of 2008.

(i) “Regulatory Authority” refers to the Bangko Sentral ng Pilipinas (SSP) as regards banks, quasi-banks, trust entities and other supervised financial institutions; the Securities and Exchange Commission (SEC) for investment companies, investment houses, stockbrokerages and pre-need plan companies; and the Office of the Insurance Commission (OIC) for insurance companies.

(j) “Overseas Filipino” refers to (1) an individual citizen of the Philippines who is working or deriving income from abroad, including one who retained or reacquired his Philippine citizenship under Republic Act No. 9225, otherwise known as the “Citizenship Retention and Reacquisition Act of 2003″; or (2) the legitimate spouse, whether or not said spouse is of Filipino ancestry, and the children of the Filipino citizen mentioned in item (1) hereof.

PERA Rule 4 – PERA Market Participants: Administrator, Investment Manager and Custodian.

PERA Rule 4.A. – Administrator.

1. Entities eligible to act as Administrators

An entity must possess both the Qualification and Accreditation Certificate issued by the concerned Regulatory Authority and the Bureau of Internal Revenue, respectively, in order to act as an Administrator.

The following entities may apply with the concerned Regulatory Authority for prequalification as a PERA Administrator:

2. Pre-qualification requirements for the Administrator.

The concerned Regulatory Authority shall issue a Qualification Certificate to the applicant upon its compliance with the following requirements:

(a) The applicant maintains a net worth of at least One Hundred Million Pesos (Php100, 000,000.00) at all times.

Net worth shall refer to the combined capital accounts of the Administrator which shall mean the total of the unimpaired paid-in capital, surplus and undivided profits, less:

1) The one percent (1 %) of the book value of the total volume of PERA assets administered and other capital adjustments as may be required by the concerned Regulatory Authority;

2) Total outstanding unsecured credit accommodations, both direct and indirect, extended by the Administrator to directors, officers, all stockholders and their related interests (DOSRI); and

3) Appraisal surplus or appreciation credit as a result of appreciation or an increase in the book value of the assets of the Administrator.

DOSRI cited in item a(2) above shall refer to that provided in the Subsection X326.1 of the BSP Manual of Regulations for Banks (MORB), provided that for purposes of this 1 As defined under Republic Act No. 2629, otherwise known as the Investment Company Act provision, references to a bank as an entity shall be understood to include references to any other type of entity acting as Administrator.

(b) It has adopted a Manual of Corporate Governance approved by the concerned Regulatory Authority, and is in full compliance therewith.

(c) It has a clear and sufficient organization plan or structure of its personnel who will perform the PERA administration functions, stating the definition of the duties and responsibilities as well as the line and staff functional relationships.

(d) It possesses adequate systems and technological capabilities, and the necessary technical expertise and personnel to administer all types of PERA Investment Products, ensure the proper recording and tracking of a Contributor’s PERA(s), and perform the other required functions of a PERA Administrator.

(e) It has submitted proof that it has sufficient personnel who have undergone the requisite training prescribed by the concerned Regulatory Authority to educate the Contributor on:
i. The nature of a PERA;
ii. Privileges, conditions and requirements of a PERA;
iii. The risks and benefits of each type of PERA Investment Product; and
iv. Respective roles of the Administrator, Investment Manager and Custodian.

(f) It has submitted to, and the concerned Regulatory Authority has approved, the following forms which the Administrator shall use in dealing with the Contributor and his PERA:

1) Pre-Acceptance Disclosure Policy described in PERA Rule 6.A.2.a;
2) Client Suitability Assessment Questionnaire referred to in PERA Rule 6.A.2.b(i);
3) Risk Disclosure Statement, which shall include the standard minimum information referred to in PERA Rule 6.A.2.d below; and
4) Contract between the Contributor and the Administrator referred to in PERA Rule 6.A.2.c.

(g) It has submitted to, and the concerned Regulatory Authority has approved, its schedule of fees and charges to be imposed for its services as Administrator.

(h) It has submitted a certification by its Chief Executive Officer (CEO) of the applicant’s compliance with all the qualification requirements and an undertaking to comply with the aforementioned requirements while it acts as an Administrator.

Failure to satisfy any of the above requirements shall be a ground for the denial of the application, without prejudice to the re-filing of an application.

3. BIR Accreditation Requirements for Administrator.

To be accredited by the BIR as a PERA Administrator, the applicant must file an Application for Accreditation (BIR Form No. ___) in triplicate copies (2 copies for the BIR and 1 file copy for the applicant) to the Taxpayer’s Service Section (TSS) of the Revenue District Office (RDO) having jurisdiction over the applicant’s principal place of business, and shall pay an Accreditation Fee of Five Hundred pesos (P500.00) to the Accredited Agent Bank (AAB) located within the aforementioned RDO. The Application for Accreditation and the Official Receipt of Payment of Accreditation Fee shall be accompanied by the following documents:

a. Qualification Certificate issued by the concerned Regulatory Authority;
b. Certified true copy of the current Certificate of BIR Registration;
c. BIR Tax Clearance; and
d. Duly stamped received copy of the Income Tax Returns and Value-Added Tax or Percentage Tax Returns (if any), filed for the year immediately preceding the date of application for accreditation.

4. Core Functions of the Administrator

An entity shall perform the following in its role as a PERA Administrator:
a. educating and inculcating financial literacy in the Contributor;
b. opening the PERA account/s in the name of the Contributor;
c. receiving and recording the cash contributions from the Contributor for investment in PERA products;
d. implementing the Contributor’s and/or his Investment Manager’s instructions on where to invest the PERA funds;
e. ensuring that PERA contributions are invested and reinvested in accordance with the prudential guidelines set by the Regulatory Authorities;
f. observing PERA contribution limits for tax purposes and enforcing withdrawal limits;
g. reporting to the SIR and the Contributor the contributions made to the PERA and the withdrawals therefrom;
h. computing the values of investments in accordance with internationally accepted accounting and valuation standards, and reporting the same to the Contributor, the concerned Regulatory Authority and the SI R;
i. custodizing the cash and securities comprising the PERA with the Custodian;
j. applying for SIR Income Tax Credit Certificates on behalf of the Contributor;
k. ensuring that appropriate taxes and penalties relative to PERA are paid to the Government; and
i. keeping and consolidating records of all contributions, investments, earnings, expenses and withdrawals from the PERA and the valuations of the PERA assets, and making regular reports thereon to the Contributor and the concerned Regulatory Authority on a regular basis or upon the Contributor or concerned Regulatory Authority’s request.

5. Security for the Faithful Performance of Administrators

As a security for the faithful performance of its duties under the PERA Act of 2008, an Administrator shall hold government securities, equivalent to one percent (1 %) of the book value of the total volume of PERA assets administered, earmarked in favor of the Regulatory Authority; provided that the Administrator shall issue an authorization in favor of the respective Regulatory Authority to withdraw, dispose and disburse the proceeds thereof to settle any claims arising from the breach of its duties as evidenced by a final and executory court order; Provided further that the Administrator shall not withdraw, transfer or replace such earmarked securities without prior written instruction from the concerned Regulatory Authority; and provided finally that the Regulatory Authority shall determine the terms of the government securities eligible for such purpose. The security for the faithful performance of Administrator functions shall be in addition to and shall be treated separately from the capital, surplus and undivided profits of the Administrator.

The concerned Regulatory Authority shall determine on a quarterly basis the sufficiency of the security deposit based on the average value of the administered assets for the quarter. Any deficiency of security deposit must be replenished within one week from the end of the quarter. Failure to maintain sufficient security deposit after such period shall be subject to appropriate sanctions.

PERA Rule 4.B – Investment Manager.

1. Entities Eligible to act as Investment Manager

The following entities may apply with the concerned Regulatory Authority for accreditation as Investment Manager:

a. trust entities licensed as such by the BSP;
b. investment company advisers licensed as such by the SEC; and
c. other entities or individuals as may be determined by the concerned Regulatory Authority as having the qualifications to be accredited as an Investment Manager.

2. Accreditation Requirements for Investment Managers
An entity applying for accreditation shall file a written application certified by the CEO with the concerned Regulatory Authority and submit the following documentary requirements:
a. Written supervision and control procedures for the conduct of the investment management functions;
b. Proof of at least 5 years experience in professional investment management;
c. Certified true copy of educational, professional/technical or other academic qualifications of its principal officers;
d. Copy of its form contract to be utilized. The agreement between the Contributor and the Investment Manager shall contain the following minimum contents:

1) Overall investment philosophy, standards and practices of the Investment Manager
2) Validation of Contributor’s Client Suitability Assessment and Investment Policy Statement made by Contributor’s Administrator referred to in PERA Rule 6.A.2.b (i) and (ii).

e. A schedule of commission charges and/or other fees it will charge for its services; and
f. such other requirements or qualifications as the concerned Regulatory Authorities may deem necessary.

3. Core function of an Investment Manager

An Investment Manager shall make investment decisions for and in behalf of the Contributor in accordance with the authority granted by the Contributor; provided that an Investment Manager shall not be allowed to recommend or sell its own investment products or that of its subsidiaries and affiliates. Such prohibition shall likewise apply to an Administrator who acts as an Investment Manager by reason of being a holder of a trust license pursuant to PERA Rule 3(a).

PERA Rule 4.C – Custodian.

1. Accreditation Requirements

a. Cash Custodian

In addition to the standard pre-qualification requirements for the grant of banking authorities enumerated in Appendix 5 of the MORS, banks applying for authority to act as cash custodian for PERA shall also comply with the following conditions:

1) The applicant bank must have complied with the minimum capital required under Subsections X1 06.1 and X1 06.2 of the MORS; and
2) The Bank’s capital adequacy, management, earnings, liquidity, and sensitivity to market risk (CAMEL) composite rating in its latest examination is not lower than “3” with management component score of not lower than “3”.

b. Securities Custodian

Only banks and other entities with trust license which have complied with the requirements under Subsection X441.5 of the MORS may be accredited as securities custodian.

The BSP may issue from time to time rules and regulations on the accreditation requirements for cash and securities custodian.

2. Core Functions of a Custodian

a. Cash Custodian
1) To receive all funds in connection with the PERA;
2) To receive instructions from the Administrator with regard to the custody and disposition of all funds of the PERA; and
3) To report to the Contributor, the Administrator and the concerned Regulatory Authority within ten (10) days after the end of each quarter all financial transactions and all funds in its custody under a PERA.

b. Securities Custodian
1) To maintain custody of all securities, evidence of deposits or other evidence of investment;
2) To receive instructions from the Administrator with regard to the custody and disposition of non-cash assets of the PERA; and

3) To report to the Contributor, the Administrator and the concerned Regulatory Authority within ten (10) days after the end of each quarter all financial transactions and all documents in its custody under a PERA.
PERA Rule 4.D – Grounds for Suspension or Revocation of Accreditation of Administrator, Investment Manager or Custodian.

The qualification of an Administrator, and the accreditation of Investment Manager and Custodian may be refused, restricted, suspended or revoked by the concerned Regulatory Authority if, after due notice and hearing, the concerned Regulatory Authority determines that the applicant or licensee:

1. Has willfully violated any provision of the PERA Act of 2008, the PERA Rules or any regulations and issuances by the concerned Regulatory Authority made pursuant hereto, or any other law administered by the concerned Regulatory Authority relevant to its function as a PERA market participant, or providing prudential standards for asset management or has aided, abetted, counseled, commanded, induced or procured such violation;
2. Has failed to supervise, with a view to preventing such violation, a person associated to the applicant or licensee by virtue of an agreement or other types of arrangement and who commits such violation;
3. Has willfully made or caused to be made a materially false or misleading statement in the application for pre-qualification or report filed with the concerned Regulatory Authority, or has willfully omitted to state any material fact that is required to be stated therein or necessary to make the statement therein not misleading;
4. Has failed to maintain the qualifications or requirements for accreditation prescribed under these PERA Rules or has failed to maintain compliance with any of them;
5. Has failed to carry on and manage its PERA-related business and activities in a proper, diligent and efficient manner to the prejudice of the Contributor;
6. Has been subject to regulatory sanctions for (1) violations, which the concerned Regulatory Authority determines to affect its operating conditions and ability as a PERA market participant, such as but not limited to violations affecting required capitalization and/or solvency, or (2) any act or behavior prejudicial to the Contributors;
7. Has been enjoined or restrained by a competent body from engaging in securities, banking, or insurance activities;
8. Has failed to enforce or monitor PERA contribution limits entitled to tax incentives; or
9. Has failed to manage or adequately address conflicts of interest in the performance of its functions, which may be identified by the concerned Regulatory Authority as prejudicial to the interests of the Contributor. For purposes of this subsection, the term “competent body” shall include a foreign court of competent jurisdiction and a foreign financial regulator.

PERA Rule 4.E. – Duties of the Administrator, Investment Manager or Custodian in the Event of Suspension or Revocation of their Accreditation

1. Common Provisions to Administrator, Investment Manager and Custodians
In the event of suspension or revocation of the qualification of an Administrator, or the accreditation of an Investment Manager or Custodian, the concerned entity shall, within three (3) working days from receipt of notice of suspension or revocation from the concerned Regulatory Authority, advise the Contributors of such suspension or revocation by way of direct written notice to each Contributor and through the posting of notices in the premises of the head office and branches of the Administrator, Investment Manager or Custodian.
The Contributor should advise the Administrator of his choice of a new Administrator, Investment Manager or Custodian within three (3) working days from receipt by the Contributor of such notice of suspension or revocation.

2. Administrator
In case of a revocation of the Administrator’s qualification, the Administrator shall effect the transfer of Contributor’s PERA Assets to the new Administrator of the Contributor’s choice, within two working days from receipt of Contributor’s advice on the chosen Administrator.
In case of a suspension of the Administrator’s qualification, the Contributor may opt to transfer his PERA to a new Administrator and the suspended Administrator shall effect the transfer of the PERA assets to the new Administrator within two (2) working days from receipt of Contributor’s advice on the chosen Administrator.
Any withdrawal of PERA Assets from the Administrator by reason of the suspension or revocation of the accreditation of the Administrator shall not be treated as early withdrawal described herein provided that the entire PERA Assets are transferred to another Administrator within the period provided in the preceding paragraph; provided that if the non-compliance with the mandatory period of transfer is due to the Administrator, it shall be personally liable for the early withdrawal penalties on such account.
The BIR may issue rules and regulations on the refusal or revocation of SIR accreditation of an Administrator.

3. Investment Manager
In case of suspension or revocation of the accreditation of the Investment Manager, the Investment Manager shall likewise advise the Administrators of the Contributors. Absent any advice from the Contributor on the choice of a new Investment Manager, the Investment Manager shall turn over to the Administrators such records and documents in his possession pertaining to the Contributors and their PERA within three (3) working days from notification.

4. Custodian
In case of suspension or revocation of the accreditation of the Custodian, the Custodian shall likewise advise the Administrators of the Contributors. The Custodian, shall, within two (2) working days, turn over to the new Custodian of the Contributor’s choice, with the assistance of the Administrator, all of the Contributor’s PERA assets in its custody. The Custodian shall also submit to the Administrator a report on all financial transactions and documents in its custody under the PERA within the same period.

PERA Rule 5 – PERA Investment Product.

A. Prior Approval for PERA Investment Product

1. An Investment Product falling under any category of PERA Investment Products enumerated in PERA Rule 3.A(h), must be approved by the concerned Regulatory Authority before the BI R can grant tax-exempt privileges to its holders.
2. Any other investment product or outlet may be offered as a PERA Investment Product, provided that the concerned Regulatory Authority approves such if in its judgment, other investment product or outlet shall be:
a. Non-speculative;
b. Readily marketable; and
c. Have a track record of regular income payment to investors.
The concerned Regulatory Authority shall issue guidelines relative to the application of the aforementioned criteria in qualifying an investment product or outlet as PERA Investment Product.

B. Disclosure of Risks

The concerned Regulatory Authority shall prescribe the standard minimum information on the nature and risks of each category of PERA Investment Product which all Administrators and Investment Managers shall be required to give all Contributors who engage their services. (General Risk Disclosure Statement)
A risk disclosure statement in conformity with the form prescribed by the concerned Regulatory Authority shall be a requirement for the approval of a PERA Investment Product. Such statement shall be provided by the Administrator and/or the Investment Manager to the Contributors who may wish to invest therein. (Specific Risk Disclosure Statement)

The Administrator and/or the Investment Manager and the Contributor shall affix their signatures in the General Risk Disclosure Statement which shall form part of the Administrator’s files.

C. Classification of PERA Investment Products

The Administrator must classify individual PERA products according to the following investor-risk profile classification:

1. Conservative – for investment products which are investment grade and composed of highly liquid investments, government securities, Republic of the Philippines’ bonds, deposits with local banks/branches of foreign banks operating in the Philippines and deposits with financial institutions provided that said financial institution has at least an investment grade credit rating from a reputable credit rating agency duly accredited by the SEC.

2. Moderate – for investment products which may provide potential returns that are higher than the regular traditional deposit products but with higher level of risk.

3. Aggressive – for investment products which provide considerably high return on capital but may involve volatility of returns and higher possibility of loss of investment.

The Administrator must disclose such classification for each category of PERA Investment Product to the Contributor.

D. Valuation of PERA Investment Products

Each PERA Investment Product shall be valued in accordance with the valuation methodology, standards and reporting requirements as prescribed by the concerned Regulatory Authority for that category of PERA Investment Product; provided that such valuation methods and standards are in accordance with internationally accepted accounting and valuation standards.

PERA Rule 6. – Establishment and Administration of PERA.

PERA Rule 6.A. – Establishment of PERA.

1. A Contributor may create and maintain a maximum of five (5) PERA at any one time, provided the Contributor shall designate and maintain only one (1) Administrator for all his PERAs. Each PERA shall be confined to one category of investment product.

The Contributor shall make all investment decisions pertaining to his PERA. However, he has the option of appointing an Investment Manager, either in writing or in electronic form, to make investment decisions on his behalf without prior consultation.

2. The Administrator must observe the following procedures in the establishment of a PERA:

a. Pre-Acceptance Disclosure Policy
The Administrator shall adopt a Pre-Acceptance Disclosure Policy which shall provide for the disclosure to the potential Contributor of the following:
1) the nature of a PERA, the privileges and conditions of its establishment; emphasis must be placed on the long-term nature of PERA, the conditions for tax exemption and penalties for early withdrawal unless the early withdrawal is allowed under the exceptions provided in the PERA Act of 2008;
2) the category and classification of PERA Investment Products available to a Contributor;
3) the risks associated with each category of PERA Investment Product and forming part of the Risk Disclosure Statement; and
4) the specific obligations and responsibilities of the Administrator, Investment Manager and Custodian of PERAs.

b. Account Opening Process
The account opening process shall at least involve the following:

1) Conduct of Client Suitability Assessment

The Administrator shall require Contributors to accomplish a client suitability questionnaire prior to the acceptance of such Contributor’s PERA investment.

The Client Suitability Assessment shall aim to provide the Administrator with information leading to the prudent administration of the PERA suited to the investment objectives and risk tolerance of the Contributor. The Client Suitability Assessment shall be formulated to solicit, at the minimum, the following information:

a) Personal Data – Minimum personal information that are unique to the Contributor which shall also cover demographics and know-your-client (KYC) information, as required by the Anti-Money Laundering Act of 2001, as amended, the designated beneficiaries and other relevant personal information.

b) Investment Objective – A clear statement or definition of the Contributor’s investment goals/purposes.

c) Knowledge and Financial Sophistication – The Administrator must take into account the knowledge, experience, and financial sophistication of the potential Contributor to assess the level of investment sophistication. Experience relates to the categories of investment products the Contributor is familiar with, acquired from actual/personal investment experience, or of similar investment circumstances.

d) Risk Tolerance – The Administrator shall classify a Contributor in accordance with its pre-set internal risk classification only after a careful and objective overall assessment of the Contributor’s personal and financial circumstances, attitude towards risk, investment expectations, level of investing experience, and the degree of uncertainty that the Contributor can handle in regard to a negative change in the value of his/her investment PERA product.

2) Formulation of Investment Policy Statement

Based on the results of the Client Suitability Assessment the Administrator shall formulate an Investment Policy Statement which shall communicate to Contributors the results of the assessment. The Investment Policy Statement must reflect the investment objectives and risk tolerance of the Contributor and provide a clear frame of reference for investment decisions.

It must include, at a minimum, a description of the following:
a) investment objective(s)
b) investment strategy – indicating the categories and classification(s) of PERA Investment Products suited to the Contributor’s investment objective(s).
c) investment performance review – indicating proposed market benchmarks, if any, and the desired frequency of the performance review / reporting.
d) investment limits – identifies any limitation which the Contributor may have for the PERA.

A copy of the Investment Policy Statement shall be furnished the Contributor, and shall form part of the Contributor’s contract with the Administrator.

c. Documentation

The contract between the Administrator and the Contributor shall be established formally through a written agreement which shall contain the following provisions:

1) Nature of the relationship between the Administrator and Contributor – whether that of trust or agency;

2) Description of the services to be provided;

3) All fees and charges to be imposed and how the charges are calculated;

4) Reporting and notice obligations of the Administrator to the Contributor;

5) Identification of the Contributor’s Investment Manager, if any, authorized by the Contributor to direct the PERA investments;

6) Provision for the appointment by the Contributor of a Custodian unrelated to the Administrator; and

7) General Statement on the long-term nature of PERA, the conditions for tax exemption and penalties for early withdrawal.

d. Risk Disclosure Statement

The Administrator shall provide the Contributor with a clearly stated and easily understood General Risk Disclosure Statement, which shall form part of the contract between the Administrator and the Contributor. The Risk Disclosure Statement shall contain, among others, the following provisions:

1) The general risks associated with each category of PERA Investment Product, as provided in PERA Rule 5.2 above;

2) Cautionary statement on the general risks of investing associated with each category of PERA Investment Product;

3) Such statement must be given due prominence, and not to be concealed or masked in any way by the wording, design or format of the information provided;

4) Advisory statement for certain types of PERA Investment Products that said Investment Products can be subject to sudden and sharp falls in value such that the Contributor may lose some or all investment;

e. Investment Options

The Administrator shall inform the Contributor of the full range of PERA Investment Products with emphasis on the specific category of products corresponding to his risk profile classification as borne by the results of his Client Suitability Assessment. The Administrator, however, shall provide a process for allowing Contributors to invest in PERA Investment Products not falling within his risk profile classification; provided that any such investment may be allowed only upon the prior written instruction of the Contributor.

The Contributor shall indicate in writing whether he intends to make investment decisions for his own PERA or if he intends to appoint an Investment Manager.

PERA Rule 6.B – Account Administration.

It is the duty of the Administrator to administer the PERA and perform its core functions as PERA Administrator solely for the benefit of the Contributor.

PERA administration shall involve the following basic duties, among others:
1. Reporting to the BIR on:
a. Establishment of a PERA by the Contributor;
b. Tax-privileged contributions made to a PERA;
c. PERA investment products to which the tax-privileged Contributions are invested;
d. Termination of a PERA or withdrawals made by the Contributor; and
e. Taxes withheld and penalties paid in case of early termination or withdrawal.

2. Applying for tax credit certificates from the BIR for and behalf of the Contributor and furnishing the same to the Contributor.

3. Reporting to the Contributor the sale and purchase of PERA Assets.

4. Providing the Contributor, at least quarterly, with a summary of the following information:
a. Total contributions and withdrawals for each PERA, indicating therein the total amount of contributions entitled to tax incentives;
b. Total income earned on the Contributions, indicating those entitled to income tax exemption;
c. Total fees and charges assessed and paid by the Contributor to:
1) the Administrator for PERA administration services;
2) the Investment Manager, if any, for investment management services; and
3) the Custodian for custodial services with respect to the PERA assets;
d. Purchase and sale transactions of PERA assets implemented and those pending execution; and
e. Valuation of the PERA assets and investments.

PERA Rule 7. – Maximum Annual PERA Contributions.

A. Maximum Annual PERA Contribution and Tax Incentives thereto

The maximum amount of annual contributions entitled to a five percent (5%) tax credit shall be One Hundred Thousand Pesos (P100,000.00) or its equivalent in any convertible foreign currency at the prevailing rate at the time the Administrator receives the contribution.

If the Contributor is married, each of the spouses shall be entitled to make a maximum annual contribution of One Hundred Thousand pesos (P100,000.00) or its equivalent in any convertible foreign currency to his/her respective PERA.

Overseas Filipinos shall be allowed to make maximum contributions double the allowable maximum amount provided herein.

A Contributor has the option to contribute more than the maximum annual amount prescribed herein, provided that the excess contribution shall no longer be entitled to a tax credit of five percent (5%) and that the investment income made therefrom is not exempt from tax.

The Secretary of Finance may adjust the maximum contribution from time to time, taking into consideration the present value of the said maximum contribution using the Consumer Price Index as published by the National Statistics Office, the fiscal position of the government and other pertinent factors.

B. Special Rules for Overseas Filipinos

1. Special requirements for Overseas Filipinos

An Overseas Filipino can avail of the tax incentives corresponding to his contributions of twice the allowable maximum amount, upon submission of the following additional requirements:

a. For an individual citizen of the Philippines who is working or deriving income from abroad, he shall submit the Overseas Employment Certificate (OEC) or its equivalent document issued by the Philippine Overseas Employment Administration (POEA).

b. For an individual who has retained or reacquired his Philippine citizenship under Republic Act No. 9225, otherwise known as the “Citizenship Retention and Reacquisition Act of 2003″, he shall submit the Identification Certificate issued by the Bureau of Immigration, to prove his reacquisition of Philippine citizenship, and his income tax return filed in the foreign country, to show that he is earning income in such foreign country.

c. For the legitimate spouse of the individual referred to in (i) and (ii), the marriage certificate shall be submitted in addition to the documents mentioned in (i) and (ii).

d. For any child of the individual mentioned in letter (i) and (ii), the birth certificate of the child shall be submitted in addition to the documents mentioned in (i) and (ii).

PERA RULE 8 – Employer’s Contribution.

A private employer may contribute to its employee’s PERA to the extent of the maximum amount allowable to the Contributor: Provided, however, that the employer complies with the mandatory Social Security System (SSS) contribution and retirement pay under the Labor Code of the Philippines. Such contribution shall be allowed as a deduction from the employer’s gross income. The Contributor, however, retains the prerogative to make investment decisions pertaining to his PERA.

PERA Rule 9. Separate Asset.

The PERA shall be kept separate from the other assets of the Administrator/Custodian and shall not be part of the general assets of the Administrator/Custodian for purposes of insolvency.

PERA Rule 10 – Tax Treatment of Contributions.

The Contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution: Provided, however, that in no instance can there be any refund of the said tax credit arising from the PERA contributions. If the Contributor is an overseas Filipino, he shall be entitled to claim tax credit from any tax payable to the National Government under the National Internal Revenue Code of 1997, as amended.

PERA Rule 11 – Tax Treatment of Investment Income.

All income earned from the investments and reinvestments of the maximum amount allowed herein are tax-exempt.

PERA Rule 12 – Tax Treatment of Distributions.

All distributions in accordance with PERA Rule 14 hereof are tax-exempt.

PERA Rule 13- Premature Termination.

A. Any termination not falling under PERA Rule 14 on tax-free distributions shall constitute premature termination of a PERA and shall be treated as an early withdrawal under PERA Rule 15 hereof: Provided, That the penalties thereunder shall not apply if the PERA Assets are transferred to another PERA investment and/or another Administrator within the mandatory periods herein.

B. Premature termination shall not occur in the event that the Contributor, upon giving the instruction to terminate the PERA or to withdraw the PERA Investment Products, directs the Administrator to transfer the entire proceeds therefrom to other PERA Investment Products and/or to another Administrator.

PERA Rule 14 -Tax -Free Distributions Upon Retirement/Death.

A. Upon attaining the age of fifty-five (55) years and subject to the requirement that the Contributor has made contributions for at least five (5) years, the Contributor may elect to terminate the PERA and withdraw the PERA Assets therefrom.

The Contributor shall inform the Administrator whether he elects to receive the proceeds of his PERA in either lump sum or pension for a definite period or lifetime pension.

Notwithstanding the presence of the conditions for tax-free distributions, the Contributor may opt to continue his PERA and enjoy the corresponding tax-privileges.

B. Upon the death of the Contributor, the Administrator shall terminate the PERA and release the PERA Assets to the designated beneficiary/ies. However, should there be no designated beneficiary/ies, the PERA Assets shall be paid to the estate of the deceased Contributor in accordance with the laws on succession and Rules of Court. The proceeds of the PERA distribution shall not form part of the estate subject to estate tax.

PERA Rule 15 – Penalty on Early Withdrawal.

A. Any premature termination under PERA Rule 13 shall constitute an early withdrawal subject to penalties.
The Administrator shall forthwith:
1. Compute and withhold from the proceeds due to the Contributor the early withdrawal penalty in an amount equivalent to the tax incentives enjoyed by the Contributor during the entire period of the PERA.
2. Notify the BIR of the early withdrawal of the PERA and remit the early withdrawal penalties withheld from the Contributor.

B. No early withdrawal penalty shall be imposed on any withdrawal of funds upon presentation of the following documents evidencing the purposes stated under Section 13 of the PERA Act of 2008:
1. A notarized doctor’s certificate attesting to an accident or illness-related hospitalization in excess of thirty (30) days; or
2. Certification from the pertinent government agency that the Contributor has been subsequently rendered permanently totally disabled as defined under the Employees Compensation Law, Social Security Law or Government Service Insurance System Law.

C. The distribution of the funds for which the Contributor did not enjoy any tax incentive shall not be subject to any early withdrawal penalty.

PERA Rule 16 – Non-Assignability.

No portion of the PERA Assets may be assigned, alienated, pledged, encumbered, attached, garnished, seized or levied upon. The prohibition against involuntary attachment, garnishment, seizure or levy shall continue to apply to PERA Assets which have been distributed in accordance with Section 12 of the PERA Act of 2008 and PERA Rule 14. Assets shall not be considered assets of the Contributor for purposes of insolvency and estate taxes.

PERA Rule. 17 – Administration of Tax Incentives.

The BIR shall issue the implementing revenue rules and regulations regarding all aspects of tax administration relating to PERA.

PERA Rule 18 – Penalty.

A fine of not less than Fifty thousand pesos (P50,000.00) nor more than Two hundred thousand pesos (P200,000.00) or imprisonment of not less than six (6) years and one (1) day to not more than twelve (12) years or both such fine and imprisonment, at the discretion of the court, shall be imposed upon any person, association, partnership or corporation, its officer, employee or agent, who, acting alone or in connivance with others, shall:
a. Act as Administrator, Custodian or Investment Manager without being properly qualified or without being granted prior accreditation by the concerned Regulatory Authority;
b. Invest the contribution without written or electronically authenticated authority from the Contributor, or invest the contribution in contravention of the instructions of the Contributor;
c. Knowingly and willfully make any statement in any application, report, or document required to be filed under this Act, which statement is false or misleading with respect to any material fact;
d. Misappropriate or convert, to the prejudice of the Contributor, contributions to and investments or income from the PERA;
e. By gross negligence, cause any loss, conversion, or misappropriation of the contributions to, or investments from the PERA; or
f. Violate any provision of this Act or rules and regulations issued pursuant to this Act.
Notwithstanding the foregoing, any willful violation by the accredited Administrator, Custodian or Investment Manager of any of the provisions of this Act, the PERA Rules, relevant rules and regulations issued by the concerned Regulatory Authorities or other terms and conditions of the authority to act as Administrator, Custodian or Investment Manager may be subject to the administrative sanctions provided for in applicable laws.
The above penalties shall be without prejudice to whatever civil and criminal liability provided for under applicable laws for the same act or omission.

PERA Rule 19 – Abuse of the Tax Exemption and Privileges.

Any person, natural or juridical, who unduly avails of the tax exemption privileges herein granted shall be subject to the penalties provided in Section 17 of the PERA Act of 2008. In addition, the offender shall refund to the government double the amount of the tax exemptions and privileges enjoyed under the PERA Act of 2008, plus interest of twelve percent (12%) per year from the date of enjoyment of the tax exemptions and privileges to the date of actual payment.

PERA Rule 21 – Effectivity.

These rules shall take effect immediately upon its publication in a newspaper of general circulation.

APPROVED ON 21 OCTOBER 2009
BY:

You can download the pdf file from the BSP website.

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I was wondering if there were any updates about the Personal Equity and Retirement Account (PERA) Law (R.A. 9505), since it was heralded in the news last November 2014 that the target date for implementation was January 2015. Well, it’s now July 2015 so I decided to trace the pronouncements on PERA and what exactly is missing for it to be finally implemented.

What is the PERA Law all about?

Many people have said that the PERA Law is the Philippine equivalent of the United States’ 401(k) or Roth IRA. Well, I’m not really very familiar with both, but my idea is that they are both retirement funds which a person, throughout his lifetime, can contribute to, such that upon retirement, he/she can get tax-free benefits. In that sense, the PERA Law may be considered as the Philippine version.

I believe the PERA Law was conceptualized so that Filipinos will be encouraged to save more, and not just rely on the Social Security System (SSS) which I think many agree has been giving pension not enough to live on (I think around P6,400 a month maximum?). It’s quite alarming that at present, SSS’ fund life is only projected to last until 2042 considering that it pays so little pension. Let’s not even start on the bonuses that they give to their officials inspite of that. In contrast, with the PERA Law, the investments will be managed by financial institutions who (I hope) will do a better job.

History of the PERA Law

The PERA Law (R.A. 9505) was approved on August 22, 2008. Its Implementing Rules and Regulations were approved on October 21, 2009.

The Bureau of Internal Revenue (BIR) released Revenue Regulations No. 17-2011 in 2011 and this took effect on January 1, 2012. These regulations are crucial since the advantages of the PERA Law lie mainly on its tax advantages.

Section 14. Issuance of Guidelines and Procedure – A separate Revenue Memorandum Order (RMO) shall be issued defining the guidelines and procedure for proper administrative reporting to the Bureau of Internal Revenue of PERA Transactions involving Contributions, Income, Withdrawals and/or Termination including the Administrator’s operational expenses relative to PERA management. The same RMO shall include the procedure to guide the PERA Processing Office in all the matters involving BIR PERA-related transactions including all the PERA-related forms and formats for reporting.

To date, there is still no RMO on the PERA Law. I believe that when this RMO is released, that is the time when the PERA Law will finally be implemented. To be fair, the proper recording of transactions and implementation of the tax credits will really be the backbone of the implementation of the law so perhaps that’s way the BIR is not yet finished with it. I’m not sure though if the possible tax revenues that will be lost is also a factor in the delay.

The next update came three (3) years later, when the Bangko Sentral ng Pilipinas (BSP) approved on November 28, 2014, Circular No. 860, Series of 2014, which embodied the Guidelines on the Qualification/Accreditation Requirements of Personal Equity and Retirement Account (PERA) Market Participants and PERA Investment Products (“Guidelines”).

The Guidelines are quite straightforward, and I actually think it’s possible that the BSP already has accredited PERA Market Participants and PERA Investment Products. I believe BPI and BDO have been ready to implement the PERA Law since it was passed in 2008. I noted though that in the Guidelines, an Administrator who has already been issued a “Qualification Certificate” by the BSP still needs to file an application for accreditation with the BIR to complete its application process to become a PERA administrator. And since there is still no BIR RMO, there is still a dead end at this point.

Not as publicized was the approval on December 2, 2014 of BSP Memorandum No. M-2014-045 which embodied the Operational Guidelines on the Administration of the Personal Equity and Retirement Account (PERA).  I suggest those who are interested to invest under the PERA Law read this since this contains the documents which a PERA participant needs to sign, and other important information:

• Minimum Documentary Requirements for Account Opening
• Pre-Acceptance and General Disclosure Statement
• PERA Client Suitability Assessment
• Investment Policy Statement for PERA
• PERA Administration Agreement
• PERA Investment Management (Advisory) Agreement
• PERA Contribution and Investment Instruction Form
• Cash Custody Agreement
• Securities Custody Agreement
• PERA Notice of Withdrawal/Termination Form

Interesting Features of the PERA Law

Since my background is in tax, I was naturally drawn to the tax features of the PERA Law. Here are some of the interesting tax planning ideas I had:

• Since the proceeds of the PERA distribution shall not form part of the estate subject to estate tax, it should be considered as an important estate planning tool, similar to life insurance proceeds where the beneficiaries are designated as irrevocable.
• If a person has contributed for at least 5 years, and has reached 55 years old, he/she can withdraw his/her PERA account funds tax-free. This is a good incentive for Filipinos to set aside money specifically for retirement, specially since there are withdrawal penalties if one withdraws prior to age 55 and 5 years of contributions.
• Employers may contribute to the PERA account of its employees, but not to exceed the maximum allowable amount per year. For example, if the employee contributed P1,000.00 to his/her PERA account, his/her employer can contribute P99,000.00 to his/her PERA account. This amount will not be subject to withholding tax on wages (WTW). Then I remembered this can be used in addition to BIR RR 3-2015 which increased the tax-free limit of 13^th month pay and other benefits from P30,000 to P82,000. I think this employer contribution feature in PERA can be used as a tax planning measure for bonuses recharacterized as PERA contributions.
• Five percent (5%) of the employee’s contributions to his/her PERA account may be considered as tax credit against his income tax. The employer will accordingly reduce the amount of withholding taxes to be withheld from the employee’s salary. Assuming that the maximum contribution for a Philippine-based Filipino will be made, i.e., P100,000.00 per year, the income tax credit will be P5,000.00. Plus, the employee’s PERA contribution will also not be included in the amount of gross income subject to WTW, as it will be treated as a deduction similar to mandatory contributions to SSS and Pag-Ibig which are very low.
• For self-employed individuals, the income tax credit will likewise be 5% of the PERA contribution.
• For Overseas Filipinos, the maximum contribution is P200,000 per year (P400,000 for a couple who are both overseas Filipinos). The 5% tax credit may also be applied to other taxes, if they have no income tax payable in the Philippines.
• Income from PERA investments are tax-exempt. Thus, if you will be investing in stocks, might as well invest in them through your PERA account.
• Another benefit, though not purely tax in character, is that it seems that PERA assets cannot be reached by creditors via garnishment or levy.

When will the PERA Law be implemented?

It seems to me that the ball is now in the BIR’s court. I believe that the RMO on the PERA Law should really be forthcoming since this is good news which can prop up the ratings of the current administration, which can thus help them in the coming elections. Other than that, we Filipinos really, really need to take serious steps in securing our lives come retirement. The belief that ensuring that our children are educated = retirement plan is so outdated already.

What do you think?

The article Is the PERA Law (R.A. 9505) Ready for Implementation? appeared first on ForeclosurePhilippines.com

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Up to now, a lot of people keep asking me this question: “How do I get started with real estate investing?”. It’s quite common really. People want to invest in real estate, but don’t know how or where to start. Today, I’m going to answer this question through a video.

Maybe you’re one of those wannabe real estate investors who gather listings of foreclosed properties from several banks, and from the Sunday edition of Manila Bulletin, and yet you really don’t know what to do with all those properties. Those listings would just end up in a pile of newspapers.

I can relate because that was exactly how I felt years ago. I wanted to start investing in 2005, but I actually bought my first foreclosed property several years later.

Looking back, there were three things that helped me to begin to “see” good deals.

It’s not that there were no good deals, it’s more like I did not know what I was looking for. And yet good deals were under my nose, but I could not see them.

I have a pretty long answer to this question, so I’ll just answer through a video.

Note: This video is 26 minutes long, so grab some coffee before watching.

Click to watch video: How to get started with real estate investing

Tell me what you think by leaving a comment below the video. Thanks.

P.S. You can also ask questions there. Click here to watch the video now.

The article How To Begin Finding Good Real Estate Deals (I’ll Show You How) appeared first on ForeclosurePhilippines.com

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A public auction of PNB foreclosed properties in Cagayan, Isabela, Nueva Vizcaya, and Quirino Province, shall take place on July 30, 2015, Thursday, 2:00pm, at The Hotel Andrea, Don Jose Canciller Avenue, Cauayan City,

Isabela. More than 70 properties are included in the listing, which you can download below.

height="491" />

Bidding details

• The Bank reserves the right at anytime to pull out or update status of the properties in the event discrepancies are found.
• Inadvertent misprints shall not alter the property’s factual condition nor shall they be deemed as a misrepresentation of the property
• PRICE & STATUS OF THE PROPERTIES ARE SUBJECT TO CHANGE WITHOUT PRIOR NOTICE
• PROPERTIES FOR SALE ARE ON AN “AS IS WHERE IS BASIS”
• Prior to the auction, bidders/buyers are advised to exercise due diligence on the physical and legal conditions of the property.
• DEPOSIT: PHP 25,000.00 CASH OR MANAGER’S CHECK ONLY
  -NO DEPOSIT, NO PARTICIPATION-
• FOR INSTALLMENT BUYERS, PLEASE BRING PROOF OF INCOME (ITR, Cert. Of Employment, Bank Statement, Etc.)
• FOR REPRESENTATIVES, PLEASE BRING LETTER OF AUTHORIZATION
• Rates vary according to market value of property
• Brokers / Referrers of bidders need to be present during the auction to be eligible for commission

TERMS OF PAYMENT
1. Cash
2. Installment

A. For REGULAR SALE

– fixed 6% interest rate up to 5 years
– fixed 8% interest rate up to 5 to 10 years

B. For PABAHAY BONANZA Program
(properties 5M & below; with 20% deposit requirement)

– fixed 6% interest rate up to 10 years
– fixed 8% interest rate up to 10 to 20 years

Download the list of PNB foreclosed properties

You may download the list of PNB foreclosed properties that are for sale through auction on July 30, 2015 below.

Click to download list of

PNB foreclosed properties for for public auction in Cauayan City, Isabela on July 30, 2015

Happy Hunting!

Reminder: Please contact PNB directly for more details with regard to this public bidding and any of the properties included. Their contact details are inside the listing, which

you can download above. Thank you for understanding.

Full disclosure: Nothing to disclose. We won’t be able to attend this public sealed bidding so please contact PNB directly for more details (their contact details are included in

the listing). Thank you.

P.S. Do you want to get started with investing in foreclosed properties but you don’t know how or where to start? Check out our new and free video series for beginning investors,

href="http://bit.ly/1ftq1nI" target="_blank">click here to watch the first video

The article PNB Foreclosed Properties Auction In Cauayan City, Isabela Slated On July 30, 2015 appeared first on ForeclosurePhilippines.com

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The Housing and Urban Development Coordinating Council (HUDCC) approved HUDCC Resolution No. 2, Series of 2015 on June 8, 2015, increasing the Economic Housing loan ceiling from P1,250,000.00 to P1,700,000.00. The said resolution was published in The Philippine Star (print and digital edition) last July 14, 2015.

Philippine Star Digital Edition – Economic Housing 1.7M

What are the implications of this increase in loan ceiling?

My first thought was that more developers would be willing to produce units under economic housing since the threshold is now P1.7M. According to this article, the Philippines has a housing backlog of 5.5 million houses, and 60% of the housing needs are for socialized and economic houses.

I found a link to the Philippine Housing Industry Roadmap: 2012-2030 prepared by the Subdivision and Housing Developers Association, Inc. (SHDA) and I was happy to know that developers are working towards filling the backlog.

Aside from responding to the people’s housing needs, the developers will also be earning a handsome sum since socialized and economic housing projects are part of the 2014 Investment Priorities Plan (IPP) activities which may be granted an Income Tax Holiday (ITH) of 3 to 4 years. Considering that the corporate income tax rate is thirty percent (30%), the ITH incentive is significant. No wonder big developers all have their socialized and economic housing brands (like Amaia and Bella Vita for the Ayala Group).

I read the 2014 IPP again though and noted that socialized and economic housing for purposes of the IPP was above P450,000 up to P3M so it appears that the increase in loan ceiling as per HUDCC Resolution No. 2, Series of 2015 has no effect on the ITH.

With regard to construction standards for socialized and economic housing, the same standards under BP 220 will still apply.

What is the effect of a Home Guaranty Corporation (HGC) guaranty?

The above resolution quotes Section 15 of R.A. 8763 [HGC Act of 2000] so I took a closer look at it. It provides:

• The Corporation shall guarantee accounts under this Act, as follows:

  1. At least forty percent (40%) of guaranty accounts shall be allocated for socialized housing packages;
  2. At least thirty percent (30%) of guaranty accounts shall be allocated for low-cost housing packages;
  3. At least twenty percent (20%) of guaranty accounts shall be allocated for medium-cost housing packages; and
  4. Not more than ten percent (10%) of guaranty accounts may be allocated for open housing packages.

  For the foregoing purpose, the respective ceilings for socialized, low-cost, medium-cost, and open housing shall be jointly determined by the Housing and Urban Development Coordinating Council and the National Economic and Development Authority: Provided, That at any time, but not more often than once every two (2) years, such ceilings may be reviewed or revised to conform to prevailing economic conditions.

I then checked the Frequently Asked Questions (FAQ) page of HGC and learned the benefits of an HGC guaranty:

              What are the benefits of the HGC Guaranty?

It guarantees the payment of the guaranteed loan or investment balance outstanding and due on the principal obligation, plus interest yields of up to 11%;

It exempts the interests derived and other yields from the loan from all forms of taxes(up to 11% rate of interests);

For socialized housing, those with contract prices of P 400,000.00 and below are entitled to the maximum cover and tax-exempt interest of up to 11%, and;

The Government of the Republic of the Philippines guarantees the payment of HGC’s obligations.

Home loan borrowers can borrow up to 90% of the appraisal value of collateral property.

Banks are exempt from the Banko Sentral ng Pilipinas (BSP) capital reserve requirement for HGC guaranteed loans

Banks are freed-up from administrative burden when a loan defaults

With the above, it dawned on me that since a big percentage of HGC guaranty accounts will be allocated for loans for houses costing up to P1.7 million, Pag-Ibig and other banks will have less risk should their borrowers default on their loans since they will be backed by an HGC guaranty. With less risk, they will have more incentive to lend and maybe even consider lowering their interest rates.

I tried to read more about securitization since HGC has something to do with that but right now my brain is not absorbing it (sorry!). Can anyone explain this?

What do you think are the effects of this HUDCC Resolution? Are they positive or negative?

The article HUDCC Raises Economic Housing Loan Ceiling To P1.7 Million from P1.25 Million appeared first on ForeclosurePhilippines.com

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In October 2014, I read in the news that the Bangko Sentral ng Pilipinas (BSP) will set a cap on real estate loans at sixty percent (60%) of their collateral values. I did not write about it then as I was not able to research yet on the actual BSP document. I thought of the repercussions of this policy, if true – necessarily, for a person to get a loan, he/she needs to be ready with forty percent (40%) equity (also known as downpayment). Thus, for a person to be able to purchase a P1 million property, he/she needs to have P400,000.00 ready in cash. How many people will NOT be able to purchase a property because of this policy? A lot.

Is the cap for housing loans really 60%?

The Monetary Board approved on October 29, 2014, BSP Circular No. 855 Series of 2014. It embodies the Guidelines on Sound Credit Risk Management Practices. The Media Release on the said circular, which is a little bit easier to understand, can be found here.

Here is the exact portion of BSP Circular No. 855 which mentions the 60% collateral requirement:

60 percent collateral BSP Circular No. 855

My understanding is that the loan will be considered secured only to the extent of 60% of the value of the real property used as collateral. It does not mean that the banks are allowed to lend only up to 60% of the value of the collateral. If the bank, based on its internal policy and evaluation of the borrower’s cash flow, credit history, and capacity to pay, among others, believes the borrower will be able to repay his/her loan, the bank may still lend an amount in excess of 60%. The amount in excess may be secured using other arrangements or may probably be considered unsecured, for which loan loss provisions may be made, to properly reflect the financial position of the bank.

I believe my understanding is in line with the BSP Media Release on Circular No. 855:

The BSP clarified that the cap on REM collateral value is not the same as a loan-to-value ratio limit imposed in some jurisdictions for real estate lending which is synonymous to a minimum borrower equity requirement.  Under both existing and revised rules, the minimum borrower equity requirement is bank-determined internal policy.  Current industry practice is a minimum equity requirement reportedly averaging around 20 percent.  However, under the enhanced guidelines such internal policy will be subject to close regulatory scrutiny as to whether the borrower equity requirement of a bank is prudent given the risk profile of its target market.

In other words, the equity requirement will depend on the risk profile of the bank’s target market.

My husband has noted that in the sales of BDO foreclosed assets, they now require forty percent (40%) equity while the sixty percent (60%) may be loaned. I believe this is because their requirements for “in house” loans for foreclosed asset sales are not as stringent as the regular loans.

What if the banks would require forty percent (40%) equity?

It is possible that banks would be conservative and require forty percent (40%) equity/downpayment, meaning a downpayment of P400,000.00 for every P1,000,000.00 worth of property. If this is the case, then many people will not be able to purchase a property and will just rent. This is favorable to lessors/real estate investors.

Another option would be for investors to lend at higher rates to those who will not qualify for bank loans, or to offer seller financing schemes. These may be considered as shadow banking which the BSP seeks to monitor.

As for developers, they can stretch the downpayment period so that the monthly downpayment will be affordable. If people will still not be able to buy, I believe the developers can offer some units for lease instead of for sale. This is already being done by at least one developer.

Is this Circular good for the country?

Definitely, this Circular is good for the country because it clearly spells out the details that banks need to look into when granting loans. The main purpose of the BSP is to make sure that our banks are stable and will not be unduly exposed to unmanageable bad loans that may lead to a bursting real estate bubble.

How about you, what do you think?

The article Is It True That The Maximum Loanable Amount For New Housing Loans Is Just 60% of the Appraised Value? appeared first on ForeclosurePhilippines.com

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So you probably found some very promising real estate deals using tips I shared in Video 1, which is about how you can begin finding good deals. Question is, how would you know if these potential deals can really make money after you consider costs like repairs, taxes, and transfer fees? Check out the video below to learn how.

As a real estate investor, it is our duty to make sure any deal really has enough room for a significant Return On Investment (ROI) after costs like repairs, taxes, transfer fees, and holding costs are factored in. Otherwise, it would be a waste of time, money, and effort.

In the video below, I’ll try to explain how you can do this, in just a little over 30 minutes.

Click to watch video: How to estimate repairs, taxes, and ROI for foreclosed properties

Please tell me what you think by leaving a comment below the video, and don’t forget to like and share. Thanks!

P.S. You can also ask questions after watching the video. Watch the video now.

Note: If you have not watched Video 1 of this 3-part video series, you can still watch it here: How To Get Started With Real Estate Investing

The article How To Estimate Repairs, Taxes, And ROI For Foreclosed Properties appeared first on ForeclosurePhilippines.com

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“Finding Dream Tenants and Dealing With Horror Ones” was the topic of our friend, Mr. Carl Dy, at the 2015 Money Summit held at SMX Aura Taguig last July 18, 2015. Carl is a real estate investor and the President of Spectrum Investments, a property portfolio management company. He was previously the Director for Sales of Ayala Land Inc. The topic he discussed is very, very important in securing passive income with the least headaches, so I strongly recommend that you read on.

Why real estate and why rental income?

All investments have their pros and cons. Real estate has pros and cons as well (for discussion and not debate purposes, you can check them out here (leverage), here (less risks), and here (control). Carl ably distilled real estate’s pros through stories.

Capital appreciation

According to Carl, in 1962, a lot in Bel-Air Makati cost P55/sqm and now it is around P100,000/sq. Thus, it is a good hedge against inflation. He also gave examples of the pre-selling prices of Ayala properties in BGC, Nuvali, and Greenbelt (note: Carl used to be with Ayala), the values of which have now more than doubled and the cash flow from rentals on which are now substantial.

Carl also shared the story of his lola, who, in 1976, invested P350,000 in a house and lot in Quezon City and kept P350,000 in the bank. The house is now worth P15 million while the cash is now gone. In this case, the “illiquidity” of real estate was a big plus. Liquid investments can be easily pulled out if you don’t have enough willpower to stay the course.

Cash flow

In 1984, Carl’s Aunt Lucy, who was a 35-year old housewife with 5 kids (aged 3,5,7,8, and 10 years old) suddenly became widowed. Her kids were then studying at prestigious schools like Xavier. They survived because they had a 4-door apartment in New Manila which was earning P6,000 per unit at that time. Later, they added more doors, and now, at P20,000 per month per unit, they have  a passive income of around P160,000 per month.

This, I believe, is a very, very important aspect of estate planning. Insurance agents usually make computations which require an outrageous amount for coverage because the insured amount is computed to last over many years, to be eaten up slowly but surely. Dividends from stocks are not assured and are not given every month, while living expenses need money on a day-to-day or monthly basis. The only answer (in my opinion) to monthly recurring expenses is a source of cash flow which may come from real estate or a business.

As Carl Dy pointed out, income from real estate is easy to compute and easy to manage – this was perfect for his housewife aunt. A business may be complicated and it may take some time for the spouse or children to ably manage it, and it is possible that once the main businessman is gone the business will follow soon after.

In other words, properties which provide cash flow may be passed on to many generations. Notice how the richest families in the Philippines are able to retain their wealth over centuries. You don’t have to be a rocket scientist to figure out that the richest families all have real estate investments.

The greatest secret of the rich, according to Carl Dy, is PASSIVE INCOME. They go for the golden goose instead of the golden egg, the apple tree instead of the apple fruit. They get rich while they sleep.

Positive psychological effect

Carl recommends buying your primary home first. This is because of the positive psychological effect of having your own home. It gives you a sense of security and gives you confidence to strive for more.

Your primary home will also have the benefit of capital appreciation and once you have fully paid for it, your monthly expenses will be lessened, and you can then invest the money which you have already disciplined yourself to set aside for amortization for another investment.

As you invest in more properties, you can grow your wealth continuously, slowly but surely, and as you grow more confident in your abilities you will be able to venture into different types of real estate investment, and in greater quantity with better quality. You feel a sense of fulfillment because you are contributing not only to the good of your own family, but also to the good of another family and the good of the nation – this is the highest level in Maslow’s hierarchy of needs.

When you become a lessor and know that you have a fresh supply of money every month, you can enjoy life and do what you really want to do with your time. Quite simply, it is one path (among many, yes) to financial and time freedom, definitely a goal worthy of our consistent effort.

What is a Dream Tenant?

According to Carl Dy, a dream tenant is someone who pays rent on time, stays for an extended period of time, and takes good care of the property. I would also like to add, a dream tenant is someone who doesn’t bother the landlord except for major issues.

How To Get A Dream Tenant

Have you noticed that in Filipino movies and telenovelas, landlords are almost always portrayed in a bad light, usually making a scene outside the rental property, shouting at the tenants to pay up and embarrassing tenants in the process. This stereotyping is not helping, as people become quite afraid to become landlords because of horror stories of the stereotypical tenant who doesn’t pay rent and wrecks the property. At the same time, lessees have the image in their minds that their landlord is not a good person.

So, considering the stereotypes above, how can one get a dream tenant? The straightforward answer is: Be a good landlord.

How To Be A Good Landlord

1. Start with a good property. If the property meets the needs of the tenant, for example, it’s near their workplace or the school of their children, it is secure and well-ventilated, etc., they will consider your property.
2. Make your price reasonable. Tenants will be able to compare your lease rate with others, and they will know if you took advantage of them.
3. The lease contract must be fair. I noticed that usually, the lease contract is skewed in favor of the lessor but do be open to suggestions from the lessee.
4. Stick to the contract. Do not cancel the contract without reason.
5. Be reachable. Answer your tenant’s calls. Solve their problems immediately. Tenants like well-maintained properties that don’t give them stress.
6. Maintain the place well. Aside from pleasing your current tenant, you can extend the cash flow life of your property if it is well-maintained.
7. Respect privacy. Do not come unannounced.
8. Listen to concerns. If the tenant’s requests are valid and reasonable, being amenable to their requests may make them stay in your property longer, thereby lowering your vacancy rate. Remember, if your current tenant leaves, it will take you around two months to get another tenant since you have to lean, refresh, repaint, and advertise your property. This translates to two months’ foregone income so it’s better to keep your current tenants happy.
9. Be understanding. If your tenant requests for an extension in the rent payment and it is a rare occurrence, be understanding.
10. Return the security deposit promptly. Normal wear and tear is ok.

How To Deal With Tenants From Hell

1. Avoid tenants from hell by having a good screening process.
2. Call your lawyer.
3. Ask help from the Admin Officer (if condo) or the Barangay officials
4. Offer a deal to ease them out. If they leave, you can offer to return their security deposit. It has to be sabay/kaliwaan.
5. Move on. It’s no big deal.

How To Screen Tenants

1. Check your first impression. Does the prospective tenant look like a decent, clean person?
2. Let them fill out an application form. (Note: I use a form which I got from REBAP Legal Forms. It looks like a one-page Bio-data.) Look at them when they are writing on the application form. If they are shady, they will feel uncomfortable. Ask for their reason for renting, where they were renting previously, and the reason they left. Ask for their company ID and other valid ID’s.
3. Provide them with an Offer to Lease. Include the details of the property, size, furnishings, parking, etc.
4. Call the references they listed in the application form.
5. Don’t be afraid to say no. If you don’t have a good feeling about the prospective tenant, just say no. I always remember our mentor, Engr. Cruz, who said that whenever he posts an advertisement for a property for rent, he always rejects the first person who calls. When a person is in too much of a hurry to move in, in a way “forcing” the lessor to lease the property, that is a red flag.

Tips Before Move-In Of Tenants

1. Go through the lease contract one by one with your tenant.
2. Do a move-in report. Include pictures of the condition of the property and furnishings upon move-in.
3. Get off on the right foot. Carl provides a welcome basket and a directory of food delivery companies and providers of other necessary services, and these are appreciated by clients.
4. Document all requests and put all information about the property and the lease in a folder.

Lease Contract provisions

So many people ask me about what to do in different scenarios and I always say, “Read the contract.” In the case of a lease, your contract will protect you, whether you are the lessor or lessee, so you better make it as clear and fair as possible. I like to describe a good contract as airtight and Carl describes a good contract as bullet-proof.

Carl Dy discussed the provisions in the lease contract that he uses for his rental properties. In the Money Summit, I took advantage of his promo of P2,000 for a soft copy of his actual lease contract (with free 6 Steps book). I have my own version of a lease contract, which is already a mixture of various provisions which I have seen in many lease contracts. You can make your own as well.

6 Steps To Renting Out Your Condo

6 Steps to Renting Out Your Condo

Carl also discussed the contract provisions in his lease contract in his book “6 Steps to Renting Out Your Condo,” which I highly recommend. You can buy a copy from Carl whenever he gives talks. It is very reasonably priced at only P150.

I think he will have another talk for Learning Curve this year, we will announce it once we have information about it. Please note that there is a wealth of information in his book that was not discussed in his talk so I highly recommend that you purchase it. It’s a very light read but it’s something that I believe is good to read over and over again so the wisdom will really seep into your consciousness.

Carl also has an upcoming book, “Creating Wealth in Real Estate” which I’m sure will be blessing many people once available (definitely, we will let you know). We hope to work with him very soon and help him share his knowledge to more people all over the world.

I hope you learned a lot today. If you want to watch videos of Carl Dy, please watch the videos below. Note that the last two videos are partly in Chinese.

Videos

Is there anything else you would like to know about leasing? Please let us know in the comments.

P.S. Do you want to learn how you can get started with finding good real estate deals for free? If yes, then you should check out my husband’s free 3-part video series. Jay already released Video 1 (How to get started with real estate investing), and Video 2 (How to estimate repairs, taxes, and return on investment with foreclosed properties). Video 3 will be released very soon. Sign up now to get instant access to the videos below:

Click to sign-up for a free 3-part video series on “How to get started with finding good real estate deals”

The article Finding Dream Tenants and Dealing With Horror Ones appeared first on ForeclosurePhilippines.com

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Just a quick heads-up on the public auction schedules for Unionbank foreclosed properties in Metro Manila, VisMin, and repossessed cars, for July 2015. Sorry for the short notice, I just got an email about these yesterday. Get more details below.

The 236th Special Public Auction for Visayas and Mindanao foreclosed properties will be on July 25, 2015, 9:00am, at the Cebu Country Club Banilad (Cebu City)

The 237th Special Public Auction for Luzon (includes Metro Manila) and the brand new house and lots in Amalfi, Damarinas Cavite will also be held on July 25, 2015, Saturday, 9:00am, at Function Room No. 1, 28th Flr. UnionBank Plaza, Meralco Ave. cor. Onyx Rd., Ortigas Ctr., Pasig City

Unionbank will also have a bidding for pre-owned vehicles/repossessed cars, and the deadline for submission of bids shall be on July 27, 2015.

Download the list of UnionBank foreclosed properties and view other details

To access the complete listings of Unionbank foreclosed properties and to view other details like payment terms, minimum downpayment required, interest rates, etc., just visit the following page:

UnionBank Foreclosed Properties Auction Listings (Metro Manila/Luzon/Amalfi/Repossessed Cars)

Source: Ronald Panganiban, Asset Recovery Officer – Union Bank of the Philippines

Happy hunting!

~~~

Text by Jay Castillo and Cherry Castillo. Copyright © 2008 – 2015 All rights reserved.

Full disclosure: Nothing to disclose, we won’t be able to attend these auctions.

P.S. Do you want to learn how you can get started with finding good real estate deals for free? If yes, then you should check out my free 3-part video series. I have already released Video 1 (How to get started with real estate investing), and Video 2 (How to estimate repairs, taxes, and return on investment with foreclosed properties). I will release Video 3 very soon. Sign up now to get instant access to the videos below:

Click to sign-up for a free 3-part video series on “How to get started with finding good real estate deals”

The article UnionBank Foreclosed Properties And Repossessed Cars Auctions For July 2015 appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

Here’s one more chance for delinquent real property owners in Las Pinas City as the real property tax amnesty was extended up to July 31, 2015. Affected real property owners are encouraged to take advantage of another opportunity to save their properties from being auctioned off. Check out the details below.

I helped a friend earlier today with his real property taxes in Las Pinas when I noticed the tarpaulin above, which was right in front of the Las Pinas City hall.

How to pay your real property tax

For your reference, here’s a step-by-step guide on how you can pay for your real property taxes, which you will see once you enter the Las Pinas City hall. (Note: This also applies to properties that are not tax delinquent.)

You can have all of this done in about 30 minutes if there are no long queues, and you can even enjoy free coffee.

Procedure for Senior Citizens

I was glad to see that Senior Citizens need not queue, and can immediately proceed to windows 5, 6, and 7 to secure the order of payment. The next step would be the payment of taxes in Windows 15 and 16. Please see the procedure below.

Tax amnesty details

To get more details with regard to the tax amnesty, please refer to my earlier post Real Property Tax Amnesty For Las Pinas City Ends On June 30, 2015.

I believe they simply extended the tax amnesty to July 31, 2015, although I could not find any city ordinance for this in the official website of Las Pinas City.

Anyway, for those who are covered, please don’t waste this opportunity to save your properties from being included in the next tax delinquent property auction.

The article Las Pinas City Real Property Tax Amnesty Extended Until July 31, 2015 appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

Good news for those who would like to take the real estate brokers’ exam even without having a real estate management degree! PRBRES Chairman E. G. Ong has announced that there will be another real estate brokers’ exam in the first quarter of 2016, but only for those who took the May 24, 2015 exam but did not make it (around 5,150 people). This is one scenario which I have discussed in my previous post.

I personally heard PRBRES Chairman E. G. Ong talk about this exam in the 2nd National General Membership Meeting (NGMM) of the Real Estate Brokers Association of the Philippines (REBAP) last June 26, 2015. At that time, my understanding was that the PRBRES may give an exam but it was not yet sure.

In the oathtaking ceremonies of the new real estate brokers, however, it appears that E. G. Ong made a categorical announcement that there will be another exam. Fortunately, someone was able to take a video of it (youtube user Vocalista Sixto).

And so the Board has decided, for those who did not make it in the May 24 examination, to give the flunkers a second chance. So with the permission of the Commission, we might give it (in) the first quarter of 2016. And that is to show that our industry and the real estate service profession is a very robust profession, that we want everybody to be on board. So that we can reap the glory, the success that our profession can give. It will always be good morning real estate to all…

Special 8-day review

In line with the said exam, so far I have only heard of one review school giving a special review – Urban Institute. Based on Engr. Cruz’ email, in the May 24, 2015 PRC exam, Urban’s highest passing rate by section is 74%, and they produced 11 topnotchers from Top 3 to Top 10.

I believe this is not a requirement since examinees all have the certificate for the 120-hour seminar already. However, since the examinees for the 1st quarter 2016 already did not make it in their first try, there may be some who wish to avail of this review to increase their chances of passing, or at the very least make them more confident on their second take.

Based on the RESA Law and IRR, the 1st quarter 2016 exam should be the last exam that would not require a real estate management degree.

Please note that I have not seen yet an official written announcement about this exam though. Some may be asking, what about those who did not pass in the earlier exams (2011-2014), are they also allowed to take the exam? And since they will be holding another exam, why not open it to everyone (even those who did not take the May 24, 2015 exam) and allow people to attend a 120-hour seminar? To those questions, I have no answer.

Anyway, for those interested, here are the details of the Special 8-day review to be conducted by Urban Institute:

8-DAY SPECIAL REVIEW with online FB Review until examination day in preparation for the next PRC real estate brokers licensure examination in 2016.

Available schedules: 

Section 1 – Ateneo-QC – Saturdays 8:00 AM to 12:00 PM.

September 19, October 3, 17, November 7, December 5, 12, January 9 & 16.

Section 2 – AIM-ACCM Makati – Sundays 1:30 to 6:00 PM

September 27, October 11, November 8, 22, December 6, January 3 and 17.

Section 3 – AIM-ACCM Makati – Regular Days 6:00 to 10:30 PM

September 15, October 13, November 24, December 1, 8 and 2 Tuesdays in January 2016

Other schedules and time slots may be offered later.

Covered topics are Documentation and registration and all Legal Aspects, Taxation, Finance & Economics with computations, Appraisal, Ecology and Environmental topics, CLUP, Zoning, HLURB Rules and Condominium and others.

Review Fee is P8,000.00 with 10% discount for early birds. Early birds are those fully paid 15 days before the start of the review.

For details, inquiries, and reservation, please email:  urbanet.ph@gmail.com

If you know of other review schools who may be offering a similar review, please let us know in the comments so we can include them in our post.

With regard to the nitty-gritty exam details, we will announce once we get an official announcement. I suppose examinees need to pay another examination fee and file an application again with the PRC. I hope the PRC will just look for their names and not ask for the requirements which they have already previously submitted, for a more efficient process.

Good luck to all!

The article Good News! Another Exam for Real Estate Brokers in the First Quarter of 2016 appeared first on ForeclosurePhilippines.com

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I believe that the #MMShakeDrill held today, July 30, 2015 was a success. It has definitely increased the awareness of people about earthquakes and what to do in case an earthquake occurs – this alone will save many lives. When it comes to disasters, preparation and presence of mind are very, very important.

MMShakedrill

Previous experience with disaster

I have had an experience with a natural disaster already – the infamous Ondoy on September 26, 2009. I knew there was a typhoon, and I remember seeing the water level in the Marikina River that morning and thinking that it seemed quite high. Inspite of that, I didn’t see the need to worry. Little did I know that later that morning, the water would reach catastrophic levels and destroy many properties and take many lives.

Now, Marikina has a system whereby someone always monitors the water level in the Marikina River, and they sound the sirens when the water reaches certain levels. That may be the signal for the residents to evacuate. If that system was in place when Ondoy struck, I believe so many people would have been saved.

While my previous experience was with floods, I believe that all disasters, whether floods or earthquakes or what not, need preparation and presence of mind.

Preparation

I have read about emergency kits ever since our Ondoy experience. But like everybody else, I procrastinated (sorry!). Since there was a scheduled #MMShakeDrill, I made it my personal deadline to finally prepare our emergency bag. I put it near our door so in case of emergency, it’s easy to bring. I’m not really a person with complete presence of mind during emergencies so it’s better if the procedure is a no-brainer for me. I just feel that my emergency bag is too heavy (I think I put too much canned goods and water hehe!).

Our son’s school also sent us a questionnaire about our level of preparation for an earthquake so that helped as well (in letting me know I need to prepare more!). I asked his teacher before and I learned that they have monthly earthquake drills, so that’s a relief. I also know that the physical lay-out of the school would make evacuation manageable, and the kids are quite disciplined too, so I feel at ease.

As a parent, we always think about our children and how they would be doing in case an earthquake occurs when they are in school. If you have children, I suggest you ask them about earthquake drills and their school and also personally check if the school buildings look sturdy.

Personally, I feel that my son is safe in his school because when I was in elementary in the same school during the July 16, 1990 earthquake, we had no problem getting to an open space because of the school’s lay-out. I can only pray that my son will always be safe in his school.

I also did my own research and checked bepreparedmetromanila.com,  metromanilashakedrill.com, and rappler.com, among others.

I researched about where our evacuation center would be (South Sector – Villamor). I looked for the barangay hall location as it would be the nearest evacuation center. Our family has agreed to go to a nearby vacant lot in case of emergency. I put the emergency numbers beside our home phone.

I think we can do more but for now perhaps these will do.

Infographic #MMShakedrill

I re-read my old articles on earthquakes (and its relation to real estate investing):

• Earthquakes, Faultlines, And Real Estate Investing

• Dealing With Earthquakes – The Importance Of Earthquake-Resistant Homes

• Check Geohazard Maps For Flooding And Landslide-Prone Areas Before Investing in Real Estate

I found a cool video about the study that was made on the risks for natural disasters in the Greater Metro Manila area. I appreciate that they really spent time to study the risks. At the same time, it’s quite scary to know that there’s really sound basis for us to be prepared for a disaster.

During the #MMShakeDrill

I purposely did not schedule a meeting so that I would be at home during the drill. I was expecting to hear a wailing siren (since it was announced that we would hear it since it would signal the start of the drill) but there was none. There was nothing going on and I did not even do the drop, cover, and hold since I was near the door and planned to just get out to the street. But no one went out also. So I just stayed put.

I realized that the neighborhood association should also have a system for responding to earthquakes and other disasters. We cannot expect the national or even local government to give us special attention, specially since everybody will surely be asking for help when it comes to a real emergency.

During Ondoy, so many people were calling the hotlines all at the same time, everyone was asking for help, and no one could help! You can count only on yourself! We have to be realistic. I think I will suggest that the association secure a satellite phone just in case we may need it.

At 9:29am, I received a text message from MMDA through Globe about the #MMShakeDrill. This was the message:

At exactly 10:30 AM, magaganap ang Metro Manila Shake Drill. Makilahok. Drop, cover, and hold for 45 seconds. This public service advisory is brought to you by MMDA and Globe.

I thought that this may already be the implementation of R.A. 10639 or the “Free Mobile Disaster Alerts Act”. Very good! I received another text at 10:56 am, informing me of the start of the drill. Hmm, 26 minutes late. A friend posted the text from Smart which was also late. Maybe next time they can work on that.

After the #MMShakeDrill

Since we don’t have a tv (by choice), I just checked the internet for news and I think for the most part, it went well.

There was a foreigner who liked the use of motorcycles by rescuers since it is likely that the roads would be obstructed in case of an earthquake. Another one suggested that the scenarios be more realistic, and that the officials could use technology to simulate different scenarios so they can think of how to respond properly to each scenario.

I read an article that there will be a seaborne hospital, in anticipation of some roads not being passable. In case the patients become too many, they may be airlifted via military helicopters to hospitals. These plans are good. I hope they have a plan in case the rescuers also become victims or have families that are victims such that they won’t be able to attend to others anymore (like what happened during Yolanda).

If Guadalupe bridge is one of the roads that they predict will collapse, then it should really  be strengthened already! PNoy mentioned the problems that are stopping them from implementing the project in his last SONA. I hope the people affected will cooperate since it’s quite scary to imagine the Guadalupe falling down – so many vehicles pass through it.

As for me, I think the one that should be given more attention is the quality of our structures. As Dr. Elizabeth Hausler, earthquake engineer, said, “Earthquakes don’t kill people. Poorly built buildings do.”

It’s good that rappler published a self-test so you can determine whether your house can withstand major earthquakes. At the end, however, if you get a low score, you are advised to consult a structural engineer immediately. I am not familiar with how much structural engineers charge for consultation though. I suppose the costs to strengthen a house would vary from house to house. On this point, I believe that the local government unit (LGU) should take the initiative and hire a structural engineer to evaluate the integrity of structures within their jurisdiction.

This may be useful (from http://www.aseponline.org/contacts/)

Association of Structural Engineers of the Philippines, Inc. (ASEP)
Future Point Plaza Condominium 1, 112 Panay Avenue.,
Quezon City 110 Philippines
Telephone Number: (+632) 411-8606
Fax Number: (+632) 410-0483
Mobile Number: (+63917) 823-7739
E-mail: aseponline@gmail.com

Rappler’s article on what makes buildings earthquake-ready is also a very good read. Those building their own homes or those in the build and sell business should read it.

I also found an FB community that gives very good information about the Building Code: https://www.facebook.com/BuildingCode.Ph. I think this is being run by architects.

Overall, I think the project was a success. I would like to thank MMDA, Phivolcs, the LGU’s, and all of the people who worked hard to make the #MMShakeDrill a success. We are thankful for your service. May God bless us all and protect us from natural disasters.

How about you, what can you say about the #MMShakeDrill? Do you have suggestions for improvement?

The article My #MMShakeDrill Earthquake Preparedness Experience appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

The Philippines is an archipelagic country which is very rich in natural resources and even human resources. The Philippines may be a small country, but I love it very much.

It pains me to know that another country is bullying us and taking advantage of our natural resources. I feel very strongly that we Filipinos should know what the issues are regarding the West Philippine Sea. This issue is very serious and may have a devastating effect on real estate investing should a war erupt (God forbid!).

The Philippines is a rich country – MB

Documentaries on the West Philippine Sea issue

The Philippines’ Department of Foreign Affairs has released three documentaries so that more Filipinos would understand the depth and gravity of the West Philippine Sea issue. If you have not seen these videos, I strongly recommend that you watch them intently and tell me how you feel after you’ve watched them.

Video 1

Video 2

Video 3

You can also check updates from the facebook page of the West Philippine Sea/ Scarborough Watch.

International Law

This issue is within the purview of the United Nations Convention on the Law of the Sea (UNCLOS). This is one of the times when we really need lawyers, and I truly believe that our best lawyers are working on this case.

I really hope that this issue will be resolved quickly, and in our favor. It makes me very sad to know that our coral reefs are destroyed and our food security is threatened. Almost every day we hear news of China testing us – putting buoys, stopping our government from sending things to our old guard ship, among others.

China is a very big country. I cannot understand why they have to take our seas as well.

Oratio Imperata for the West Philippine Sea Row

In times like these, the only hope of a small country like ours is to get recourse through legal means – to hope that the tribunal rules in our favor, and that China will respect the tribunal’s decision.

Our most powerful weapon is still prayer. I would like to share with you the Oratio Imperata for the West Philippine Sea Row. I know that God will never forsake us and that our collective prayers will be heard.

O Lord our God, Maker of heaven and earth, the sky and the seas, look kindly on us, Your children of the Philippine islands, our home, now beset with tensions over our West Philippine Sea.

We pray to you for peace over that part of our islands and waters.

We pray that questions over it may be resolved through justice and respect for people’s rights.

We pray that no harm may be done to our marine creatures and habitat.

We pray that our fellow Filipinos, protecting our islands and seas, be kept safe from natural and man-made disasters.

Loving God, You are our wonderful Creator, our generous provider of good things. Send Your Holy Spirit of wisdom and understanding to our leaders, that they may resolve this crisis with courage and in the spirit of dialogue. Help us all to remain faithful to Your Word and obedient to Your will always.

This we ask through Christ, Our Lord.

Amen.

The article What Every Filipino Should Know About The West Philippine Sea (Videos) appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

After finding foreclosed properties that have a good potential Return On Investment or ROI as discussed in my last video (Video 2: How to estimate repairs, taxes, and ROI), there are more things you need to do before buying those properties. You need to do your due diligence. Learn how to do your due diligence by watching the video below.

Although people often hear the advice that doing due diligence is a must before buying a property, a lot of people still have no idea what due diligence is. Most don’t even know how to do due diligence.

As a real estate investor, you should never buy a property without doing a reasonable amount of due diligence. This helps you avoid problematic properties out there that can cost you a lot of money, wasted time, and lost opportunities.

In the third installment of our 3-part video series on how to get started with real estate investing, I will explain in the most simple terms the importance of due diligence, what it is, and I will also share some tips on how you can do your due diligence, which you need to do before you buy a foreclosed property.

This is a long video (51 minutes) as it is full of actual examples and tips, and I also answered some of the top questions I have received through the comments. Grab your coffee, prepare to take notes, and watch the video below!

Click to watch Video 3: Due Diligence Essentials

Please tell me what you think by leaving a comment below the video, and don’t forget to like and share. Thanks!

P.S. If you haven’t watch the first 2 videos in this 3-part video series, you can still watch them, just click on the links below:

• Video 1: How to start finding good real estate deals
• Video 2: How to estimate repairs, taxes, and ROI for foreclosed properties

The article How To Do Your Due Diligence Before Buying Foreclosed Properties appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

Bahay Financial Services (BFS) has just released their updated list of foreclosed properties for sale, as of August 2015. We now have a total of 1,994 properties from Bahay Financial Services located all over the Philippines. This listing has properties that are priced as low as Php25,000 (no kidding!). Check out details for this update below.

BFS foreclosed property listing summary of updates for August 2015

Here’s a summary of updates for the August 2015 listing, which comes directly from BFS:

• 54 new listings were added to the database (pictures to follow)
• 70 properties that are no longer available were removed from the database
• Total number of BFS foreclosed properties as of August is 1,994
• This update supersedes all previous listings from BFS

Big discounts are available!

-> SPOT CASH BUYERS GET THE BIGGEST DISCOUNTS!

-> Discounts range from 5K to more than 100K for SPOT CASH PAYMENT!

* Don’t forget to tell BFS that you learned about them from ForeclosurePhilippines.com to get the best deals!

** Offer prices are subject to change without prior notice.

*** BFS does not make any representations on its properties. We encourage you to make an ocular inspection of the property as these are sold “As is, Where is” and the pictures contained herein may vary.

Access/download the updated list of BFS foreclosed properties

To ensure you will see only the most updated list available, please access our page dedicated for BFS property listings, which includes links to the properties in the database that has pictures, and downloadable listings in PDF format. To access this page, just click on the link below:

Click to access All BFS foreclosed properties

How to inquire

To inquire, please call the designated BFS sales specialist as indicated on the individual listing, or on the PDF file. (Please have the property account number ready when inquiring).

You may also call or text BFS:

Telephone:

• (02) 756-6230
• (02) 750-3888
• (02) 756-6330
• (02) 756-6376
• (082) 221-0809 – Davao
• Local Nos. 543, 303, 385, 523, 490, 479, 388, 510, 546

Text:

• +63-922-9999-BFS

PLDT toll-free outside of Metro Manila and Davao:

• 1-800-10-2255-BFS (237)

Visit BFS offices:

Bonifacio Global City (Head Office)
22^nd Floor, RCBC Savings Bank Corporate Center
25^th and 26^th Streets, Bonifacio Global City, Bonifacio Global South,
Taguig, Philippines

Alabang Office
8th Floor, Insular Life Building
Filinvest Corporate City
Alabang, Muntinlupa, Philippines

Davao Office
Unit 301, Plaza de Luisa
Ramon Magsaysay Avenue
Davao City, Davao, Philippines

P.S. – Don’t forget to subscribe to email alerts to get notified of updated listings.

The article BFS Releases Updated Nationwide List of Foreclosed Properties as of August 2015 appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

This post was written by Mr. Jojo Salas, Director – Pinnacle Research and Consulting. I’m happy that they have allowed me to feature it here in ForeclosurePhilippines.com, as this is full of information smart real estate investors should know. As usual, I have reformatted it a bit for easier reading. The original article can be found here.

Macroeconomy

The sunny days are starting to give way to wetter days. By the end of the third quarter, a handful of strong storms would have passed, given that approximately 20 typhoons visit the Philippine area of responsibility per year.

By the second half of the year, another season would have set in; not the wet season coming from the dry, but rather the election season. Political candidates have started sprinkling the “tri-media”; and some have already fully utilized school graduations and town fiestas in recent months for visibility. Various surveys are coming out, not only from the major survey firms, but suddenly radio and talk shows feel compelled to conduct their own surveys on potential candidates.

The political cycle impacts on the economic cycle. In turn, the economic cycle weighs heavily on the property cycle. While it is true that the real estate business activities have been contributing to the sustained economic growth in recent years, it is instructive to be aware of the political and economic forces in play.

GDP Growth

Philippines’ gross domestic product (GDP) grew by 5.2% during the first quarter of the year based on the latest Philippine Statistics Authority (PSA) data.

While this is lower than the 6.1% GDP annual growth in 2014, the first quarter of 2014 was also a relatively slow growth of 5.6% and finished with a strong growth of 6.9% by the fourth quarter.

Under-spending by the government is the easiest to blame since the government have the resources but has been viewed to be slow in deploying this capital. This may dramatically change given that there are a number of approved and ongoing infrastructure projects. It has been observed that spending during the “election season” is high and may even be inflationary.

At any rate, from the private sector, the Services Sector is the main driver of growth for the quarter, which grew by 5.6% from 6.8% growth last year. Industry accelerated to 5.5% from 5.4%. The Agriculture sector grew by 1.6 % from 0.6 %.

Bank Interest Rates

Based on Bangko Sentral ng Pilipinas (BSP) statistics, the average bank interest rate inched up to 4.18% as of May this year as compared to 3.82% as of February.

Forex (USD to PHP)

The Philippine Peso to US Dollar exchange slipped to Php 45.103 in June from Php 44.69 in March. Dollar remittances from overseas Filipinos from January to March 2015 reached US$ 5.79B as compared to US$ 5.49B for the same period last year, or an increase of 5.46 percent.

Inflation Rate

According to PSA, inflation rate in May is 1.6% as compared to 3.7% by the end of 2014.

Unemployment Rate

The latest unemployment rate data is pegged at 6.6% as of January of this year, which is slightly lower than the 6.17% in July 2014.

Tourist arrivals

According to the Department of Tourism, the total Visitor Arrivals for the first quarter of the year reached 1,391,836 visitors, registering an increase of 6.26% over the last year’s arrivals of 1,309,872 for the same period.

Visitors from South Korea still cornered the top spot at 361,480 arrivals; second from the United States with 214,057 visitors; and third from Japan with 130,374 arrivals. Visitors from China still grabbed the fourth spot with 93,043 visitors.

Tourism earnings for the first quarter of 2015 reached Php 58.96B, up by 2.21% from the Php 57.68B for the same period last year.

Bracing for election season: What top real estate developers in the Philippines are doing

If one is looking for bell weather, checking the top real estate developers is a good place to start.

Ayala Land Group

The Ayala Land Group, which announced a target capital expenditure of Php 100 billion this year, is keen to build township projects in 25 additional Philippine cities over three to five years. As earlier reported by Pinnacle, building townships widens the offerings of the corresponding developer and often result to big leap in profitability, and inevitably, the company’s stock price.

The Ayala Land Group is building Alviera, in Porac, Pampanga, which is envisioned to be another premier township. Alviera is a 1,100-hectare large-scale master-planned development that is being positioned as the premier business and leisure hub in Central Luzon. After the Mt. Pinatubo eruption in the Nineties, and the subsequent lahar flows and related flooding, many developers skipped the former rice bowl of the country. Given the rejuvenated Clark Special Economic Zone and Subic Bay Freeport Zone, and the vital connection of the Subic Clark Tarlac Expressway, local and national players have been carving out prime spots to service the high population and income growth rate of the region.

In addition, the group is increasing its usual residential developments catering to all segments of the market, including the socialized housing; and boosting its office, shopping center and hotel portfolio as well. It is even embarking on education venture as earlier reported.

SM Group

For its part, the SM Group will build “micro cities” around its shopping malls by developing apartments, offices and hotels to maximize the value of its property holdings. Fifteen of the over 50 shopping malls are on land large enough for high-density and mixed-used developments. The biggest bet is on the planned Manila Bay reclamation of 600 hectares, and the group intends to pour in Php 100 billion of investments, that would turn the property into a master-planned, integrated and mixed-use community.

Megaworld

Pinnacle cited in its previous report that Megaworld together with its subsidiaries shall launch five new townships: two in Luzon, two in the Visayas and one in Mindanao, with a total land area of around 400 hectares. This will bring Megaworld Groups’s total township land area to 3,100 hectares by year-end.

The “Big Three” and Townships

Building mixed use developments and townships has proven to be a successful concept of economy of scale and multiplying profits.

Based on the April release of the Bloomberg Asia Pacific Real Estate Index, SM Prime has gained 37% over the last year, Megaworld grew by 30%, and Ayala Land increased by 29 percent.

The Philippine Stock Exchange index grew by 24% during the same period.

While the big three have been scaling up townships, the other top developers have been busy carving out their market share by focusing on their core competence.

Strategies of other developers

Robinsons Land Group acquired the 18.5-hectare property along Ortigas Avenue extension, where it would build a major township. In addition, it is expanding its residential, office, hotel and mall portfolios nationwide.

Recently, the Greenfield/Unilab Group announced to develop the 12.8 hectare expansion of the “EDSA Central” complex into a mixed use community as well.

Meanwhile, the Vista Land Group has been penetrating tertiary cities where other national brands are still contemplating on, and has been expanding its commercial retail investments.

The Puregold Group for its part has been solidifying its position in the retail sector.

Other sectors and trends

Apart from the different segments in the real estate market, some major players have expanded into other sectors such as transportation and toll ways. DMCI, Filinvest, Metrobank/Federal Land Groups have been steadily investing in the power sector as well.

One vivid trend is the drive for recurring income. After years of raking from brisk sales, all of these players have been steadily building up their office, retail, hotel and even industrial portfolios to generate rental income. Even the Eton Group reported a shift in strategy; from the residential bandwagon, it is now accelerating its in gear in offering more office spaces.

For these top developers, the weather is fine even with the upcoming elections. They will always try to be ahead of the curve and fill the gaps in the real estate market.

Snapshots and trends

Here are snapshots and trends for different real estate market sectors.

Office Market

The Business Process Outsourcing (BPO) industry is the biggest contributor to the Philippines’ gross domestic product (GDP) and is expected to generate 1.23 million jobs and US$21.8B in revenues this year.

BSP Deputy Governor Diwa Guinigundo even characterized the BPO industry as both pro-cyclical and anti-cyclical since BPOs have the tendency to grow regardless of economic conditions. He noted that if times are good, offshore companies need to outsource non-core services to remain competitive, but when their economies are not doing well, they have to resort to outsourcing because of the need to cut on costs.

This continuous growth of the industry translates to additional demand for office spaces across all major business districts. The overall vacancy rate of major business districts in Metro Manila is below 4%, which slightly spiked due to new buildings in Makati CBD (including Alphaland Tower) and in Bonifacio Global City.

Makati rents of Premium Grade A buildings have a weighted average of Php 1,275 per sqm per month; for Grade A buildings, the weighted average is Php 850 per sqm per month; and for Grade B&C Buildings, the weighted average is Php 650 per sqm per month.

The weighted average rent in BGC is comparable to Makati Grade A at Php 850 per sqm per month.

The weighted average rent of Grade A office buildings in both Ortigas and Alabang business districts is estimated at Php 625 per sqm per month.

Quezon City Grade A buildings are practically fully leased out and the average rent remains unchanged at Php 625 per sqm per month.

Residential Market

Based on the Housing and Land Use Regulatory Board (HLURB) figures of approved licenses to sell in the past five years, the average annual production reached over 200,000 residential lots/units, including condominium units. Condominium units and economic housing are the top two categories.

While these figures appear to be high, they pale in comparison to the projected housing needs. The Statistical Research and Training Center, an attached agency of National Economic and Development Authority (NEDA) projected in 2013 the housing needs up to 2017 using the Census of Population and Housing 2010 data. The estimated housing needs is over 800,000 per annum; of this, close to 400,000 households annually can afford to by acceptable housing units. The table below presents the summary.

Leasing activity has been increasing in recent years, especially with the residential condominium market. The usual practice has been quoting the total monthly rent of these residential units rather than the rent on per square meter basis used in office and commercial spaces.

Rents have been generally stable, where high-end and upper-mid market condominium units have dominated the rental market with leasing rates from Php 50,000 to Php 100,000 per month for upper-mid condominium units, and over Php 100,000 per month for high-end, depending on the sizes.

Luxury condominium units can command rents at Php 300,000 per month-level, even breaching the Php 400,000 per month-rent.

Leasing of studio and one-bedroom units ranges between Php 15,000 to Php 30,000, and may reach the Php 50,000 per month-level, depending on the location, furnishing, and amenities of the condominium unit.

The rentals of residential condominium market in Makati CBD, Rockwell and BGC are now quoted on per square meter rate just like the office rents, but are likewise generally stable.

The Makati CBD has a more varied rental levels, ranging from Php 575 per square meter per month to Php 1,100 per sqm per month. One has to multiply the floor area to compute for the approximate monthly rent.

Rockwell condominium units have a higher base of Php 700 per sqm per month, but have the same upper range of Php 1,100 per sqm per month. Bonifacio Global City units have a lower range of Php 600 per sqm per month, and an upper range of Php 1,000 per sqm per month.

Retail Market

This segment continues to be dominated by the SM, Robinsons and Puregold Groups. In recent months, the market has seen a phenomenal growth in the convenience store platform.

Family Mart breached the 100-mark outlets by April this year. The Villar/Vista Land Group is also expanding its “All Day Mart” platform.

In addition, the Vista Land Group intends to integrate their retail platforms in their housing projects. “All Home” stores will be opening six to seven stores annually over the next five years.

The Wilcon Group, for its part, now has 33 stores all over the country.

The joint venture of Jollibee and SM Groups recently opened its first community mall in Roxas City, Capiz. This is the first of the 100 CityMall branches it plans to roll out nationwide over a five-year period. The CityMall-Arnaldo Roxas is located on a 1.4 hectare prime property along Arnaldo Boulevard, with more than 7,000 square meters of retail space and is reported to be 100% leased out.

It should be reiterated that the retail market is the most resilient sector that bucked the trend even during the Asian financial crisis in the late Nineties, political crises in the early years of the new Millennium, and the financial crunches of the global powerhouses in recent years. This resilience is due to the ever growing Philippine population and its propensity to spend.

The proven formula by the retail landlords is offering spaces to house the thousands of products. This is typically on consignment basis, where up to 90% of items being sold are actually supplied by tenants or consignees. Retail players are raking on rents and/or even on “percentage of gross sales,” but tenants/consignors are still willing to queue to get mall/retail spaces because they provide the necessary foot traffic. Rents of retail spaces are very stable and have been inching up in recent years.

One retail group has been growing its business on a different model, that is, by owning majority of the items it is selling. HMR Philippines now has 12 big stores and 3 “SOS” outlets, and has over 35 “SOS” franchisee outlets. For the 15 shops that HMR owns, the company owns majority of the products, which are then aggressively sold to small-to-medium retailers on business-to-business format. HMR Philippines has been buying its stocks for sale at a steep discount, mainly surplus items from the US, Australia and China. Profitability is reported to be high, but the risk is sitting on the unsold items. The solution of HMR Philippines is simple— sell the items through HMR Auctions.

Hotel and gaming market

Pinnacle reported in its previous releases that the big players are positioning to get huge chunks of the hotel and gaming market share.

The SM Group partnered with Macau’s Lawrence Ho in building the City of Dreams Manila. The hotel complex includes three hotel towers offering these brands: Nobu Hotel, Crown Towers and Hyatt Hotel with a combined total of 940 rooms. City of Dreams has 380 gaming tables, 1,700 slot machines and 1,700 electronic table games.

Bloomberry Resorts Corp. opened its Solaire Resort and Casino in 2013. In addition, Japanese billionaire Kazuo Okada and the joint venture of Megaworld’s Andrew L. Tan and Genting Hong Kong Ltd. are expected to open their hotel casino resorts between 2016 and 2018.

The Ayala Group has been ramping up its SEDA brand apart from its partnership with international brands like Intercontinental/Six Continents and Marriott Groups.

Robinsons Land Group, for its part, has been beefing up its GoHotels, in tandem with its partnership with Six Continent’s Crowne Plaza.

Federal Land/Metrobank Group has partnered with the Hyatt Group.

The Shangri-la Group has leveraged its successful hotel brand in offering condominium units for sale.

What is amazing is the mushrooming of local brands such as Sogo and Nice Hotels, and even international brands such as Tune Hotels.

In addition, the iconic Max’s Group, Inc. joined the fray. It intends to open its first hotel venture by this year. This is being developed at the property adjacent to the company’s “heritage store” in Quezon City. The 60-room hotel along Scout Tuazon called “Meranti” hotel will be targeting the domestic and foreign tourists, business travelers and locals who indulge in “staycations” and will be equipped with recreational facilities. It is important to note that the “heritage store” sits on a sprawling site and has been a popular venue for events such as birthdays and other parties.

Industrial Market

Pinnacle Research earlier reported the Bases Conversion and Development Authority (BCDA) is bidding out at least 200 hectares in the Clark Green City by way of joint venture since there is limited leasable land in both Clark Special Economic Zone and Subic Bay Freeport Zone.

Recently, it is reported that Cebu is also running out of Philippine Economic Zone Authority (PEZA)- accredited ecozone spaces for manufacturing. PEZA is now negotiating with Mactan Cebu International Airport (MCIA) for the lease of an additional 30-hectare property to address the current tightness in the industrial supply.

PEZA reported during its 20th Anniversary in April a total revenue generation of Php 2.862 trillion worth of investments in the past two decades, and more than 45% percent of which came in during the past four years. In addition, PEZA enterprises exported a total of US$563 billion and provided a cumulative direct employment of 1.170 million. At present, PEZA has 316 operating economic zones in the country hosting a total of 3,447 companies.

There are number of foreign companies looking to establish manufacturing operations in the Philippines, especially among the Japanese businessmen.

Even prior to President Benigno Aquino Jr.’s visit to Japan, there is already a substantial Japanese investment in the Philippines, with two Japanese suppliers of aircraft interiors and components recently investing Php 106 million in the Clark to expand their operations.

The Japanese bicycle manufacturer Shimano Inc. has just opened its Php 1.32-billion facility in Batangas, creating approximately 1,000 new jobs. With the successful Japan visit of the President, this will further solidify the interest of Japanese in locating some of their operations here, especially those operations coming from China, given the current economic (higher labor cost) and security (lingering territorial disputes) conditions.

There is no wonder why Ayala Land Group included industrial spaces in its Porac, Pampanga master development plan. The Alviera Industrial Park (AIP) is seen to capture the excess demand for industrial space and drive economic activity in the region. Sixteen lots of the 31-hectare industrial park have already been reported sold. Three clusters of standard factory buildings are still available for lease. AIP is seen to complement the industrial hubs in Clark and Subic targeting companies in light to medium, non-polluting enterprises.

Flexible people, resilient market

President Aquino and his allies were the staunchest critics of the past administration. Even with the usual political drama surrounding every national election, former President Gloria Macapagal Arroyo stepped down and transferred power to her bitter political rival.

Surely, there would be heated debates and entrenching of positions along the way, and perhaps some political violence.

But Filipinos are like bamboos, they tend to sway with the strongest winds. They would enjoy the festivity and even ferocity of the upcoming election season, but they will not break.

During the political noise of the election season, people would have to work and report to their offices, whether in traditional offices or IT/PEZA zones.

Filipinos would continue to build and repair their homes. Families would keep on shopping and spending in malls. Fun-loving Filipinos would continue to travel and go to resort-hotels.

In short, Filipinos are used to typhoons, and the real estate market would likely weather the political storm and remain resilient.

Do you think the elections will have an effect on real estate investors like you and me?

As for me, I believe the elections should not have a big effect in general. What I do see is a big growth potential for areas where big developers are rolling out new projects, as listed above.

How about you, do you think the upcoming national elections will somehow have an effect on your real estate investing activities? Let us know by leaving a comment below.

Source

The article Weathering The Storm: The Election Season And How It Might Affect The Philippine Real Estate Market appeared first on ForeclosurePhilippines.com

P.S.- Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?! Get 11 Incredible Blessings worth $251.50 for FREE, join Bo Sanchez's Truly Rich Club now! Click here to learn more

Just a quick heads-up, I will be releasing in a few hours the fourth and final video of our series on “How to get started with real estate investing”. Get more details after the jump.

I’m really sorry I haven’t been able to publish any new articles lately because I have been very busy finishing the fourth and final video for the series. Video 4 covers the “Big Picture” of the real estate investing process. Here’s a sneak-peak what you will see inside the upcoming video.

I just had to use my son’s drawing to illustrate my point in the upcoming video. :-)

I hope most of you have been able to watch the first 3 videos as those are “required viewing” before watching Video 4. If you have not watched them yet, or if you want to watch any of them again, you can do so through the links below. Make sure to watch them NOW as I will be pulling them down very soon.

Click to view Video 1: How to start finding good real estate deals

Click to view Video 2: How to estimate Repairs, Taxes, and ROI for foreclosed properties

Click to view Video 3: How to do Due Diligence essentials

By the way, I’m also opening enrollment for my BUY FORECLOSED PROPERTIES online training today. You’ll get more details inside Video 4.

I remember the last time I opened something similar last year, almost all slots were filled-up after just sending two emails,  Which is why I want to give all of you a heads-up as a lot of you have been waiting for this, and it’s finally here after more than a year.

I’ll send the a link to Video 4 once it’s ready to “go live” in a few hours.

Best regards,
Jay Castillo

P.S. I’m serious! If you missed any of the 3 free training videos on how you can get started with investing in foreclosed properties, you need to watch them NOW, because I’m going to pull down the videos very soon. You can still watch them below:

• Video 1: How to start finding good real estate deals
• Video 2: How to estimate repairs, taxes, and ROI for foreclosed properties
• Video 3: How to do due diligence essentials

The article The “BIG PICTURE” of the Real Estate Investing Process (Coming Soon) appeared first on ForeclosurePhilippines.com

Finally, Video 4 is now live! It’s about the “BIG PICTURE” of real estate investing. You need to know these things before you even think of investing in real estate. Get more details below.

By the way, I have also opened enrollment for the BUY FORECLOSED PROPERTIES online training. Yes, everything is now live! Watch the video below to get all the details:

CLICK HERE to watch Video 4 and learn more about the training

In Video 4, I will also explain what’s inside the training. In a nutshell, I believe this is the most complete, step-by-step training that covers finding, analyzing, buying, fixing, and profiting from foreclosed properties, where I will hold nothing back.

It’s a 10-module digital online course that will go through the whole foreclosed property investing process with one objective: help you buy a profitable property.

I’ll also show the list of modules, and topics inside each module, in Video 4. I’ll also talk about the special bonuses that will only be available during this special launch for VIP’s. In case you are wondering, I consider all our valued subscribers and followers as VIP’s.

Jay Castillo – Owner and founder, ForeclosurePhilippines.com

P.S. Enrollment will only be open up to August 21, 2015, unless I will have to close registration early if too many people sign up. Remember this post is going to reach all blog subscribers (that’s more than 27,000 people!), so it might be a good idea to secure your slots by enrolling early for the BUY FORECLOSED PROPERTIES (BFP) online training. Keep this in mind, when I opened something similar last year, I had to close registration after sending just two (2) emails… no kidding!

The article Video 4 Is Live – The “BIG PICTURE” of the Real Estate Investing Process appeared first on ForeclosurePhilippines.com

Confirmed! At the speech of Mr. Eduardo G. Ong, Chairman of the Professional Regulatory Board for Real Estate Service (PRB-RES) at the iRISE event at the SMX Mall of Asia, he said that there will be another real estate brokers’ exam for those who did not graduate with a real estate management degree. Get more details below.

Unlike in his previous speech in the Oathtaking of the May 2014 real estate brokers’ exam passers, he said that the said exam will be open not only to re-takers but also to those who will still be taking the 120-hour Comprehensive Real Estate Seminar (CRES). Please note that I have not yet seen a formal written announcement about this exam.

Fortunately, Jay was able to take a video of E.G. Ong’s speech during the iRise event at the SM MOA SMX last August 7, 2015. Watch the video below:

I made a transcript of the video, but please forgive me if I misheard some bits and pieces. The main message though is quite clear.

Video transcript:

In the recent examination last May 24 in the brokers’ exam, my heart bled. Because I did not want to see fifty percent passing only! I wanted sixty-seven percent (?). But be that as it may, that’s why, out of our good hearts, of the Board, we are giving those who did not make it, another chance.

Out there, I was approached by I think Phil Coquia, “Chairman, are you only giving a chance to those who flunked? I said, “No.”. Those who did not make it 2011, 2012, 2013, 2014, and 2015, will be allowed to take the exam.

But those who still would like to join the very rewarding career of real estate, you are also welcome. So therefore, (clapping) therefore, there’s still going to be one more CRES!

Or for those who are business-minded, three more CRES! But rest assured, please (be) ensure that the quality of your education, the quality of your teachings, of your instruction, should be at par to what the board expects. Ok ba yon? (Yes) Good.

Where can one take the 120-hour review?

For those who want to take the real estate brokers’ exam and have not yet taken the 120-hour review course previously, so far I have seen two service providers with schedules.

1. Urban Institute by Engr. Enrico Cruz

I got this info from Engr. Cruz’s FB page.

Section 1
MAKATI SATURDAY SECTION
24 sessions of 5 Hours each
September 12 to January 30
Asian Institute of Management (AIM) Conference Center
Legaspi Village, Makati City

For details, inquiries and reservation, please email: urbanet.ph@gmail.com

*I heard that the slots are quickly filling up so if you’re interested, better reserve a slot. I don’t know how much the cost is so please just inquire directly with Urban.

2. PREVAIL

I got this info from their FB page.

Seminar Dates: Sept 26-Nov 8 (Sat-Sun; 8am-5pm)
Seminar Venue: Best Western Hotel la Corona Manila, MH del Pilar St. corner Arquiza St. Ermita Manila (near Ermita Church)

Reserve and Avail our Early Bird Promo + Special Installment Scheme (P993/session)
**NO Tuition Fee Increase**

Inclusive of AM+PM Snacks, Lunch, Seminar Kit and Review Materials!

Limited Seats Available.

For more details, please contact:
PREVAIL Inc.
353-7892 | 400-7423
0916-3588168
0908-4146328
0923-9579482

Organized by:
Mr. Romeo Lacsamana Jr.
Prime Real Estate Values And Integrated Learnings Inc.
PRC Accredited Service Provider No. 016

PREVAIL

If you know of other service providers, please do let us know in the comments so we can include them in this list.

For those who have already taken the 120-hour CRES and would like to have a short review only, please refer to our previous post.

The article Confirmed! The Next Real Estate Brokers’ Exam in Q1-2016 Will Be Open To All (Not Only For Re-takers) appeared first on ForeclosurePhilippines.com

Before anything else, I would like to give a big THANK YOU to those who have already enrolled for our BUY FORECLOSED PROPERTIES online training. I also have a quick reminder for those who have enrolled so keep reading. The FAQ comes after the reminders for those who have already enrolled.

A couple of reminders for those who have enrolled

For those who enrolled through PayPal/Credit Card

If you enrolled through PayPal/Credit Card but have not yet received any email reply with your logon details, please let me know asap (please send an email to support@foreclosurephilippines.com or text me at +639178843882). Everything is automatic, including the email with logon details, but if for some reason you are unable to receive your login details, lets us know. (We noticed those whose email address is hosted by live.com/outlook.com are having problems and a fix is on the way).

For those who enrolled via bank remittance

If you enrolled via bank remittance, we noticed that sometimes there is a delay before your remittance is posted on our side, so please be patient as we wait for the the funds to be transferred, and once confirmed, we will send you your login details through email. For those who enrolled via bank deposit, it’s more or less updated in real time.

Anyway, I now move on to the main purpose of this email/post. I have been receiving a lot of questions about our Buy Foreclosed Properties online training, so here are answers to the most frequently asked (so far).

Frequently Asked Questions

1. Why don’t you offer a live training instead?

Answer:
I could have, but I didn’t, because a live training course would be so expensive to run, and it will obviously be more expensive for those who want to attend.

I believe my online training would be the equivalent of doing 12 live seminars. Let’s assume the price of the cheapest live seminar out there would be around Php2,000 per seminar, and using simple math, 12days xPhp2,000=Php24,000. Compare that to my online training which is just Php15,997 plus 3.5% transaction fee if payment is through PayPal/credit card (no transaction fee if through bank payment). Of course, this would be like comparing apples and oranges.

You see, a “laser focused”, and highly specialized live training can be priced anywhere from Php38,000 to Php60,000 and more. Now those are better comparables for my online training, but notice the price difference?!

2. Why is this training so pricey?

Answer:
A lot of people usually look at the cost of a training, when they should consider the value that they get with their investment. In fact, when friends and mentors of mine learned how much I charged for everything included for a similar training I released last year, they were all unanimous in saying I undervalued what I offered.

Now I listened.

Nevertheless, I still went below their recommended price, which is why I am offering this at an “introductory” enrollment fee of just Php15,997 (plus 3.5% transaction fee if through PayPal/credit card, no transaction fee if through bank payment), which includes crazy bonuses for VIP’s like lifetime access, downloadable video/audio of the training topics, and the ultimate real estate investing action plan.

I honestly believe this is the most complete training you can get that will teach you step-by-step how you can find, analyze, buy, and profit from foreclosed properties.

If you go for something else that is “cheap”, then you might end up with something that has only bits and pieces, that can lead to costly mistakes.

You might also end up just wasting a lot of your precious time, which you will never get back.

Sometimes, what appears to cost less actually costs more… think about it.

Ok, this training might be pricey compared to a previous offering, but it is still a great deal compared to live trainings out there (see #1 above)

Note: I might be stating the obvious, but it goes without saying that a price increase is very likely if and when I do decide to re-open this in the future.

3. Hi Jay, can you be my mentor?

Answer:
Actually, this is a very general question which I get even without the training. Before I answer this, let me give my own definition of what a mentor is. For me, a mentor is someone who has been there and done that (whatever it is you want to do). In other words, a mentor is someone who guides you based on experience.

In that sense, then yes, you will get me as a mentor when you enroll for this training, because I will be training you and guiding you using my own experience with investing in foreclosed properties.

4. Will this training allow me to get Continuing Professional Development (CPD) units to renew my real estate broker license?

Answer:
No, this training will not earn for you any CPD units as of now.

I am also not sure if this can qualify as part of “self-directed learning” activities. “Self-directed learning” is defined as “learning activities such as on-line trainings, local/international seminars/non-degree courses, institution/company-sponsored training programs, and the like which did not undergo CPD accreditation but may be applied for and awarded CPD units by the respective CPD Councils.” as mentioned in PRC Resolution No. 2013-774, Series of 2013.

Although we have plans to check with PRC and have this accredited, I can’t give any promises as of now.

5. I can’t see the button to pay through PayPal/Credit Card, where is it?

Answer:
The “Add to Cart” button will appear below the Video on the page for the VIP promo, after a few seconds. I’ll fix this so it will show immediately. You can also scroll down to see the same buttons just after the FAQ.

6. Will you be conducting another training like this soon?

Answer: The last time I opened something similar was more than a year ago. I said before that I shall open another batch after 3 months, but a lot of things beyond my control happened, hence I was no longer able to re-open, until now.

This time around, I wish I can say I will re-open very soon, but I don’t have a crystal ball, so I won’t. What I do know is this is the last time I will offer lifetime access for a one-time payment plus downloadable videos/audio versions of the training.

This is to ensure I will be able to handle all questions of participants, just like during the humble beginnings of the blog in 2008 where I was able to answer all questions very quickly (we only had about 200 daily visitors back then).

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Okay, that’s our list of frequently asked questions for now. Other frequently asked questions are already included in the sign-up page (near the bottom).

If you have other questions, just let me know by leaving a comment below.

Thanks and best regards,

Jay Castillo – Owner and founder, ForeclosurePhilippines.com

P.S. – You still have 3 days left to enroll and get the all the crazy bonuses that will only be available during this VIP launch which include lifetime access, free platinum upgrade (downloadable video/audio), and my ultimate Real Estate Investing action plan.

Click here to enroll for the BUY FORECLOSED PROPERTIES online training

The article Frequently Asked Questions about the Buy Foreclosed Properties online training appeared first on ForeclosurePhilippines.com