SEC urges real estate firms to tap capital market for growth

The Securities and Exchange Commission (SEC) is encouraging more real estate firms—especially small and medium players—to leverage the Philippine capital market for funding, as it formally launched new guidelines aimed at streamlining investment processes for companies with rental pool arrangements.

During a launch event held on May 21 at the SEC headquarters in Makati City, the agency unveiled the Securing & Expanding Capital in Real Estate Investment Transactions (SEC RENT) framework, which simplifies the registration of securities by real estate companies offering investment contracts under rental pool schemes.

Implemented through Memorandum Circular No. 12, Series of 2024, the program is seen as a game-changer for property developers engaged in the sale of condominium units, hotels, and resort properties bundled with income-generating rental agreements.

SEC Commissioner McJill Bryant Fernandez highlighted the economic significance of the real estate sector, which accounted for 5.6 percent of the country's gross domestic product (GDP) in 2024. He noted that the industry’s extensive linkages to construction, finance, retail, and tourism make it a vital growth driver.

“Given its scale and strategic importance, the real estate sector stands to benefit immensely from deeper participation in the capital market,” Fernandez said.

Under SEC RENT, the agency’s Markets and Securities Regulation Department is mandated to act on registration filings within 45 days, expediting the process for firms seeking to raise capital through securities.

The launch was held in partnership with the Chamber of Real Estate and Builders’ Associations, Inc. (CREBA), which represents over 4,000 industry stakeholders nationwide.

CREBA Vice President for Housing Affairs Demetrio Posadas welcomed the SEC’s initiative, saying the streamlined rules provide smaller developers with an alternative to traditional bank loans.

“Small companies like us have typically relied on borrowings to fund our operations. Now, the SEC is showing us that we too can participate in the capital market,” Posadas said.

Rental pool agreements, covered under SEC RENT, allow buyers to earn income from their properties by contributing them to a centrally managed pool. These arrangements are often used in hospitality and mixed-use developments.

By expanding capital market access and formalizing investment structures, the SEC hopes to support continued growth and transparency in the country’s real estate industry—an effort that aligns with broader goals to democratize finance and improve investment opportunities for both developers and investors.