BSP sees capital flows as threats

Although emerging economies in Asia, including the Philippines, have coped well with capital inflows, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco has reiterated the need to closely monitor the funds surge.

Capital inflows, or money from foreign investors that flows into the local stock market, government securities and other money market instruments, remain to be the biggest threat to the economy, Tetangco  said.

Capital flows are being watched closely.  Tetanco said they  they have the tendency to raise the risks of asset price bubbles and the currency exchange rate which can also potentially undermine financial stability.

Equally important, because capital can just as freely and quickly flow out of the country, such sudden stops and abrupt reversals can threaten the real economy.

Tetangco explained that the surge of capital to emerging market economies is a major consequence of the financial crisis in the United States and the Euro Zone.

The easy monetary policy and risk appetite in advanced countries are “pushing” money out of their markets, and the favorable macroeconomic prospects of and interest rate differential with emerging market economies are “pulling” in the funds.

Analysts say that with the recent credit rating upgrades given by Standard and Poor’s and Fitch Ratings, the rate of capital inflows may increase.

Tetangco said emerging Asian countries have also used macro-prudential and capital account measures to manage capital inflows and contain the build-up of excesses in specific sectors and in the banking system.
They have employed macro-prudential policies as the first line of defense against financial stability risks, especially since the relatively shallower nature of their financial markets means that asset price bubbles could form rather quickly.

But he added that policymakers should also be cautious about the use of macroprudential measures.
“At the BSP, we look at macroprudential measures to help maintain stability in the financial system while we work on the further development of the financial market,” Tetangco said in an article in Emerging Markets, a Euromoney publication distributed during the Asian Development Bank annual meeting.

Tetangco stressed that “the nexus between macro-prudential and monetary policies should be duly considered.”

For example, Tetangco said macro-prudential restrictions on borrowing may affect expenditures in other sectors and, subsequently, economic output.

They may also weaken the transmission of monetary policy by influencing credit supply conditions.

“Monetary policy, in turn, may impinge on financial stability. Policy rates affect the cost of borrowing with subsequent impacts on how market agents decide on leverage and composition of assets and liabilities,” Tetangco said.

“Efficiency dictates that we should have a clear assignment of tools to policy objectives - monetary policy should be focused on ensuring price stability, and macro-prudential tools should be used to manage potential build-up of systemic risks.

In many instances, both policies can be mutually reinforcing, such as when they both lean against the business and financial cycles,” Tetangco explained.

Since 2010, Tetangco said that emerging market economies have been receiving more than a trillion dollars of capital flows a year, with emerging Asia getting about half.

“While the potential benefits of capital flows are well recognized, the size and volatility of these flows create risks to financial stability. They also present challenges to the conduct of monetary policy,” Tetangco said.
In most of the emerging economies, he said the amount of capital exceeds the absorptive capacity.

“Liquidity management becomes a huge hurdle to monetary authorities. Subsequently, there is a risk of build-up of financial imbalances due to rapid credit growth and rising asset prices,” he added.

“The reversal of flows is the other side of this risk.  There is no doubt these may have a destabilizing impact on emerging market economies,” he said.

Tetangco stressed that the BSP has tried to make effective use of monetary policy instruments.
“We were able to reduce policy rates because of the benign inflation environment, and we have rationalized our reserve requirements. In general, Asian currencies have appreciated as a consequence of the flows. Sterilized interventions were mainly to temper volatility of currency movements, although these actions have resulted in rising costs of stabilization. In the case of the peso, the appreciation has been at 9 percent since 2009,” Tetangco said.

Although capital inflows to Asean countries including the Philippines have increased over the past few years, Bank of America Merrill Lynch (BofAML) said that the magnitude and volatility of inflows have not, however, reached previous peaks.

The US-based banking giant even cited the moves done by the Bangko Sentral ng Pilipinas (BSP) which include cutting SDA rates, banning foreign funds in special deposit accounts, and imposing a cap on banks’ non-deliverable forward holdings to temper capital inflows and ease upward pressure on the peso.

“Overall, we see further risk of more FX intervention and macro-prudential measures to contain bubble risks, while capital controls are less likely,” BofAML said.

But the BSP has said that should capital flows reach high point, possibly resulting to disruptions in asset prices and inflation, they are ready to combat these flows.

source:  Malaya

BSP considers changes to real estate financing

The Philippine central bank is considering changes to guidelines for real estate lending to avoid an asset-price bubble in the property market, Governor Amando Tetangco said yesterday,after data showed a rise in activity.
Tetangco said Bangko Sentral ng Pilipinas’s (BSP) monitoring of banks’ exposure to the property market confirmed an increase in activity, although growth in real estate loans remained consistent with overall credit expansion.

Late last year, the central bank asked banks to provide more information on their real estate-related lending and investments. Data suggest that the non-performing real estate loan ratio for banks as a whole continues to be “stable.”

“Despite such front-line indicators, however, the BSP will be studying possible policy adjustments that may be warranted, both on a per institution basis, and across the system as a whole,” Tetangco told Reuters through email.

“We are not yet ready to announce the exact form of such adjustments but we will certainly do so as soon as we firm these up,” he said.

Tetangco also said the central bank was closely monitoring banks’ credit underwriting standards to ensure that “standards have not been sacrificed in order to help real estate developers move their growing inventory.”

At present, banks are allowed to lend only up to 20 percent of their total loan portfolio to the property sector, and the central bank has previously said the ceiling is being reviewed.

Banks’ exposure to the sector reached 561.6 billion pesos ($13.73 billion) at the end of June 2012, up almost 19 percent from a year ago, according to the latest central bank data.

source:  Malaya

Philippine Daily Inquirer Editorial: Investments and Ratings

International credit watchdog Standard & Poor’s Ratings Services affirmed last week the Philippines’ investment-grade status, a month after Fitch Ratings gave it its first investment-grade credit rating. Malacañang spokesperson Edwin Lacierda, Finance Secretary Cesar Purisima and Bangko Sentral ng Pilipinas Governor Amando Tetangco all credited the good governance platform of President Aquino for the upgrade. They said the S&P action would trigger an influx of investments that, in turn, would fuel and sustain the economy’s stellar growth. Will it, really?

The term “investment grade” historically referred to bonds and other debt securities that bank regulators and investors viewed as suitable investment outlets. Now, the term is broadly used to describe issuers like governments or corporations with relatively high levels of credit-worthiness and credit quality.

In its latest ratings action, S&P cited the Philippines’ increased ability to pay its foreign debts, as evidenced by its dollar reserves that currently stand at about $84 billion and are driven largely by remittances from Filipinos overseas, foreign investments in the business process outsourcing sector, and “hot money” (foreign investments mainly in the local stock market). S&P also noted the Philippine government’s declining debt burden, which it attributed to a nearly decade-long effort to improve tax collection. After peaking at 74 percent in 2004, the ratio of the government’s outstanding debt to the country’s gross domestic product declined to about 50 percent by the end of 2012 and is projected to fall further to 47 percent by yearend. “The current and previous administrations improved fiscal flexibility through restraining expenditures, reducing the share of foreign currency debt , deepening domestic capital markets and more recently through modest revenue gains,” S&P said.

But S&P did not say that foreign direct investments would start flowing to the Philippines. What exactly do credit ratings mean? Here is what S&P has to say: Credit ratings are opinions about credit risk. S&P ratings express the agency’s opinion about the ability and willingness of an issuer, in this case the Philippine government, to meet its financial obligations in full and on time. They are just one factor investors may consider in making investment decisions. Credit ratings are not guarantees of credit quality or of future credit risk.

While the forward-looking opinions of rating agencies can be of use to investors and market participants who are making long- or short-term investment and business decisions, S&P pointed out that credit ratings are not a guarantee that an investment will pay out or that it will not default. While investors may use credit ratings in making investment decisions, S&P said, its ratings are not indications of investment merit. In other words, the ratings are not buy, sell, or hold recommendations, or a measure of asset value. They speak to one aspect of an investment decision—credit quality—and, in some cases, may also address what investors can expect to recover in the event of default, it added.

“In evaluating an investment, investors should consider, in addition to credit quality, the current makeup of their portfolios, their investment strategy and time horizon, their tolerance for risk, and an estimation of the security’s relative value in comparison to other securities they might choose. By way of analogy, while reputation for dependability may be an important consideration in buying a car, it is not the sole criterion on which drivers normally base their purchase decisions,” S&P said.

Foreign investors entered the banking sector in the 1990s and the retail sector starting in 2000 when the Philippines was not investment-grade. They also recently entered the mining industry when the Philippines was not investment-grade. They did so because the government allowed them to—by removing restrictions andother barriers that were provided in the Constitution and in laws and regulations.

Purisima said something very significant when he was asked to comment on the S&P upgrade last week. In a TV interview, he said the Aquino administration was preparing measures that would open up certain sectors of the economy to foreign investors, economic activities that would not need time-consuming congressional action to amend the Constitution.

Now that—and not a ratings upgrade—will really excite investors.

STEP-BY-STEP PRC APPLICATION for REGISTRATION WITHOUT EXAMINATION
By a Licensed Real Estate Broker

FAR FROM an expected scenario, it took only 20 minutes to file and register my DTI - Real Estate License to Professional Regulatory Commission (PRC) yesterday.

The actual PRC Filing opened only yesterday (Tuesday - August 17 2010). The in-charge-PRC-employees for Real Estate Brokers Registration has just finished sorting out our DTI Records last Monday (August 16). Two (2) verification windows handle the identical records --- Window 28 of Registration Division in Main Bldg and Window H of Records Division in Annex: Customer Service Center. Not all DTI-Licensed Brokers records are present on both windows. In my case, I was directed by Window 28 to proceed to Window H to search and verify my DTI-Exam Rating. (Just an opinion, if you lost your Actual Rating Report Paper, you can have it verified on Window H. Going to DTI is like the same thing going to PRC because our DTI Records are already transferred to PRC.)

To download the PDF copy of this blog, go to the last portion and "Download Document" to your computer.

The 20-minute Registration yesterday is entirely due to (1) dedicated windows/table to Real Estate Brokers arranged by the Commission and PRB-RES; (2) Ease of Process; and, (3) the minimal turn-out of the broker-registrants. Tumagal nga lang ng konte kasi there were blank infos on my Application for Registration Without Examination Form and Permanent Examination & Registration Record Card. Admittedly, a bit excited to be among the Doctors, Engineers, Accountants, Teachers, Geologists and other Professionals who are filing their licenses. (Thank Jesus and Mama Mary, I made some pretty right choices during the 2008 REBL Exam.)

A PRC personnel asked me why it seems that of all the numerous records (they've shown me the boxes stacked in the room), the filers seems to come in "trickle".

* Told the lovely lady that some of the brokers are on a wait-and-see attitude to take CPE which is a crucial requirement.

* Others, specially the women are battling it out it in some government agencies --- justifying their real names and real marriage contracts :).

* Others, are thinking that this week's registration will have a huge turn-out kaya baka maipit sila at matagalang pumila so palipas na lang muna sila. A Broker told me that she's filing on October 10, 1010 --- 101010 --- para memorable date daw! Told her, goodluck and mag-pray sya :) ... na hindi sya maipahuli before 101010 until 011011 (Jan 2011) for practicing without license. FYI, it would take between 1 to 3 months before ma-release ang PRC License!

BAKA LANG MAKATULONG, here are some practical tips when you finally decide to come down and file your application for registration to PRC:

To download the PDF copy of this blog, go to the last portion and "Download Document" to your computer.

IMPORTANT OFFICES:
a. Office of the Asst. Secretary >>> 3F - Main Building
b. Notary Public >>> 2F - Main Building
c. Registration Division (Window 28) >>> GF - Main Buidling
d. Cashier >>> GF - Main Building (outside)

e. Records Division (Window H) >>> GF - Annex: Customer Service Center (outside)
f. Metered Documentary Stamp >>> GF - Annex: Customer Service Center (outside)

For the first timers in PRC grounds, Annex:Custtomer Service Center is immediately after the Entrance Gate. Main Building sa dulo, pagpasok.


THINGS TO DO:

1. Make sure that your APPLICATION FOR REGISTRATION WITHOUT EXAMINATION Form is completely filled-up. You need to write down your Cedula Details. Form is available in 3F-Main Building. Or you can download at http://www.ra9646.blogspot.com/.

2. Staple all zeroxed copies of requirements together with the Originals of notarized CPE Certificate; NBI Clearance; and, Surety Bond.
      Another source of P20k-Surety Bond for 3years = P2,200
      Call 687-5393 and Look for Nancy/Malou
      @ 902 Megaplaza at the back of Robinsons Galleria
      Code: Broker’s Surety Bond
      Present your Cedula at pwede mo nang hintayin ang policy!
      Or you can ask Nancy that your policy be mailed
           para hindi ka na pumunta.

3. Indicate on top of the PERMANENT EXAMINATION & REGISTRATION RECORD Card ... "For Real Estate Broker". Card is available in 3F-Main Building.

4. Come in a very comfortable but decent attire. Take into consideration na walang elevator at 2 buildings ang babalik-balikan mo. Pwedeng tsinelas basta Havaianas flip flops :)


REGISTRATION PROCESS:

i. Documents Pre-Qualification @ 3F - Main Building > Office of the Asst Secretary. Walang upuan dito kaya tiis ka nakatayo habang bigay ang docs mo one-by-one. If you followed #2-above, mas mabilis ang pag-tingin sa docs mo. If docs are complete, you'll be given the PERMANENT EXAMINATION & REGISTRATION RECORD Card. Fill-up the Card somewhere else after ... kasi masikip sa 3F.

ii. Proceed to Registration Division (Window 28) @ GF. If your DTI Record is with them, they'll validate your Exam Rating as you've written on the Form. Otherwise, you'll have to go out to Annex: Customer Service Center and proceed to Records Division - Window H. Once verified, you'll have to return to Window 28. Also, yung picture na ididikit mo sa Card, pwede ka na hingi paste sa counter kung wala dala.

iii. Get your Documentary Stamp @ GF - Annex: Customer Service Center. Prepare ka exact P 210.00.

iv. Go to Cashier @ GF - Main Building (outside). Prepare ka exact P 900.00.

v. Go to Notary Public @ 2F - Main Building. Prepare ka exact P 50.00

vi. Lastly proceed to 3F - Main Building > Office of the Asst Secretary to submit everything ... notarized Form, registered Card, verified rating, doc stamp and paid registration. In return for everything, you'll be given a signed REGISTRATION WITHOUT EXAMINATION FOLLOW-UP SLIP. Take this home, fill-up and use for application follow-up after 3 months.

Hope you'll get lucky just like me during the whole process --- maikli pila; gwapo at magaganda ang mga kasabay na mga Brokers; mabait na mga PRC personnel; and, to top them all ... walang traffic sa kalsada!

By the way, I happened to be the last DTI-Licensed Real Estate Broker to finish my PRC application for registration yesterday. When I asked for the headcount, I was told that I am ... #23 on the list overall of the expected 21,800 broker-registrants.

To download the PDF copy of this blog, place your mouse below, right click and "Download Document" to your computer.

PRC to Hold REBL Exam on Feb 2011

The Professional Regulatory Board of Real Estate Service (PRB-RES) announced that the supposed Real Estate Brokers Licensure (REBL) Examination in December 05 2010 shall be re-scheduled on February 05, 2011.

The proposed schedule has been requested and will soon be calendared along with the different Board Examinations under the supervision of Philippine Regulatory Commission (PRC). PRC's 2011 Master Schedules of Board Licensure Examinations for Professionals is expcted to be published in December.

LICENSE Application to PRC starts Monday, Aug 16

RA 9646's Implementing Rules and Regulation (IRR) published last July 24 in Philippine Daily Inquirer and Philippine Star takes effect Monday, August 09 2010.

All DTI Licensed Brokers and Passers of Real Estate Exams in previous years may now apply for PRC registration starting Monday, August 16.

For reference, you may download below the "Application for Registration w/o Examination" along with the PRC Guidelines and Requirements. These information maybe found as well to http://www.prc.gov.ph/.

To download >>> place your mouse pointer anywhere below and right-click to Download Document to your computer.

RA 9646's IRR
(published and emphasized)

Pursuant to Section 5, (J), Article II and Section 42, Article V of Republic Act No. 9646,“An Act regulating the Practice of Real Estate Service in the Philippines, Creating for the Purpose a Professional Regulatory Board of Real Estate Service, Appropriating Funds Therefor and for Other Purposes”, the Professional Regulatory Board of Real Estate Service, hereinafter called as the Board, after the review and approval by the Professional Regulation Commission, hereinafter referred to as the Commission, hereby adopts, issues, and promulgates this resolution embodying the following Implementing Rules and Regulations to carry out, administer, and enforce the provisions of R.A. No. 9646

Note: To download the IRR, position the mouse anywhere below, right click and "Download Document" to your computer.

RA 9646
REAL ESTATE SERVICE ACT

Congress of the Philippines
Fourteenth Congress

[ REPUBLIC ACT NO. 9646 ]
AN ACT REGULATING
THE PRACTICE OF REAL ESTATE SERVICE IN THE PHILIPPINES, CREATING FOR THE PURPOSE A PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

ARTICLE I
TITLE, DECLARATION OF POLICY AND DEFINITION OF TERMS

SECTION 1. Title. - This Act shall be known as the. "Real Estate Service Act of the Philippines".

SEC. 2. Declaration of Policy. - The State recognizes the vital role of real estate service practitioners in the social political, economic development and progress of the country by promoting the real estate market, stimulating economic activity and enhancing government income from real property-based transactions. Hence, it shall develop and nurture through proper and effective regulation and supervision a corps of technically competent, responsible and respected professional real estate service practitioners whose standards of practice and service shall be globally competitive and will promote the growth of the real estate industry.

SEC. 3. Definition of Terms. - As used in this Act, the following terms shall mean:

A. "Appraiser" also known as valuer, refers to a person who conducts valuation/appraisal; specifically, one who possesses the necessary qualifications, license, ability and experience to execute or direct the valuation/appraisal of real property.

B. "Assessor" refers to an official in the local government unit, who performs appraisal and assessment of real properties, including plants, equipment, and machineries, essentially for taxation purposes. This definition also includes assistant assessors.

C. "Real estate" refers to the land and all those items which are attached to the land. It is the physical, tangible entity, together with all the additions or improvements on, above or below the ground.

D. "Real estate development project" means the development of land for residential, commercial, industrial, agricultural, institutional or recreational purposes, or any combination of such including, but not limited to, tourist resorts, reclamation projects, building or housing projects, whether for individual or condominium ownership, memorial parks and others of similar nature.

E, "Real estate developer" refers to any natural or juridical person engaged in the business of developing real estate development project for his/her or its own account and offering them for sale or lease.

F. "Real property" includes all the rights, interests and benefits related to the ownership of real estate.

G. "Real estate service practitioners" shall refer to and consist of the following:

1. Real estate consultant - a duly registered and licensed -natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of real estate projects.

2. Real estate appraiser - a duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, performs or renders, or offers to perform services in estimating and arriving at an opinion of or acts as an expert on real estate values, such services of which shall be finally rendered by the preparation of the report in acceptable written form.

3. Real estate assessor — a duly registered and licensed natural person who works in a local government unit and performs appraisal and assessment of real properties, including plants, equipment, and machineries, essentially for taxation purposes.

4. Real estate broker - a duly registered and licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.

5. Real estate salesperson - a duly accredited natural person who performs service for, and in behalf of. a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.

ARTICLE II
PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE

SEC. 4. Creation and Composition of the Board. - There is hereby created a Professional Regulatory Board of Real Estate Service, hereinafter referred to as the Board, under the supervision and administrative control of the Professional Regulation Commission (PRC), hereinafter referred to as the Commission, composed of a chairperson and four (4) members who shall be appointed by the President of the Philippines from the three (3) recommendees chosen by the Commission from a list of five (5) nominees per position submitted by the accredited and integrated professional organization of real estate service practitioners: Provided, That two (2) of the members of the Board shall represent the government assessors and appraisers.
The first Board shall be organized within six (6) months from the effectivity of this Act.

SEC. 5. Powers and Functions of the Board. — The Board is hereby vested the following powers and functions:

A. Provide comprehensive policy guidelines for the promotion and development of the real estate industry;

B. Conduct licensure examinations for the practice of the real estate service profession and prescribe the appropriate, syllabi of the subjects for examination;

C. Issue, suspend, revoke or reinstate, after due notice and hearing, certificates of registration or professional identification cards for the practice of real estate service;

D. Maintain a comprehensive and updated register of licensed real estate service professionals;

E. Monitor the conditions affecting the practice of real estate service and adopt such measures as may be proper for the enhancement of the profession and/or the maintenance of high professional, ethical and technical standards;

F. Adopt a national Code of Ethics and Responsibilities to be strictly observed by all licensed real estate service practitioners;

G. Hear or investigate any violation of this Act, its implementing rules and regulations, and the Code of Ethics and Responsibilities for real estate service practitioners and issue subpoena and subpoena duces tecum to secure the appearance of witnesses and the production of documents in connection therewith;

H. Safeguard and protect legitimate and licensed real estate service practitioners and, in coordination with the accredited and integrated professional organization of real estate service practitioners, monitor all forms of advertisements, announcements, signboards, billboards, pamphlets, brochures and others of similar nature concerning real estate and, where necessary, exercise its quasi-judicial and administrative powers to finally and completely eradicate the pernicious practices of unauthorized or unlicensed individuals;

I Prescribe, in cooperation with the Commission on Higher Education (CHED) or the concerned state university or college, the essential requirements as to the curricula and facilities of schools, colleges or universities seeking permission to open academic courses or already offering such courses in real estate service, and to see to it that these requirements, including the employment of qualified faculty members, are properly complied with;

J. Promulgate, .administer and enforce rules and regulations necessary in carrying out the provisions of this Act;

K. Supervise and regulate the registration, licensure and practice of real estate service in the Philippines;

L. Assess and fix the rate of reasonable regulatory fees;

M. Administer oaths and affirmations;

N. Adopt an official seal of the Board;

O. Evaluate periodically the status of real estate service education and profession, and recommend and/or adopt measures to upgrade and maintain its high standard;

P. Prescribe guidelines and criteria for the Continuing Professional Education (CPE) program for real estate service practitioners in consultation with the accredited and integrated professional organization of real estate service practitioners;

Q. Screen, issue and monitor permits to organizations of real estate professionals in the conduct of seminars and accredit such seminars pursuant to the CPE program, as well as the instructors or lecturers therein, for the purpose of upgrading the quality and knowledge of the profession;

R. Monitor and supervise the activities of the accredited and integrated professional organization and other associations of real estate service practitioners; and

S, Discharge such other powers, duties and functions as the Commission may deem necessary to carry out the provisions of this Act.
The policies, resolutions and rules and regulations issued or promulgated by the Board shall be subject to the review and approval by the Commission. However, the Board's decisions, resolutions or orders which are not interlocutory, rendered in an administrative case, shall be subject to review by the Commission only on appeal.

SEC. 6. Qualifications of the Chairperson and Members of the Board. - The chairperson and the members of the Board shall, at the time of their appointment, possess the following qualifications:

A. A citizen and resident of the Philippines;

B. A holder of a bachelor's degree related to real estate;

C. An active licensed practitioner of real estate service for at least ten (10) years prior to his/her appointment;

D. A bona fide member in good standing of the accredited and integrated professional organization of real estate service practitioners but not an officer or trustee at the time of his/her appointment;

E. Neither be a member of the faculty of an institute, school, college or university, nor have any pecuniary interest, direct or indirect, in any institution or association where review classes or lectures in preparation for the licensure examination are being offered or conducted; and

F. Of good moral character, and must not have been convicted by final judgment by a competent court of a criminal offense involving moral turpitude.

SEC. 7. Term of Office. - The chairperson and the members of the Board shall hold office for a term of three (3) years from the date of their appointment and until their successor/s shall have been appointed: Provided, That the members of the first appointed Board shall hold office for the following terms: one (1) member as chairperson, to serve for three (3) years; two (2) members, to serve for two (2) years; and two (2) members, to serve for one (1) year.

The chairperson and the members of the Board may be reappointed for a second term but in no case shall he/she serve continuously for more than six (6) years. Any vacancy in the Board shall be filled for the unexpired portion of the term of the member who vacated the position. On the constitution of the first Board, the chairperson and the members of the Board shall automatically be registered and issued certificates of registration and professional identification cards. Each member of the Board shall take the proper oath of office prior to the assumption of duty.

SEC. 8. Compensation and Allowances of the Chairperson and Members of the Board. - The chairperson and the members of the Board shall receive compensation and allowances comparable to the compensation and allowances received by the chairman and the members of existing professional regulatory boards under the Commission, as provided for in the General Appropriations Act.

SEC. 9. Removal of the Chairperson and Members of the Board. - The chairperson or any member of the Board may be suspended or removed by the President of the Philippines, upon the recommendation of the Commission, for neglect of duty; abuse of power; oppression; incompetence; unprofessional, unethical, immoral or dishonorable conduct; commission or toleration of irregularities in the conduct of examination or tampering of the grades therein, or for any final judgment or conviction of any criminal offense involving moral turpitude.

SEC. 10. Supervision of the Board, Custodian of its Records, Secretariat and Support Services. — The Board shall be under the general supervision and administrative control of the Commission. All records of the Board, including applications for examination, examination papers and results, minutes of deliberations, administrative and other investigative cases involving real estate service practitioners, shall be kept by the Commission. The Commission shall designate the secretary of the Board and shall provide the secretariat and other support services to implement the provisions of this Act subject to the usual government accounting and auditing rules and regulations.

SEC. 11. Annual Report. - The Board shall, at the close of each calendar year, submit an annual report to the Commission, giving a detailed account of its proceedings and accomplishments during the year and recommending measures to be adopted with the end-in-view of upgrading and improving the conditions affecting the practice of real estate service in the Philippines.

ARTICLE III
LICENSURE EXAMINATION AND REGISTRATION

SEC. 12. Licensure Examination. - Every applicant seeking to be registered and licensed as a real estate service practitioner, except a real estate salesperson, shall undergo an examination as provided for in this Act. Examinations for the practice of real estate service in the Philippines shall be given by the Board at least once every year in such places and dates as the Commission may designate.

SEC. 13. Scope of Examination. - An examination shall be given to the licensure applicants for real estate brokers, real estate appraisers and real estate consultants which shall include, but not limited to, the following:

A. For real estate consultants - fundamentals of real estate consulting; standards and ethics; consulting tools and techniques, which include project feasibility study and investment measurement tools; real estate finance and economics; real estate consulting and investment analyses; consulting for specific engagement, which includes consulting for commercial, industrial, recreation and resort and hotel properties, and consulting for government and corporate and financial institutions; land management system and real property laws; and any other related subjects as may be determined by the Board;

B. For real estate appraisers — fundamentals of real estate principles and practices; standards and ethics; theories and principles in appraisal; human and physical geography; methodology of appraisal approaches; valuation procedures and research; appraisal of machinery and equipment; practical appraisal mathematics; appraisal report writing; real estate finance and economics; case studies; land management system and real property laws; and any other related subjects as may be determined by the Board; and

C. For real estate brokers - fundamentals of property ownership; code of ethics and responsibilities; legal requirements for real estate service practice; real estate brokerage practice; subdivision development; condominium concept; real estate finance and economics; basic principles of ecology; urban and rural land use; planning, development and zoning; legal aspect of sale, mortgage and lease; documentation and registration; real property laws; and any other related subjects as may be determined by the Board.

To conform with technological and modern developments, the Board may re-cluster, rearrange, modify, add to, or exclude any of the foregoing subjects as may be necessary.

SEC. 14. Qualification of Applicants for Examinations. - In order to be admitted to the licensure examination for real estate service, a candidate shall, at the time of filing his/her application, establish to the satisfaction of the Board that he/she possesses the following qualifications:

A. A citizen of the Philippines;

B. A holder of a relevant bachelor's degree from a state university or college, or other educational institution duly recognized by the CHED: Provided, That as soon as a course leading to a Bachelor's degree in Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for taking the "licensure examination; and

C. Of good moral character, and must not have been convicted of any crime involving moral turpitude: Provided, That an applicant for the licensure examination for real estate consultants must show proof that he/she has at least ten (10) years experience as a licensed real estate broker or an assessor, or as a bank or institutional appraiser or an employed person performing real property valuation, or at least five (5) years experience as a licensed real estate appraiser.

All applications for examination shall be filed with the Board which shall assess and approve said applications and issue to the qualified examinees the corresponding permits to take such examination.

SEC. 15. Ratings in the Examination. - In order that a candidate may be deemed to have successfully passed the examination, he/she must have obtained an average of at least seventy-five percent (75%) in all subjects, with no rating below fifty percent (50%) in any subject.

SEC. 16. Release of the Results of Examination. - The results of the licensure examination shall be released by the Board within ten (10) days from the last day of the examination.

SEC. 17. Issuance of the Certificate of Registration and Professional Identification Card. - A certificate of registration shall be issued to examinees who pass the licensure examination for real estate service subject to payment of fees prescribed by the Commission. The certificate of registration shall bear the signature of the chairperson of the Commission and the chairperson and the members of the Board, stamped with the official seal of the Commission, indicating that the person named therein is entitled to practice the profession with all the benefits and privileges appurtenant thereto. This certificate of registration shall remain in full force and effect until revoked or suspended in accordance with this Act.

A professional identification card bearing the registration number, date of issuance and expiry date, duly signed by the chairperson of the Commission, shall likewise be issued to every registrant upon payment of the required fees. The professional identification card shall be renewed every three (3) years and upon satisfying the requirements of the Board such as, but not limited to, attendance in the CPE program.

SEC. 18. Refusal to Register. - The Board shall not register and issue a certificate of registration to any successful examinee who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude or has been found guilty of immoral or dishonorable conduct after investigation by the Board, or has been found to be psychologically unfit.

SEC. 19. Revocation or Suspension of the Certificate of Registration and the Professional Identification Card or Cancellation of Special/Temporary Permit. - The Board may, after giving proper notice and hearing to the party concerned, revoke the certificate of registration and the professional identification card, or cancel the special/temporary permit of a real estate service practitioner, or suspend him/her from the practice of the profession on any of the following instances hereunder:

A. Procurement of a certificate of registration and/or professional identification card, or special/temporary permit by fraud or deceit;

B. Allowing an unqualified person to advertise or to practice the profession by using one's certificate of registration or professional identification card, or special/temporary permit;

C. Unprofessional or unethical conduct;

D. Malpractice or violation of any of the provisions of this Act, its implementing rules and regulations, and the Code of Ethics and Responsibilities for real estate service practitioners; and

E, Engaging in the practice of the profession during theperiod of one's suspension.

SEC. 20. Registration Without Examination. - Upon application and payment of the required fees, the following shall be registered, and shall be issued by the Board and the Commission a certificate of registration and a professional identification card without taking the prescribed examination:

A. Those who, on the date of the effectivity of this Act, are already licensed as real estate brokers, real estate appraisers or real estate consultants by the Department of Trade and Industry (DTI) by virtue of Ministry Order No. 39, as amended: Provided, That they are in active practice as real estate brokers, real estate appraisers and real estate consultants, and have undertaken relevant CPE to the satisfaction of the Board;

B. Assessors and appraisers who, on the date of the effectivity of this Act, hold permanent appointments and are performing actual appraisal and assessment functions for the last five (5) years, have passed the Real Property Assessing Officer (RPAO) examination conducted and administered by the Civil Service Commission (CSC) in coordination with the Department of Finance (DOF), and have undertaken relevant CPE to the satisfaction of the Board; and

C. Assessors and appraisers who, on the date of the effectivity of this Act, hold permanent appointments and have at least ten (10) years actual experience in real property appraisal or assessment and have completed at least one hundred twenty (120) hours of accredited training on real property appraisal conducted by national or international appraisal organizations or institutions/entities recognized by the Board and relevant CPE to the satisfaction of the Board.

Those falling under categories (b) and (c) shall register with the Board after they shall have complied with the requirements for registration as real estate appraisers: Provided, That those seeking to be licensed to a new credential level shall be required to take the pertinent licensure examination.

Those so exempt under the aforementioned categories shall file their application within two (2) years from the effectivity of this Act: Provided, That the renewal of the professional identification card is subject to the provisions of Section 17 hereof.

SEC. 21. Reinstatement, Reissuance or Replacement of Certificate of Registration, Professional Identification Card and Special/Temporary Permit. - The Board may, after the expiration of two (2) years from the date of revocation of a certificate of registration and/or professional identification card, and upon application, compliance with the required CPE units, and for reasons deemed proper and sufficient, reinstate any revoked certificate of registration and reissue a suspended professional identification card and in so doing, may, in its discretion, exempt the applicant from taking another examination. A new certificate of registration, professional identification card or special/temporary permit may be issued to replace lost, destroyed or mutilated ones, subject to the rules as may be promulgated by the Board.

SEC. 22. Roster of Real Estate Service Practitioners. -The Board, in coordination with the integrated professional organization of real estate service practitioners, shall prepare, update and maintain a roster of real estate service practitioners which shall contain the names of all registered real estate service practitioners, their residence and office addresses, license number, dates of registration or issuance of certificates, and other data which the Board may deem pertinent. Copies thereof shall be made available to the public upon request.

SEC. 23. Issuance of Special/Temporary Permit. - Upon application and payment of the required fees and. subject to the approval of the Commission, the Board may issue special/temporary permit to real estate service practitioners from foreign countries whose services are urgently needed in the absence or unavailability of local real estate service practitioners for the purpose of promoting or enhancing the practice of the profession in the Philippines.

SEC. 24. Foreign Reciprocity. - No foreign real estate service practitioner shall be admitted to the licensure examination or be given a certificate of registration or a professional identification card, or be entitled to any of the privileges under this Act unless the country of which he/she is a citizen specifically allows Filipino real estate service practitioners to practice within its territorial limits on the same basis as citizens of such foreign country.

ARTICLE IV
PRACTICE OF REAL ESTATE SERVICE

SEC. 25. Oath. — All successful examinees qualified for registration and all qualified applicants for registration without examination as well as accredited salespersons shall be required to take an oath before any member of the Board or any officer of the Commission duly authorized by the Commission to administer oaths prior to entering into the practice of real estate service in the Philippines.

SEC. 26. Professional Indemnity Insurance/Cash or Surety Bond. - All real estate brokers and private real estate appraisers shall, in addition to the oath referred to in the preceding section, be required to post a professional indemnity insurance/cash or surety bond, renewable every three (3) years, in an amount to be determined bjr the Board, which in no case shall be less than Twenty thousand pesos (P20,000.00), without prejudice to the additional requirement of the client.

SEC. 27. Acts Constituting the Practice of Real Estate Service. - Any single act or transaction embraced within the provisions of Section 3(g) hereof, as performed by real estate service practitioners, shall constitute an act of engaging in the practice of real estate service.

SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. - The provisions of this Act and its rules and regulations shall not apply to the following":
A. Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section 3 hereof with reference to his/her or its own property, except real estate developers;

B. Any receiver, trustee or assignee in bankruptcy or insolvency proceedings;

C. Any person acting pursuant to the order of any court of justice;

D. Any person who is a duly constituted attorney-in-fact for purposes of sale, mortgage, lease or exchange, or other similar contracts of real estate, without requiring any form of compensation or remuneration; and

E. Public officers in the performance of their official duties and functions, except government assessors and appraisers.

SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service. - No person shall practice or offer to practice real estate service in the Philippines or offer himself/herself as real estate service practitioner, or use the title, word, letter, figure or any sign tending to convey the impression that one is a real estate service practitioner, or advertise or indicate in any manner whatsoever that one is qualified to practice the profession, or be appointed as real property appraiser or assessor in any national government entity or local government unit, unless he/she has satisfactorily passed the licensure examination given by the Board, except as otherwise provided in this Act, a holder of a valid certificate of registration, and professional identification card or a valid special/temporary permit duly issued to him/her by the Board and the Commission, and in the case of real estate brokers and private appraisers, they have paid the required bond as hereto provided.

SEC. 30. Positions in Government Requiring the Services of Registered and Licensed Real Estate Service Practitioners. - Within three (3) years from the effectivity of this Act, all existing and new positions in the national and local governments, whether career, permanent, temporary or contractual, and primarily requiring the services of any real estate service practitioner, shall be filled only by registered and licensed real estate service practitioners.

All incumbent assessors holding permanent appointments shall continue to perform their functions without need for re appointment and without diminution of status, rank and salary grade, and shall enjoy security of tenure. However, they may not be promoted to a higher position until they meet the qualification requirements of that higher position as herein prescribed. Nothing in this Act shall be construed to reduce any benefit, interest, or right enjoyed by the incumbents at the time of the enactment of this Act. The appointing authority shall exercise his power to appoint the assessor in accordance with the provisions of this Act only when a vacancy occurs.

SEC. 31. Supervision of Real Estate Salespersons. - For real estate salespersons, no examination shall be given, but they shall be accredited by the Board: Provided, That they have completed at least two (2) years of college and have undergone training and seminars in real estate brokerage, as may be required by the Board. Real estate salespersons shall be under the direct supervision and accountability of a real estate broker. As such, they cannot by themselves be signatories to a written agreement involving a real estate transaction unless the real estate broker who has direct supervision and accountability over them is also a signatory thereto. No real estate salesperson, either directly or indirectly, can negotiate, mediate or transact any real estate transaction for and in behalf of a real estate broker without first securing an authorized accreditation as real estate salesperson for the real estate broker, as prescribed by the Board. A real estate broker shall be guilty of violating this Act for employing or utilizing the services of a real estate salesperson when he/she has not secured the required accreditation from the Board prior to such employment.

No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind from any person, other than the duly licensed real estate broker who has direct control and supervision over him, for any service rendered or work done by such salesperson in any real estate transaction.

No violation of this provision shall be a cause for revocation or suspension of the certificate of registration of the real estate broker unless there was actual knowledge of such violation or the broker retains the benefits, profits or proceeds of a transaction wrongfully negotiated by the salesperson.

SEC. 32. Corporate Practice of the Real Estate Service. –

A. No partnership or corporation shall engage in the business of real estate service unless it is duly registered with the Securities and Exchange Commission (SEC), and the persons authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be. The partnership or corporation shall regularly submit a list of its real estate service practitioners to the Commission and to the SEC as part of its annual reportorial requirements. There shall at least be one (1) licensed real estate broker for every twenty (20) accredited salespersons.

B. Divisions or departments of partnerships and corporations engaged in marketing or selling any real estate development project in the regular course of business must be headed by full-time registered and licensed real estate brokers.

C. Branch offices of real estate brokers, appraisers or consultants must be manned by a duly licensed real estate broker, appraiser or consultant as the case may be.

D. In case of resignation or termination from employment of a real estate service practitioner, the same shall be reported by the employer to the Board within a period not to exceed fifteen (15) days from the date of effectivity of the resignation or termination.

Subject to the provisions of the Labor Code, a corporation or partnership may hire the services of registered and licensed real estate brokers, appraisers or consultants on commission basis to perform real estate services and the latter shall be deemed independent contractors and not employees of such corporations.

SEC. 33. Display of License in the Place of Business. - Every registered and licensed real estate service practitioner shall establish and maintain a principal place of business and such other branch offices as may be necessary, and shall conspicuously display therein the original and/or certified true copies of his/her certificate of registration as well as the certificates of registration of all the real estate service practitioners employed in such office.

SEC. 34. Accreditation and Integration of Real Estate Service Associations. - All real estate service associations shall be integrated into one (1) national organization, which shall be recognized by the Board, subject to the approval of the Commission, as the only accredited and integrated professional organization of real estate service practitioners.

A real estate service practitioner duly registered with the Board shall automatically become a member of the accredited and integrated professional organization of real estate service practitioners, and shall receive the benefits and privileges appurtenant thereto. Membership in the accredited and integrated professional organization of real estate service practitioners shall not be a bar to membership in other associations of real estate service practitioners.

SEC. 35. Code of Ethics and Responsibilities for Real Estate Service Practitioners. - The Board shall adopt and promulgate the Code of Ethics and Responsibilities for real estate service practitioners which shall be prescribed and issued by the accredited and integrated professional organization of real estate service practitioners.

SEC. 36. Continuing Professional Education (CPE) Program. - The Board shall develop, prescribe and promulgate guidelines on CPE upon consultation with the accredited and integrated professional organization of real estate service practitioners, affiliated association of real estate service practitioners and other concerned sectors, and in accordance with such policies as may have been prescribed by the Board, subject to the approval of the Commission. The Board shall create a CPE Council that shall be composed of a chairperson coming from the Board, a member from the accredited and integrated professional organization of real estate service practitioners and a member from the academe.

SEC. 37. Enforcement Assistance to the Board. — The Board shall be assisted by the Commission in carrying out the provisions of this Act and its implementing rules and regulations and other policies. The lawyers of the Commission shall act as prosecutors against illegal practitioners and other violators of this Act and its rules. The duly constituted authorities of the government shall likewise assist the Board and the Commission in enforcing the provisions of this Act and its rules.

SEC. 38. Indication of the Certificate of Registration, Professional Identification Card/License Number, Privilege Tax Receipt (PTR) Number and Accredited Professional Organization (APO) Number. - Real estate service practitioners shall be required to indicate the certificate of registration, professional identification card, PTR number, and APO receipt number, and the date of issuance and the duration of validity on the documents he/she signs, uses or issues in connection with the practice of his/her profession.

ARTICLE V
PENAL AND FINAL PROVISIONS

SEC. 39. Penal Provisions. - Any violation of this Act, including violations of implementing rules and regulations, shall be meted the penalty of a fine of not less than One hundred thousand pesos (P100,000.00) or imprisonment of not less than two (2) years, or both such fine and imprisonment upon the discretion of the court. In case the violation is committed by an unlicensed real estate service practitioner, the penalty shall be double the aforesaid fine and imprisonment.

In case the violation is committed, by a partnership, corporation, association or any other juridical person, the partner, president, director or manager who has committed or consented to or knowingly tolerated such violation shall be held directly liable and responsible for the acts as principal or as a co-principal with the other participants, if any.

SEC. 40. Appropriations. — The chairperson of the Professional Regulation Commission shall immediately include in the Commission's programs the implementation of this Act, the funding of which shall be included in the annual General Appropriations Act and thereafter.

SEC. 41, Transitory Provision. - Within ninety (90) days from the effectivity of this Act, the DTI - Bureau of Trade Regulation and Consumer Protection (BTRCP) shall transfer all pertinent records, documents and other materials to the Professional Regulatory Board of Real Estate Service.

SEC. 42. Implementing Rules and Regulations. - Within six (6) months after the effectivity of this Act, the Commission, together with the Board and the accredited and integrated professional organization of real estate service practitioners, the Department of Finance, and the CHED, shall prepare the necessary rules and regulations, including the Code of Ethics and Responsibilities for real estate service practitioners, needed to implement the provisions of this Act.

SEC. 43. Separability Clause. — If any clause, sentence, paragraph or part of this Act shall be declared unconstitutional or invalid, such judgment shall not affect, invalidate or impair any other part of this Act.

SEC. 44. Repealing Clause. – (a) Sections 3(e) and (ee) of Act No. 2728, as amended by Act No. 3715 and Act No. 3969, Sections 472 and 473 of the Local Government Code of 1991 (Republic Act No. 7160), and pertinent provisions of the Civil Service Law are hereby modified accordingly.

(b) All laws, decrees, executive orders, department or memorandum orders and other administrative issuances or parts thereof which are inconsistent with the provisions of this Act are hereby modified, superseded or repealed accordingly.

SEC. 45. Effectivity. - This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in a major daily newspaper of general circulation in the Philippines.


Approved,
This Act which is a consolidation of Senate Bill No. 2963 and House Bill No. 3514 was finally passed by the Senate and the House of Representatives on May 12, 2009.


Approved:
GLORIA MACAPAGAL-ARROYO
President of the Philippines

[ Approved last June 29, 2009 ]

LEGISLATIVE HISTORY: SENATE

12/9/2008
Prepared and submitted jointly by the Committee(s) on CIVIL SERVICE AND GOVERNMENT REORGANIZATION and URBAN PLANNING, HOUSING AND RESETTLEMENT with Senator(s) MIRIAM DEFENSOR SANTIAGO, RODOLFO G. BIAZON, ANTONIO "SONNY" F. TRILLANES IV and PANFILO M. LACSON as author(s) per Committee Report No. 232, recommending its approval in substitution of SBNos. 1298, 1644, 1656 and taking into consideration HBN-3514;

12/15/2008
Committee Report Calendared for Ordinary Business;

12/15/2008
Sponsor: Senator PANFILO M. LACSON;

12/17/2008
Assigned for Consideration by Special Order;
Sponsorship speech of Senator(s) PANFILO M. LACSON;

2/4/2009
Period of interpellation closed;

Period of committee amendments;

Period of committee amendments closed;

Inquiry of Senator Pimentel, Jr.;

2/9/2009
Period of individual amendments;
Period of individual amendments closed;
Approved on Second Reading with Amendments;
Senators ESCUDERO, ZUBIRI and GORDON were made coauthors;

2/10/2009
Printed copies were distributed to the Senators;

2/16/2009
Approved on Third Reading;
In favor: (14) BENIGNO S. AQUINO III, JOKER P. ARROYO, "COMPANERA" PIA S. CAYETANO, JINGGOY P. EJERCITO-ESTRADA, JUAN PONCE ENRILE, FRANCIS "CHIZ" G. ESCUDERO, RICHARD "DICK" J. GORDON, GREGORIO B. HONASAN II, PANFILO M. LACSON, MANUEL "LITO" M. LAPID, LOREN B. LEGARDA, FRANCIS N. PANGILINAN, MAR ROXAS and JUAN MIGUEL F. ZUBIRI;
Against: (1) PIMENTEL, JR.;
Abstention: N o n e ;

2/17/2009
Senate requested the House of Representatives for a conference on the disagreeing provisions of SBN-2963 and HBN-3514, and designated Senators Lacson, Legarda and Companero Alan Peter S. Cayetano as its conferees to the Bicameral Conference Committee;

2/18/2009
Sent to the House of Representatives requesting for concurrence;

2/25/2009
Senator MANUEL "LITO" M. LAPID was made as coauthor;

4/14/2009
House of Representatives agreed to a conference on the disagreeing provisions of HBN-3514 and SBN-2963, and designated Representatives Gonzales Jr., Del Mar, Zialcita, Valencia and Binay as its conferees to the Bicameral Conference Committee on March 2, 2009;

5/12/2009
Conference Committee Report submitted to the Senate, recommending that SBN-2963, in consolidation with HBN-3514, be approved as reconciled;

Sponsorship speech of Senator Lacson on the Conference Committee Report;Conference Committee Report Approved by the Senate;

5/18/2009
Conference Committee Report approved by the House of Representatives on May 12, 2009;

5/28/2009
Enrolled copies of the consolidated version of SBN-2963 and HBN-3514, sent to the House of Representatives for the signature of the Speaker and the Secretary General;

6/1/2009
Enrolled copies of the consolidated version of SBN-2963 and HBN-3514, received by the Senate, already signed by the Speaker and the Secretary General of the House of Representatives;

Enrolled copies of the consolidated version of SBN-2963 and HBN-3514, sent to the Office of the President of the Philippines, Her Excellency President Gloria Macapagal Arroyo, for her signature and approval;

6/29/2009
Approved and signed into law by the President of the Philippines, Her Excellency President Gloria Macapagal Arroyo and became; (See: O.B. dated July 29, 2009)REPUBLIC ACT NO. 9646