The Duterte administration continues to lay out plans for the country, weeks before it assumes position, this time focusing on real estate investment trusts (REIT) and the infrastructure budget.
Incoming Finance Secretary Carlos “Sonny” Dominguez III will take charge of the improvement of REITs, while Budget Secretary Benjamin Diokno wants to raise infrastructure spending.
REIT is a stock corporation or company that owns income-generating real estate assets. It provides investors regular income streams, long-term capital appreciation and diversification, much like mutual funds.
The outgoing Aquino administration imposed stringent REIT rules that limit losses in revenue caused by laws that grant tax perks. Dominguez wants to review and amend the existing policies and rules of REITs.
“Is it a correct approach to think that a reduction in revenue is the way it should be interpreted [under the Aquino administration] rather than [as] an investment that encourages business activity that will result in more savings, in the case of PERA, and more economic activity in terms of the REIT?” Business World reported Dominguez as saying.
“Instead of looking at it as a reduction in income or revenue, maybe it should be looked at a different way: it’s an investment in the future,” Dominguez added.
Meanwhile, Diokno plans to increase the infrastructure budget by strengthening internal revenue allotments (IRA) of local governments under the Duterte administration.
Diokno said that the IRA will take a “formula-based, no-questions asked” approach in distributing infrastructure funds to local government units.
The incoming Budget Secretary said that a lot of improvements are needed in infrastructure spending after its neglect for the past six years.
“We have to make up for the past neglect of infrastructure,” ANC News reported Diokno as saying in the channel’s “Headstart With Karen Davila” interview on Monday.
He accused the outgoing Aquino administration of using bottom-up-budgeting (BuB), an alternative to the top-to-bottom approach, to bankroll infrastructure projects in communities. He added that it was used as a political tool to favor the administration’s allies.
Diokno also noted the Daang Hari road project which took the Aquino government five years to bid out. Daang Hari connects southern Metro Manila to the province of Cavite.
Aside from ramping up infrastructure spending, the next administration will also be pushing for a new budget reform act.
"There are many improvements since then and I want this embodied in the budget reform act, consistent with the recent Supreme Court decisions on PDAF (Priority Development Assistance Fund) and DAP (Disbursement Acceleration Program)," ABS-CBN News reported Diokno as saying.