Philippines improves real estate transparency

The Philippines improved its ranking in Jones Lang Lasalle’s Global Real Estate Transparency Index, placing 42nd from its previous rank of 44th in 2020.

JLL cited the Philippines’ move to extend the Anti-Money Laundering Act to cover real estate as among the new initiatives in real estate transparency implemented around the world over the last two years.

Republic Act 11521, which strengthened the anti-money laundering law, the country included real estate developers (REDs), real estate brokers (REBs), offshore gaming operators (OGOs), and OGO-service providers (OGO-SPs) as covered persons. The law was enacted in January 2021.

Despite the higher rank, the Philippines registered an overall score of 2.91, the same score it posted in 2020.

The Philippine real estate market is classified under the semi-transparent market along with other countries such as Israel, Greece and India, among others. Screenshot from JLL’s website.

The index is based on a scoring of one to five, with one being the most transparent and five being opaque.

The country registered its highest score in the listed vehicles sub-index with a score of 2.24. The sub-index assesses transparency in the financial disclosure and corporate governance requirements of listed real estate vehicles.

This was followed by the transaction processes sub-index with a score of 2.47. This examines transparency across key elements of the transaction process for sales transactions.

The Philippines registered a score of 2.52 in the market fundamentals sub-index, which measures the availability, quality and depth of real estate market data across geographies, sectors and types of data.

The country scored its lowest in the investment performance sub-index with a score of 3.79. This covers four topics particularly, direct property indices, listed real estate securities indices, private real estate fund indices, and valuations.

It also recorded scores of 2.66 and 3.33 in the regulatory and legal sub-indices and sustainability sub-index, respectively.

Given its overall score, the country was classified under the semi-transparent level which covers those scoring 2.66 to 3.50.

The transparency index classified countries into five tiers namely highly transparent, transparent, semi-transparent, low transparency and opaque.

JLL’s global real estate transparency index covered a total of 94 countries and 156 city markets.