In my previous write up, I stated clearly my disagreement about the ASEAN Integration, precisely because I can foresee the dangers that the individual Real Estate practitioner, professional or sole proprietor have to meet. Individual Professionals will be at a disadvantage against large multinational corporations and conglomerates. Today, for example , the foreign owed real estate service corporations dominate the appraisal industry.
This threat ,that foreign corporations will dominate the real estate service industry even more after 2015, urges us to prepare, plan and set-up a strategic position, to meet tough competition.
Even without the ASEAN integration, the top 4 or 5 foreign real estate service corporations have taken about 45- 50% of the market share of appraisal services. The question is, what will happen to most of the Filipino real estate professionals?
Will it be the doom or opportunity for a boom?
Other countries have government policies called “nationalization” wherein foreign experts are hired to develop the infrastructures and technology for a specific period. When the locals are trained and have gained experience, they inherit the technology , expertise and the skills. Is this what “transfer of technology” means? Or, is it be the means by which, foreigners could take advantage of Filipino professionals?
For example, If our government supports , recognizes, and accredits, our local real estate appraisers, then , it would be beneficial, for our local professionals. However, the reality is that Some Important Government Agencies, Corporations, and Departments, do not in general accredit our local real estate appraisers!
Therefore , if our real estate professionals, do not get recognized, then worst things may happen to our Filipino real estate appraisers. Especially, with the ASEAN integration, were we expect new rules, regulations, and international standards to be required, approved and implemented.
I can be sure that the majority of “abused, battered and prejudiced” local appraisers will lose business ; or , be unable to practice, or if lucky, eventually get ” absorbed ” – hired as an employee by the bigger foreign, real estate service corporations.
The Filipino Real Estate Appraisal Industry is crying out…Foul! Unfair! Why?!
For Professional Real Estate Appraisers, one of our concerns is the issue , of the need to comply for accreditations. This is a requirement from Government Departments, Agencies, Corporations and the like; such as the Security and Exchange Commission, Banko Sentral Ng Pilipinas, GSIS, SSS and Philippine Stock Exchange.
The so called “Accreditation” requirements add to the unnecessary burden to the Real Estate Professional. And even at times, humiliates one, and deprives the professional to practice. Thus, one is at a disadvantage, and bared from his livelihood , economic well-being, and constitutional / Legal right to practice.
In most cases, an independent real estate appraiser, who wishes to render services for a commercial bank, is required to get an accreditation from BSP. However , The Bangko Sentral ng Pilipinas has one of the more stringent requirements for real estate appraisers. ( click here for Bangko Sentral ng Pilipinas Requirements for Appraisers )
PAG-IBIG also have several requirements that makes it quite difficult for real estate appraisers to get the accreditation (click here for PAG-IBIG requirements for appraisers). A checklist of requirements are needed for compliance and the more complicated rules are;
14. Statement of all its ongoing and completed government and private contracts for the last three (3) years including contracts awarded but not yet started
15. Certification from clients, preferably banking institutions within the last five (5) years stating that they have availed of the services of the appraisal company
together with an authority for Pag-IBIG Fund.
16. List of clients within the last five (5) years who have availed of the services of
the appraisal company, including information on the client’s contact person
The SEC for example requires;
i. The applicant shall be registered with the Commission either as a corporation or general professional partnership organized by individuals engaged in appraisal work;
ii. The certifying property valuer employed or engaged by the applicant shall possess the following qualifications:
a. A professional valuer licensed by PRBRES pursuant to R. A. 9646 and its Implementing Rules and Regulations;
b. An officer or a member in good standing of any registered association of property valuers;
c. With a minimum experience of five (5) years in providing property valuation services on a regular basis;
d. Compliant with the Continuing Professional Education (CPE) prescribed by PRBRES.
iii. At the time of application, the applicant entity shall have the following minimum qualifications:
a. It has been in the business of providing property valuation services for at least five (5) years;
b. It has all the requisite business permits and licenses to operate the business;
c. It has at least two (2) permanently employed valuers who each possesses the qualifications required under paragraph II(3)(ii);
Last June 27, 2013, the Philippine Association of Realty appraisers, Inc. (PARA) sent a position letter to Atty. Ma. Gracia Casals-Diaz of the Securities and Exchange Commission (SEC) clarifying — why accountants are designated to review appraisal reports instead of licensed appraisers and why individual licensed appraisers are not accredited by SEC while corporations with unlicensed foreigners using corporate practice to avoid complying to the RESA Act 9646 are.
Another position letter was sent by the Philippine Association of Realty Consultants and Specialist Inc. to the SEC Chairperson, Hon. Teresita J. Herbosa. The PARCS questioned why professional appraisers should be accredited by Securities and Exchange Commission (SEC) since the PRC’s responsible in regulating professionals in accordance to Sec, 29 of the Real Estate Service Act (RESA) law. The PARTCs said additional requirements and accreditation from SEC is a restraint of trade and of free exercise guaranteed by the constitution. As stated in Section 32 of the RESA Law, corporate practice requires “that all be licensed”.
However we do not discount the fact that when it comes to ” corporate practice ” in real estate service either as brokers, or appraisers, the Securities and Exchange Commission has some kind of jurisdiction and monitors corporate activity. We see no overlapping functions here, the corporation code, corporate governance, and other regulatory functions to protect shareholders, investors and the general public is a responsibility of the Securities and Exchange Commission.
But what I do not understand, is the power of the SEC, to “Regulate” and “Accredit” Real Estate Appraisers. Is this not the job of the Professional Regulatory Commission?
Unfortunately we feel that the Securities and Exchange Commission has extended its powers in requiring an accreditation process, and that the requirements are very tedious ; next to impossible. Why is it that out of around 3,000 licensed appraisers nationwide, only about 10-12 are accredited by the Securities and Exchange Commission, and out of the credited corporations, about 4 or 5 of them are foreign owned and controlled.
In my opinion, this is a violation of Section 2 or Declaration of Policy of Republic Act 9646 that states “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.“
Then why is there so much bias against our local appraisers? Why is the professional practice being prejudiced against “corporate practice”? These corporations rendering Real Estate Services, are managed and owned by non licensed real estate appraisers?
These again is a violation of Section 29 or Prohibition Against the Unauthorized Practice of Real Estate Service of RA 9646 “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.” and it is clear in Section 32 or Corporate Practice of the Real Estate Service of the RESA law that corporate practice requires “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 list of Accredited Real Estate Appraisers are:
- Professional Asset Valuers, Inc.
- CB Richard Ellis Phils., Inc.
- Vitale Valuation Services, Inc.
- Royal Asia Appraisal, Inc.
- TopConsult, Inc.
- Asian Appraisal Co., Inc.
- Cuervo Appraisers, Inc.
- Tan-Gatue Appraisal Associates, Inc.
- Colliers International Philippines, Inc.
- LCH Philippines, Inc.
- Philippine Appraisal Co., Inc.
This means that the large majority of competent, experienced. & knowledgeable Real Estate Appraisers, are faced with the sad reality not being recognized, accepted, and given a fair chance to practice his/ her profession.
To survive this threat, my advice is that we Real Estate practitioners must prepare oneself, plan strategically, move to a position of advantage so as to profit for the threats and dangers from big competition, then we can transform the pending doom to a boom.
On a positive note, Albay will host the first major activity of the Asia-Pacific Economic Cooperation (APEC) in December 4-5 2014. The Informal Senior Ministerial Meetings will be held at the world-class Misibis Bay Resort hideaway Pacific island in Bacacay, Albay. The summit will be attended by 300 ranking officials of the APEC member countries including ministers and their deputies and representatives of world media. We can be sure this will translate to an advantage for real state in Albay.
“Department of Trade and Industry (DTI) officials, the lead agency in charge of APEC summit preparations, have allowed Albay to host at least 10 events because they are convinced that the province is ready, with in-place disaster risk reduction systems. It is also home of the iconic Mayon volcano.” The hosting boosted Albay’s infrastructure projects in the province such as the construction of the Southern Luzon International Airport in the town of Daraga. Albay Gov. Joey Salceda added.
In other Western Visayas cities, Iloilo is teeming with potentials in the field of real estate. The acquisition of the 54-hectare old airport property (P1.2 billion) in Iloilo Mandurriao by Megaworld has placed the province in the global map of the booming real estate industry. The optimism in the real estate spread to neighboring provinces and benefited the construction industry as Negros Oriental and Cebu posted additional construction projects of 277 and 153, respectively.
It is clear that cross-border opportunities in the real estate industry have increase, and it’s the driving force to boost tourism and the construction industry in our country.
In conclusion, for us Professional Real Estate Appraisers can, and must make a difference, whether it be the pressure of foreign competition, victims of the injustice of the ” accreditation ” requirements or the Integration of ASEAN Nations, resulting to a borderless practice of once’s profession.
In the end, it will be for us to accept the challenge, and prove that we are indeed Globally Competitive and Competent.
I urge each one to start “Working out”, via Education, Networking, Niche Competence and Expertise, Skill and Technical Training, so as to be Professionally Strong. Develop Prestige and Create an Institution that will be Internationally Recognize and Respected.
My next article will focus more on the Professional Regulation Commission ( PRC) proposed Road Map for Global Competitiveness. We will come up with the means necessary for one to be Internationally Acceptable. And, some advice on how must a Professional develop certain human virtues, in order to demand more from once self ,and form a unique Personality and Character. That will attract the World and seek out the Filipino Professional as Outstanding, Creative, and Brilliant!
Securities and Exchange Commission website