SECURITIZING PH REAL ESTATE

Can you “securitize” real estate in the Philippines?

A common idea in real estate is this: what if you could pool money from hundreds—or even thousands—of investors to buy a single property?

Before anything else, let’s define the term.

"Securitization" is the process of turning an asset into financial instruments (“securities”) that can be sold to multiple investors.

In practice:

+ You set up a company (SPV)

+ The company buys the property

+ Investors buy shares in the company

So instead of owning the property directly, investors own a stake in the entity that owns it. This concept already exists globally—REITs are a perfect example.

Before the pandemic, a foreign group tried to apply this in the Philippines—but with a twist.

Instead of shares, they wanted to issue digital tokens (“coins”). Investors could freely buy and sell these tokens, making the investment more liquid.

Sounds ideal—until regulation comes in.

In the Philippines, the SEC strictly regulates investment solicitation. If you offer securities to more than 19 investors, it’s considered a public offering, which requires SEC registration (unless exempt).

And here’s the key point:

It doesn’t matter what you call it—shares, units, or tokens.

If it functions like an investment, the SEC will treat it as a security.

Also, exits are not tax-free. Gains are still subject to applicable taxes depending on structure.

So why not just register?

Because it’s not easy.

Even large financial institutions find SEC approvals for securitized products extremely difficult—long timelines, heavy compliance, and strict investor protection requirements. I’ve seen this firsthand in the financial institution I used to work for—even with scale, capital, and expertise, getting SEC approval for securitized products was still EXTREMELY difficult.

Bottom line:

The concept works. The challenge is regulation.

In the Philippines, you can’t scale this beyond a small group without triggering SEC oversight. And once you do, the real question becomes: Can you make it work after regulatory costs and complexity?

Because here, structure is easy—approval is the real game.