Senate bill meant to boost cities’ realty taxes passed on 3rd reading

The Philippine Senate on Monday approved on third and final reading a priority bill seeking to fast-track and boost the monitoring of real property sales of local government units (LGUs) and to maintain a digital database of up-to-date market values.

In a 23-0-0 vote, senators voted in favor of Senate Bill No. 2386 or the Real Property Valuation and Assessment Reform Act, which aims to improve real property tax collections by updating valuations without increasing or imposing new taxes.

The bill, which was sponsored by Ways and Means Committee chairperson, Sen. Sherwin T. Gatchalian, would also grant amnesty for unpaid real property taxes and interests.

“Through this proposed measure, we not only pave the way for greater efficiency and accuracy in property valuation but also extend a helping hand to our delinquent property owners and low-income LGUs,” he told the Senate floor after the measure’s approval.

Under the proposal, a real property information system would be maintained to make accurate property valuations readily available and reduce discrepancies in these transactions.

The system would provide an up-to-date database of the sale, exchange, lease, mortgage, donation, transfer among other real property transactions.

The Department of Information and Communications Technology (DICT) will be tasked to assist lower-income class LGUs to support a real property tax administration fund.

The measure aims to boost tax collection efficiency through the automation of real property services provided by local governments.

The Bureau of Local Government Finance (BLGF), which is under the Department of Finance (DoF), would be the primary agency to develop valuation standards for real property appraisal used for taxation and to ensure LGU compliance.

A new unit of the BLGF called the Real Property Valuation Services would be established to support the development valuation of real property taxes.

New schedule of market values, the basis for calculating property tax, would take effect within two years of the bill’s approval.

During these two years, a one-time 6% cap on each type of real property tax would be imposed to allow taxpayers to adjust to new real property market values. LGUs would have the authority to extend the cap once it expires.

The House of Representatives approved a counterpart bill on third reading in December, 2022.

Last December, the DoF said the measure would boost investor confidence through the adoption of internationally accepted valuation standards.

Based on Philippine Statistics Authority (PSA) data, the gross value-added contribution of real estate and ownership of dwelling last year was at 5.6% of the Philippine gross domestic product, or about P1.37 trillion.

Real property collections by cities only grew by 5.3% between 2019  and 2021, the Congressional Policy and Budget Research Department (CPBRD) said in a report last year.

The late and former Senate President Edgardo Angara J. Angara had filed a similar measure in 2005.

“For almost two decades, a dream has echoed in the halls of Congress: a single, transparent, and updated valuation system,” Mr. Gatchalian said. “Today, that vision inches closer to reality.”

Source: Business World

Is an oral sale of land really unenforceable?

In the Philippines, the enforceability of an oral sale of land depends on the circumstances. Let’s explore this further:

• Unenforceability Under the Statute of Frauds:

• Generally, an oral sale of real property is not considered void, but it is unenforceable under the Statute of Frauds. This means that while the oral agreement itself may not be legally binding, it can still have some legal effects.

• The Statute of Frauds requires certain contracts, including real estate transactions, to be in writing to be enforceable. However, there are exceptions.

• Partially or Completely Executed Contracts:

• If the oral sale has been partially or completely executed, it may still be enforceable. In other words, if the parties have already taken significant steps (such as possession, payment, or other acts) based on the oral agreement, it can be upheld.

• The Statute of Frauds is not applicable in cases where the verbal sale has been executed, meaning that the parties have fulfilled their obligations under the agreement.

• Legal Effects Between the Parties:

• Even without a written contract, an oral sale of real estate can still produce legal effects between the parties.

• Courts recognize that practical considerations and actions taken by the parties can validate an oral agreement, especially when it has been acted upon.

In summary, while an oral sale of land is generally unenforceable under the Statute of Frauds, its validity depends on the specific circumstances and whether it has been partially or completely executed.

Source: ZigguratRealestate.ph

ASEAN Bank Stability Report Reveals Most (and Least) Reliable Philippines Banks

In the contemporary era where the digital economy shapes the core of financial transactions, the reliance on banking services and stability has significantly escalated, including in the Philippines.

This reliance is not merely a reflection of a preference for convenience, but underscores a pivotal shift towards digital banking as an indispensable component of both personal and business financial management.

The ASEAN Bank Stability Report, introduced by Singaporean fintech software and services firm Brankas, evaluates the resilience and reliability of banking infrastructure, particularly focusing on the ASEAN region with an in-depth analysis of bank stability in both the Philippines and Indonesia.

This comprehensive study of bank uptimes and downtimes aims to dissect the ramifications of traditional bank stability, delving into the operational reliability of banks in the Philippines, challenges in maintaining uninterrupted service, and the consequent impacts on the financial ecosystem at large.

The Critical Role of Uptime in Banking Services

The digital transformation of banking has accentuated the critical nature of continuous service availability. In an age where digital transactions form the backbone of daily financial activities, the stability of online bank services become a fundamental requirement in the Philippines and throughout the region.

The ASEAN Bank Stability Report, through its assessment of network uptime performance, highlights the operational reliability of the major Philippine and Indonesian banks such as RCBC, Bank Mandiri, and UnionBank.

Influential Factors on Bank Uptime

The discourse on banking uptime is nuanced, attributing downtime to several factors including scheduled maintenance, system upgrades, and unforeseen technical glitches.

Scheduled maintenance is a necessary operation for banks, involving essential updates and security enhancements that necessitate temporary service suspensions.

System upgrades are equally vital, ensuring that banking operations align with current industry standards and security requirements. Technical glitches represent unforeseen challenges that can disrupt service.

The swift and effective resolution of such glitches is critical for maintaining service continuity.

The report advocates for a balance between essential maintenance and the need for uninterrupted service, suggesting advanced notifications for scheduled downtimes to minimize customer inconvenience.

Bank Performance Stability in the Philippines

The report provides a detailed overview of the performance metrics of Philippine banks, with the Rizal Commercial Banking Corporation, better known as RCBC, emerging as a frontrunner with an impressive uptime of 98.3% and a record of seven months without any downtime events.

In stark contrast, UnionBank’s performance was highlighted as the least impressive, with an uptime of 95.98% and significant outages, including one that lasted around 20 hours.

Landbank and Metrobank stood out for their proactive dissemination of notices regarding both scheduled and emergency maintenance operations.

In contrast, BPI was diligent in announcing planned maintenance but fell short in alerting customers to unforeseen service interruptions. UnionBank and BDO were notably less efficient in communicating both scheduled and unexpected system disruptions.

Impact of Banking Downtimes in the Philippines

Throughout the year, all banks faced operational downtimes, with UnionBank and Metrobank experiencing the greatest number of incidents. The duration of these downtimes typically varied from one to three hours, although there were instances of extended disruptions:

UnionBank suffered a 20-hour outage, Metrobank experienced downtimes between six and eight hours, BPI had an 18-hour interruption, and Landbank encountered an eight-hour pause in services.

January 2023 emerged as the month with the minimal downtime incidents across banks in the Philippines. RCBC demonstrated exemplary performance by maintaining uninterrupted service for seven consecutive months.

A significant disruption occurred in March when an InstaPay issue impacted the majority of banks, leading to widespread system interruptions.

BDO and Metrobank initiated an eight-hour maintenance shutdown between April and May 2023.

UnionBank observed increased downtime during payday periods, hinting at the existing infrastructure’s inability to manage abrupt surges in demand. UnionBank recorded the highest total downtime of 183 hours over the year, equivalent to an offline status for 7.6 days.

The analysis further reveals the infrastructural strains during peak periods such as payday, suggesting a need for capacity enhancement to handle traffic spikes.

The proactive communication by banks, or lack thereof, in the event of both planned and unplanned outages is underscored as a critical area for improvement, to safeguard reputation and ensure customer satisfaction.

The Banking Sector at a Crossroads

The emergence of digital banks and fintech companies has catalyzed a transformative shift in the banking sector, propelling traditional banks towards innovation and customer-centric service models.

The report highlights a significant consumer trend, with digital banks and fintechs capturing a substantial share of new checking accounts opened in 2023.

This shift not only illustrates the evolving consumer preferences but also serves as a clarion call for traditional banks to adapt and innovate to remain competitive.

The indispensability of a reliable banking ecosystem is emphasized, considering the increasing sophistication of cyberattacks, the demand for cross-border access, and the diverse banking support required across various platforms and devices.

The insights gleaned from the ASEAN Bank Stability Report by Brankas are invaluable for a spectrum of stakeholders within the financial ecosystem, offering a lens through which the reliability and stability of digital banking services can be assessed.

As the report highlights, the significance of network uptime in digital banking cannot be overstated, with its direct implications on business operations and consumer trust.

As the ASEAN region continues to evolve as a dynamic financial hub, the report’s findings offer critical insights for informed decision-making, paving the way for a banking sector that is equipped to meet the challenges of the digital age and cater to the evolving demands of a diverse clientele.

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Source: Fintechnews