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Letter to the Editor

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This is in response to the article of Mr. Ramon Clarete published on 7 January 2019 titled, “Property Valuation Service: Are we losing international competitiveness?”

I thank Mr. Ramon Clarete for his interest in our work and for the stimulating comments which highlight our profession and offer a broader perspective. I am certainly in agreement with the writer on the role of property valuation to economies in weathering crisis. However, I was appalled by some points in his article and allow me to comment. His assertion on the maturity of the real estate appraisal profession; quality of service and the valuation standards are quiet disturbing.


Real estate appraisal in the country is in its infancy stage, as a profession. Even though it started in 1961, it was considered as a trade rather than a profession. However, since July 2009, with the passage into law of Republic Act 9646 or the Real Estate Service Act of the Philippines (RESA), real estate appraisal has been recognized as a profession and strengthened.

Mr. Clarete pointed his pen on the 90% of the appraisers. He consistently mixes the know-how in real estate practice and the quality of service. However, Mr. Clarete misses the point. The number of appraisers might triple in number, but the question is, have the opportunities to practice the profession also tripled?

To practice the profession, appraisers have been subjected to different barriers that only few can endure. Take for example the government projects under President Duterte: the Department of Public Works and Highways required appraisers to have an accreditation with the Bangko Sentral ng Pilipinas to qualify in a bidding. BSP has its own criteria in evaluating appraisers as outlined in its guidelines “BSP Acceptable Appraisal Companies for Ocular Inspection and Appraisal of Real Estate Properties.” To be part of the list, the appraiser or the appraisal company must comply with certain criteria to be accredited. One is the setting of company net worth to P4 million; and the other one is the setting of ten (10) years’ experience in the real estate-appraisal business as a requirement to manage and sign the appraisal report.

The Securities and Exchange Commission (SEC), Energy Regulatory Commission, and other government agencies and even commercial banks have their own guidelines and requirements. It is not surprising that only 11 companies, as of December 31, 2017, were accredited by the SEC, and 22 under the BSP.

In the broader context, these accreditation requirements and non-implementation of certain provisions of the Real Estate Service Act have a multiplier effect on appraisal practice. Negating the appraisers of the opportunity to participate in government projects and practice their profession. And it has been 10 years now.

On the International Standards: Mr. Clarete should never forget that the International Valuation Standards was adopted and prescribed as the reference standards in the country only in October 2009, by prescribing the Philippine Valuation Standards. It is only since then that the country laid down the foundation, through education and training, in developing the capability of property appraisers in the country to be at par with other countries. Thus, appraisers now are attending international seminars and conferences to learn best practices of other countries and also share our situation and experiences. In an increasingly globalized world, the consistency and compatibility of standards across jurisdictions is an important issue.

The valuation practice and standards in the appraisal are intertwined. Theories will remain theories if they will not be applied. Provide the appraisers with the venue to practice their profession, and they will surely rise to a new and higher level of professional practice.

We should endeavor in helping real estate appraisers to developed and fulfill their role in the economy, society and our people and be globally competitive in professional practice and standards.

 

Augusto B. Agosto
PAREB Vice-President for the Visayas,
2018 PAREB Chairman on Appraisal Committee
Faculty, University of San Carlos
School of Business and Economics