The core issue lies in the nature of the reported profit. Villar Land’s trillion-peso leap  was not the result of explosive business growth, increased productivity, or outsized  market performance. It came from a revaluation of real estate holdings essentially a  change in how the company values its land, not a change in how the business  performs.  

As Somera points out in his piece “Vantage Point: Villar Land’s net income—a trillion peso mirage?”, the income being celebrated is not cash in hand nor profit from sales  but a reappraisal gain, one that does little to reflect the company’s actual earning  capacity. The Philippine Stock Exchange (PSE) even clarified that such a gain is  considered “non-recurring,” a technical term that investors know to treat with  caution.  

Equally troubling is the apparent inaction from the Securities and Exchange  Commission (SEC) and the PSE, the very institutions tasked with ensuring  transparency, fairness, and truthfulness in our financial markets. As Somera asserts  in his follow-up article, “[ANALYSIS] SEC and PSE under suspicion of lapses over  Villar Land revaluations,” there is growing concern that these regulators failed to  adequately review, question, or explain the implications of the revaluation. The PSE  merely issued a boilerplate reminder about the difference between recurring and non recurring income.  

At a time when the Philippine capital market is striving for global relevance and  investor confidence, an episode like this undermines credibility. If companies can  inflate net income figures into the trillions with minimal explanation and little  regulatory friction, what kind of message does this send to the investing public? Or  to international observers? 

This is not just about Villar Land. It is about the rules of the game, and whether they  still apply to all players equally. The seeming indifference of regulators calls into  question the institutional capacity or willingness of the SEC and PSE to fulfill their  mandate. If they cannot or will not demand transparency and accountability in cases  like this, then they become complicit in undermining the very market they are meant  to protect. 

If Villar Land’s revaluation had been thoroughly explained, vetted, and scrutinized  by regulators and communicated clearly to the investing public, this could have been  an opportunity to showcase strategic land banking or portfolio management.  

Let the Villar Land episode serve as a wake-up call not just for regulators, but for  every stakeholder in the Philippine financial system. Because when a trillion-peso  mirage can be passed off as success, we are not building markets, we are building  illusions.