Leasing out a house, condominium unit, apartment, room, bedspace, or other residential property in the Philippines is not merely a private arrangement between owner and tenant. In Philippine tax law, it is generally treated as an income-generating activity that may require Bureau of Internal Revenue registration, invoicing, bookkeeping, and the filing and payment of taxes. Many lessors discover this only after years of informal leasing, when a tenant asks for a BIR-registered invoice, a bank requests proof of declared rental income, or the BIR issues a compliance notice.

This article explains the Philippine legal and tax framework for residential leasing, with emphasis on BIR registration, recurring tax obligations, tax options, common mistakes, documentary requirements, and special situations. It is written in general informational form and should be read together with the National Internal Revenue Code, as amended, the implementing regulations of the BIR, and current administrative issuances applicable at the time of compliance.

1. Why residential leasing is a taxable activity

As a rule, rental income from property is taxable income. The source of the income is the lease contract, but the tax consequence attaches to the fact that the owner or lessor is earning from the use or occupancy of property. It does not matter that the owner is not operating a storefront, that there is only one unit being leased, or that the leasing is part-time. For tax purposes, earning rent is enough to trigger possible registration and compliance duties.

In Philippine practice, the lessor of residential property is commonly treated as a person engaged in business for tax administration purposes. That is why BIR registration issues arise even where the owner does not think of himself as “running a business.”

2. What kinds of residential leasing are covered

The discussion generally covers:

lease of a condominium unit for residential use;
lease of a house and lot for residential use;
lease of an apartment unit;
lease of rooms, bedspaces, and similar accommodations intended as residence;
lease of residential units by an individual owner, co-owners, an estate, or a corporation.

This article is about residential leasing. It does not primarily address hotels, motels, inns, transient lodging businesses, serviced apartments run like hospitality operations, or short-stay arrangements that may be treated differently under tax, licensing, and local regulation rules. Once the arrangement begins to look like a lodging business rather than an ordinary residential lease, the tax profile may materially change.

3. The first legal question: do you need to register with the BIR?

In most cases, yes.

A person who earns recurring rental income from leasing residential property should ordinarily register with the BIR for that activity. This is true even if:

there is only one property;
the rental is modest;
the owner already has a TIN as an employee;
the tenant is a family, student, or individual rather than a company;
the arrangement is informal or verbal.

Having a TIN is not the same as being registered for the leasing activity. Many individuals already have a TIN because they are employees or have previously registered another activity. What matters is whether the taxpayer has properly updated his registration to reflect the business line or income-generating activity of leasing real property.

4. Who should register: owner, co-owners, estate, or corporation

A. Sole owner

If one individual owns the property and receives the rentals, that individual is ordinarily the taxpayer who should register and report the income.

B. Spouses

If the property is conjugal, absolute community property, or otherwise jointly owned by spouses, the income tax treatment can become more nuanced. As a practical matter, many spouses report the rental income through one registered lessor account, but the proper treatment may depend on property relations and how income is actually earned and recorded. For substantial operations, the structure should be reviewed carefully.

C. Co-owners

If several heirs or co-owners lease out inherited or co-owned property, the tax result depends on how the arrangement is structured.

A mere co-ownership that simply preserves the property and collects rent may allow each co-owner to report his distributive share. But once the co-owners contribute to a common enterprise and operate the leasing activity in a way that resembles a business venture for profit, the arrangement can raise the issue of whether an unregistered partnership exists for tax purposes. That has major consequences because an unregistered partnership may be taxed like a corporation.

This is one of the most overlooked risk areas in inherited apartment buildings and family-owned rentals.

D. Estate of a decedent

If the owner dies and the estate continues to lease out the property during settlement, the estate may itself become the taxable entity for that period until distribution is completed.

E. Corporation or partnership

If the property is owned by a domestic corporation, partnership, or other juridical entity, the entity registers and reports the lease income in its own name.

5. What BIR registration usually involves

The exact forms and administrative process may change as the BIR updates its systems, but the usual components of registration for a residential lessor include the following:

A. TIN issuance or TIN update

If the lessor does not yet have a TIN, one must be secured. If the lessor already has a TIN, the registration data usually has to be updated to include the leasing activity.

B. Registration of the line of business

The taxpayer should register the activity in terms that reflect leasing of real property or rental operations. The BIR record should match the actual business activity.

C. Registration of books of accounts

The lessor is generally required to maintain registered books of accounts, whether manual, loose-leaf, or computerized, depending on the taxpayer’s system and approval status. Even a small lessor should keep a basic and consistent record of rent billed, rent received, deposits, expenses, and taxes paid.

D. Authority to use invoices or printing/issuance compliance

A lessor must comply with the invoicing rules. Under the newer invoicing framework, the system has moved away from the old distinction that heavily relied on “official receipts” for services. In practice, lessors should ensure they are using the currently prescribed invoicing document and format recognized by the BIR.

E. Registration through BIR channels

Registration may be done through the appropriate Revenue District Office or through online channels made available by the BIR, depending on the taxpayer’s circumstances and current administrative rules.

6. Common documentary requirements

The BIR may require some or all of the following, depending on the taxpayer profile and current rules:

valid government-issued ID;
TIN details;
proof of address;
proof of ownership of the property, such as a transfer certificate of title, condominium certificate of title, tax declaration, deed of sale, or similar document;
lease contract or draft lease contract;
sample invoice details or invoicing application requirements;
books of accounts registration requirements;
for entities, SEC or DTI documents where applicable;
SPA or authorization documents if processed through a representative.

The exact checklist can vary by RDO and by the taxpayer’s status as individual, estate, or entity.

7. Is an annual registration fee still part of compliance?

For many years, taxpayers were familiar with the old annual registration fee. The current framework should always be checked against the latest law and regulations in force at the time of filing because this is one of the areas that has seen reform. A taxpayer should not assume that older checklists still apply exactly as before.

The practical lesson is simple: follow the current registration process in force when you register or update, not the checklist remembered by a printer, bookkeeper, or old internet post.

8. The taxes that usually apply to residential leasing

Residential leasing can involve several different taxes, not all of which apply in every case.

The main taxes are:

income tax;
VAT or percentage tax, depending on the rental profile and tax option;
withholding tax, in special cases where the tenant is required to withhold;
documentary stamp tax, in connection with certain lease instruments;
local taxes and fees, though these are not BIR taxes, such as real property tax and local business permit requirements.

9. Income tax: always the starting point

Rental income is taxable income. The lessor must report it and pay income tax under the regime applicable to the taxpayer.

For an individual lessor, the common possibilities are:

graduated income tax rates on net taxable income, or
the optional 8% income tax on gross sales/receipts and other non-operating income in excess of the statutory threshold, when legally available.

For a corporate lessor, corporate income tax rules apply.

Gross rental income

Gross rental income generally includes:

fixed monthly rent;
advance rent, when received and not merely held subject to return;
amounts paid by the tenant on behalf of the lessor if they are really obligations of the lessor;
forfeited deposits, once they cease to be refundable and are applied as income.

Security deposits

A true security deposit that is refundable at the end of the lease is generally not income upon receipt. It becomes income only when it is retained, forfeited, or applied to unpaid rent or damages in a manner that makes it no longer refundable.

Advance rent

Advance rent is generally treated differently from a refundable security deposit. If the amount is payment for future use or occupancy, it is ordinarily taxable when received.

This distinction matters greatly in leasing practice because many lessors receive “two months advance and two months deposit” and mistakenly treat the entire collection as non-taxable.

10. Graduated income tax versus the 8% option

For many individual residential lessors, the most practical tax decision is whether to use the regular graduated income tax system or the optional 8% regime, if available.

A. Graduated income tax

Under the graduated system, the lessor pays income tax on net taxable income, meaning gross rentals less allowable deductions. This regime is usually preferable where deductible expenses are substantial.

Common potentially deductible expenses, if properly substantiated and legally allowable, include:

repairs and maintenance;
condominium dues or association dues borne by the lessor;
commissions to brokers or agents;
salaries or wages of caretakers or property managers;
utilities paid by the lessor;
insurance;
interest on loans related to the property, subject to tax rules;
depreciation of the building and certain improvements;
real property taxes and other taxes that are deductible under tax law;
legal and professional fees directly related to the leasing activity.

Not all expenditures are immediately deductible. Capital expenditures such as major improvements, structural additions, and acquisitions are generally capitalized and recovered through depreciation or other tax treatment, not deducted outright in one year.

Substantiation is essential. No matter how real an expense is, it can be disallowed if unsupported by proper invoices and records.

B. Optional 8% income tax

An individual lessor may, if legally qualified, choose the 8% tax on gross sales/receipts and other non-operating income in lieu of graduated income tax and percentage tax.

This option is attractive when:

gross rentals are not too high;
expenses are low or difficult to substantiate;
the lessor wants simpler compliance.

But the 8% option has limits:

it is generally available only to qualified non-VAT taxpayers below the VAT threshold;
once the taxpayer is VAT-registered or becomes subject to VAT, the option is not available;
the taxpayer gives up itemized deductions because the tax is based on gross receipts, not net income;
for mixed-income earners, the interaction with compensation income must be handled correctly.

A person who is both an employee and a residential lessor is often a mixed-income earner. This is common and frequently mishandled. The tax treatment of the leasing income still requires registration and separate compliance even if the person’s salary is already being taxed through withholding by an employer.

11. VAT in residential leasing

VAT is the most misunderstood part of residential leasing.

Not every lessor is subject to VAT. The treatment depends on the nature of the property, the amount of rental, the aggregate receipts, and whether the taxpayer is VAT-registered or required to be VAT-registered.

A. Basic rule

Lease of real property is generally a VAT-able transaction unless specifically exempt or unless the taxpayer falls below the threshold and is not otherwise VAT-registered.

B. Residential lease exemption threshold per unit

Philippine VAT law has long contained a specific exemption for the lease of residential units where the monthly rental per unit does not exceed the statutory ceiling provided by law and regulations.

In ordinary practice, this means that many lower-rent residential units are VAT-exempt, even if the lessor has several units.

C. When residential rent can become VAT-able

Residential leasing may become VAT-able when the monthly rent per unit exceeds the exemption ceiling and the lessor is required to register as a VAT taxpayer because aggregate annual gross receipts exceed the VAT threshold, or the lessor voluntarily registers for VAT.

D. Practical result

For many individual condo or apartment lessors, the actual VAT question can be reduced to this:

If the residential rent per unit is within the statutory exemption ceiling, the rental may be VAT-exempt.
If the rent per unit is above that ceiling, then the next question is whether the lessor remains a non-VAT taxpayer or has crossed into VAT registration territory.

Because VAT treatment depends on thresholds and election status, it must be monitored continuously, not decided once and forgotten.

12. Percentage tax for non-VAT lessors

If the lessor is not VAT-registered and not VAT-liable, the leasing activity may be subject to percentage tax, unless the taxpayer validly opted for the 8% income tax regime in lieu of percentage tax.

This is why the 8% option matters. Without it, a non-VAT lessor may have both:

income tax, and
percentage tax.

A lessor who incorrectly assumes that “small landlord means no business tax” can accumulate percentage tax deficiencies over several years.

13. Can a residential lessor voluntarily register for VAT?

Yes, in some cases a taxpayer may voluntarily register for VAT even if not yet legally required by the threshold. But this is not automatically beneficial.

Voluntary VAT registration can be disadvantageous for a residential lessor whose tenants are ordinary individuals or families. Why?

Because:

the lessor may have to pass on 12% VAT, making the rent less competitive;
residential tenants usually cannot claim input VAT;
the lessor’s deductible input VAT may not be large enough to justify the compliance burden.

Voluntary VAT registration should be a considered decision, not a casual step.

14. Invoicing: a lessor must issue proper BIR-compliant invoices

A registered lessor must issue the correct BIR-compliant invoice for rental transactions. This is true even if the tenant does not ask for one.

This is one of the biggest shifts in practice. Many small landlords historically issued nothing, or issued homemade acknowledgments, or relied on old-style official receipts without updating to current rules. That creates exposure not only for non-issuance penalties but also for disallowance of declared expenses and weak audit support.

The invoice should reflect:

the registered taxpayer name;
TIN and business details as required;
serial or system control details;
date;
customer or tenant information, where required;
description of the transaction;
amount charged;
tax breakdown if VAT applies.

The exact format must comply with the invoicing rules currently in force.

15. Do you still need a written lease contract?

For civil law purposes, a lease can exist without notarization, and in some cases even orally. But for tax compliance, a written contract is strongly advisable.

A written lease contract helps establish:

the nature of the use as residential;
monthly rental;
security deposit versus advance rent;
utilities and dues allocation;
lease term;
escalation clause;
repairs and maintenance obligations;
penalties and default rules.

Tax disputes often turn on these details. A poorly drafted contract causes avoidable problems in income recognition, VAT treatment, and documentary compliance.

16. Documentary stamp tax on lease instruments

Lease agreements may be subject to documentary stamp tax under the Tax Code. The amount depends on the instrument, rental amount, and period or term, under the applicable statutory schedule.

This is an area where taxpayers often do nothing at all. In practice, documentary stamp tax is frequently overlooked in ordinary residential leasing. Even where the amounts are not large, non-compliance remains technically a tax issue.

The existence, rate, and computation should always be checked against the currently effective DST provisions and BIR rules applicable at the time the instrument is executed.

17. Books of accounts and record-keeping

A residential lessor should keep organized tax records, including:

lease contracts and amendments;
monthly billing schedule;
proof of collections;
invoices issued;
deposit ledger;
expenses with supporting invoices and proof of payment;
proof of ownership and property documents;
tax returns filed;
proof of tax payments;
correspondence on tenant defaults, deposit application, or contract termination.

Even a one-unit lessor should keep a rent roll and a ledger. In an audit, the BIR often reconstructs income from bank deposits, lease contracts, and third-party data. If the taxpayer’s own books are incomplete, the taxpayer loses control of the narrative.

18. Filing obligations and frequency

The exact forms and deadlines depend on the taxpayer type and tax regime, but the common recurring obligations of a residential lessor may include:

A. Quarterly income tax returns

Individual lessors under the ordinary system file quarterly income tax returns and an annual income tax return. Corporate lessors likewise file quarterly and annual returns under the corporate system.

B. Annual income tax return

Individuals generally file an annual return covering total taxable income for the year, including lease income and other income streams as applicable.

C. Quarterly percentage tax return

If the lessor is a non-VAT taxpayer and did not validly opt for 8%, percentage tax may be due quarterly.

D. Quarterly VAT return

If the lessor is VAT-registered or VAT-liable, VAT filing is generally required on a quarterly basis under the current regime.

E. Withholding tax returns

These arise only in specific situations, such as when the lessor also pays suppliers or workers subject to withholding, or where other withholding obligations attach.

The correct filing profile depends on the taxpayer’s actual registration. The tax returns the BIR expects are determined by what the taxpayer registered for, not by what the taxpayer later decides he preferred to be registered as.

19. What if the tenant is a company or a withholding agent?

Where the tenant is a corporation, government office, or other withholding agent, rental payments may be subject to creditable withholding tax, depending on the character of the lease and the applicable withholding rules.

In a true residential lease to a private individual or family, withholding tax is usually not part of the picture. But once the tenant is a business entity paying rent under circumstances covered by withholding regulations, the lessor may receive payment net of withholding tax, and the withheld amount can be claimed as a tax credit.

This matters because some lessors mistakenly declare only the net amount actually received, rather than the gross rental before withholding.

20. Security deposits, unpaid rent, and bad debts

A. Security deposit not automatically income

As noted, refundable security deposits are generally not income on receipt.

B. Applied deposit becomes income

If the deposit is later applied to unpaid rent, it becomes rental income at that point.

C. Unpaid rent

Accrual or cash treatment depends on the taxpayer’s accounting method. Many individual lessors effectively follow a cash basis, but the accounting treatment should align with the taxpayer’s books and reporting method.

D. Bad debts

If rent becomes uncollectible, claiming a bad debt deduction under the ordinary income tax regime requires compliance with the tax rules on bad debts. One cannot simply write “unpaid by tenant” and deduct it automatically.

21. Deductible expenses: what can usually be claimed under the regular regime

Under the graduated income tax system, allowable and substantiated ordinary and necessary expenses may reduce taxable income. In residential leasing, these often include:

repairs that do not materially improve or prolong the property’s life beyond ordinary maintenance;
repainting and minor restoration;
cleaning and janitorial expenses;
property management fees;
leasing commissions;
advertising for tenants;
accounting and legal fees related to the rental activity;
insurance;
depreciation of the building and certain leasehold or capitalized improvements;
real property tax;
association dues and maintenance charges shouldered by the owner;
interest expense, subject to tax limitations.

Not usually immediately deductible

These are often misclassified:

construction of an additional room or floor;
major renovation that enhances value substantially;
replacement amounting to betterment;
purchase of furniture, appliances, or equipment with multi-year useful life.

Those are usually capital expenditures, not current deductions.

22. The trap of informal cash leasing

The most common compliance pattern in the Philippines is the informal landlord who:

receives rent in cash or personal bank transfer;
does not issue BIR-compliant invoices;
does not register books;
does not file returns;
treats deposits and advances casually;
reports nothing unless challenged.

This works only until it does not. Triggers for exposure include:

a tenant who is later audited and names the lessor;
bank KYC or loan applications requiring declared income;
sale or transfer of the property where prior income history becomes relevant;
BIR campaigns on real estate lessors;
disputes with tenants leading to documentary review;
estate settlement or family partition requiring income reconciliation.

Once discovered, the liability can include deficiency taxes, surcharges, interest, and compromise penalties.

23. Local government obligations that often accompany BIR compliance

Strictly speaking, these are not BIR taxes, but they matter in practice.

A. Real property tax

Real property tax is imposed by the local government unit, not the BIR. A lessor should keep these current because unpaid real property tax can create separate enforcement problems.

B. Mayor’s permit or local business permit

Some cities and municipalities require business permits for leasing activities, particularly where there are multiple units or a clear rental operation. Practice varies widely by locality.

C. Barangay clearance and other local clearances

Depending on the LGU, these may be part of permit compliance.

A taxpayer who regularizes BIR registration should not ignore local law requirements.

24. Mixed-income earners: employee by day, landlord on the side

A very common Philippine scenario is the employee who owns one condo unit and leases it out.

That person is a mixed-income earner if he receives both compensation income and business or professional income from leasing. The implications are important:

the lease activity still has to be registered separately;
invoices still have to be issued for rent;
returns for the leasing activity still have to be filed;
the 8% option, if chosen, has to be evaluated correctly in relation to mixed-income rules;
the annual return must properly combine the relevant income streams under the law.

Being a purely salaried employee for one income stream does not excuse registration for the rental stream.

25. Co-ownership and inherited property: a danger zone

Suppose siblings inherit a small apartment building and simply divide the rent among themselves. They may assume each one can report his own share, or worse, that nobody needs to register because the property is “family property.”

This is dangerous.

The tax outcome depends on whether the arrangement remains a mere co-ownership or has effectively become a profit-oriented enterprise akin to an unregistered partnership. If the latter, a separate taxable entity may exist for income tax purposes.

This is highly fact-sensitive and one of the most technical areas of Philippine tax treatment of real property leasing. Family lessors should not improvise here.

26. Corporation-owned residential units

If a corporation leases out residential units, the corporation pays tax under corporate rules. Key consequences include:

corporate income tax;
VAT or percentage tax depending on the transaction profile and registration;
stricter bookkeeping and corporate records;
withholding obligations where the corporation acts as withholding agent for its own payments;
reconciliation between accounting income and tax reporting.

The use being residential does not transform a corporate lessor into a simpler individual taxpayer.

27. Foreign owners and non-residents

Where the owner is a non-resident individual or foreign corporation, or where there is a resident agent or local representative involved, the tax analysis becomes more specialized. Questions may arise on source of income, withholding, local registration, and treaty interaction.

For ordinary practice, foreign owners of Philippine residential property earning rent should not assume that because they are abroad, no Philippine tax compliance is required. Philippine-source rental income from property located in the Philippines remains fundamentally taxable in the Philippines.

28. Short-term rentals versus ordinary residential leases

A long-term residential lease is not the same as operating a short-stay accommodation business. If the activity involves transient stays, frequent turnover, hotel-like services, or platform-based bookings, it may trigger a different tax and regulatory profile.

That distinction matters because some owners label everything “residential lease” even where the actual arrangement resembles hospitality or lodging operations. The legal and tax analysis should follow substance, not labels.

29. Penalties for non-compliance

Failure to register, file, pay, keep books, or issue invoices can lead to:

deficiency income tax;
deficiency VAT or percentage tax;
surcharges;
interest;
compromise penalties;
penalties for failure to issue invoices or keep books;
possible administrative enforcement, including business closure measures in severe cases involving invoicing violations.

In practice, the longer the non-compliance period, the harder it becomes to reconstruct proper treatment of:

deposits;
advance rent;
rent escalations;
tenant turnover;
expenses;
unpaid accounts.

30. Can you fix non-compliance later?

Yes, but the earlier the better.

A lessor who has been leasing informally can usually still regularize by:

registering or updating BIR registration;
registering books;
becoming compliant with invoicing;
filing current and, where appropriate, past returns;
reconciling prior receipts and deposits;
documenting expenses;
seeking professional advice where historical exposure is material.

The difficult part is not the paperwork. It is the historical reconstruction of what was actually received and what taxes should have been paid.

31. Practical compliance map for a new residential lessor

A residential lessor who wants to do things properly should generally do the following before or at the start of leasing:

Confirm ownership and the exact property being leased.
Determine whether the arrangement is truly residential, not transient lodging.
Obtain or update the TIN registration to include leasing activity.
Determine the correct tax profile:
- regular income tax or 8% option for a qualified individual,
- VAT or non-VAT status,
- percentage tax implications.
Register books of accounts.
Comply with invoicing rules and secure the authority or system approval required.
Prepare a written lease contract clearly distinguishing:
- monthly rent,
- advance rent,
- security deposit,
- utilities,
- dues,
- repairs,
- escalation,
- default provisions.
Keep a monthly rent ledger and file calendar.
Preserve all expense documents if under the regular tax regime.
File and pay on time.

32. Practical compliance map for an existing but informal lessor

For a lessor already collecting rent without compliance, the rational order is:

Gather all lease contracts, tenant details, and collection history.
Separate advance rent from refundable security deposits.
Determine annual gross receipts by year.
Determine whether the activity was within residential VAT exemption, non-VAT, percentage tax, or VAT territory.
Evaluate whether the 8% option was or is available.
Register or update BIR records immediately going forward.
Reconstruct expenses only if using the regular regime and only if support exists.
Address prior filings based on actual legal exposure.

33. Frequent misconceptions

“It is only one condo unit, so no registration is needed.”

False. One unit can still be a taxable and registrable leasing activity.

“I already have a TIN from my job.”

A TIN alone is not enough. The leasing activity may still need to be registered.

“The tenant never asks for a receipt.”

That does not remove the obligation to issue the proper invoice.

“Deposits are never taxable.”

False. Refundable security deposits are different from advance rent, and a deposit becomes income once forfeited or applied.

“Residential means automatically no VAT and no business tax.”

False. Residential leasing can be VAT-exempt, non-VAT subject to percentage tax, or VAT-able, depending on the facts.

“Cash basis means I report only what I feel like declaring.”

False. Cash basis does not excuse registration, books, or truthful reporting.

“Inherited family rental property does not count as a business.”

Not necessarily. Co-ownership and unregistered partnership issues may arise.

34. The most important legal distinctions to get right

If a residential lessor remembers only a handful of rules, they should be these:

First, leasing residential property is generally taxable and usually requires BIR registration.

Second, income tax always matters; VAT does not always apply.

Third, refundable security deposits and advance rent are not the same thing.

Fourth, under the regular income tax regime, deductions matter only if they are lawful and substantiated.

Fifth, the optional 8% regime can simplify life for qualified individual lessors, but it is not automatically available in every case.

Sixth, residential lease VAT treatment depends on statutory thresholds and actual facts, not on habit or hearsay.

Seventh, co-owned and inherited rental property can create entity-level tax issues.

Eighth, the invoicing rules matter even for small landlords.

35. Conclusion

In the Philippines, leasing residential property is often treated too casually from a tax standpoint. Yet from the BIR’s perspective, it is a structured income activity with registration, documentation, invoicing, record-keeping, and return-filing consequences. The lessor’s main legal tasks are to determine the proper taxpayer, register the activity correctly, choose the correct tax regime, distinguish rent from deposits, maintain proper books and invoices, and file the correct returns on time.

The subject looks simple because the transaction looks familiar: owner, tenant, monthly rent. But the legal detail underneath is not simple at all. The crucial issues are not merely how much rent is charged, but who earns it, how the property is held, whether the lease is truly residential, whether VAT exemption applies, whether the 8% option is available, whether expenses are substantiated, whether deposits are being treated correctly, and whether the lessor’s BIR registration actually matches reality.

That is the real framework of BIR registration and tax compliance for residential leasing in the Philippines.