President Ferdinand R. Marcos, Jr. signed into law a measure that allows foreigners to lease land in the Philippines for up to 99 years.
Republic Act (RA) No. 12252 amends RA No. 7652 or the Investors’ Lease Act by further liberalizing the lease of private lands by foreign investors.
“It is the policy of the State to ensure the reliability of investors’ lease contracts to provide a stable environment for foreign investments,” the law read.
The law extends the term of foreign investors’ land leases to 99 years from the current 75, putting the country in line with policies of Singapore, Malaysia, and Indonesia.
Under the law, the President, upon the recommendation of the Fiscal Incentives Review Board (FIRB) or other agencies, can impose a shorter lease period for foreign investors in sectors considered as “critical infrastructure” in the interest of national security.
The law allows long-term land lease for “the establishment of industrial estates, factories, assembly or processing plants, agro-industrial enterprises, land development for industrial or commercial use, tourism, agriculture, agro-forestry, ecological conservation and other similar priority productive endeavors.”
In the case of tourism projects, the 99-year lease is limited to projects with an investment of not less than $5 million, 70% of which will be invested in the project within three years.
Under the law, foreign investors that violate the lease contracts face a fine of between P1 million to P10 million or imprisonment of up to six years.
The lease contract can be terminated if the foreign investor fails to start the investment project within three years of the signing.
This measure was a priority by Legislative-Executive Development Advisory Council for passage before the 19th Congress adjourned.
Mr. Marcos signed the law on Sept. 3, but a copy of the law was uploaded on the Official Gazette website on Sept. 4.
The law takes effect 15 days after it has been published in the Official Gazette or a newspaper of general circulation. – CRAG and EAAE