President Ferdinand R. Marcos, Jr. enacted a statute permitting foreigners to rent land in the Philippines for a duration of up to 99 years.
Republic Act (RA) No. 12252 modifies RA No. 7652 or the Investors’ Lease Act by further easing the leasing of private properties by foreign investors.
“The policy of the State is to guarantee the integrity of investors’ leasing agreements to create a stable climate for foreign investments,” the legislation stated.
The statute prolongs the duration of foreign investors’ land leases to 99 years from the existing 75, aligning the nation with the practices of Singapore, Malaysia, and Indonesia.
According to the law, the President, based on the suggestions of the Fiscal Incentives Review Board (FIRB) or other bodies, may impose a shorter lease duration for foreign investors in sectors deemed as “essential infrastructure” for national security reasons.
The law permits long-term land leasing for “the creation of industrial zones, factories, assembly or processing facilities, agro-industrial ventures, land development for industrial or commercial purposes, tourism, agriculture, agro-forestry, ecological preservation, and other comparable priority productive activities.”
In the context of tourism initiatives, the 99-year lease is confined to projects with an investment of no less than $5 million, 70% of which must be injected into the project within three years.
According to the statute, foreign investors who breach their lease agreements face penalties ranging from P1 million to P10 million or imprisonment of up to six years.
The lease agreement can be rescinded if the foreign investor does not initiate the investment project within three years of signing.
This measure was prioritized by the Legislative-Executive Development Advisory Council for passage before the 19th Congress concluded.
Mr. Marcos enacted the statute on Sept. 3, but a copy was published on the Official Gazette website on Sept. 4.
The law will be effective 15 days after its publication in the Official Gazette or a widely circulated newspaper. – CRAG and EAAE