Republic Act (R.A.) No. 7652, also known as the “Investors’ Lease Act,” allows foreign investors to lease long-term private lands to encourage foreign investment in the Philippines. Under the act, foreign investors can lease private lands for up to 50 years, with an option to renew for another 25 years.
However, a measure authored by House Speaker Martin Romualdez was just passed on December 17, 2024–House Bill No. 10755, which amends R.A. 7652, extending the lease period for private land to foreign entities from 50 to 99 years.
Requirements for foreign investors to avail of land lease
As stated in the bill, foreign investors eligible for the 99-year lease must first have approved or registered investments under the R.A. No. 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises Act, which lowers corporate tax rates and rationalizes fiscal incentives for domestic and foreign corporations in the country.
Foreign nationals must submit the Bureau of Internal Revenue Form 1904, a photocopy of their passport, and, if applicable, an Alien Employment Permit or Provisional Work Permit to register their investments under this act.
Once these documents are submitted and their investment is registered, they are eligible for the extended lease term.
Industrial and economic goals under the act
The Investors’ Lease Act emphasizes flexibility and innovation to boost economic growth. Section 2 of the law highlights its focus on industrial estates, factories and processing plants, agro-industrial enterprises, and tourism developments.
Supporters believe that the act makes it easier for foreign investors to lease land, attracts more foreign investments, and promotes economic growth, job creation, and a more favorable investment environment, wanting for a lease extension.
“Longer lease terms not only encourage sustainable development and infrastructure investment but also facilitate increased economic activity, leading to higher tax revenues for the government, and maintaining investor confidence,” stated in a position paper by the Philippine Economic Zone Authority.
What are the challenges posed by long-term foreign land leases?
While many agree that the Investors’ Lease Act is extremely beneficial for the country’s economic growth, many also disagree, citing that it is a risk to many areas of the country.
For the landowners, if the foreign investor’s business fails, they could face financial and legal challenges. For the Philippines, concerns mount that this may lead to foreign control over strategic lands and might impact the small, local Filipino businesses negatively. There are also concerns on land misuse and environmental degradation.
Moreover, many critics also argue that the act and extending its lease term could effectively circumvent constitutional restrictions on foreign land ownership and jeopardize national sovereignty and farmers’ land rights.
“There appears to be a lack of understanding by our national leaders of the extent of foreign ownership under the law of businesses in our country,” retired Supreme Court Senior Associate Justice Antonio Carpio stated.
