By Adrian H. Halili, Reporter
THE SENATE and the House of Representatives approved a bicameral conference committee report late Monday on a measure extending the maximum land lease periods for foreigners.
“This is intended to provide a broad economic option for foreigners who can enter into business here without having to own land, which is prohibited by the Constitution,” Senate President Francis G. Escudero, the principal author of the Senate’s version of the bill, told reporters on Tuesday.
The measure was identified as a priority by President Ferdinand R. Marcos, Jr.’s Legislative-Executive Development Advisory Council for passage before the 19th Congress adjourns.
The measure will extend the term of foreign leases to 99 years from the current 75, placing the country in line with the practice of Singapore, Malaysia, and Indonesia.
The version agreed upon by the bicam includes a provision authorizing the President to impose a shorter lease period for certain investors, with prior approval from the Fiscal Incentives Review Board (FIRB).
The measure allows foreign investors to sublet properties unless prohibited under their contract. Sublease contracts longer than 25 years or more must be registered with the Register of Deeds, while contracts of less than 25 years are exempt.
It also allows for foreigners to acquire land leases for purposes like industry, agro-industrial, commercial, tourism, agriculture, agroforestry and ecological conservation.
The measure will impose a fine of between P1 million to P10 million on foreign investors that enter a lease contract illegally, or prison time of up to six years.
The Implementing Rules and Regulations of the measure will be drafted by the Board of Investments, and the Land Registration Authority, with input from the FIRB and other agencies.
“Extending the land lease for foreign investors to 99 years can help attract long-term foreign investment, particularly in capital-intensive sectors such as manufacturing, renewable energy, logistics, and tourism,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said via Viber.
He added that the measure offers investors predictability, security, and time to recoup their investments, making the Philippines a better investment destination.
Mr. Rivera said the measure must be accompanied by “complementary reforms,” like streamlined land titling, reduced red tape, improved infrastructure, and regulatory clarity.
“Without these, the extended lease alone may not be enough to significantly boost foreign investor confidence,” he added.
Terry L. Ridon, convenor of think tank InfraWatch, said via Viber that investors remain impeded by red tape, corruption and high power costs, which are “real and immediate burdens to businesses.”
“99-year land leases are effective land ownership which may entice foreign investment into the country, as land ownership by foreigners remains prohibited by the 1987 Constitution,” Mr. Ridon added.
Foundation for Economic Freedom President Calixto V. Chikiamco said that the measure could expand the investment scope to agro-forestry and environment ventures.
“It will give long-term security of rights to foreign investors. For example, foreign investors can lease private land to plant trees for carbon farming for 99 years,” Mr. Chikiamco said via Viber.
The measure addresses investor concerns about “uncertainty if the investment can be renewed,” he said.
The measure amends the 31-year-old Investors’ Lease Act or Republic Act No. 7652, which only allows foreign investors to lease private land for 50 years, renewable only once after 25 years.
Mr. Chikiamco added that the proposed law will also deter land speculation, or the purchase of land on the expectation that its value will increase.