QuestionsQuestions (Republic Act No. 8179)
RA 8179 amends Republic Act No. 7042 (Foreign Investments Act of 1991). Its general purpose is to further liberalize foreign investments while maintaining constitutional and legal limits.
A Philippine national includes: (1) a Philippine citizen; (2) a domestic partnership/association wholly owned by Filipinos; (3) a Philippine corporation with at least 60% of outstanding voting capital owned by Philippine citizens; and (4) an overseas corporation registered to do business in the Philippines where 100% of outstanding voting capital is wholly owned by Filipinos. It also includes a trustee of pension/retirement funds where the trustee is a Philippine national and at least 60% of the fund benefits Philippine nationals.
To be considered a Philippine national, at least 60% of the voting capital of each corporation (the Philippine corporation and the SEC-registered enterprise) must be owned by Filipino citizens, and at least 60% of the members of the Board of Directors of each must be Filipino citizens.
Non-Philippine nationals may own up to 100% of domestic market enterprises, unless prohibited or limited by the Constitution, existing law, or the Foreign Investment Negative List under Section 8 of the Act.
It has two component lists: List A (areas reserved to Philippine nationals by the Constitution and specific laws) and List B (areas regulated pursuant to law—defense-related matters and activities with implications on public health and morals).
Activities such as manufacture, repair, storage and/or distribution of firearms, ammunition, lethal weapons, military ordnance, explosives, pyrotechnics, and similar materials—unless manufacturing/repair is specifically authorized with substantial export component by the Secretary of National Defense.
The text lists: manufacture and distribution of dangerous drugs; all forms of gambling; nightclubs, bars, beer houses, dance halls, sauna and steam bathhouses, and massage clinics.
SMEs with paid-in equity capital less than the equivalent of US$200,000 are reserved to Philippine nationals. Exception: if the enterprise involves advanced technology (as determined by DOST) or employs at least 50 direct employees, a minimum paid-in capital of US$100,000 may be allowed to non-Philippine nationals.
Amendments to List B may be made upon recommendation of: (1) the Secretary of National Defense, or (2) the Secretary of Health or the Secretary of Education, Culture and Sports (indorsed by NEDA), or (3) upon NEDA’s motu proprio recommendation, approved by the President, and promulgated by Presidential Proclamation.
The transitory list is replaced at the end of the transitory period by the first Regular Negative List formulated by NEDA using the process/criteria in Sections 8 and 9. The first Regular Negative Lists must be published not later than 60 days before the end of the transitory period, and become effective immediately at the end of that period.
No. Each Negative List is prospective in operation and in no way affects foreign investment existing on the date of publication.
Amendments to List B after promulgation and publication of the first Regular Foreign Investment Negative List shall not be made more often than once every two (2) years.
They have the same investment rights as Philippine citizens in cooperatives (RA 6938), rural banks (RA 7353), thrift and private development banks (RA 7906), and financing companies (RA 5980). Rights do not extend to activities reserved by the Constitution, including: (1) the exercise of profession; (2) defense-related activities under Section 8(b) unless specifically authorized by the Secretary of National Defense; and (3) activities covered by RA 1180 (Retail Trade Act), RA 5487 (Security Agency Act), RA 7076 (Small Scale Mining Act), RA 3018 (as amended) (Rice and Corn Industry Act), and PD 449 (Cockpits).
A legal-capacity former natural-born citizen may be a transferee of private land up to: (1) 5,000 sq. meters for urban land or (2) 3 hectares for rural land, for business or other purposes. For married couples, either one may avail; if both avail, total area cannot exceed the maximum fixed.
A transferee may acquire not more than two (2) lots situated in different municipalities/cities, with total area not exceeding 5,000 sq. meters for urban or 3 hectares for rural. If the transferee already acquired urban land, they are disqualified from acquiring rural land, and vice versa.
NEDA must amend the IRR of RA 7042 to reflect RA 8179’s changes, and NEDA (with BOI, DTI, and SEC consultation) must prepare primer/campaign materials within 60 days and disseminate to relevant parties. The Act takes effect 15 days after publication in two (2) newspapers of general circulation in the Philippines.