QuestionsQuestions (Republic Act No. 10881)
It is the policy of the State to attract and promote foreign investments in activities that significantly contribute to industrialization, socioeconomic development, and sustainable inclusive growth, and to amend foreign investment limitations in certain laws in order to increase investments.
“Investment” refers to equity participation in any enterprise organized or existing under Philippine laws and duly recorded in the Stock Transfer Book (or equivalent) of the enterprise.
It repeals the nationality requirements for adjustment companies, investment houses, lending companies, and financing companies as provided in their respective governing laws, subject to the Act and the Constitution.
Adjustment companies: Presidential Decree (PD) No. 612 (Insurance Code), specifically Section 332. Lending companies: Republic Act (RA) No. 9474, Section 6. Financing companies: RA No. 8556, Section 6. Investment houses: PD No. 129, Section 5 (as amended by RA No. 8366).
The law keeps the requirement that no person/entity may act as an adjuster unless authorized by a license issued or renewed by the Commissioner under the Insurance Code, as amended.
They may be owned up to 100% by foreign nationals.
If more than 40% of its capital is foreign-owned, it may bid and take part in the sale of such land as a consequence of the mortgage, avail of enforcement proceedings, take possession, and transfer its rights to qualified Philippine nationals for a period not exceeding five (5) years from actual possession; however, title to the land shall not be transferred to such lending companies.
No. Title to the land shall not be transferred to the lending company, even though it may take possession and transfer rights to qualified Philippine nationals within the five-year limit.
Yes. Not less than P10,000,000.00 for Metro Manila and first-class cities; P5,000,000.00 for other classes of cities; and P2,500,000.00 for municipalities.
The SEC may adjust the minimum paid-up levels as warranted by prudential oversight requirements, consistent with the objectives of the Act.
They must comply within one (1) year from the effectivity of RA 10881.
An investment house may be owned up to 100% by foreign nationals.
Yes. Foreign nationals may become members of the board of directors to the extent of the foreign participation in the equity of the investment house.
No. Section 8 clarifies that nothing precludes the Bangko Sentral ng Pilipinas from exercising its powers and authorities over financing companies, lending companies, and investment houses pursuant to existing laws.
If any provision of the Act is declared invalid, the remaining provisions not affected by the invalidity remain in full force and effect.
All statutory laws, orders, issuances, rules, regulations, or parts thereof inconsistent with RA 10881 are repealed or modified accordingly.
Fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.
It indicates the bill became law without the President’s signature because it lapsed into law in accordance with Article VI, Section 27(1) of the 1987 Constitution (i.e., the President did not act within the constitutional period).