QuestionsQuestions (Republic Act No. 7652)
RA 7652 declares the State’s policy to encourage foreign investments consistent with the constitutional mandate to conserve and develop the country’s patrimony, adopting a flexible approach to granting long-term leases of private lands to foreign investors for specified productive endeavors.
It means making an equity investment through actual remittance of foreign exchange or transfer of assets (e.g., capital goods, patents, formulae, or technological rights/processes) upon registration with the Securities and Exchange Commission.
It includes: (a) failure to operate the project for any three (3) consecutive years; or (b) outright abandonment at any time during the approved lease period; provided that failure to pay lease rental for three (3) consecutive months coupled with failure to operate for the same period is deemed outright abandonment.
Any foreign investor investing in the Philippines is allowed to lease private lands under the Act, subject to the conditions and limitations stated in RA 7652.
A lease contract shall not exceed fifty (50) years, renewable once for not more than twenty-five (25) years.
The leased area must be used solely for the purpose of the investment, subject to mutual agreement of the parties.
The leased premises must comprise only such area as may reasonably be required for the purpose of the investment, subject to the Comprehensive Agrarian Reform Law and the Local Government Code.
The leasehold right acquired under long-term lease contracts may be sold, transferred, or assigned; however, if the buyer/transferee/assignee is a foreigner or foreign-owned enterprise, the same conditions and limitations on use under RA 7652 continue to apply.
No. Foreign individuals/corporations/associations/partnerships not otherwise investing in the Philippines as defined in RA 7652 remain covered by Presidential Decree No. 471 and other existing laws on lease of lands to foreigners.
It warrants the ipso facto termination of the lease agreement without prejudice to the right of the lessor to be compensated for damages.
It should be interpreted to mean renewal upon mutual agreement of the parties, not purely unilateral renewal by the lessee.
The foreign lessee must show that it has made social and economic contributions to the country.
Yes. Tourism projects must have an investment of not less than US$5,000,000, with 70% of the amount infused into the project within three (3) years from the signing of the lease contract.
The Secretary of Trade and Industry terminates any lease contract if the investment project is not initiated within three (3) years from the signing of the lease contract.
Any contract/agreement violating prohibited acts such as: stipulating a lease period beyond the Section 4 limit; using premises contrary to law/public order/public policy/morals/good customs; or leasing an area in excess of that approved by DTI (subject to liability provisions).
A fine of not less than P100,000 nor more than P1,000,000, or imprisonment of six (6) months to six (6) years, or both, at the discretion of the court—against both contracting parties.
If the excess is due to the acts of the lessee, the lessee shall be held solely liable.
The president, manager, director, trustee, or officers responsible for the violation shall bear the criminal liability.
The separability clause states that if any provision/Application is unconstitutional, the rest remains unaffected. The repealing clause states that acts, rules, and regulations contrary to or inconsistent with RA 7652 are repealed or modified accordingly.
It took effect immediately upon its approval (approved June 4, 1993).