Amendment of Foreign Investment Restrictions

Section 1 declares State policy to attract and promote investments from foreign individuals, partnerships, corporations and governments (including their political subdivisions) in activities that contribute to industrialization, socioeconomic development, and sustainable inclusive growth.
Section 1 directs that amending limitations on foreign investment participation in activities listed in the Foreign Investment Negative List under specific laws is necessary to meet development objectives and increase investments.
Section 2 defines “investment” as equity participation in any enterprise organized or existing under the laws of the Philippines and duly recorded in the enterprise’s Stock Transfer Book (or its equivalent).

Section 3 repeals the nationality requirements for adjustment companies under Presidential Decree No. 612.
Section 3 repeals the nationality requirements for investment houses under Presidential Decree No. 129.
Section 3 repeals the nationality requirements for lending companies under Republic Act No. 9474.
Section 3 repeals the nationality requirements for financing companies under Republic Act No. 8556.
Section 3 makes the repeal subject to the provisions of this Act and the Constitution.

Section 4 amends Section 332 of Presidential Decree No. 612 (the “Insurance Code”), as amended by Republic Act No. 10607.
Section 332, as amended, provides that no person, partnership, association, or corporation shall act as an adjuster unless authorized by a license issued or renewed by the Commissioner.
Section 332 requires that the license for adjusters be issued or renewed pursuant to the provisions of the Insurance Code.

Section 5 amends Section 6 of Republic Act No. 9474 (the “Lending Company Regulation Act of 2007”).
Section 6 establishes that a lending company may be owned up to one hundred percent (100%) by foreign nationals.
Section 6 provides a land-secured limitation: where the loan is secured by land, a lending company with more than forty percent (40%) of its capital owned by foreign nationals may bid and take part in any sale of the land.
Section 6 further permits, for land-secured loans, the same lending company to avail of enforcement proceedings, take possession, and transfer their rights to qualified Philippine nationals.
Section 6 limits the transfer of rights to a period not exceeding five (5) years from actual possession.
Section 6 prohibits title transfer: title to the land shall not be transferred to such lending companies.
Section 6 requires that investments of a lending company be in accordance with the provisions of the Constitution.

Section 6 amends Section 6 of Republic Act No. 8556 (the “Financing Company Act of 1998”).
Section 6 requires financing companies to be organized in the form of stock corporations.
Section 6 permits financing companies to be owned up to one hundred percent (100%) by foreign nationals.
Section 6 sets minimum paid-up capital levels:
- not less than ten million pesos (P10,000,000.00) if located in Metro Manila and other first class cities;
- five million pesos (P5,000,000.00) if located in other classes of cities; and
- two million five hundred thousand pesos (P2,500,000.00) if located in municipalities.
Section 6 authorizes the Securities and Exchange Commission to adjust these minimum paid-up levels as it deems warranted by prudential oversight requirements and consistent with the objectives of the Act.
Section 6 imposes a transitional capital compliance rule: financing companies duly existing and in operation before the effectivity of the Act must comply with the minimum capital requirement within one (1) year from the date of effectivity.
Section 6 requires compliance with the constitutional rule on foreign ownership of land where land is concerned.

Section 7 amends Section 5 of Presidential Decree No. 129 (the “Investment Houses Law”), as amended by Republic Act No. 8366.
Section 5, as amended, provides that an Investment House may be owned up to one hundred percent (100%) by foreign nationals.
Section 5, as amended, allows foreign nationals to become members of the board of directors to the extent of the foreign participation in the equity of the enterprise.

Section 8 states that nothing in the Act precludes the Bangko Sentral ng Pilipinas from exercising its powers and authorities over financing companies, lending companies and investment houses.
Section 8 makes clear that BSP authority remains pursuant to existing laws.

Section 9 provides a separability rule: if any provision of the Act is declared invalid, the remaining provisions continue in full force and effect.
Section 10 provides a repealing/modifying rule: all statutory laws, orders, issuances, rules and regulations, and/or parts thereof inconsistent with the Act are repealed or modified accordingly.