Law Summary

Introduction

This Executive Order No. 182 was issued by President Fidel V. Ramos on June 22, 1994, to establish the First Regular Foreign Investment Negative List, aimed at attracting and promoting foreign investments in the Philippines while protecting certain sectors reserved for Philippine nationals.

Purpose and Background

• Legal and Economic Context:

  • Recognizes the necessity of foreign investments for economic growth and the transition to a newly industrializing economy.
  • Acknowledges the role of foreign equity participation in meeting financial and technological needs, allowing up to 100% foreign ownership except in areas reserved for Philippine nationals.

• Protection of Local Interests:

  • Emphasizes the importance of protecting areas reserved for Philippine nationals as mandated by the Constitution and relevant laws, considering aspects of security, defense, public health, morals, and local enterprises.

Foreign Investment Negative List

• Investment Areas:

  • Section 1 specifies that only those investment areas listed in Annex A, termed the Foreign Investment Negative List, are reserved exclusively for Philippine nationals.
  • Foreign equity participation in these areas is strictly limited to the percentages indicated in the List.

  • Investment areas must be explicitly stated in Annex A.
  • Foreign equity participation caps are detailed in the List.

Amendment Procedures

• Frequency of Amendments:

  • Section 2 stipulates that amendments to the Foreign Investment Negative List can only occur biennially, in accordance with Section 8 of the Foreign Investments Act (FIA) and Rule XI of its Implementing Rules and Regulations.

  • Amendments to the list are allowed every two years.
  • This ensures a stable investment climate and predictable regulations.

Repeal of Inconsistent Regulations

• Revocation of Conflicting Orders:

  • Section 3 states that any previous orders, issuances, rules, or regulations inconsistent with this Executive Order are hereby revoked or modified.

  • This ensures legal consistency and clarity moving forward.
  • It clears any legal ambiguity from prior conflicting regulations.

Effectivity

• Implementation Timeline:

  • Section 4 declares that this Executive Order takes effect immediately after the transitory period ending on October 24, 1994.

  • The order is effective immediately following October 24, 1994.
  • This marks the formal establishment of the Foreign Investment Negative List in the Philippines.

Signatories

• The Order is signed by President Fidel V. Ramos and the Executive Secretary, Teofisto T. Guingona, Jr., reflecting the authority behind the issuance.

Key Takeaways

• Executive Order No. 182 establishes a framework for foreign investment in the Philippines, promoting economic growth while safeguarding certain sectors for local participation.
• It introduces a Foreign Investment Negative List, with specific areas reserved for Philippine nationals and limits on foreign equity participation.
• Amendments to the list can only occur biennially, ensuring a structured approach to foreign investments.
• The Order revokes any conflicting regulations to ensure legal clarity and takes effect following a set transitory period.